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The Reason Why Japan Is Regulating Crypto Wallets

The never-ending crypto scams are making the Japanese authorities feel uneasy. Despite being one of the crypto-friendliest countries in the world, Japan is not blind to the risks that come with digital assets.

Earlier this year the industry was granted a self-regulatory status but the officials are still concerned that the baddies might go under the radar. This time they are keeping an eye on cryptocurrency wallets. According to reports, wallet regulatory frameworks are underway. The Japanese Financial Services Agency (FSA) is working around the clock to further improve the digital asset ecosystem in the country.

At the moment the industry is self-regulated but it doesn’t mean that businesses are not listed within the FSA. However, this is valid only for companies offering trading services and as you have guesses wallets are not falling into this category. Put simply, the FSA assumes that as being part of the regulatory gray area, cryptocurrency wallets providers get the chance of doing all the nefarious things we wouldn’t want them to do. On the other hand, cryptocurrency trade indirectly involves the use of wallets. The latter makes the authorities believe that wallets should feel the strong hand of the law as well.

This is the moment were we should note that the upcoming regulations are most likely referring only to custodial wallets. The concerns are that third-parties, which are in charge of customers’ funds might abuse their power. Having that in mind, the officials do have a point here. Supposedly, the new rules aim to level up security to international standards. Obviously, they aim to cut off illicit practices such as terrorist financing and money laundering. Additionally, wallet providers will have to adhere to KYC policies.

However, it is unclear when the new regulations will take place.

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Ledger Adds IOTA Integration

The non-profit IOTA Foundation announced last week that it has partnered with Ledger, one of the leading cryptocurrency wallets manufacturers. The partnership will see IOTA tokens integrated to Ledger Nano S, the flagship model of the cold wallet giant.

For the uninitiated, Ledger Nano S is by far one of the most secure hardware wallets on the market. Its one and only goal is to protect private keys giving you access to your cryptocurrency funds. Now that Ledger has added support for IOTA, it practically allows IOTA hodlers to store their tokens within Ledger Nano S. What’s even better, Ledger smoothly integrates with IOTA’s native Trinity Wallet and Romeo Wallet. Put simply, IOTA lovers can add yet another layer of security by isolating the keys to their accounts from the internet. The integration between Trinity/Romeo and Ledger means that users can verify IOTA transactions on their Ledger Nano S hardware device.

Eric Larchevêque, the CEO of Ledger, said regarding the partnership:

“Providing the highest level of security and quality is a major focus at both Ledger and IOTA. The collaboration between the teams created an immediate synergy concentrated on developing a compatibility feature allowing users to access, store and manage IOTA tokens on Ledger devices. We are thrilled to welcome IOTA onto the Ledger platform.”

Ledger differs from other cold wallets in many ways. It runs on the top of its native BOLOS operating system, which in turn utilizes EAL5+ certified secure chip. To get an idea of how secure this chip is, we have to tell you that credit/debit card issuers, as well as passport issuers, use the very same type of chips. This secure chip is able to store and manage data and applications in accordance with a pre-established set of rules. In short, hackers will have a very hard time compromising it.

“Hardware wallets are regarded as the safest way to store cryptocurrencies. At IOTA, we made a commitment to delivering the safest and most usable standalone cryptocurrency wallet. The Trinity wallet is well on its way to fulfilling that commitment, and today we are proud to announce the next step on the journey. Ledger has earned a strong reputation for security and reliability, and this made it a natural choice for integration with Trinity. We are proud of how our community, the IOTA developers and the Ledger team have worked together to make this possible,” the co-chair and co-founder of IOTA Foundation, David Sønstebø, elaborated.

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Trezor Just Added Two Outstanding Features

There is a reason why everyone loves Trezor. Apart from being one of the most secure hardware wallets along with Ledger and KeepKey, Trezor never fails with creativity. The guys working for Satoshi Labs do not care about security only. They know that a great wallet is more than just a cold storage. It has to be convenient, user-friendly, and super easy to use. This is why they develop web applications as well.

Trezor Wallet Exchange

Since Monday (October 22) there is built-in Exchange feature inside the Trezor Wallet site. Put simply, users can seamlessly hop between different digital assets, without even having to leave the Wallet website. What’s even better is that the interface allows you to initiate, stop, or monitor the whole exchange process in real time.

However, Trezor notes:

The exchange feature is provided by various third parties; SatoshiLabs bears no responsibility for the process, exchange rates, fees, or functionality. In this initial release, we have decided to cooperate with ShapeShift and Changelly. Trezor Wallet will always operate without KYC, as the Wallet or your Trezor device are not custodial. If the exchange providers decide to enact KYC, registration, and verification will be done by them. Your personal information will not be processed by Trezor Wallet / SatoshiLabs, nor will it ever be requested by the company. Customer support for exchanges will be serviced by the partners.

Obviously, Trezor has partnered with Changelly and ShapeShift, which are one of the most prominent names in the business. Both companies have proven that they are trustworthy.

Trezor Password Manager

Isn’t it fascinating how Satoshi Labs always build their Trezors with something in mind? With the new Trezor Password Manager browser extension you can turn your cold storage into a password manager as well. We know that having a strong password for each and every account may be a challenging task and boy, we are happy that Satoshi Labs have finally approached this problem.

So how does it work? You install the Password Manager app and plug in your hardware device (your Trezor model doesn’t matter). Then you manually type your passwords and their relevant URLs. You Trezor encrypts this data, generates and unique private seed and puts your data in a cloud such as Google Drive or Dropbox. I know that you are already raising your eyebrows but hey, Trezor got your back. Only your device can decrypt it using your private seed. Simply said, even if someone sneaks into your Google Account your passwords are as safe as your tokens.

The next time you want to login in Facebook (or anywhere else) you just have to open the website, plug in your Trezor and press alt+shift+F. Voila! You are ready to go.

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Off-Grid Bitcoin Transactions Are Getting Traction

You need to just peep in our blog to realize we take crypto security seriously. We often tend to discuss interesting and intriguing topics such as exchange hacks, wallet hacks, cryptojacking, and virtually all things crypto. Today we are not doing that. Or at least we’ll do our best not to. Today we are going to talk about a guy from New Zealand who managed to conduct a Bitcoin transaction without using the web and without plugging to the grid. Are you getting curious?

So how does the magic happen?

Yeah, you’ve read it right no internet, no electricity, Bitcoin transaction made possible. An extra creative dude from New Zealand used low-cost equipment to send Bitcoin more than 12km away.

 

His hardware included four goTennas and a cheap $30 Android phone. GoTennas are tiny devices that the adventurers among you are familiar with. They pair with smartphones via Bluetooth and can send data between each other with the help of the old-school radio waves. The problem is that goTennas work best in the outdoor, thus limiting off grid transactions to vast areas or the next Zombie Apocalypse.

Coinsure (that’s the dev) placed the antennas six kilometers in higher ground. He then put Samourai wallet in action to generate and verify his Bitcoin transaction. The goTenna messaging platform successfully recorded it as a message and transferred it to the smartphone of the dev’s girlfriend (sorry girls, that clever dude is not single).

As simple as it sounds, off-grid transactions have the potential to completely transform the way we think about communication and obviously, cryptocurrency. Just imagine that governments fail to properly regulate the industry and decide to ban digital assets worldwide. We can practically migrate to off-chain/grid/web/whatever transactions and run an independent network. As far-fetched as it sounds, we should explore this opportunity and develop and off-grid ecosystem that can handle large-scale transfers.

Sounds exciting, doesn’t it? Though I cannot help but ask “How do you secure goTennas?”.

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Lack Of Regulation Would Kill The Crypto Market

Philipp Maume and Mathias Fromberger from the Technical University of Munich recently published a paper where they discuss the initial coin offerings market and its regulation. The authors draft that the European law should see tokens launched and promoted via ICOs as securities.

The research named Reconciling US and EU Securities Laws further implies that the EU regulators can simply follow the course set by the US Securities and Exchange Commission. The authors undoubtedly pose that there should be a clear regulatory framework regarding cryptocurrencies and ICOs in the European Union.

An excerpt from the paper reads:

“It is our view that investment tokens (including hybrid tokens with some investment functions) are ‘transferable securities’ under Directive 2014/65/EU on Markets in Financial Instruments.”

Maume and Fromberger note that a token running on a blockchain is considered a security if it is “transferable, negotiable, and standardized,” according to the EU. Blockchains do exactly that – by using public and private keys they transfer tokens between senders and receives.

The EU explicitly gives an answer to the term “negotiable”. In fact, if an exchange lists an investment token it instantly becomes negotiable. Hybrid tokens also fall in this category. The only kind of token that cannot be deemed a security is the one that acts only as a payment method. Having said that, we can easily agree that ICO associated tokens are indeed securities. In addition, we can all agree that developers do use standards when building cryptocurrencies.

Unified crypto regulation

The authors point that if there isn’t one global regulatory framework the market is going to die in the near future. The researchers emphasized that we are already “racing to the bottom”.  This term is often used to describe a situation where different nations are all trying to be at the forefront of something in particular and are ready to drop taxes and regulation in order to attract businesses. However, this usually impacts the quality of the industry in a negative way.

In fact, we are already witnessing companies hopping from one country to another, regardless of whether we are talking about exchanges, ICOs, fintech startups, wallet providers, or cryptocurrency miners. Not to mention that launching a cryptocurrency token is extremely easy. The paper notes that “less than 100 lines of code seem to be typical in the industry,” implying that via platforms like Ethereum everyone can set up their own token.

Should we note that the cryptocurrency industry is full of shitcoins? Should we say again that we need quality, not quantity?

 

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Why 2018 Is Not The Year Of The Bitcoin?

When Bitcoin was just shy of $20,000 in December 2017 everyone was shouting “To the MOON”. However, the events took rather a different turn and large portion of the crypto fortune got wiped off within days. It’s not that experienced crypto traders hadn’t seen the market crash before. 2018 is different because everyone had great expectations and had their pink sunglasses on.

Say that back in December it wasn’t just like that. If somebody had told me then that the crypto market will enter a downward spiral and will crash literally twice a month, I would have laughed my ass off. Well, karma is a bitch they say it this might actually be the truth. But what on earth happened? What got us begging for mercy? Why even the greatest opponents of crypto regulation now deemed it Bitcoin’s last chance? There are certainly many factors that played a role and I might possibly not cover all of them in this article but here are they anyway:

The Immense Hype

Yes, when the market is flourishing and the prices are surging nobody believes things might go the other way. The positive trend kept in November and December and that short two-month period got our perception of reality blurred. What am I talking about? Well, when your parents start talking about viral technology/financial/supposedly revolutionary things, then you know the topic has outgrown itself. I’m talking overhype here. It created the illusion that virtually everyone can become a millionaire overnight. There were people getting loans just to invest some cash in “the next Bitcoin”. Does that ring a bell? Sorry, but overhyping things usually leads to their demise. We collectively pumped the balloon and it eventually burst.

Scams, frauds, and swindles

Fraudster and criminals of all kinds exist since the dawn of humanity and they are capable of doing anything just to get your cash in their pockets. Yes, the crypto world makes no exception. Do you know how much money cyber culprits have snatched from January to June this year? More than $1.1 billion. These include exit-scams, phishing scams, crypto blackmails, physical crypto thefts, exchanges hacks and whatever you can think of. See, the crypto world is by no means a safe place and it’s not even necessary to see the market crashing to lose your investments.

Where are the authorities?

Scams lead us to my next point. The governments are willing to intervene for a variety of reasons – they want to regulate the space and eventually protect victims, solve disputes and so on. Another crucial pain point for the officials is that currently, cryptocurrencies are a great tool to launder money and finance crime organizations. Obviously, it wouldn’t have been that easier for criminals to do so if there were proper regulatory frameworks. Lack of regulation makes tokens volatile apart from just scaring the sh*t out of investors. Especially institutional ones.

Where do we spend cryptos?

Ok, I get it. There are retailers and merchants that do accept cryptocurrency payments. However, ask your uncle to name of few. See, if only crypto geeks know who they are there is no real cryptocurrency adoption. Since we cannot spend digital currencies the way we spend fiat, cryptocurrencies become illiquid. It’s like you have a vault with $10k in it but you don’t have the key. No one would enjoy that. Period. If you are still interested what are your spending options, click right here.

Crypto mining monopoly

Just like cryptocurrency trade, cryptocurrency mining can be very profitable. However, the more time passes by, the harder it gets to mine through a regular hardware. That’s why hardware manufacturers are cashing on the trend by producing ASIC machines, which are specifically designed to mine certain cryptocurrencies. The current industry behemoth is Chinese-based Bitmain. And guess what, it accounts for 85% of the mining rigs sales worldwide. Moreover, its devices don’t come cheap, which means not everyone can afford them. Some say this centralizes the hash power in the hands of the rich. What do you think? Are cryptocurrencies really setting us free from the current financial system? Think twice, it’s alright! Yeah monopoly, really drives off early crypto supporters.

Some of the above-mentioned factors you can control and some you cannot. The good news is that cryptocurrencies are here to stay. However, before we see all their promises come to life, we really have to learn to think in the long-term.

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What If The Cryptocurrency Bubble Bursts?

Financial analysts have long been saying that the cryptocurrency space is in a bubble-like state. Though I fiercely refused to accept their point of view last year, today I am more on their side. In fact, I really hope the bubble bursts.

No, I am not against cryptocurrencies. However, this year we can clearly see that there is something very wrong in the world of crypto finance. Apart from the long list of illicit activities that happen on a daily basis, it is obvious that the interest in digital assets has changed. The investors have changed and the attitude has changed as well. In my opinion, the sooner the bubble bursts the better for the whole cryptocurrency space.

“I want it all and I want it now”

This attitude killed the noble ideas of Satoshi Nakamoto. Cryptocurrencies emerged because they had to. Nakamoto intended to set us free from the corrupt financial system but instead, the crypto community thwarted that by speculating. Yes, I do believe that price speculation destroyed the crypto world. Instead of being independent we turned into robots which buy and sell thousands of worthless coins in an effort to bring something home. If you are still missing the point, the business side of crypto trade is bad for the market in general.

Why the bubble has to burst?

You know the answer to this question – there are way too many tokens, most of which are totally useless. In fact, there are at least 800 dead coins, according to DeadCoins.com.  What does this mean? I mean, everyone is trying to cash in on the crypto trend – developers, average Joes that know nothing of stock trading, digital assets or finance in general, fraudsters, ICO issuers, and most recently – institutional investors.

Let’s face it, the technologies underpinning cryptocurrencies are far from perfect. When something in its infancy draws so much attention and sucks up so much money somehow everyone forgets that it needs tons of improvement. What I am trying to say is, investors and traders are unconsciously forcing the events. The hype is poisoning the crypto environment because it paints a false picture that cryptocurrencies are ready to conquer the world, which they obviously aren’t.

On the other hand, when the bubble bursts we will have a more realistic point of view. Furthermore, all these shitcoins will disappear once and for all, which in turn will strengthen and consolidate the market. Indeed it would be much wiser to use a couple of well-developed tokens that have real-life use cases, that have no scalability issues and which operate under well-thought regulatory frameworks.

In conclusion

It is for the sake of cryptocurrencies to understand that we need to get rid of all these tokens that have no other use apart from speculation. Cryptocurrencies have to make our lives easier, not harder. However, at the moment it’s the opposite. We fail to justify the existence of each and every token, we fail to achieve worldwide adoption, and we even fail to have a clear stance on them. In contrast, a bubble burst will serve just like hitting the restart button. We will have the opportunity to start anew. After all, once the dot-com bubble exploded it didn’t destroy the internet but rather made internet projects more focused.

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Cryptocurrency Regulation Won’t Be The End Of Bitcoin

The world of crypto finance is rapidly evolving and what worked yesterday is outdated tomorrow. Everything is changing so fast that it is hard to tell what is right for the crypto market and what is not. Not only does the market surges and drops a hundred times per day but the investors change by the hour. We see millions and billions raised through initial coin offerings, we see projects fading away, we see institutional investors stepping in, and even the authorities have their eyes set on the crypto world these days.

For years Bitcoin remained on the sidelines. Only a few hundred tech-savvies knew what it is and how it works. Until last year, cryptocurrencies were only for the geeks. However, their prices started to move upwards and this drew the attention of many people how wouldn’t have otherwise been involved in technology or stock trading. The more average Joes joined the party, the higher the prices went. Though this unexpected growth was crucial to the technological development of blockchains we refrain to say it necessarily did well to the sector. Mainly because many people decided to run fake projects just to squeeze some cash from their naïve supporters. Yes, exit-scams are perhaps the single most important thing that made the authorities crack on cryptocurrency projects.

Point of no return

Let’s face it, the authorities are going to regulate the sector sooner or later. The question is, how do we make the most of it? Bitcoin was originally created with noble intentions such as freedom and independence. However, thanks to dark web vendors, cybercriminals, hackers, exit-scamsters, and money launderers Bitcoin and especially privacy-oriented tokens like Monero, Zcash, and DASH are mainly associated with illicit activities.

How do we clear the image of cryptocurrencies then? Well, one way is to try to educate people who are new to them. Check our survival guide, for real-life examples. The other way is to regulate the space. By designing proper regulatory frameworks the authorities can cut down fake projects without completely destroying the decentralized nature of cryptocurrencies.

Think about it for a second, we can stop hacking or at least diminish it if we all migrate to decentralized exchanges. Let’s assume both blockchain experts and lawyers participated in their creation. What if smart contracts have legal bindings as well? I am pretty sure, if someone tries to deceive a smart contract it can automatically reveal his identity. In such case, the officials will know who tried to cheat. Sounds great, doesn’t it? After all, we all think hackers deserve prosecution.

What about the regulators?

Don’t get us wrong, we are in no way supporting centralization. However, the crypto world needs regulation either from the authorities or from its strong community. Otherwise, it will bury itself. Come on, Bitcoin wasn’t meant to launder money or to finance criminal organizations. It was meant to serve the ordinary men. We should stick to that when designing regulatory frameworks. No, it wasn’t meant to make you quick-rich either, it’s not about money all the time. Think about independence and proper governance instead, think about mainstream adoption and real-life use cases.

Of course, those who will be in charge of the changes should be under the strict surveillance of the community. Did you know that Zcash, which usually recognizes itself as a privacy-oriented token is not prioritizing ASIC resistance anymore? Why do you think its governance panel voted against ASIC resistance? We dare to say it is because many members of the crypto community had forgotten why cryptocurrencies emerged in the first place.

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How To Act When Someone Says “Bitcoin Has No Value” During A Family Dinner

We all know how it feels sitting around the dinner table with your family. Everything is just perfect. You are all happy to see each other during these family gatherings. Then all of a sudden someone drops “Bitcoin” and everyone turns their eyes towards you. If you are lucky enough they will just ask you what are these cryptocurrencies, what the hype is all about and so on. Unfortunately, some of us draw the short straw. In this case, you hear some of the elders saying “This is total sh*t! You can’t spend these imaginary tokens, can you?”

Well, we’ve been there and it hurts. That’s why we decided to wrap up a short survival guide for those of you having to defend yourself for being a crypto enthusiast. Of course, you can just try to shut skeptics’ mouths by telling them they don’t understand the complex technology behind cryptocurrencies but, believe me, it won’t do the trick. You will just add fuel to the fire and the chances are you’ll lose your ground. On the other hand, being prepared with an appropriate answer will do you good as you won’t sound like an angry teenager.

Real-life use cases

In reality, you can use your tokens for practically everything. But first things first, you have to eat something right? The easiest thing you can do is search in Coinmap for venues near you that accept Bitcoins. What about grocery stores that do not accept cryptos? You can indirectly spend your cryptos there as well. Here is how – gift and prepaid card vendors such as Gyft and eGifter accept Bitcoin as a payment method, so the only thing you have to do is purchase the cards you need and then spend them in brick-and-mortar stores. Easy-peasy. Not only that, but you can actually make a gift to the crypto skeptic you are talking to by giving him a prepaid card. They’ll love it, I bet my…

Now that you’ve done the first step, the others are listening as well. You’ve made a proper answer to a person who doesn’t know a thing about digital currencies. You’ve just proven him wrong once, which means you can do it again. If they ask you whether you can travel on cryptos, you know the right answer, you can. There are many online platforms where you can instantly book and buy flights with your beloved Bitcoins. BTCTrip, aBitSky, and TravelbyBit allow you to do just that and boy, they offer great user experience. What’s more, the entire shopping area in the Brisbane Airport accepts Bitcoin. In addition, there are crypto ATMs in most major cities across the globe. So yeah, paying with cryptocurrencies for your trip has never been easier.

Even more use cases

Furthermore, the existence of OpenBazaar opens up hundreds of possibilities for you to shop for jewelry, art, music, movies, food & beverage, hardware, software, and practically anything in between. Unlike other e-commerce platforms, OpenBazaar is decentralized, meaning there are no middlemen. Users are directly connected with each other, which makes for a great shopping experience. If your listeners are still not impressed, here’s what you gonna do – show them how you can instantly buy healthcare products from AquaSource. Old people love AquaSource products and you know just how to tease them.

Of course, this is by no means a full list of real-life use cases but hey, it’s more than enough for you to survive the family dinner. Besides, why don’t you share your favorite ways of spending Bitcoin?

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Wozniak: I Like To Think Bitcoin Can Be The World’s Single Currency

Steve Wozniak, Apple’s co-founder, has expressed his interest in cryptocurrencies several times so far. In May he praised Ethereum for its pivotal role in the development of distributed ledger technologies. He even went on to say that he sees Ethereum as the new Apple. Interestingly, he hinted that he likes Ethereum for the platform it is rather than its native token.

Most recently, he seemed positive about Bitcoin’s future as well. During the Money 20/20 conference in Europe Woz said in an interview that he digs the idea of a worldwide cryptocurrency that people can exchange at almost no cost.

“I buy into what Jack Dorsey says, not that I necessarily believe it’s going to happen, but because I want it to be that way, that is so pure thinking,” he said.

As you know, the CEO of Twitter and fintech platform Square, has long been a Bitcoin advocate, stating that in ten years time it will be the one and only currency used on the internet.

“The world ultimately will have a single currency, the internet will have a single currency. I personally believe that it will be bitcoin,” Jack Dorsey said.

It looks like Steve Wozniak has not changed his view on Bitcoin despite that he admits he had sold all of his tokens. He noted that cryptocurrency trade took too much of his time. What’s more, he even fell victim to fraudsters who drained his card during a Bitcoin transaction. Woz has often described Bitcoin as “pure digital gold” and “totally decentralized”.

“Bitcoin is mathematically defined, there is a certain quantity of bitcoin, there’s a way it’s distributed… and it’s pure and there’s no human running, there’s no company running and it’s just… growing and growing… and surviving. That to me says something that is natural and nature is more important than all our human conventions.”

It is good to hear some renowned tech gurus endorsing cryptocurrencies in times when the market is in the red once again.