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Current NEU reward
3.08 NEU / 1 EUR
0.00 NEU /
EUR

News Roundup

31/10/2018

The SEC, the American Securities and Exchange Commission, got finally its own beach. Beach? Governments around the world like Singapore and Dubai have put forward sandbox environments to keep a close eye on fintech startups and develop regulations on the go. The SEC’s little sister, the Commodity Futures Trading Commission (CFTC), was aiming for establishing exactly such a sandbox environment in the US. However, the SEC doesn’t want to work as closely with the fintech industry and therefore proposed “a beach” as Hester Peirce proposed a while ago. This beach is now implemented in form of the SEC’s new Strategic Hub for Innovation and Financial Technology, short FinHub. Finally, there is a channel through which the fintech industry can approach the SEC. Circle’s CEO, Jeremy Allaire, thinks, however, that this is not enough. He demands regulation at the G20 level for assets to become globally transferable. Circle acquired this month the fundraising platform Seed Invest which has a broker-dealer license and which will help Circle in conducting regulated Security Token Offerings. And it looks like investors will be able to make their investments into those STOs with a new stable coin. Circle has teamed up with Coinbase to establishing a USD pegged stable coin called USDC. Circle and Coinbase are some of the highest valued DLT companies in the US. Coinbase post-money valuation just grew to 8 billion dollars this month after a successful Series E led by Tiger Global Management.

INDUSTRY NEWS

SEC Launches New Strategic Hub for Innovation and Financial Technology Coinbase and Circle announce the launch of USDC — a Digital Dollar Coinbase Hits $8 Billion Valuation After $300 Million Raise

09/05/2018

The SEC wants a beach, its sister the CFTC a sandbox. The SEC commissioner, Hester M. Peirce, does not endorse the CFTC’s move to open a sandbox environment for fintech startups. Instead, the SEC is to open new communication channels between the industry and regulators. She also commented on ICOs noting that “this is not to say that all ICOs must be deemed securities offerings.” The New York Stock Exchange and Goldman Sachs might welcome such news - they are both to open their own bitcoin trading operations. Otherwise, there is another alternative around for ICOs, called JCO - Jumpstart Crypto Offering. Invented by the Institute for Blockchain Innovation this instrument will allow accredited and un-accredited investors alike to acquire digital shares and trade them in SEC approved exchanges. In other news US and EU auto-makers joint forces within the MOBI initiative to kickstart a blockchain enabled ecosystem for cars. Not only car manufacturers but also Facebook will now explore Blockchain options. The initiative is headed by David Marcus, the former Pay-Pal CEO and board member of Coinbase.
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Resources

Wallet Security

Using a decentralized application for your finances means you are your own boss without relying on intermediaries like banks. But that also means you bare the risk of loss yourself. Here we explain how to protect your funds.

The history of blockchain has seen many major hacks in which millions of coins got often irrevocably lost. Mt. Gox and The DAO count to the most prominent ones. To understand how to secure your coins from not getting lost or stolen, you have to consider one of the major differences between traditional finance and blockchain-enabled finance.

If a bank gets robbed it will to a certain extent reimburse its customers. Not so with blockchain. This is for technical reasons: tokens and coins are not physically stored anywhere, they are a mere entrance in a database and once they have been shifted from account A to account B there is no return. Since the database is decentralized there is no way to undo such a transfer.

Therefore, providers of browser wallets cannot be made accountable for the security of your own funds. They just offer a convenient interface. This is fair enough and certainly practical for small amounts of coins for daily usage.

However, if you wish to make higher investments we highly recommend storing them on a hardware wallet which is not connected to the internet. Think about your briefcase and your bank account. You wouldn’t carry all your savings in your briefcase either.


We have prepared a tutorial for you in which we explain step by step how to set up a Ledger Nano hardware wallet. Tutorial


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Resources

Blockchain 101

What is Blockchain all about? Why do people ascribe it such revolutionary powers? Here is a short summary and some useful links.

A blockchain is a decentralized, censorship-resistant database. Traditional database records are being kept on one server. Blockchain records are kept on thousands of computers which makes it close to impossible to manipulate them. The technology behind it was proposed by the mysterious Satoshi Nakamoto. In 2008 Satoshi published the Bitcoin whitepaper and in January 2009 mined the first couple of Bitcoin blocks, which marks the beginning of today’s most famous blockchain.

Satoshi solved an important technical question with Bitcoin. In computer science, it is being referred to the Byzantine generals problem. Satoshi found a way for thousands of decentralized participants to create consensus without a centralized entity confirming the validity of the consensus.

This is done through the process of mining. Every time a new transaction happens, miners race to encrypt the transaction details to validify the transaction. Thereby the miner transforms the transaction information into a string of characters. The miner’s goal is to create a string with as many zeros as possible. Once a miner has created such a string the miner broadcasts it to the rest of the network. Now the network decrypts the encrypted information, by taking the string apart and thereby confirming the transaction information.

As a reward, the miner automatically receives crypto coins. Then the game starts again from the beginning and the next block is being mined. In the next block, a reference to the previous block is included and thereby chaining the blocks to each other.


Ethereum is an advanced type of blockchain. In comparison to Bitcoin, it is not only an immutable ledger for record keeping and transactions, it is also a distributed computing platform. Ethereum can be used as an operating system with functionalities such as self-executing smart contracts. This added functionality allows Ethereum developers to create decentralized applications running on top of the Ethereum network.

Ether is the cryptocurrency of the Ethereum blockchain. It can be used to pay for services within the decentralized application network. Additionally, anyone can create their own token on top of the Ethereum infrastructure. New Ether is being created in a process called mining. A miner validates transactions and therefore receives new Ether.

In 2013 Vitalik Buterin proposed the outline for the technology behind Ethereum. One year later the project’s development was financed through a crowd sale and went live the year later.


In 2017 Utility Tokens gained prominence as a means of fundraising in form of Initial Coin Offerings (ICOs). Blockchain-based Startups sold the tokens to finance their projects. Thereby so-called Utility Tokens were sold as a voucher for future services. By selling those token vouchers upfront companies financed the development of their projects.

However, the different incentives for investors to buy Utility Tokens killed a lot of such projects. One investor group planned to use the tokens for their intended purpose. They preferred low token prices. The second group supported the project with their investment, but hoped for the token price to surge. And a third group, speculators, hoped for price fluctuation to make a quick buck.

Security Tokens, on the other hand, represent real-world assets. So an investor who buys Security Tokens receives a quasi-share in the company issuing the tokens. To speak bluntly, when investing in Security Tokens you get a piece of the airline instead of frequent flyer miles.


Learn about the Basics of Blockchain Technology. Tutorial


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