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Recently, there was news that Walmart and IBM were partnering to build a blockchain for supply chain management. The goal is to track food, particularly lettuce, initially. Leafy greens suppliers will be asked to implement real-time, farm-to-store tracking using blockchain technology by next September.
The Internet, as usual, is full of criticism. ‘What suckers! Why couldn’t they have used a 40 year old database? There’s no advantage here!’
The line of thought is that blockchain is a buzzword to help IBM collect rent at the expense of Walmart. How do we explain to that person why a blockchain makes sense to Walmart? I mean, clearly Walmart sees an advantage or they wouldn’t have paid for it, right?
What makes a blockchain different from any other database is that it’s intended to maintain integrity where there is no trust in any of the parties writing to the database. Unlike a real ledger or regular database, there’s no opportunity to have a second set of books or alter records after the fact. Each record depends on each other, so it can only be entered once, and if there’s an attempt to alter it, it’s immediately obvious, because it doesn’t square with the blocks built on top of it. Walmart wants to use this to track farm to table, so that they can identify where bad lettuce came from, and prevent lost profits by not having to clear whole shelves of good lettuce with bad.
Walmart consulted with the Centers for Disease Control and Prevention (CDC) to improve traceability of food products to help public officials investigate and find the source of food-borne disease outbreaks. Just any old database wouldn’t be as trustworthy, especially when suppliers of suspect foods could alter any old database to deflect attention away from their foods. That’s the benefit of blockchain Walmart hopes they never have to use.
Two token sales to watch 👁️
AXELcoin is a token that sets out to do a number of things. Mostly, they want to be a DApp as exchange, to upset the industry for paid content. Basically, people should be able to click any file on their computer, select a selling option, and have it purchasable anywhere in the world in seconds. Transactions occur encrypted, using the AXEL token. It exists for iOS on the App Store and Google Play. Check out the whitepaper.
NextPakk is a last-mile logistics solution, focused on solving the problems of ecommerce. Instead of a warehouse, it’s a collection of independent drivers, with a blockchain to track packages through their stages of pickup and delivery to prevent loss or misdelivery, and a token used to obtain services. If it works, it beats tracking systems that claim an item was held when it wasn’t, or delivered, when it was scanned in a depot to make it look like on-time delivery, problems that exist with current couriers. The whitepaper claims that by using token as escrow, it prevents these problems.
The Good, the Bad, and the Ugly 😊😠👹
Global Standard for Crypto Anti-Money Laundering Nears
In an interview with the Financial Times, the head of Financial Action Task Force (FATF) Marshall Billingslea expressed his belief that a global set of anti-money laundering (AML) standards for cryptocurrencies will be available in October this year. First, however, the FATF will need to fill in the “gaps” in global AML standards, updating them to include the digital assets.
“It is essential that we establish a global set of standards that are applied in a uniform manner,” Billingslea said.
Over the course of the past few months, the FATF made significant advancements, encouraged by the G20 meeting in Argentina, during which finance ministers and central bank governors reaffirmed their support for the FATF. Further, they called on the agency to enhance its efforts and “clarify in October 2018 how its standards apply to crypto-assets.”
Stolen Code Spikes Illicit Crypto Mining Activity
According to Bloomberg, hackers are hijacking devices to illegally mine cryptocurrency using a code called Eternal Blue which was stolen from the U.S. National Security Agency (NSA) by a hacking group called the Shadow Brokers.
A recent report released by Cyber Threat Alliance states that the attackers are exploiting vulnerabilities in outdated Microsoft Systems software to use “computers, web browsers, internet-of-things (IoT) devices, mobile devices, and network infrastructure to steal their processing power to mine cryptocurrencies.” As a result, there has been a 459 percent increase in illicit cryptocurrency mining malware detections since 2017.
New York Attorney General Report: Crypto Exchanges at Risk of Manipulation
On September 18, the New York Office of the Attorney General (OAG) published a report stating that cryptocurrency exchanges are vulnerable to manipulation, conflicts of interest, and other consumer risks. The document is the result of the “Virtual Markets Integrity Initiative,” which was instigated by Attorney General Eric T. Schneiderman back in April when Schneiderman launched an inquiry into the policies and practices of thirteen crypto exchanges.
The report met with an outcry from the industry key players. Mike Lempres, Chief Policy Officer at Coinbase, wrote a blog post to “correct the record,” seeing as the OAG’s statements have caused the media to misrepresent the exchange's business. Meanwhile, Jesse Powell, the founder of the U.S.-based Kraken exchange, took to Twitter. “NY is that abusive,” he writes.
Japanese Cryptocurrency Exchange Zaif Hacked of 5,966 Bitcoins
The recent attack on a Japanese government-approved cryptocurrency exchange Zaif resulted in a theft of at least $60 million worth of BTC. In an official statement, the company revealed that unauthorized access to its hot wallet was detected between 17:00 and 19:00 on September 14, 2018. As soon as the exchange recognized that the error was, in fact, a hack, the matter was reported to Japan’s financial regulator. Tech Bureau informs that the extent of the damage is currently unknown. To prevent further damage, the exchange’s server will be restarted only when it’s deemed secure.
Business Insider’s Info that Goldman Sachs Ditches Crypto Trading Desk is a Lie
Business Insider reported that Goldman Sachs is putting a damper on its plans to open a cryptocurrency trading desk due to the lack of regulatory clarity. However, soon after the article went live, Goldman Sachs CFO Martin Chavez debunked that claim.
On stage at the TechCrunch Disrupt Conference, Chavez stated that the article spread “fake news.” Further, he said that answering the clients’ demand, Goldman Sachs is currently working on Bitcoin derivatives called “non-deliverable forwards.” You can watch the whole panel here.
US Lawmakers: It’s Time for Crypto Taxation Clarity
Lawmakers from the United States House of Representatives have issued an open letter to the Internal Revenue Service (IRS), requesting “comprehensive” crypto taxation guidance. According to the representatives, the IRS has had “more than adequate time” to work through complexities after its preliminary rules were issued in 2014, known as Notice 2014-21, deeming that virtual currencies are to be treated as property for taxation purposes.
“More than a year after our initial letter, the IRS continues to expand its enforcement activities without issuing any further guidance for taxpayers,” the letter reads. “We, therefore, write again today to strongly urge the IRS to issue updated guidance, providing additional clarity for taxpayers seeking to better understand and comply with their tax obligations when using virtual currencies.”
The American Institute of Certified Public Accountants has also joined the argument. In a 21-page letter to the IRS, the group asks the IRS to “release immediate guidance regarding the tax treatment of virtual currency transactions,” providing a list of 12 specific areas that require notice.
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