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It’s interesting to watch the different types of ICOs springing up and observe what categories seem to get multiples attempting to solve the same problem. We see a number of gaming ICOs, all looking to solve online gambling, or all looking to solve in-game asset purchase for cross-game use. We see different approaches to identity, to hospitality, and we see occasionally, some different approaches to insurance and healthcare (either with records or delivery.) These things keep cropping up - and it’s not (just) because it’s possible to attach an existing thing to a buzzword (what’s that word? BLØCKCHAINzzzz!!111) and not just because there’s the attraction of raising absurd amounts of funding, but because these are markets people are dissatisfied with, that feel stuck in the days when the Fax Modem was new and 56k modem connections a twinkle in US Robotic’s eye. There are many hurdles to overcome, including regulatory, user uptake, and not the least, what it means to manage an economy with a utility token with capped monetary supply. With a capped supply, are you artificially limiting the number of consumers that can take advantage of a service? And what’s the right balance on this?
Two token sales to watch 👁️
Etheal Medical tourism is a thing - if you can have a procedure performed by a competent doctor at a discounted rate compared to your home country’s rates, and the cost of travel is a rounding error in comparison, it makes sense to travel for medical service. The difficulty is in trusting a doctor’s competency. What if you had all a doctor’s reviews available to you, could search across countries, have a telemedicine appointment with them prior to travel? Add to that arranging the whole booking through one app that is intensely focused on taking away all the difficulty in booking and setup? And then, what if you paid in their token, and their token was used to pay the travel and doctors, and no one cared it was token money, because you’d be exchanging local currencies for foreign anyway? This is what Etheal is working towards. Read the whitepaper.
Etherisc is doing something a little differently. Their founding proposition is to “Make Insurance Fair and Accessible”. We’ve heard this before, but I’ve always been a little skeptical about what “fair” or “accessible” translate to in implementation. How are claims made, what’s determined to be covered, how are appeals handled, all are common questions that need answers. Here, Etherisc is proposing the use of smart contracts relying on specific conditions being met to automatically pay out on policies. There’s also room for an investor’s market for investing in risk pools. Some applications that seem to make sense are microinsurance, specialty insurance (classic auto, perhaps), or travel insurance. Basically, they want to provide the platform to build insurance products on top of. Here’s the link to the whitepaper.
The Good, the Bad, and the Ugly 😊😠👹
SEC’s Director W. Hinman: Ether’s Not a Security
During the Yahoo! All Markets Summit: Crypto in San Francisco, William Hinman, Director of Corporate Finance for the SEC, addressed the confusion surrounding Bitcoin and Ether’s classification. At least according to Hinman, the two are not securities.
“[P]utting aside the fundraising that accompanied the creation of Ether, based on my understanding of the present state of Ether, the Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions. And, as with Bitcoin, applying the disclosure regime of the federal securities laws to current transactions in Ether would seem to add little value.”
Further, Hinman explained that a cryptocurrency can begin as a security and then transform into another type of asset.
"What about cases where there is no longer any central enterprise being invested in, or where the digital asset is sold only to be used to purchase a good or service available through the network on which it was created?" Hinman said. "I believe in these cases the answer is a qualified ‘yes.’”
In light of these remarks, CBOE Global Markets Inc. president Chris Concannon speculated that regulators are now much more likely to sign off on Ether futures.
“We are pleased with the SEC’s decision to provide clarity with respect to current Ether transactions,” said Concannon. “This announcement clears a key stumbling block for Ether futures, the case for which we’ve been considering since we launched the first Bitcoin futures in December 2017.”
Last week, in an interview with CNBC, SEC Chairman Jay Clayton stated that cryptocurrencies like Bitcoin are not securities, as they act as a replacement for sovereign currencies.
Italian Authorities Seize BTC From Bitgrail Wallets
“On June 5, 2018, pursuant to the Tribunal of Florence orders, the Bitcoins contained in the company's wallets were seized and brought under control of the judicial authorities pending further Court decisions in the pre-bankruptcy proceeding.”
This action is a result of a lawsuit filed by BonelliErede Law Firm on behalf of the victims of the BitGrail hack. Back in February 2018, BitGrail’s problems began with a reported theft of 17 million Nano (previously called RaiBlocks). At the time, the amount was worth $170 million. Nano’s developers argued that a bug in the exchange’s software led to the theft of the funds. Meanwhile, BitGrail tried to conceal its financial problems in hopes of keeping the exchange alive.
Wells Fargo Says “No” to Buying Crypto With its Credit Cards
“We’re doing this in order to be consistent across the Wells Fargo enterprise due to the multiple risks associated with this volatile investment,” a spokesperson informed in a statement reported by Fortune.
The decision seems to be in line with the industry. JPMorgan Chase & Co., Bank of America Corp., and Citigroup Inc. have all already barred their clients from buying cryptos.
$20 Million Stolen From Misconfigured Ethereum Clients
According to Chinese internet security firm Qihoo 360 Netlab, $20 million in Ether have been stolen from poorly configured Ethereum mining rigs and third-party applications that have been set up to expose an RPC [Remote Procedure Call] interface on port 8545.
Back in March, the first attacks reported a theft of $2,000 - $3,000. The Netlab team claims, however, that the operation never stopped. It has intensified as multiple groups joined, with the most successful managing to siphon a startling amount of 38,657.37 Ether.
Ireland Announces Blockchain Initiative
IDA Ireland, a governmental agency responsible for attracting foreign direct investment (FDI), attempts to position the State as a leading center for blockchain. The National University of Ireland Galway has previously urged the government to promote blockchain-based businesses because of their positive impact on economic growth of the region.
Responding to the need, the “Blockchain Ireland” initiative was developed. Its main architects include the Irish Blockchain Expert Group (IBEG), an IDA Ireland-led forum, the Department of Finance, Enterprise Ireland, and Consensys, a company established by Ethereum co-founder Joe Lubin.
Blockchain Tampering As Crime, According to Proposed Michigan Bills
HB 6257 would amend the penal code relating to fraud and forgery of documents. According to the bill, “A person who falsely makes, alters, forges, or counterfeits a public record … with intent to injure or defraud another person is guilty of a felony punishable by imprisonment for not more than 14 years.” Worth noting is the bill’s direct reference to violations accomplished by “altering a record made utilizing distributed ledger technology.”
The second bill, HB 6258, would amend the relevant regulations of the Michigan Criminal Code to include the definition of distributed ledger technology and cryptocurrency to crimes involving credit cards.
Both bills have currently been referred to the Committee on Law and Justice. If passed and signed into law, the bills would grant blockchain records a legal status and judicial recognition.
Congressional Bill Calls for Study of Crypto Used in Sex Trafficking
The House of Representatives Financial Services Committee introduced HR 6069. The primary objective of the Fight Illicit Network and Detect (FIND) Trafficking Act is to “improve the efforts of Federal agencies to impede the use of virtual currencies and online marketplaces in facilitating sex and drug trafficking.”
According to the memorandum dated June 11, the act “would require the Comptroller General of the United States to carry out a study on how virtual currencies and online marketplaces are used to buy, sell, or facilitate the financing of goods or services associated with sex trafficking or drug trafficking, and for other purposes.”
Many members of Congress still remain skeptical about crypto. For instance, Brad Sherman, Representative of California, blatantly condemns digital currencies, saying that they “help terrorists and criminals move money around the world... They help startup companies commit fraud, take the money, and one percent of the time they actually create a useful business.” The proposed study would shed light on some of the accusations directed at the use of cryptocurrencies.
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