A new paper by Vitalik Buterin and other researchers proposes a novel way to finance the public goods a decentralized ecosystem needs.
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Chinese Influencers Call for Blockchain to Solve Food and Drug Safety Problem
As the Chinese population experience a food and drug safety crisis, with the latest scandal being a fraudulent rabies vaccine for babies, leading technology experts are confident that the blockchain could solve problems related to lack of transparency in China’s food and drug industries.
Decentralized Supply Chain May End Food and Drug Safety Scandals in China
The most recent drug safety scandal involved Changsheng Biotechnology, which was found to have forged documents relating to a rabies vaccine for babies, including product inspection records.
Its management is now under investigation by the police and the China Food and Drug Administration. Blockchain entrepreneurs, such as China’s biggest Bitcoin multimillionaire Li Xiaolai, are taking the debate to a national level. They are calling for the disruption of the pharmaceutical industry with the adoption of distributed ledger technology to restore public confidence in the health care system.
“If the entire vaccine supply-chain was to use the token-free blockchain solution to record everything from start to finish, then most of the problems in drug safety could be solved,” Li wrote on Chinese microblogging website Weibo.
A large number of blockchain initiatives have delved into supply chain management with the goal of making whole processes completely transparent as DLT would be able to trace and track the entire supply chain of any product by simply scanning quick-response codes. There is, however, one issue that could be fatal for the cause.
If Changsheng Biotechnology, the pharmaceutical company behind the latest drug scandal in China, were to use blockchain technology in its process, it could still manage to cheat regulators and customers. That is because if someone intends to falsify records, blockchain will carry that fake data, according to the research department of Tencent, who further explained that it is necessary to have regulations governing the use of the blockchain system.
Leonhard Weese, president of the Bitcoin Association of Hong Kong, believes the solution for the drug and food safety problem is not blockchain, but other decentralized and transparent systems, which are far cheaper and faster.
“Blockchains are slow and expensive. The amount of data that can be stored in them is minuscule. Instead, we should first figure out how to put it in a computer, then on the internet, and only then should we start talking about blockchains.”
Supply chain is a top priority for blockchain disruption. Recent projects include the G Coin, which aims to track the gold supply chain, and Coca-Cola‘s attempt to end forced labor.
Featured image from Shutterstock.
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How Will Bitcoin Solve Its Energy Consumption Problem?
If Bitcoin were a country, it would be the 40th largest consumer of electricity in the world. A new research paper has highlighted the growing problem as major cryptocurrencies seek to solve it.
Bitcoin’s Energy Crisis Explored
According to the figures, the amount of energy used for each transaction could run a dishwasher for a year.
Alex de Vries wrote: “With the Bitcoin network processing just 200,000 transactions per day, this means that the average electricity consumed per transaction equals at least 300 kWh, and could exceed 900 kWh per transaction by the end of 2018.” This doesn’t mean that Bitcoin transactions couldn’t be processed without high amounts of energy, it’s just that there are a lot of miners. Currently, miners earn about 0 per transaction.
Digiconomist estimates the consumption of electricity by Bitcoin Miners in its Bitcoin Energy Consumption Index (BEXI). According to its data, Bitcoin uses 67.91 TWh annually which is just greater than Chile, ranked 40th in the world at 66 TWh. They estimate that the amount of electricity used per transaction is higher at 929 kWh which would be the equivalent of running three dishwashers for a year. The main issue is that the figures are rising at a much steeper rate and have been since September 2017.
BEXI has to work backwards to calculate the energy used. It starts with how much money the miners are making and works out how much they probably spend on electricity. Then they consider the price of electricity and estimate how much is used. It does rely on several assumptions but it would be much harder to contact all Bitcoin miners and ask how much electricity they use.
Will the Lightning Network Help?
The Lightning Network will take Bitcoin transactions off-chain by setting up channels between users. Transactions between them will occur and only be recorded on the blockchain when the channel is closed. This will reduce the number of transactions that nodes will have to confirm and in doing so, will reduce the energy required for maintaining the network.
However, the majority of electricity used is for Bitcoin mining where computers generate hashes that fulfil a set of criteria. Reducing the number of transactions on the blockchain is unlikely to affect how many miners there are. Bitcoin transactions have halved since December but the mining difficulty has doubled, indicating there is twice as much mining equipment being used. This means that the Lightning Network will only be able to solve some of the problem.
In reality, the best bet for Bitcoin, using Proof-of-Work, is using renewable energy, as highlighted in a response to the paper. The International Energy Agency said that renewable energy is set to grow 40% by 2022 and highlighted that renewables are dominant in new energy sources being created. Iceland has already shown how it can work as it runs on 100% renewable energy. In essence, renewable electricity allows the Bitcoin Network to run without changing its underlying structure.
Other ways of solving the problem include moving to Proof-of-Stake as Ethereum is doing. Digiconomist estimate that Ethereum uses about a third of the amount of electricity used to mine Bitcoin. NewsBTC reported on the recent publication of the code for Casper. The move is likely to reduce electricity usage significantly, but the question is whether or not the network will remain secure.
Featured image from Shutterstock.
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The Blockchain Data Problem Is Bigger Than You Think
Some bitcoin data points seem easy enough to measure, but beware, there’s more nuance to those numbers than you might think.
CoinDesk
Blockchains Alone Won’t Fix the Facebook Problem
The root problem of social media is centralization of control over data. The ideas that underpin blockchain tech offer glimpses of a path forward.
Tax is Becoming a Problem For Spanish Cryptocurrency Traders
The Spanish tax agency has launched a campaign to gather information from practically its entire financial system on accounts and operations with cryptocurrency.
Spain’s Tax Agency Wants to Know Who is Using Cryptocurrencies
Directing requirements to more than 60 entities, including 16 large banks, the Spanish tax agency wants to know in depth who trades bitcoins. Banks, intermediaries, exchange houses, ATMs, and other companies that accept payments in cryptocurrencies must also respond to the order that aims to uncover this growing market. Authorities are concerned that some customers and accounts are used to launder money or other types of criminal activities. Additionally, the tax agency sees opportunities to collect more taxes.
The National Securities Market Commission, Spain’s financial watchdog, and the Bank of Spain have warned about cryptocurrencies. Once the tax agency obtains information on cryptocurrency accounts, the Treasury says they will study whether or not they initiate new research and control operations of this controversial sector.
In 2015, the tax agency sent information requests to companies for which it wanted to know more about its activities with cryptocurrencies. This year’s request is more detailed and directed at many more entities than before. The 2015 letter asked if in the exercise of its activity it would accept bitcoin as a means of payment. If the answer was yes, then it requested information about “the volume of operations collected with bitcoin” and accounting information on the operations with bitcoin. The consulted companies were given a period of ten working days to answer and they were notified that “the total or partial neglect” of the request could be “constitutive of tax infringement and give rise to the initiation of the corresponding sanctioning proceeding”.
To the credit entities, the Treasury will request information about the accounts of banks with their registered office or branch in Spain. This will come after analyzing the one already obtained by the National Fraud Investigation Office (Onif) on accounts opened abroad by exchange houses that operate with bitcoins. The Treasury aims at finding accounts that have received or issued transfers linked to cryptocurrency exchanges, including the account holder, the number, and amounts.
The Spanish authorities will also want to know more about the activity of a dozen intermediaries, such as cryptocurrency exchanges and entities linked to ATMs or payment gateways, its operations data about customers, as well as traded volumes, exchange rates and fees applied. There are also 40 companies that accepted payments in bitcoin that will have to provide information, such as invoices.
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Has The US Tax Code Become a Problem For Cryptocurrency Traders?
As U.S. taxpayers have until April 27 to file and pay what is due to the IRS, cryptocurrency investors will have to deal with a complicated process. Uncle Sam expects his cut from crypto-related income. Current tax rules turn away early adopters and innovation from taking place.
Taxing Bitcoin Still Needs Some Tweaking
Too many questions arise when discussing taxes on cryptocurrencies. Even airdrops, such as one unit of Bitcoin Cash for each Bitcoin, are unclear territory, whether to treat it as a dividend or not. All these problems of taxation and reporting to the IRS need fixing, but the tax treatment itself could be the first issue to tackle.
Coin Center, the leading U.S. non-profit research and advocacy center focused on the public policy issues facing cryptocurrency, calls for an exemption for small gains on digital currency transactions. The institution claims such simple legislation would take most of the headache out of using digital currencies like Bitcoin
Jerry Brito, Executive Director at Coin Center, is recommending that the U.S. Congress passes a ‘de minimis exemption’ for cryptocurrency transactions the same way foreign currencies are already enjoying.
“Say you buy 100 euros for 100 dollars because you’re spending the week in France. Before you get to France, the exchange rate of the Euro rises so that the €100 you bought are now worth 5. When you buy a baguette with your euros, you experience a gain, but the tax code has a de minimis exemption for personal foreign currency transactions, so you don’t have to report this gain on your taxes. As long as your gains per transaction are 0 or less, you’re good to go.”
The IRS is treating cryptocurrencies as property since its March 2014 guidance, which means gains from sale or exchange are taxed as capital gains rather than ordinary income. Property, however, does not enjoy a de minimis exemption. Not for transactions neither for exchange rate changes, no matter how small. This only discourages the use of Bitcoin or any cryptocurrency as a payment method.
Brito suggests that the tax code could be amended to designate that cryptocurrencies be treated as foreign currency, but two negatives arise: “you’d lose the favorable capital gains treatment for transactions over 0 because foreign currency gains would generally be taxed as ordinary income” and it would be hard to convince lawmakers to treat stateless cryptocurrencies the same way as currencies issued by foreign governments.
Given that the amendment could raise concerns, Coin Center finds that creating a de minimis exemption for cryptocurrency is the way to go. It removes the friction and encourages the development of the technology and its use in payments, which should be cheered by most members of Congress.
The proposal goes into detail, suggesting the creation of a new section in the tax code that mirrors Section 988(e) of the tax code or amending Section 988 itself with a new subsection that extends the exemption to personal transactions of cryptocurrencies or “convertible virtual currency”.
From over 250,000 individuals filing federal taxes through Credit Karma Tax this year, less than 100 people have reported any Bitcoin gains or losses so far.
Image From Shutterstock
The post Has The US Tax Code Become a Problem For Cryptocurrency Traders? appeared first on NewsBTC.
Olympic Gold Medalist Apolo Ohno Has a Problem With Crypto
Olympian Apolo Ohno may have just launched a cryptocurrency exchange, but he isn’t pulling punches when talking about his industry vision.
CoinDesk
Don’t Hate the Player, Hate the Game: Solving the Dating Industry’s Biggest Problem
Reputation is the oldest currency known to man, which is why a rose by any other name will always remain a rose.
But how much is yours worth?
Reputation as a currency is dogged by two missing critical elements; the absence of any quantifiable mechanism for measuring it, and a safe, immutable protocol for exchanging values. Blockchain technology is set to address the later, but what about the former?
Can I trust you to keep a secret?
A decentralized platform is currently the only way to secure information. This is due to the fact that the information is not in the possession of a single entity and therefore not vulnerable to the single point of failure attacks. But that’s not all there is to the revolutionary potential of the blockchain.
Blockchain records are not only distributed across geographically dispersed systems known as nodes, they also exist in a constant state of self-governance and consensus that constantly checks on information stored within itself, the nodes, and the Blockchain for homogeneity. This means that even if a node is compromised, the hundreds of thousands of uncompromised copies spread across the globe will be used by the blockchain to resolve the conflict, repairing the node. Overlaying all these mechanisms are cryptographic protocols, securing identities and enabling P2P exchange of values with no third-party influences.
This is the foundation on which Hicky.io’s disruptive blockchain-based dating is being built on.
What is Love?
Love is the ultimate expression. It’s the eternal bond that connects two souls together, keeping them together. It also remains one of those rare qualities that cannot be bought, rather it is freely given and gotten. However, whilst it cannot be brought or exchanged through conventional currencies, love can be had for the low, low price of a simple reputation.
But how can you guarantee reputation? How can you qualify and quantify reputation? How do you leverage it for love?
Hicky.io is how.
Hicky is a dating platform that uses the power of blockchain technology and cryptocurrencies to create an open, better and transparent platform for online dating. The platform tokenizes all that love requires – trust, reputation, privacy, and confidence – through its innovative HKY token and presents it as a competitive alternative to traditional and closed-network dating platforms. The token offers a complete tokenized economy that enables users to:
- Pay for P2P interactions
- Get incentivized for votings
- Get rewards for referrals
- Get rewards for good behaviors
- Get incentivized for higher verification rankings
Simply, HKY creates a dating platform that incentivizes good behavior and ensures that people are verified and personal data is safe. The modular utility token powers all interactions on the platform enabling users to securely interact with each other backed by smart contracts.
Hicky.io’s enterprising solution facilitates the secure exchange of encrypted communication between users, ensuring the privacy of exchanges. And the platform’s forward-thinking visual and auditory identity verification system eliminates dubious reputation and that game those players love to blame.
Visit the website and take part! Moreover, join Telegram channel to ask questions and learn more.
The post Don’t Hate the Player, Hate the Game: Solving the Dating Industry’s Biggest Problem appeared first on NewsBTC.
ICOs: Fix the Problem Before the SEC Fixes It for You
If you sold tokens to unaccredited investors, or otherwise have not complied with the federal securities laws, make it right before the SEC finds you.
CoinDesk