Japanese Holdings Company to Use Blockchain for Forex Trading

Japanese Holdings Company to Use Blockchain for Forex Trading

SBI Holdings looks forward to implementing R3 blockchain technology in Forex services

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Japan-based SBI Holdings announced on April 16 that it will begin using R3 blockchain-consortium technology for Forex Trading. This will be the first practical application of the Corda blockchain in the country.

According to the announcement published in Nikkei Japan, the technology will be implemented in conjunction with a Tokyo-based systems management services firm called CAC.

The use of Corda, which will be restricted within the company, will be used to share transaction history among involved traders. It will additionally be implemented between SBI Securities and SBI’s Forex platform Liquidity Market, or SBILM.

Automatizing Forex’s transactions processes

According to the company, blockchain technology will allow SBILM to automate confirmation processes in foreign exchange transactions, instead of using email and telephone confirmations.

Regarding the announcement, SBI Holdings issued the following statement:

“We have reduced the operational risk in the confirmation business and ensured high privacy protection and tamper resistance. Also, the blockchain guarantees the identity of transaction data between the parties and improves the reliability of collation work.”

David Rutter, CEO of R3, called SBI one of “Corda’s biggest champions,”. He also praised the announcement, noting its aim to strengthen the growth of the Corda platform in Asia.

Creating blockchain integration awareness in Asia

SBI has been promoting new technologies, such as blockchain integrations, among other banks in Southeast Asia.

Both R3 and SBI have claimed that blockchain technology is going to help guarantee the identity of transactions on the SBILM.

On the other hand, CAC assured that it would continue to support the use of blockchain in a wide range of industries.

In early 2019, Cointelegraph reported that SBI Holdings announced a joint agreement with US-based R3 to develop local use of its Corda blockchain platform.


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SBI Holdings looks forward to implementing R3 blockchain technology in Forex services

Lightning Network Proving Less Electric for Bitcoin Than Promised

Lightning Network Proving Less Electric for Bitcoin Than Promised

It’s two steps forward, one step back for Bitcoin’s scaling race, as frontrunner — the Lightning Network — experiences capacity issues

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Bitcoin (BTC) turned 10 years old recently, and if someone were to tell its founder, Satoshi Nakamoto, in 2008 that the new decentralized currency would still be thriving in 2019, he/she/they may assume that the experiment succeeded. However, an idea like Bitcoin is capable of existing even if it isn’t very effective at delivering on its promises, and it just so happens that a decade later, everyone is still knocking their heads against the very first criticism made in response to its white paper.

After Satoshi published Bitcoin’s white paper in 2008, the first person to comment on it publicly was James A. Donald, who opined to the anonymous author, “the way I understand your proposal, it does not seem to scale to the required size.” These were prescient words, yet Donald couldn’t have anticipated how sophisticated the blockchain would need to become to solve it. Bitcoin’s greatest hopes now reside in the Lightning Network (LN) and solutions like it. Even so, it seems as if LN itself may be a problem in search of a solution. Currently, the low rate of use means that operating nodes lose money when they process transactions while an average channel capacity sits at a mere 0.027 BTC (and the average node capacity is 0.216).

A decline in the Lightning Network’s capacity is casting a shadow on Bitcoin’s timely introduction into the mainstream, bringing up some existential questions that may or may not be justified.

A primer on the Lightning Network

By using the slower Bitcoin blockchain as a foundation instead of a main transaction processor, the LN essentially borrows Bitcoin’s immutable and trustless aspects without impacting its speed in a significant way. The Lightning Network exists as a sidechain in which two users can create a private payment channel between themselves, which acts as a balance sheet that they can conduct transactions on directly. Once they’re done transacting, the final balances of the two addresses are reported to the mainchain as a single transaction.

Transaction speed of various blockchains

The original Bitcoin blockchain is capable of executing around seven transactions per second (TPS), which is obviously unsuitable for any high-volume payments network. Though LN is still in its beta phase, it should be able to upgrade Bitcoin to 10,000 transactions per second or more — a significant upgrade. In comparison, according to major payments operator Visa’s claims, its network is capable of handling more than 24,000 transactions per second at an average of 150 million transactions every day (although some analysts tend to doubt those numbers).

Such significant increase in the network’s speed is possible because Bitcoin is immediately available to be moved between users on the LN — there’s no need to wait for the network to verify and process each transaction as it’s received. The Lightning Network’s speed is therefore directly related to how many people are supporting it by contributing their BTC.

Lightning falls

Called “network capacity,” the total value of Bitcoin inside LN channels at any moment is now dropping. In the beginning of 2019, the network was pushing 1,100 BTC, but, at the time of writing, the capacity of all LN payment channels equals to around 854 BTC, having dropped steadily since May 2019. One reason for this decline is the rise in BTC prices, which were in the throes of a severe bear market for most of Lightning’s existence until May 2019 recovery. The graph below illustrates this well.

Cumulative Bitcoin capacity across all channels

One can see the United States dollar value of the LN increasing (orange) while the number of BTC available is falling (violet). This means that as BTC price increases, people are taking their coins off the network — likely to sell them and take profits. The same is happening to the Lightning Network for Litecoin. The recent halving of Litecoin’s block rewards is a likely culprit of its steeper fall-off, as this event could reduce the future supply, providing as violent a price boom as it does a plunge in capacity.

Competition is stiff in the scaling game

However, all this may not matter. Because coins like BTC have relative value, people will simply be sending smaller BTC transactions as its price increases. As each channel’s capacity falls due to newer channels being opened with smaller limits, the overall network’s transaction capacity will follow suit. CEO and co-founder of RSK Labs Diego Gutierrez Zaldivar concurs, saying: 

“The impact of Lightning’s drop-in capacity is only temporary, and as adoption increases and ecosystem interoperability makes the network as a whole more resilient, events like these will become irrelevant. Since off-chain networks require only a fraction of the value accessible off the chain for day-to-day transactions, this also limits the overall impact of these kinds of shortages for the end user.”

The Lightning Network may yet prove that decentralization can take us all the way there, but RSK Labs is another innovator decidedly taking on the scaling challenge in a different manner. The idea of offloading processes to a sidechain is preserved, but it operates smart contracts that are secured by BTC on the Bitcoin blockchain instead of a rudimentary payment channel. BTC is linked to RSK smart contracts by its one-to-one peg, or RBTC — a sophisticated bridge mechanism that allows scalable applications to be built on Bitcoin for the first time.

Scaling is being tackled in many ways by many different projects. Even Ethereum (ETH) has found a way for people to transact and represent Bitcoin in its decentralized applications with Wrapped Bitcoin (WBTC), which simply uses a smart contract-based price oracle and a one-to-one backing to denominate BTC in ERC-20 financial systems. These solutions all show that there is a lot of work going into the Bitcoin ecosystem, and even if there are stumbles on the way, at least they are stumbles forward.

An existential crisis at scale

Despite its massive popularity in the sector and laurels of the original crypto, Bitcoin is facing somewhat of an existential crisis. Though it has become a widely used investment and speculative asset, it remains far from its goal of a fully decentralized currency used in everyday transactions, hampered by its own design and oversized demand. Even so, new solutions could improve the status quo, assuming they actually solve an existing problem.

As long as transactions on the chain are not more expensive than the Lightning Network’s, users will likely stay on the Bitcoin chain instead of locking up their assets elsewhere. Nevertheless, progress requires innovation, and Bitcoin’s own architecture means it’s resistant to change. By implementing solutions such as LN and preparing to scale, Bitcoin could eventually become the currency Nakamoto originally envisioned.


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It’s two steps forward, one step back for Bitcoin’s scaling race, as frontrunner — the Lightning Network — experiences capacity issues

Seagate Moving Forward with Blockchain Pilot to Track Hard Drives

Seagate Moving Forward with Blockchain Pilot to Track Hard Drives

Seagate has entered the pilot stage of its blockchain project designed to improve supply chain of hard drives tracking products to the customers and back to the company

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American tech giant Seagate has entered the pilot stage of its blockchain project designed to fight counterfeit hard disk drives (HDD), Forbes reported on July 30.

This pilot is a part of the joint initiative Seagate and IBM launched last November. The project aims to help manufacturers, integrators and business partners to better authenticate the provenance of HDDs by using IBM’s Blockchain Platform.

According to Seagate’s data security research group managing technologist Manuel Offenberg, in the pilot IBM “is both the customer of these drives, as well as the technology provider for the underlying Hyperledger Fabric platform”. 

Seagate’s blockchain is designed to improve the supply chain of hard drives and track products to the customers and back to the company in the event of a return.

Personal data protection

With this move, Seagate also intends to ensure that HDDs returned due to defects contain no customer personal data. Mentioning a so-called “certified erase” as a solution, Offenberg said that the company wants “to make sure that these devices have no PII [personally identifiable information] data on them,” adding:

“When a drive fills in a customer’s system and the drive comes back as part of its returns process, if we can prove that the drive was cryptographically erased, and therefore, the information is no longer on the device, then, from a risk perspective, this reverse supply chain can treat that device differently.“

Speaking further about the preliminary work with IBM, Offenberg said that the company is „involving the cryptographic identity of the device in the blockchain transaction, such that the digital trust of the product itself is part of the transaction.“ According to Offenberg, Seagate is also planning to extend its partner network in the reverse supply chain.

As a recent study by the market research and consulting firm Allied Market Research shows, the global blockchain supply chain market is expected to reach over $9 billion by 2025. Among the key driving factors the study named the sector’s demand for transparency and improved security of supply chain transactions that blockchain technology could purportedly ensure.


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Seagate has entered the pilot stage of its blockchain project designed to improve supply chain of hard drives tracking products to the customers and back to the company

Ethereum Core Devs to Move Forward With ASIC-Resistant PoW Algorithm

Ethereum Core Devs to Move Forward With ASIC-Resistant PoW Algorithm

Ethereum core developers have reached a tentative consensus to implement a new proof-of-work algorithm that would reduce the efficiency of ASIC-based mining on the network

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Ethereum (ETH) core developers have reached a tentative consensus to implement a new proof-of-work (PoW) algorithm that would increase the efficiency of GPU-based — as opposed to ASIC-based — mining on the network. The development was discussed in a meeting today, Jan. 4.

During the meeting, developer Hudson Jameson noted he had heard “very little dissent” to implementing  “ProgPoW,” which has so far been trialed via client implementations running on the “Gangnam” testnet. As previously reported, a testnet is essentially a simulated version of the primary network that allows developers to try out upgrades or run smart contracts without having to pay “gas” (computation fees) for their execution.

ASIC refers to mining hardware that uses Application-Specific Integrated Circuit (ASIC) chips, which are tailored to efficiently mine cryptocurrency based on a specific hashing algorithm. Meanwhile, set-ups that use graphics processing units (GPUs) are less specialized, and have therefore to date struggled to compete for rewards on the network with those that deploy ASICs.

Two developers from the ProgPoW team gave their digest of recent developments to the algorithm’s specification, which have reportedly not only made it “a little bit harder” for ASIC miners, but have also stabilized hashrates.  

Security lead Martin Holst Swende gave his opinion that ProgPoW is more resistant both to ASICs and to certain accelerators that can be used for GPU-based setups, and that a switch to ProgPoW would “postpone the level of ASICs on our network for at least a year on our network, or perhaps more.”

He also noted that Ethereum’s current PoW algorithm, Ethash, “has flaws which are currently being targeted,” stating “that’s why I would like to switch as soon as possible to give us time to move to proof-of-stake.”

As reported, after evolving through the hybrid PoS-PoW Casper protocol, Ethereum is expected to ultimately transition to PoS (Casper v2). Alongside sharding, that latter will aim to mitigate the excessive energy consumption associated with PoW, “issues with equal access to mining hardware, mining pool centralization,” as well as providing an on-chain scaling solution.

The devs’ meeting today comes just ahead of the planned implementation of Ethereum’s fifth system-wide update, or hard fork, dubbed “Constantinople.”

The devs leaned towards rolling out ProgPoW sometime before the launch of the subsequent planned hard fork, Istanbul, as a stand-alone but system-wide upgrade — although the exact timing for ProgPoW will continue to be discussed in the next devs’ meeting January 18.

Ethereum co-founder Vitalik Buterin recently posted extensive comments on future blockchains with sharding based on proof-of-stake (PoS), claiming they will be “thousands of times more efficient” than existing networks.


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Ethereum core developers have reached a tentative consensus to implement a new proof-of-work algorithm that would reduce the efficiency of ASIC-based mining on the network

$4 Billion Lawsuit Against Craig Wright Moves Forward as Judge Declines Dismissal Request

$4 Billion Lawsuit Against Craig Wright Moves Forward as Judge Declines Dismissal Request

Craight Wright’s request to dismiss has been denied by the judge in a $4 billion lawsuit that claims the self-alleged Satoshi stole BTC from the now-deceased David Kleiman

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A United States court has rejected repeated requests from nChain chief scientist Craig Wright to dismiss a $4 billion lawsuit against him, documents revealed Dec. 27.

In the latest stage of an ongoing legal battle over Wright’s alleged theft of Bitcoin (BTC) from the estate of deceased crypto developer David Kleiman, a South Florida District Court judge denied an application to have the charges thrown out.

The case originally came to court in February, with Kleiman’s family alleging Wright stole up to 1.1 million BTC after he passed away.

Wright, who has proclaimed himself to be Bitcoin creator Satoshi Nakamoto, vyed with Kleiman as possible candidates for the anonymous early developer of the cryptocurrency.

After Kleiman’s death in 2013, Wright had contacted his estate, claiming to want to help dispose of the Bitcoin fortune.

Wright in part did so, but did not return the funds, the family says. In an amended lawsuit supported by judge Beth Bloom, a figure of 300,000 BTC is now circulating.

“The Court finds that Plaintiffs have sufficiently alleged a claim for conversion,” the court document confirms, continuing:

“The Amended Complaint alleges that Defendant converted at least 300,000 bitcoins upon Dave’s death and transferred them to various international trusts, which was an unauthorized act that deprived the Plaintiffs of the bitcoins therein. Accordingly, Plaintiffs’ claim for conversion… survives Defendant’s Motion to Dismiss.”

Wright has until Jan. 10 to respond to the counts which remain outstanding.

The move caps a contentious year for the entrepreneur, whose favored altcoin Bitcoin SV (BSV) has faced negative publicity since it hard forked from Bitcoin Cash (BCH) in November.


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Craight Wright’s request to dismiss has been denied by the judge in a $4 billion lawsuit that claims the self-alleged Satoshi stole BTC from the now-deceased David Kleiman

How Crypto Incentives Work, Explained

How Crypto Incentives Work, Explained

Incentivization has played role in driving the crypto world forward. Let’s take a look at the common tools used to reward miners, validators and everyday users

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3.

One could argue that PoS provides a double incentive.

Here, the onus changes to “staking,” where miners have a better chance of being chosen to add a block to the chain — and hence get rewarded — depending on how many coins they possess. As well as being motivated to invest in a platform and support a currency to increase their profitability, there are the rewards to think about on the horizon.

Although it has addressed some of the issues inherent in the PoW protocol — namely the extraordinary costs involved with mining, which can run into hundreds of thousands of dollars a day — it does deliver its own disadvantages. For example, PoS does run the risk of monopolization, where a few validators rich in coins end up receiving the lion’s share of the rewards.

All of this said, PoS does inoculate a platform against a so-called “51 percent attack” — as such an attack would likely devalue the digital currency which the validators themselves own. In a PoW scenario, miners can reap rewards even if they don’t own the asset involved. Again, it just goes to show that incentives in the crypto world can present themselves in many ways.


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Incentivization has played role in driving the crypto world forward. Let’s take a look at the common tools used to reward miners, validators and everyday users