Blockchain News Issue. 4

moac.io

Published in

MOAC

9 min readJun 28, 2018

I. Commentary of the Week

Application of blockchain technology has already reached the entity field in China, with the number of blockchain companies with block chain businesses in China reaching 456 at the end of March this year, as the industry begins to scale. As the blockchain technology continues to mature with more innovation, the application of blockchain has already spread from the financial field to the entity field, including electronic information storage, copyright management and exchange, product tracking, digital asset trading, Internet of Things, smart manufacturing, supply chain management, etc, forming an “Industrial Blockchain.”

Comment：Blockchain is without a doubt a new technology for this era. In the course of the development of human civilization, new ideas, new technologies, new applications and or new products will meet many different views in the early days of their birth. Rejoicing or complaining, believing or doubting, and perhaps blockchain is currently experiencing this step, and after a few years of global hype it is changing from just a concept to forming an actual product in the industry.

Ⅱ.Policy Developments

EU — The EU issued its fifth anti money laundering directive (EU directive 2018/843)

On Tuesday,July 22nd, which will allow the EU to supervise digital currency movements. It is aimed at discovering, investigating and preventing money laundering. The directive acknowledges that the inclusion of service providers will not eliminate the anonymity of digital currencies, the currencies will to a large extent remain anonymous. However, in response to the related risks of anonymity, the Financial Intelligent Unit (FIU) will be able to match digital currency addresses with corresponding identities.

Japan — The Japanese Finance Office issued an announcement regarding administrative punishments for 6 cryptocurrency exchanges.

On June 22nd, the official website of the Japanese Finance Office issued a bulletin on administrative penalties for 6 cryptocurrency exchanges, including bitFlyer, QUOINE, bitpointjapan, bitbank, BTCbox and Tech Bureau. According to the announcement, the exchanges need to improve the contents of the exchange, including taking measures to ensure the normal and reliable operation of the business, as well as establishing management systems for the risk management of money laundering, terrorist financing, and user information security management.

South Korea — As of June 21st, all exchanges that sale bitcoin or similar coins are labeled as a “virtual currency exchange,” and all virtual currency exchanges need to declare themselvess to the South Korean government.

Without a declaration, banking service will be cut off and the exchange will be unable to continue to operate. On June 19th, South Korea’s Financial Committee said it would continue to push the revision of Special Financial Transaction Information Reporting and Relevant Laws. “The legislation puts virtual currency trading places (virtual currency exchanges) as a direct target for the anti money laundering system,” said Sun Chengen, director of planning and operations at the Financial Intelligence Analysis Institute (FIU). The main purpose is to prevent the use of virtual currency for “black market” transactions.

Taiwan — Overseas Edition of the People’s Daily：As of June 20th, Taiwan plans onbring ICO’s under regulatory control.

ICO’s are a current trend in Taiwan, Taiwan’s Minister of Legal Affairs Qiu Taisan recently mentioned inviting the HKMA, the Ministry of Internal Affairs, the central bank, the police department, and the Bureau of Investigations, etc, to discuss how to strengthen the control and management of money laundering through bitcoin and other digital currencies. It is expected to complete the related work before the APG is held in November this year.

New Zealand — On June 19th, the central bank of New Zealand released a document discussing the advantages and disadvantages of issuing a central bank digital currency.

The New Zealand Reserve Bank (central bank) published the article on Tuesday morning on their official website. The article explores the nature of cryptocurrency. For use with cash, there would need to be a fixed exchange rate, no interest, and a balance sheet that cannot go negative. The cryptocurrency can be used in the same format as “traditional” digital currencies, relying on existing payment technologies or distributed ledger technology. According to the central bank, there needs to be better assessment and understanding of monetary policy and the impact of cryptocurrency on financial stability. This article does not discuss how to design a cryptocurrency issued by the central bank, nor does it suggest that the central bank issue one on its own.

Ⅲ.Industry Developments

Bithumb — Bithumb had $32 million USD worth of digital currency stolen, government to investigate. .

Bithumb had $32 million USD worth of digital currency stolen on June 21st, and have currently ceased withdrawal and deposit operations. Bithumb officially announced because of increasing security concerns, they are changing their wallet system. Do not deposit until notified by the exchange. Any attempted deposits will not reach your wallet until the change is finished.

South Korea’s Ministry of Technology and Information said that the security systems of 21 crytpocurrency exchanges will be inspected and take corrective measures in regards to any shortcomings. The Korean Internet Security Association (KISA) said that the cause of the hacker attacks against Bithumb and Coinrail is being investigated.

Tencent — Tencent Security and Huobi.com teamed up with other institutions to form the China Blockchain Security Alliance on June 20th.

On Monday, the UN hosted a “Blockchain Global Influence Summit” in which Rostin Benham, a member of the U.S. Commodity Futures Trading Commission (CFTC) gave a speech. His speech emphasized great potential of block chains in areas such as health care, employment and crime. Benham also expressed his belief that in the future, crytpocurrency will be part of every economy in the world, stressing that they won’t disappear but will spread to every economy and every corner of the earth, changing economic and social structure.

Guangzhou — On June 22nd, Guangzhou opened the country’s first blockchain based electronic invoice with a full scene data flow.

“Tax Cahin,” the first blockchain electronic invoice system was launched in Huangpu and Development districts of Guangzhou. Guangzhou Gas Group Co., Ltd. is authorized by the tax authorities to join the blockchain network, to open the first “on chain” invoice, and to realize the storage and circulation of the blockchain on the first electronic invoice in the country, moving from “ticket-controlled tax” to “information management tax”.

Coinbase — June 21 — Coinbase spokesman said Coinbase Custody is expected to be approved soon to provide services to clients that meet qualified custodian qualifications and meet the US Asset Management Standards.

Coinbase Project leader Sam McIngvale expects about $20 billion dollars worth of encrypted assets will be moved into escrow once the service is available. In addition, according to people familiar with the matter, New York Mellon bank has been exploring the concept of cold storage, the storage of crypto assets on an offline server. JP Morgan and Northern Trust are also considering how to provide custodian qualifications, but no final decision has yet been made.

Public Chain List — The Blockchain Research Institute, a branch of the Ministry of Industry and Information, released the second Public Chain Technology Assessment.

The Top Five applications were NEO, ETH, Qtum, Star Chain (Stellar) and Nebular Chain (Nebulars). The top four base technologies were EOS, Steem, Bitshares, and star chain (Stellar); top five for total index were EOS, ETH, NEO, Star Chain (stellar), and Application Chain (Lisk)

IV. Cryptocurrency

Australia, Australia’s cryptocurrency ATMs have doubled in the past six months

As of June 22, the number of cryptocurrency ATMs in Australia has doubled in the last six months. Although bitcoin is still not widely used, the growth of ATMs in crypto currencies is a noteworthy trend. At present, the number of crypto supported ATMs in Australia has exceeded 3000.

South Korea — South Korean exchanges have suffered 4 hacks and a loss of 158 million USD and information on 36,487 accounts in the last year.

June 22nd, 2017, the first Korean virtual currency exchange was attacked by hackers for the first time in Youbit, when the amount lost was 100 billion SKW; the second time the Korean exchange was attacked by hackers was Bithumb, the hacker stole information for 31506 users and 4981 accounts. The third attack by a hacker was the recent Coinrail with a loss of 40 billion SKW; the latest was the June 20th attack on the exchange Bithumb, the second of its kind, with a loss of 35 billion SKW. Since 2017, the loss of the Korea virtual currency exchange is 175 billion SKW, about 158 million US dollars, and the total amount of users and accounts whose information has been stolen is 36,487.

[EOS] EOS network froze for 5 hours

The EOS network promises to be fast and innovative, but on June 18th, a loophole in its consensus agreement had completely frozen it for 5 hours. Considering the size of the EOS project, this has caused the community a large amount of discomfort and brings to question whether its ecosystem can run distributed applications as promised. A series of failures after the launch of the main network has led EOS’s skeptics to continue to criticize the project for too many commitments and not testing the launch of its network.

Ⅴ. Voices

Nick Szabo, creator of the smart contract — bitcoin is the safest financial network on the planet.

June 20th, Nick Szabo, creator of the smart contract, said bitcoin is the safest financial network on the planet, but the centralization of outside companies is insecure. He said that Mt.Gox had lost $400 million in cyber attacks, Bitfinex had lost $72 million in cyber attacks, and the US digital currency exchange Cryptsy had lost 9 million yuan in an attack.

CBOE President: the upcoming “reckoning” will shake the ICO market.

In June 20th, Chris Concannon, President and COO of CBOE, believed that the ICO market was going through significant regulatory changes, with the SEC classifying ICO tokens as securities, leading industry participants to discuss filing lawsuits. For investors, what is really worrying is that ICO’s, if regarded as a unregistered securities, may become worthless.

Bank of International Settlements (BIS): cryptocurrency is unable to perform monetary function effectively.

On June 21st, the Bank of International Settlements (BIS) has published a chapter in its forthcoming annual report, which claims that because of price fluctuations, cryptocurrencies do not effectively perform monetary functions. Retail use based on blockchain based payment mechanisms will “impede interconnectivity.” It also claimed large-scale use of cryptocurrencies will bring the environmental loss, and the trust generated by dispersed networks is too “fragile” to compete with the central authorities.

Ⅵ. Market Trend

Market Quote BTC prices fell 5.73% this week, down 70% from the peak, and the mining difficultly up 210%.

BTC prices fell 5.73% this week, down nearly 70% from its peak in December 2017, but the difficulty of mining has increased by 210% since then. The difficulty of mining began slowly increasing from the beginning of 2016, and increased rapidly after September 2017. The last difficulty increase was in June 4, 2018, and the difficulty of mining increased from 4.3069T to 4.9407T. This change in difficulty of mining was the largest in history.