In an Oct.16rh Note to U.S. Treasury Secretary Steven Mnuchin, inspect general Eric Thorson indicated a list of “management and performance challenges” that he anticipates will drastically affect the Treasury Department in the coming months and years. Though the ramifications are unknown, Thorson is sure the future bitcoin impact will be substantial.
Specifically, the U.S. Mint – which products and circulates coinage – and the Bureau of Engraving and Printing (BEP) faces the biggest challenges from new payments methods like cryptocurrency. While Thorson did not sound the alarm on any immediate threats, he urged the two agencies to begin examining the long-term effect such “technological advances” could pose to their business models.
Thorson wrote: “In addition, BEP and the Mint need to consider the effect of alternative payment methods and other technological advances (such as stored value cards, the Internet, smartphones, and virtual currencies) as well as consumer demand for their respective business models, practices, future planning and interactions with their customers, and the Federal Reserve Bank.”
Elsewhere, the subject of cryptocurrencies was also raised, in reference to the US Financial Crimes Enforcement Network (FinCEN), an agency that oversees exchanges in the US.
A consortium of banks is coming together in launching a joint business venture for its in-development blockchain commerce platform. Specifically, the Digital Trade Chain group is building a distributed ledger framework that will connect a buyer, sellers, banks, and intermediaries to simplify transaction management and tracking.
The consortium aims to create a new business entity in the Republic of Ireland, jointly owned by the eight founding banks, that will manage and delegate the offering, now rebranded as “we.trade.” The expected date of formation is speculated to be by the end of the year.
In an official statement, the consortium said: “The commercialization of the platform is expected in 2Q18. From February 2018, test clients of the founding banks will be able to use the platform.”
Amongst the consortium’s membership includes Banco Santander, Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Societe Generale and UniCredit- as well as IBM.
In the upcoming months, the consortium seeks to attract additional partners on top of financial services. One particular area of focus will be companies involved in the trade process, including shipping – an industry that has seen rapidly growing interested in blockchain tech in recent months.
Bank of America (NYSE:BAC) is rumored to be exploring the use of a blockchain to optimize its tracking of file transfers in real time.
The system, outlined in a pair of patent applications recently released by the US Patent and Trademark Office, detailed a system through which a blockchain would be combined with communications and memory devices to simplify the data processing process. Current systems require middleware to function properly and have a large number of memory, resource, and time requirements. The data’s status during processing can’t be traced, due to these memory requirements.
So, the bank is proposing the use of a blockchain to transfer large volumes of data in a more efficient manner, while simultaneously tracking the data using cryptographic keys as packets are transferred.
The system will apply a blockchain to handle two types of data processing: the transfer itself, and as a log of the cryptographic keys that identify each data packet and its current processing stage.
As of August 2017, Bank of America has filed for more than 20 patents related to blockchain or cryptocurrency since 2014.
Initial coin offerings, or ICOs, have been closely watched by not only national-level securities regulators.
Just last month, the North American Securities Administrators Association (NASAA) – an organization composed of local, state and regionally based markets watchdogs in Canada, Mexico, and the United States – published its Enforcement Report for 2017. Within such report is a section on the blockchain use case.
First noting that NASAA members believe that trading around cryptocurrencies in general “is likely to pose a significant risk to investors,” the association indicates growing interest in ICOs, which can be utilized to bootstrap and fund new blockchain networks.
Specifically, the report states: “cryptocurrencies purport to store value in a distributed digital ledger, and are currently very popular as a means of raising capital for very early stage startups (usually referred to as an ‘initial coin offering” or ICO). NASAA members are closely watching this emerging market.”
More interestingly, such statement speaks to a growing number of pronouncements from securities regulators worldwide, where in certain cases, cryptographic tokens distributed through an ICO may be considered securities under federal law.
But the case doesn’t seem as optimal in Asia, where regulators in China and South Korea declare that the ICO funding model is an illegal form of financing, triggering a wave of platform closures and refunds for projects that were in the middle of soliciting funds.
The World Economic Forum’s work with blockchain is underway, with the research phase just beginning. So far, the international non-profit comprised of the leaders of more than a thousand of the largest companies in the world has focused mostly on establishing a blockchain working group. Last week, the forum published its first in-depth white paper to indicate how to maximize the impact of the popular technology.
However, following its publication, WEF managing director Richard Samans made a shocking, albeit modest confession on how much more many of his members still have to learn.
Specifically, Samans told CoinDesk: “Most of this leader-level community is not very well versed in blockchain. In fact, they may know the term, but they don’t know much about where the technology is right now and how it may be applied in multifaceted ways throughout society.”
The key to optimizing the learning curve are two main groups within the WEF.
First, the newly launched Global Future Council on the Future of Blockchain. Second, is the Center for the Fourth Industrial Revolution, launched a year ago to examine new ways of leveraging the multi-stakeholder approach across industries. According to Samans, blockchain itself is positioned perfectly for the multi-stakeholder principles being followed in the center, which “could improve the prospects for the technology’s development.”
But, whether any of that happens, is completely dependent upon how quickly the members can acclimate to the technology, and whether developers can adapt to such centralizing oversight, regardless of its intentions.
Starting next year, Australians will no longer have to pay the goods and services (GST) tax on cryptocurrency purchases, often referred to as the bitcoin tax.
The law, which instilled a “double taxation” of cryptocurrencies-first when buying it, then later when buying items subject to eh tax- was enacted in 2014. In other words, the legislation treated cryptocurrencies as bartered goods for GST purposes, which quickly received widespread criticism from technology advocates. Last year, government officials pledged to rectify the issue.
The Australian Senate Economics References Committee first proposed a review of the case in August, and the Treasury Department first set out new legislation to resolve the issue in May’s budget.
As of today, the new legislation was officially passed in the country’s parliament. This means, as of July 1, 2018, bitcoin and other cryptocurrencies will get the same GST treatment as foreign currencies.
In the bigger picture, the move comes amidst a larger, international dialogue about the tax treatment of blockchain-enabled assets, and the various approaches government regulations can and should take.
AlphaPoint is a blockchain solutions provider who has partnered with technology giant Intel on a new security solution for digital assets.
The new partnership will see AlphaPoint’s release of a new virtual machine offering, called the TrustedVM, to be backed by Intel’s Software Guard Extensions (SGXs). This is the latest instance in which Intel’s security-focused solutions have been utilized to create trusted computing environments for sensitive data, such as private keys that enable access to blockchain-based assets.
According to a detailed report by AlphaPoint, the hard-backed solution can eliminate some of the privacy and security concerns that enterprise companies may have on the question of creating and exchanging digitized forms of physical assets.
More specifically, Igor Telyatnikov, AlphaPoint’s president and CEO said, “With this upgraded solution, we are enabling rapid implementation of blockchain technology into production within months instead of years. Our financial services customers want the benefits of distributed ledger technology without the security and privacy limitations of existing blockchain solutions.”
Intel also expressed optimism that the partnership could form the basis for continued work in the area of digital assets. Indeed, the exchange of digital assets is an area Intel has been pushing into, even unveiling a demo marketplace during an event earlier this year.
You’ve done your research, you feel confident about Ethereum and now you want to buy it. But, there’s a problem, you don’t know how to. Well, you’ve come to the right place. Below, we’ll walk you through the steps on how to buy Ethereum and introduce you to some of the places where Ethereum is bought and sold.
How Do You Buy Ethereum?
We’ve outlined 5 easy steps below to help you along in your journey of buying Ethereum.
Step 1: Find an Exchange and Create an Account
An online exchange is the only way to buy and sell Ethereum, as is the case with all cryptocurrencies. So the first thing you’ll need to do is a bit of research into online exchanges and choose the one which is right for your needs. For example, not all exchanges work in all countries, or they may have certain restrictions imposed on them based on where you live. So do your homework first and when you settle on the exchange for you, go ahead and create your account with it.
A good starting point is to look at the most popular exchanges: Coinbase, Bitstamp, Kraken, and Gemini are all good starting points.
Step 2: Set Up Your Account
Most exchanges require that you upload a number of personal documents for verification purposes in order to fully set up your account (and if an exchange does not require this, it may not be a trustworthy exchange). For example, you may need to upload your passport or driver’s license. The reason for this is that exchanges want to be sure you are who you say you are and that you are reputable. Exchanges need to complete “Know Your Customer” (KYC) and Anti-Money Laundering (AML) checks on each person that registers for them; for this they will need both proof of address and photo identification from you.
Verification of your account may take up to several days. How long depends largely on how busy the exchange is.
Step 3: Deposit Fiat Currency into Your Account
Fiat currency is a currency that is considered legal tender by a government, which takes its value from supply and demand rather than the value of the material the money is made of. Most world currencies, such as the US dollar, are fiat currencies.
That means you need actual money in order to start buying Ethereum (as opposed to, say, trying to buy it with gold), which generally isn’t going to be a problem for most people.
Once your account has been set up and verified, you’ll need to deposit fiat currency into your account in order to purchase the ether. This can be done either through a direct bank or wire transfer or through credit or debit payments. Some exchanges may specify that you transfer money into your account in a certain way.
Transferring money into your account may take several days, again this depends on the exchange. Also be aware that most exchanges charge a fee each time you transfer money in. You can find the details of an exchange’s fees located in the footer of its website.
Step 4: Buy Some Ethereum
Once you have money deposited into your account, you’ll be able to start buying Ethereum (or other cryptocurrencies) on the exchange. Each exchange works a little differently, but generally, you can expect to confirm your transactions, wait for them to go through, and then see the ether you’ve purchased show up in your account. Again, processing times will all differ from exchange to exchange, and will also depend on how many transactions you’ve requested.
Most exchanges will limit the amount of cryptocurrency you can purchase at any given time.
Step 5: Withdraw Your Ethereum into a Wallet
This is one extra step that most users will probably want to take, to better secure their purchases. Withdrawing your Ethereum, or any other purchases you’ve made on an exchange, into an online wallet helps to protect your tokens from being stolen if the exchange is hacked, which can and does happen. A wallet is a place where you can store tokens privately; only you can see them and only you can access them (except in extreme cases when the wallet is compromised).
You’ll have to download and install a wallet with Ethereum capabilities in order to store your purchased ether and create an account for this as well.
Once that’s done, you’ll be able to put your wallet account address into the exchange so that you can transfer your ether securely into your wallet.
Generally speaking, if you’ve only purchased a small amount of Ethereum, it’s probably better to just keep it in the exchange, so you don’t have to pay a transaction fee to transfer it out (which may end up being more than the small amount of ether is worth). However, for larger purchases, you’d be better off securing it in your wallet.
To sell your Ether, you will have to transfer it back to the exchange from your wallet.
Buying Ethereum is simple once you’ve followed the steps listed above. However, there are a few important things to note when considering purchasing it.
All Ethereum transactions are final and non-exchangeable. That means, once you buy it, you can only get rid of it again by selling it in a second, separate transaction.
Sometimes, Ethereum transactions will be invalid, such as when a user doesn’t have enough funds to complete the transaction. In these cases, the transaction will not be completed and will therefore not be included in the Ethereum blockchain.
On the reverse side of this, all completed (valid) transactions will be stored on the Ethereum blockchain, and they will live there permanently.
Where can I buy Ethereum?
As mentioned above, there are several exchanges where Ethereum can be bought (and sold). Although most exchanges work approximately the same as far as the steps go, not all exchanges do the same thing, and not all exchanges work at full capability in all countries.
First and foremost, you want to ensure that you are signing up for an exchange that accepts Ethereum transactions. There are exchanges that allow you to sell Ether, which is what you want to use, but there are also platforms that only allow you to speculate on the price of Ethereum. These you’ll want to avoid, assuming you actually want to buy Ether. An example of one of these is eToro. You won’t have access to your coins on eToro, nor will you be able to send any coins to anybody else.
Next, you’ll want to make sure the exchange will work properly in your country.
Below is a list of some of the most popular Ethereum-equipped exchanges.
Coinbase is one of the simplest exchanges to use, however it is not available in all countries, and in some countries, Coinbase doesn’t allow you to trade Ethereum. Check what you can do on Coinbase first before getting an account.
Coinbase allows you do use either a credit card or pay directly from your bank account. Once you’ve set up your payment method, you can click “Buy/Sell”, select the amount you want, then click “Buy Ethereum” (or “Sell Ethereum”).
Coinbase charges a 1.49-3.99% fee per transaction, with credit cards at a higher fee than wire transfers.
Coinmama sells Ethereum worldwide. You can buy Ethereum with your credit card, and the exchange rates aren’t too bad.
CEX.io is another exchange that allows you to buy Ethereum with your credit card. Fees are included in the exchange rate, which is why they are higher than most other exchanges. CEX.io also works around the world.
The steps for buying Ethereum from CEX.io are similar to those from Coinbase.
Coinhouse only works for countries listed with the EU. You can buy Ethereum with your credit card, debit card, or with Neosurf.
So there you have it!; the basics to start you on your Ethereum journey. Happy Buying!
An Ethereum smart contract is considered by many to be the best smart contract available but why is that? Why is Ethereum’s Network considered the greatest? and what exactly is a smart contract and what is the benefit of using one? This beginner’s guide to Ethereum smart contracts will answer all of these questions for a better understanding of this highly misunderstood topic. Let’s start with the basics.
What is an Ethereum smart contract?
A smart contract is similar to a regular, run-of-the-mill contract that you might receive from a lawyer or broker – your typical ‘standard contract’. Well, a smart contract is the same in its form, composition, agreement, everything – but it has one vital difference – it is digital.
A smart contract binds the relationship between the contract parties with a cryptographic code, whereas a standard contract merely outlines the terms of that relationship in a way that is enforced by law.
Smart contracts are meant to be a way to exchange money, shares, or really anything of value, in a conflict-free environment without the need for a middleman.Smart contracts are designed to carry out the exact tasks given by the original makers, or, to execute exactly as directed by the creator of the smart contract.
The idea behind the smart contract (first thought up by cryptographer and computer scientist Nick Szabo in 1993) is that it works like a digital vending machine. Digital currency can be dropped in, digitally tracked and transferred, and the result is whatever was originally agreed on by the parties when they created the smart contract. Out pops that result like a snack would from a vending machine after inserting money.
Most of the time, smart contracts work in tandem with each other, with each additional related smart contract helping to complete the first one.
What is the benefit of a smart contract?
Smart contracts are considered to be much more efficient than a regular contract and as such there are many benefits to using one instead of a standard contract. Let’s list them:
They are digital: No need for reams of paper and faster accessibility, shareability to the contract.
They are more Autonomous: cutting out the middleman (and the subsequent back and forth that that entails), making things easier for all parties involved. The originator of the contract is the primary executor of the agreement. This eliminates the risk of error, or even corruption, from a third party.
Trust: The digital format means that the information of the smart contract is encrypted. The encrypted data is stored on a shared ledger (shared between the parties only) and it will always be there and be accessible; therefore, it can’t be lost or ever off limits to you and all data is constantly backed up, as it is updated.
Safety: Because all of the data of the contract is encrypted (ie. not stored in its original format, and unlockable only with the right key), the skills needed to hack into the system and discover what the data holds is incredibly high and extremely rare. Smart contracts are not easily decrypted and so they are incredibly safe.
Speed: The digitization of a smart contract also makes it faster. No paper is required and it doesn’t need to be manually constructed. The program does it all.
Cost effective: With more speed comes more saving; less time and therefore less money is needed to spend on smart contracts. Also, say goodbye to any lawyer or third party fees.
What can a smart contract do?
The fundamental use is to manage agreements between parties. They act as ‘multi-signature’ accounts, meaning that funds will only be spent if the required percentage of people agree. Smart contracts can work in tandem together to build on each other and verify each other and can also be used to store information about an application, such as domain registration information.
What’s the connection to Ethereum?
Smart contracts can be encoded on any blockchain, but Ethereum’s platform was built specifically to create smart contracts. The Ethereum platform was designed in a way that would give developers the ability to write their own programs and build their own smart contracts. There is a far broader range of computational instructions within the Ethereum platform, than in, for example, Bitcoin, which is what allows this to be possible.
Bitcoin is limited in its ability to process documents. Ethereum, on the other hand, allows for complete freedom in terms of the coding and implementation of smart contracts.
Because Ethereum does allow developers to program their own smart contracts, the developers are referred to as ‘autonomous agents’ – they control the smart contract completely. Smart contracts are also automatic on Ethereum. Ethereum will run a smart contract code when a user (or another contract) sends it a message with enough transaction fees.
As an example, a person using Ethereum could send 10 ether to somebody else through the use of a smart contract. They would do this by creating a contract and placing the data which is coded for this transaction into the contract itself. The smart contract would then be able to execute the desired command once the 10 ether has been given by the creator of the smart contract.
The Ethereum smart contract tools which are built into the Ethereum platform are not intended to be used in isolation. The intent is that they can provide the base for any decentralized application, or even for whole decentralized autonomous companies.
When multiple smart contracts are running together, ether transactions will be required for each. How much the fee is will depend entirely on how much computational power is required to run the smart contract.
Many people ask the question ‘What is Ethereum?’, but not many people have the answer – or at least, not the answer that is comprehensible to the average reader. We’re going to simplify and explain, step by step, what Ethereum is and how it works. If you’re new to the cryptocurrency world, you’re in the right place, we’re just going to cover the basics.
The first thing to establish about Ethereum is that it is a form of online currency – cryptocurrency. Users are transferring it from one place to another, and every transfer, transaction, and storage place is tracked by the Ethereum online network. Ethereum takes things a step further by turning the way we normally store things online on its head. This explains how.
How does the normal online storage system work?
Any information that you put on the computer – passwords, financial information (including credit card data and transaction history), personal data, etc. – is collected and stored in the online world through clouds and servers owned by companies such as Google or Apple. With this method, these companies are able to secure all of your data so that you don’t have to do so yourself.
However, this method also leaves your data vulnerable to attack or infiltration without your knowledge. It can be changed, stolen, or leaked by outside sources out of your control, leaving both you and the third-party storing your information without much of a defense.
This is what is known as a centralized design for the Internet. Cryptocurrencies are a way of decentralizing the Internet, and so that is what Ethereum, at its simplest, is attempting to do.
How does the Ethereum storage system work?
As it stands now, people’s information is controlled by third parties in the system described above; Ethereum is looking to keep that control in the hands of the users.
Ethereum will replace the use of Internet third parties that control user information by using what is called a blockchain. This blockchain will allow developers to create and distribute decentralized applications – meaning that no central authority will be able to hold the information creating those applications; only the actual users will.
The clouds and servers of the centralized system will be replaced by thousands of “nodes”, which are run by volunteers all around the world. This will allow people to have control over their own information, but will still allow them to also have the ability to obtain that information whenever they like.
Not everybody is for this decentralizing system (of Ethereum or any other cryptocurrency). Those cynical of the decentralized system predict downsides and remind everyone that it is still a new industry, with lots more to learn. It is still unclear whether the applications of a decentralized system will prove to be useful, capable, or, most importantly, secure.
What does Ethereum’s blockchain do?
Ethereum’s blockchain structure is a shared record, through the multitude of nodes around the world, of a complete transaction history for the user – everything that the user does with Ethereum, or stores via Ethereum, is tracked by the nodes. The network for Ethereum is made up of these nodes, and the basic unit of Ethereum is the account of transactions stored by these nodes.
This means that Ethereum’s network is made up of a thousand computers, all processing the same program at the same time.
This is what allows Ethereum’s nodes to store the most recent state of the user’s information or transactions. The network keeps track of all the up-to-date information, including the user’s balance of Ethereum and where it’s all stored.
The Ethereum blockchain tracks this information at its most updated, and is maintained and updated by the many nodes connected to the network. So, rather than a third-party keeping track of information, the Ethereum blockchain aims to have the user keep this ability for themselves, through the use of the network of nodes.
How is Ethereum exchanged?
Ethereum is exchanged through the use of its crypto tokens, which are called ether. Ether is designed to be used as the payment method for hosting and accessing apps on the Ethereum blockchain (and it is these ether transactions that the blockchain keeps track of).
Just as with any other token of a cryptocurrency, ether has a value and can be bought or sold for an equivalent value of Fiat or other cryptocurrencies. Ether is also completely dependent on supply and demand, and it is therefore extremely volatile. However, it is this volatility of ether’s value that makes it an ideal asset for trading.
Ethereum is exchanged, or tracked, in a similar way to actual money (but less like money, ether value may be worth more or less depending on the day, thus affecting how much of it must be transferred). Whatever the current value of ether is at the time of the transaction will be transferred between accounts, the way you would transfer money from one bank account to another.
Due to the up-to-date transaction tracking that is done by Ethereum’s network and placed in the users’ hands, users (or, as they are actually called, miners) can ensure that no one is double spending their ether (and therefore their money).
Ethereum has demonstrated good growth in its value as of late, and this increase can be attributed to a number of different factors. There are many different developments currently taking place with the Ethereum platform, which is positively affecting its future potential and boosting the present trading activity of ether.
What’s the most important thing to take away about Ethereum?
Ethereum is looking to decentralize the online world. It wants to take away the control of personal data, such as passwords, financial information, and transaction history, from third-party users, and put that control back with the original users.
Ethereum uses blockchain technology to do so. Through a network of nodes coming from across the world, ether transactions are tracked and stored, with up-to-date values, amounts, and locations, ready at the ether miner’s hands.
Transactions occur as they would at a bank, transferring from one account to another. The value of ether fluctuates, so it may be worth more on some days than it is on others.