How Blockchain Is Changing the Advertising Industry

How Blockchain Is Changing the Advertising Industry

Modern advertising is facing new problems that require new solutions, and blockchain may be just the key.

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Even though advertising has been around for about as long as commerce has, in today’s digital age entirely new problems are popping up that are souring the experience for advertisers, publishers and the public alike. Costs have risen, the handling of consumer data has become an issue and ad fraud is far too common. Now, some innovative blockchain products are trying to address all of this and make advertising simpler, more direct, safer and more profitable all around.

Current challenges facing digital advertising

One of the biggest issues that advertisers and publishers struggle with today is profitability. At one time, roughly $0.85 out of every dollar spent on an advertising campaign made it to the publisher. However, over time, more and more middlemen have been taking a cut. Modern advertisements are often bought and sold on exchanges, and these companies invariably skim a bit off the top along with ad agencies, sales houses or anyone else that is involved with a campaign. The added hands and complexities lead to increased waste, and this has led to only about $0.35 making it into the pockets of publishers by the end of the process. On top of all of this, the fact that there are so many moving parts means that it can take advertising creators months to be paid after the contract is fulfilled.

Another big issue within the industry is fraud. Advertising contracts can be falsified, riddled with fine print or simply not fulfilled by one or more parties. This leads to a massive drain on the entire industry and an impressive amount of wasted money. According to a report by IBM, “Wasted ad spend owing to fraud alone adds up to USD 51 million every day, or USD 19 billion by the end of 2018.” Clearly, advertisers and publishers could save significant amounts of capital and time if contracts could simply be trustless.

On the consumer side of things, there are issues too. It’s really no secret that Google and other big technology companies track ad data and even share it within the industry. Regular citizens often don’t know what information is being recorded from their interactions with advertisements or who is able to see it. Not to mention that while ordinary people are generating this resource (data) that can then be sold for profit, none of that money ever goes back to consumers. This has led many to feel that the practice is overly exploitative toward customers.

All of this has led to a digital advertising experience that is less than ideal for everyone. Fortunately, people are working hard on solutions to these issues, and they’re leveraging blockchain to do it. 

How companies are trying to change the landscape

Several different approaches have begun popping up that attempt to address these modern issues with advertising. For example, IBM has partnered with many of the biggest advertising spenders out there and is pushing its IBM Blockchain product as a solution to reduce costs and increase transparency. While it is encouraging to see such big names getting involved, the focus here does seem to be on cutting costs for these big companies with little mention of how it will help the consumer. It is fair to say that if businesses can save money, then that can be transferred down to the customer, but this solution is definitely focused on big industry.

One of the better-known attempts to solve all of the above issues is the Brave project and its Basic Attention Token (BAT). By releasing a proprietary browser — the Brave browser — the team has made it a priority to balance the needs of users, advertisers and publishers alike. Individual anonymity is maintained, and a cut of the revenue is returned to the people who actually watch the ads. There have been other projects with similar approaches, but they have seen little development or adoption and have as of yet not fulfilled the promises of overcoming these modern advertising hurdles.

One project that is hoping to bring the best solutions to all levels of the ecosystem, and to do so with minimum hassle, is the Smart Advertising Transaction Token (SaTT) created by Atayen. SaTT is an ERC-20 token on Ethereum, and through interaction with the official decentralized application, brands can create their own ad campaigns that offer SaTT rewards in exchange for engagement on social media. Influencers and other community members can create posts and get paid automatically according to several performance indicators such as likes, shares or views of the content. Brands are free to come up with their own unique conditions, of course, but smart contracts ensure that once in place, these agreements cannot be broken. Furthermore, payments can be made in near real time as the campaign is running, and there are no middlemen involved to take a cut, only a third-party application called an “Oracle” that triggers the payment according to the data provided.

The road ahead

Atayen has already partnered to make its SaTT service functional with major social media platforms such as Facebook, Instagram, Twitter and YouTube. It also created a developer program that allows anyone to create custom Oracles and feed data to their smart contracts. This means we could soon see further integration into social media platforms such as TikTok, LinkedIn — literally anything. Hopefully, compatibility with the networks that people are already using to push their campaigns will see increased adoption of this new model.

Whether one of the systems outlined above will become the premier model for the future of advertising remains to be seen. Plausibly, new projects will emerge to augment the landscape, and all of these networks could potentially even work in tandem to make the system better for everybody. It’s too early to call it, but it sounds like people are pushing the right ideas.

Learn more about SaTT

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.


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Modern advertising is facing new problems that require new solutions, and blockchain may be just the key.

Elon Musk and Joe Rogan Discuss Problems With Traditional Currencies

Elon Musk and Joe Rogan Discuss Problems With Traditional Currencies

Tesla founder, Elon Musk, recently discussed current difficulties amid massive U.S. money printing efforts, but failed to mention Bitcoin’s inflation-proof model.

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In a recent interview with podcaster Joe Rogan, Elon Musk bashed inflation — a problem that Bitcoin fixes.

Some of the current U.S. population sees the economy as an ever-flowing gift basket that will continuing providing essentials even while the country is shut down from its regular work flow, Musk told Rogan on May 7. 

„This notion though, that you can just sort of send checks out to everybody and things will be fine, is not true,“ Musk said referring to stimulus money the U.S. government sent to citizens.

The government cannot logically sustain its money printing efforts

In an attempt to right the currently struggling financial shift, the U.S. government has taken the cap off its money printer, putting a $2 trillion stimulus package in play.  

Simply printing money whithout producing goods or services does not work, according to Musk. „If you don’t make stuff, there’s no stuff,“ he said. „You can’t just legislate money and solve these things.“

Bitcoin solves this

Built with a limited maximum 21 million coin supply, Bitcoin does not allow inflation. The only inflation seen in Bitcoin lies in its mining reward, which adds to its circulating supply from its maximum cap. Short of a consensus-driven hard fork to Bitcoin’s blockchain, that cap can never be raised.    

Musk and Rogan failed to mention Bitcoin during the lengthy two hour interview however, according to a transcript scan of the chat. 

Gold bug Peter Schiff also weighed in on the interview with a tweet on Musk’s comments. „Once foreign demand for dollars crashes, and we can’t import the stuff others make, there’s also no stuff,“ Schiff said, also failing to mention Bitcoin as a part of a possible solution. 

Schiff has made a name for himself as an anti-Bitcoin personality. Musk only reportedly owns roughly 0.25 BTC himself, as of 2019. 


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Tesla founder, Elon Musk, recently discussed current difficulties amid massive U.S. money printing efforts, but failed to mention Bitcoin’s inflation-proof model.

Anonymous Crypto Payments Cause Problems for South Korean Child Porn Case

Anonymous Crypto Payments Cause Problems for South Korean Child Porn Case

IT experts believe that South Korean authorities could not track the crypto payments made from overseas exchanges

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South Korean IT experts claim that investigators in the Telegram Nth room case could have trouble identifying users who used crypto payments to access illicit videos via the chat platform. 

Overseas exchanges’ transactions could be an issue

According to local media, Maeil Kyungjae, it is more difficult to trace payments made via international crypto exchanges versus local exchanges. A police officer involved in the investigation told Maeil Kyungjae:

„It is complicated to realistically track the money that criminals have exchanged in foreign exchanges into Korean Won through illegal exchange offices.“

South Korean law enforcement members also warned that when illegal money is stored in overseas exchanges, information about the funds must go through international judicial assistance.

Allegedly the group’s mastermind, Cho Joo-bin, used a Finnish Bitcoin (BTC) OTC exchange when sending transactions.

Authorities identify suspects who they believe made crypto payments

Cointelegraph reported on April 27 that South Korean authorities identified the digital fingerprints of at least 40 people suspected of having paid crypto to access the illicit videos.

Authorities identified these users by tracking 20 of the biggest crypto exchanges in South Korea.

Additionally, on March 25, local media unveiled that Upbit, Bithumb, Coinone, and Korbit were reportedly working with the police to identify the users behind the payments.


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IT experts believe that South Korean authorities could not track the crypto payments made from overseas exchanges

Crypto Mining Giant Bitmain Confirms Problems With Antminer S17 Units

Crypto Mining Giant Bitmain Confirms Problems With Antminer S17 Units

After several customer complaints aired on social media, Chinese mining giant Bitmain confirms that some of its Antminer S17 units have issues.

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Chinese mining hardware company Bitmain has admitted to having issues with some of Antminer S17 units.

“Antminer is paying close attention to the issues of some products from the 17 series, which has recently been mentioned by the media,” a Bitmain spokesperson told Cointelegraph on May 6, adding:

“During this process, we have begun to negotiate solutions with customers who have encountered issues from the product. Antminer has always been adhering to the concept of placing customers first. If any customer has any product issues, please contact the official customer service of Antminer at any time.”

As recently reported by Cointelegraph, a mining entrepreneur started a Telegram group earlier this month after supposedly receiving a „bad batch“ of Antminer S17+ devices, with around 30% of the ordered machines glitching or breaking down after only one month of use. The group, which now has over 160 members, contains several complaints of a similar nature. 

Identical concerns were previously articulated by Samson Mow, chief strategy officer of blockchain infrastructure firm Blockstream. Mow tweeted last month that Bitmain customers have a 20–30% failure rate with Antminer S17/T17 units.

More Antminer units to be shipped out soon

With the Bitcoin halving taking place in one week, Bitmain has recently sold out its first round of domestic Antminer S19 sales, although the units will not be shipped until May 11 at the earliest. The new product was designed to produce increased mining output in post-halving conditions.


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After several customer complaints aired on social media, Chinese mining giant Bitmain confirms that some of its Antminer S17 units have issues.

Coronavirus Pandemic Is Reshaping Blockchain Companies’ Roadmaps

Coronavirus Pandemic Is Reshaping Blockchain Companies’ Roadmaps

While bringing financial losses and problems to blockchain projects, the coronavirus means new business opportunities for others

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The coronavirus pandemic has been affecting more and more aspects of the blockchain and cryptocurrency market. As Cointelegraph previously reported, more than half of the 2020 crypto conferences were either canceled or postponed due to the COVID-19 outbreak, while mining manufacturers had to stop the equipment production in China.

At the same time, other companies have been able to master new opportunities by digitizing business processes and moving employees online. Cointelegraph has analyzed how severe the consequences appeared to be for projects working with blockchain technology and cryptocurrencies, and how the coronavirus pandemic has affected their roadmaps and release schedules.

Geographic factor

The latest news related to digital initiatives shows that, in most cases, the extent of changes within the project directly correlates with the degree of spread of the coronavirus in a specific country.

For example, China, which reportedly halted the spread of the pandemic on its territory, announced that it will launch its national blockchain network in April of 2020, as it was initially scheduled. Chinese mining companies have resumed their work after the recent closure of their offices and facilities.

Meanwhile, Russia, which is facing rapid growth in the number of COVID-19 cases, has postponed the adoption of a law on cryptocurrencies indefinitely. Earlier, Cointelegraph also reported that the Russian government halved the budget for the development of blockchain technologies. The city of New York, which is experiencing an extreme number of confirmed coronavirus cases, has seen almost all local blockchain companies, including Cointelegraph, close their offices.

Other projects have temporarily suspended their activities related to doing business in other countries. For example, Prime Trust, a company that provides open banking solutions in the blockchain industry, said that its representatives cannot visit their recently opened offices in Cyprus, which has resulted in slowdowns and delays with everyone working remotely.

The situation with new releases

It seems that the roadmaps from the top 20 crypto projects in terms of capitalization have been unaffected by the coronavirus. This can be explained by the fact that the launch of the main critical updates planned for 2020 is carried out by the blockchain, not by people, and the employees involved are used to working in a decentralized way.

Moreover, the automation of processes has allowed Bitcoin Cash (BCH) and Steemit (STEEM) to successfully fork, while Tether (USDT) has launched its stablecoin on the Bitcoin Cash network. The pandemic appears not to have affected the date of the much-anticipated Bitcoin halving event either unless miners around the world turn off their equipment all at once.

The development of Cardano’s (ADA) blockchain platform is also going as planned despite the COVID-19 pandemic, as Cordano Founder Charles Hoskinson noted during a YouTube Livestream held on March 13. Furthermore, the developers reassured the investors and users that the project has been making substantial progress on the upcoming network update called Shelley — with a number of bugs reported by testnet users having significantly decreased during the past few weeks.

In an interview with Cointelegraph, Paul DiMarzio, the director of community at Enterprise Ethereum Alliance, explained that the company’s groups carry on with their work, although the alliance had to make adjustments to its roadmap:

“For Synchronize and Consensus we rolled our sponsorship over to 2021, Blockchain Revolution Global is now to be in the fall. We’ve put any thought of conferences on hold for now until life starts to restabilize.”

Firms cut budgets and staff

For many blockchain companies, this is an extreme measure taken to minimize the economic consequences caused by the COVID-19 outbreak. Large blockchain analytics firms Elliptic, Chainalysis and CipherTrace reported that they have already cut either their workforce or budgets or plan to do this in the near future. In particular, Elliptic has cut 30% of its staff in the United States and the United Kingdom; CipherTrace has reduced the workforce in its sales and marketing departments; and Chainalysis has announced its plans to cut employees’ salaries by 10%.

In April, digital asset custody agency Trustology laid off seven employees, as the company’s key clients — large banks and institutional players — have been taking longer than expected to leap into the crypto house.

Marketing is another article of expenditures that companies working with crypto and blockchain technology have been cutting by canceling offline conferences and other events. In particular, AlphaWallet developers have tokenized the tickets for the EDCON 2020 Ethereum conference. However, due to the event’s cancellation, the blockchain tickets they worked on are not needed anymore. The company’s CEO, Victor Zhang, shared with Cointelegraph that it cost the team about 40 hours of development time.

Carlos Domingo, the CEO and co-founder of Securitize, a blockchain-based security tokenization firm, told Cointelegraph that while the company hasn’t laid off any staff, it has cut back its marketing budget.

Another blockchain project — Telos Foundation — has also had its budgets affected by the recent lockdown and market volatility. Justin Giudici, the head of product at Telos, explained to Cointelegraph that in order to cope with the negative consequences, the project team has changed its focus to initiatives with a shorter time frame for impact. Meanwhile, according to Giudici, the company hasn’t fired any employee while seeing a rise in staff’s working time instead:

“Some participants have unfortunately lost their day job freeing them up to contribute even more to Telos. Many of these contributors have savings and are fortunately happy to work for TLOS or even for free out of passion and belief in the project.”

Other projects have been moving expenses from marketing to other areas to better manage their budgets. Thus, HedgeTrade, a prediction platform that allows users to make predictions on live sporting events, postponed its launch due to the cancelations of sports events worldwide. David Waslen, the CEO and co-founder of HedgeTrade, commented on the issue: “As a result, we’ll shift some of that marketing and development focus toward other areas of expansion, such as adding stock predictions and entering in the esports arena.”

Tokensales on hold

The restrictions and economic problems caused by the coronavirus have left many token sales without investments, while forcing others to postpone their launch. The latest report by ICOBench shows that the investments raised by projects over the period of the last week of January to the first week of February are considerably lower, compared with the same period last year.

Many projects have postponed their token offerings indefinitely. Jesse Uzzell, the CEO and founder of Climate Futures, said that the project had to cancel its token sale and DApp launch initially scheduled for March: “We postponed our 1PLANET launch and we have not decided on the new official launch date because of coronavirus crisis and how it dominates the news.”

SWAZM, another blockchain company that had its initial exchange offering scheduled for Q1 2020, reported its postponement. Vali Malinoiu, the company’s CEO and founder, said:

“This forced us to implement work-from-home policies, delayed many partnerships, and put us in a general alerting state.”

Investors are now more focused on conserving their cash and are waiting to see what the business and economic landscape will look like after COVID-19 passes, according to Sukhi Jutla. The token sale of her project, MarketOrders, a blockchain-based marketplace for the gold and diamond jewelry industry, was delayed by three months, as tech development slowed down.

However, there are those who have announced that their token sales were unaffected by the pandemic. For example, on March 5, crypto exchange BTSE reported its IEO as successful, with tokens sold out in four hours, while blockchain project Solana raised $1.76 million, selling out all its tokens via a Dutch auction.

Exchanges

Major cryptocurrency exchanges such as Kraken, Gemini, OKEx and Bitstamp seem to remain unaffected by the coronavirus pandemic, reporting a surge in user sign-ups and trading volumes. Binance’s futures monthly trading report revealed an 85% increase in trading volumes across the exchange’s futures perpetual contracts for January 2020. In February, OKEx exchange launched OKChain on a testnet and its first decentralized finance application, OKEx DEx, followed by the launch of its “Buy Crypto” fiat gateway service for users to convert their fiat into cryptocurrencies in March. 

The massive spread of the coronavirus in Asia has not precluded the launch of Huobi Thailand, as reported by Cointelegraph on March 5. Two other major cryptocurrency exchanges — Poloniex and Bitfinex — have not postponed their launches, which are planned for this month — LaunchBase and Staking Rewards Program, respectively.

Related: Here’s How the Crypto Sector Is Navigating the Pandemic’s Challenges

When it comes to cryptocurrency exchanges working in other regions, the situation appears to be the same. Bithumb Global, for instance, shared with Cointelegraph its plans to release developments as initially intended.

“The coronavirus doesn’t really affect our growth due to most of our activities are primary digital,” the company’s vice president, Vincent Poon, claimed. Sunny Ng, the CMO of Bithumb Global, also added that the company has accelerated the development of diversified trading products.

Ali Beikverdi, the founder and CEO of exchange software provider bitHolla, told Cointelegraph that existing crypto exchanges using the company’s exchange kit software have been racking in record trading volumes. “This is perhaps due to more people being online while they are stuck in quarantine, trying to make living online trading crypto,” Beikverdi added. 

However, according to Beikverdi, the growing hesitation from potential exchange operators who want to start an exchange business has made the provider postpone advertising and marketing content and push back new content creation.

How are projects coping with the consequences of COVID-19?

Cointelegraph talked with 18 projects in order to understand how the coronavirus affected the activities of blockchain and crypto companies in terms of numbers. Ten of them reported that the pandemic had no effect on their business processes. They are attributing this to their decentralized approach. For example, Changelly CEO Eric Benz told Cointelegraph that the team is still on course to launch its most important product of this quarter, and operations continue to remain strong, seeing a large increase in usage.

Careful spending is also what helps blockchain projects keep their processes unaffected. The Foundation for Interwallet Operability, a smart token developer, shared with Cointelegraph that wise budget management helped the company launch the FIO Protocol blockchain in late March with the participation of 23 block producers from around the world. Other projects have been adapting with new methods appearing to be efficient in the new reality. Silicon Valley blockchain startup Harmony, for instance, is now experimenting with a “digital whiteboard”:

“Everyone can jump in anytime, comment around our execution in an asynchronous way, while we have continuous windows open if you want to catch up with a colleague. This has also led us to improve the intra-cooperation between our offices and colleagues in Europe and China.”

Garlam Won, the CMO of Harmony, also noted an increasing number of Stake Heist participants before the public launch of Open Staking due to the extended availability of people who are staying home. 

In an interview with Cointelegraph, Norbert Goffa, the co-founder and executive manager of ILCoin, explained that despite the cancelation of many events and travel restrictions, the project plans to showcase the technology in the fall and adapt to the situation to stick to the roadmap. Meanwhile, the company is focusing on other aspects that do not require face-to-face meetings — such as exchange listings and partnerships.

Matic, another blockchain scalability platform, saw numerous partnerships in March despite the postponement of important events. Chandresh Aharwar, the vice president of operations and marketing at Matic, told Cointelegraph:

“Overall, remote working has worked for us well, and I personally see that overall performance of the team has improved (we have been hiring continuously in this times also, so that is also playing a role).”

However, the remaining projects saw their plans significantly affected by the outbreak of the coronavirus. In a recent blog post, the Filecoin team explained that some of the project’s community members in China have requested a delay before launching the second version of the testnet, thus affecting the final mainnet launch that was later postponed until the summer of 2020.

Some projects report financial losses and partnership disruptions caused by postponing critical events. Gary Bracey, the CEO of Terra Virtua, told Cointelegraph that the project is about six weeks behind schedule:

“We had originally planned to conduct a wide beta test in mid-March, with an official launch intended for April. Due to the prevailing conditions, we have had to adapt our strategy accordingly. Key to this was our development studio, as each individual had to take their equipment from the office and set-up at home.”


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While bringing financial losses and problems to blockchain projects, the coronavirus means new business opportunities for others

‚No Bailouts Required‘ — Bitcoin Difficulty to Rise as Hash Rate Recovers

‚No Bailouts Required‘ — Bitcoin Difficulty to Rise as Hash Rate Recovers

Bitcoin solves its own problems once again as hash rate rebounds following March’s price crash to $3,700

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Bitcoin (BTC) did not need a multi-trillion dollar rescue package to continue functioning after crashing 60% in hours.

That was the conclusion from analyzing the latest blockchain data, which showed that Bitcoin’s hash rate rebounded in recent weeks.

BTC 16% difficulty drop steadies network

Figures from monitoring resource Blockchain confirm that since March 21, the hash rate has expanded by over 10%.

The move was made possible by Bitcoin’s difficulty lowering, in order to make mining more economical for network participants.

Hash rate refers to the computing power which miners devote to validating the Bitcoin blockchain. The higher the number of hashes per second, the more implied power there is. 

Hash rate goes hand in hand with difficulty, which is an expression of how intensive it is to solve the equations to find the solution for blocks of Bitcoin transactions.

Bitcoin hash rate 6-month chart

Bitcoin hash rate 6-month chart. Source: Blockchain

In March, the price nosedived, which subsequently meant it was unprofitable for some miners to continue. Thereafter, Bitcoin’s difficulty dropped 16%, reversing the downward spiral of less miner participation and therefore preserving network security. 

The next difficulty change is set for April 8, and should begin to see the number rise once more, estimates from BTC.com suggest.

The phenomenon puts Bitcoin firmly at odds with the fiat economy, which depends on central banks and governments intervening in order to survive. This, in turn, is a product of governments refusing to allow free markets with the use of “hard” money.

“No bailouts required,” Canadian exchange Shakepay summarized about hash rate performance.

Hard money takes care of itself

As Cointelegraph noted last week, Bitcoin is de facto the “hardest” money there is. Unlike gold, verification is built into how Bitcoin functions. 

Bitcoins cannot be faked, and any attempt to increase the supply must gain approval by a majority of miners — something they will not do, as it would reduce their income.

Separately, if Bitcoin’s price increases, its supply cannot be mined any faster than the block reward released roughly every ten minutes. 

As Saifedean Ammous explains in his popular book, “The Bitcoin Standard,” this ensures that, unlike any other money in history, participants cannot devote excessive time and energy to making more units of Bitcoin the currency more quickly.


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Bitcoin solves its own problems once again as hash rate rebounds following March’s price crash to $3,700

Crypto Contributes to Money Laundering Problems in Latin America, Report

Crypto Contributes to Money Laundering Problems in Latin America, Report

Crypto exchanges in Latin America attract money launderers due to “extremely lax” AML and KYC regulations, a new report says

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Amid a major economic downturn, countries in Latin America (LATAM) are increasingly suffering from money laundering through cryptocurrencies, a new report says.

Cryptocurrencies like Bitcoin (BTC) have become a major tool of organized crime groups and hackers in LATAM countries, according to a Feb. 27 report issued by threat intelligence firm IntSights.

Titled “The Dark Side of Latin America,” the report claims that LATAM countries top the list of the world’s worst money laundering nations, while local crypto-related firms apparently lack Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations.

To issue the report, IntSights partnered with major global blockchain security firm CipherTrace and LATAM-focused cybersecurity startup Scitum.

Latin American crypto exchanges are associated with “extremely lax” regulations

According to the study, threat finance has been on the rise in LATAM countries as criminals in the region turn to cryptocurrency to launder large amounts of money. As part of the increased crypto-based money laundering in LATAM, criminals purportedly take advantage of insufficient KYC and AML regulation of local crypto services as well as global peer-to-peer (P2P) crypto exchange services like LocalBitcoins, the report notes.

Specifically, the IntSights’ data claims that the vast majority of world’s illicit crypto funds tend to end up in Latin American crypto exchanges. According to the report, LATAM-based exchanges are typically characterized with “extremely lax” regulations. The study reads:

“Researchers estimate that after cryptocurrencies have been cleaned on exchanges, 97 percent end up in countries that have extremely lax KYC/AML regulations, with Latin American economies topping the charts.”

As an example, IntSights cited a major money laundering case with Panama-based payment processing firm Crypto Capital, which involved at least $350 million. As reported by Cointelegraph, Crypto Capital’s president Ivan Manuel Molina Lee was arrested in October 2019, with enforcement authorities claiming that the seized $350 million was directly tied to money laundering for Colombian drug cartels using cryptocurrency. As reported, Crypto Capital allegedly managed to mislead Bitfinex, one of the world’s biggest Bitcoin exchanges.

P2P crypto exchange services like LocalBitcoins lack AML measures, too

However, lack of regulation on local crypto platforms is apparently not the only loophole for criminals in Latin America, IntSights emphasized. The firm outlined that popular Finland-based P2P platform LocalBitcoins saw record surge in transaction volumes across the region and especially in Venezuela and Argentina. 

According to the research, P2P platforms like LocalBitcoins and Paxful are often associated with significant lack of regulations. The study reads:

“P2P exchangers typically lack AML programs and perform little or no KYC due diligence, which entices criminal actors to utilize P2P versus traditional cryptocurrency exchanges.”

In late January, LocalBitcoins was reportedly suspending user accounts in some countries with no warning, subsequently citing “enhanced due diligence process.”


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Crypto exchanges in Latin America attract money launderers due to “extremely lax” AML and KYC regulations, a new report says

Biggest Problems With Stablecoins, Explained

Biggest Problems With Stablecoins, Explained

Concerns over transparency and reserves are lingering over stablecoins, with big players facing regulatory pushback as they try to launch their own currencies #CT_sponsored

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5.

Potentially, but there are hurdles that stand in the way.

Earlier this year, Facebook unveiled plans for Libra — a stablecoin that would be pegged to a basket of assets — including major fiat currencies such as the U.S. dollar, yen, euro and pound. The social network has the vision of enabling its billions of users to send and receive money between each other — including across borders — potentially disrupting the remittances market. However, Mark Zuckerberg, the co-founder and CEO of Facebook, has had to slam the brakes on the project, with American politicians fearing that it could undermine the U.S. dollar and even threaten the global economy. That’s thrown its 2020 launch date into doubt, with Facebook admitting to investors that it may never launch at all.

Walmart, one of the world’s biggest retailers, has also been getting in on the action. A patent filing suggests that, like Facebook, it wants to develop a digital currency backed by the U.S. dollar that could be used to store wealth — and be redeemed and converted into cash at selected retailers. This could give consumers who don’t use banking services a financial alternative, and prove a headache for credit and debit card companies. As reported by Cointelegraph, some experts believe Walmart will face less regulatory pushback than Libra.

These projects have thrust stablecoins into the limelight — giving many members of the public their first opportunity to understand what blockchain and crypto are, and what they could offer. Back in February, a report published by the stablecoin startup Reserve claimed that stablecoins will play a key role in the mainstream adoption of crypto technologies — not least in countries that have been ravaged by hyperinflation, such as Venezuela and Angola. Stablecoin trading volumes have been rising steadily over the past few months, with market cap records being broken along the way.


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Concerns over transparency and reserves are lingering over stablecoins, with big players facing regulatory pushback as they try to launch their own currencies #CT_sponsored

Smart Cities Offer Promises and Concerns Over Privacy

Smart Cities Offer Promises and Concerns Over Privacy

Political promises disguise problems with smart city projects

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The promise is great for so-called smart cities, which will deploy a network of interactive sensors to achieve efficiency and innovation. The smart city vision includes driverless cars, renewable energy to aid a city’s power consumption, energy-efficient buildings, and communications systems that work with the location’s infrastructure to avoid waste, among other features.  

A report by the International Data Corporation (IDC) indicates that spending on smart city technology is expected to grow to $135 billion by 2021.

Despite the promise of a futuristic and more environmentally friendly city, the results — at least so far — are not vast. Politicians talk about future benefits while special interest committees are formed and plans are made. Still, little progress seems to be made toward actually implementing most of the programs or setting a timetable for deployment.

That may be changing. Google is creating a smart city in Toronto, and, with the vast resources of the technology giant, the first widespread implementation of the promises of smart cities may be at hand. But there are still concerns over certain aspects of implementing the smart cities program.

Canadian Prime Minister Justin Trudeau appeared at the October 2017 kickoff for the smart city being designed by Google for Toronto. “We know the world is changing,” said Trudeau, as he stood alongside senior Google executive Eric Schmidt. “The choice we have is to either resist it and be frightened by it, or to say we can step up and shape it.”

Google’s aim in Toronto is to address common urban problems like congestion, inefficient services, and unaffordable housing on 12-acres of waterfront land. But already, there are concerns being raised about the project. Many reports have surfaced concerning privacy for the residents of the new city, who will be constantly recorded in their activities.

Compact hidden cameras would take low-resolution pictures of inhabitants and visitors, as well as automobiles on the streets. The smart city pledges to use the “feedback of residents” to plan and adapt services. But the project has upset many people, including local technologists, property developers, politicians from both sides of the aisle, urbanists, academics, privacy experts, business leaders and the Canadian Civil Liberties Union.  

Are we being over-promised?

Prime Minister Trudeau said at the press conference announcing Google’s smart city project that Toronto would serve as a model for Canada and the globe.

One analyst agreed that the promise of smart cities may be oversold. But, he added, that’s not necessarily a bad thing. “Of course, but that’s nothing new,” said Peter Hirshberg, co-founder of co-working space Maker City and chairman of Swytch, a blockchain-based platform that tracks and verifies the impact of sustainability efforts and actions on the worldwide level of CO2 emissions.

“Cities have always been home to our greatest aspirations and visions of utopia. The 1939 World’s Fair/urban renewal/post-war cities promised a utopian city of tomorrow with no blight and smooth traffic. Instead, we got suburbs, too many cars, traffic, white flight and lack of sustainability. The modern urban movement of the 1990s promised a creative class and revived urban centers built on the principle that denser cities were smarter and open innovation worked better than suburban office parks.”

Privacy might be a thing of the past in a world of smart cities

As with Toronto’s concerns, how to safeguard privacy and data collected in a smart city is a major question that still needs to be answered. The data gathered by a municipality must be largely anonymous in urban environments.

Jeffrey Blessing, a professor and director at the Milwaukee School of Engineering, sees other reasons to be wary. “I’m concerned with the cybersecurity implications of the smart city,” Blessing told Cointelegraph.

The devices and services we use in a metropolitan setting must be data secure, he says. This is necessary to gain the public’s trust. And, in order to achieve this, it seems clear that companies that compete will have to collaborate in order to truly benefit.

“Computer networks are an excellent example of this; standards are set so that devices cooperate and communicate, but compete on the implementation of services,” Blessing said.

He also believes that companies will have to provide both simple user experiences and privacy safeguards.

“When it comes to users adopting and accepting new technology, convenience and ease-of-use is key,” he said. “However, security is often inconvenient and gates with guards must be placed around valuable data and info.”

He adds: “We’ve all heard horror stories of hacking, cyber break-ins and loss of data from all types of institutions, public and private, large and small. Technological innovation in a public setting is always challenging, because there are contradictory forces at work.”

Artificial Intelligence (AI) serves as an example of Blessing’s points:

“From a cybersecurity perspective, AI technology is in the hands of both the good guys (white hats) and the bad guys (black hats). Companies are continuously collecting data about us from our cell phones, smart speakers, ubiquitous cameras, etc. and using AI to learn about our habits, objectives, and intentions through machine learning. While we should not be paranoid about big brother, we need public officials to demand transparency and accountability from technology companies that are trying to profit from personal data that is collected via smart city initiatives.”

Blockchain and crypto technologies in a smart city

In a smart city’s environment, there will need to be a system in place that allows the devices that are attempting to monetize certain activities to verify a large number of transactions and quickly confirm their authenticity.

That’s where blockchain and DLT could have a role. But there are limitations with the current state of the technology. The ability to scale to service millions of daily transactions is one, with another being the speed of verifying transactions and potentially high transaction fees.

The problem is somewhat endemic to the current state of DLT and blockchain. That’s because transactions using DLT and blockchain need to be verified by the operators of nodes along the chains, who are then rewarded with a digital coin for their trouble.

This can result in a network that takes a long time to verify things when the volume gets high, with transaction fees rising to incentivize transaction confirmations. That makes it currently impractical for use in most large-scale situations.

However, there are many companies trying to solve these problems for enterprise clients. R3’s Corda, which has created a blockchain-based platform inspired by the Bitcoin blockchain, is working with enterprise clients on such projects. IBM and Samsung are developing an architecture for blockchain and Internet of Things (IoT), and IOTA’s Tangle is heavily involved in the sector.

LO3 Energy, a blockchain-powered smart meter that helps monitor utilities usage and distribution, is seeking to provide a way for renewable energy, conservative water usage and pollution mitigation. And Omnitude and the island of Malta have partnered to create a blockchain infrastructure for public transit management. Blockchain could serve as a payment center for public transport, including bus, train, and subway tickets.

Smart cities: boom or bust?

In the end, the hype around smart cities might just be a marketing ploy for big corporations to sell their devices and gadgets.

“Smart Cities were originally proposed by vendors such as Cisco, IBM, and others as a way for them to sell sensors, big data, machine learning to governmental entities to reduce costs and increase efficiency,” said Evan Caron, CEO of Swytch. “Many, many trials have happened, some successful, some not. What has become apparent is that the sensors themselves are quite inexpensive. What is expensive for a city to invest in is the security and data analytics required to make sense of the data thrown off by sensors.”

Caron told Cointelegraph that certain cities, including San Francisco, have responded to this by providing an open data platform so that citizen coders can create applications based on the flow of information coming in from sensors.

“This has been an enormously successful and generative thing for cities,” Caron said. “But, it has not always been remunerative for the vendors themselves.”

Thus, smart cities apparently are at a crossroads between promise and the fulfillment of those promises. Many companies and politicians are working toward solving the issues. Whether that actually happens in a way acceptable to the public remains to be seen.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.


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Political promises disguise problems with smart city projects

Report: Bitcoin Unable to Solve Problems of Traditional Payment Systems

Report: Bitcoin Unable to Solve Problems of Traditional Payment Systems

An official from the Bank of Spain believes that Bitcoin is unable to solve the problems of traditional payments systems

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An official from Spain’s central bank, the Bank of Spain (BDE) believes that Bitcoin (BTC) is unable to resolve the problems faced by major payment systems. BDE’s Deputy General Director for financial innovations and market infrastructure, Carlos Colesa, gave his opinion on the leading cryptocurrency in a report published on Sunday, Feb. 17.

The study dubbed „Bitcoin: a solution for payment systems or a solution in search of a problem?,“ is marked as an “occasional paper,” according to Cointelegraph en Español. This  means that the Bank of Spain does not necessarily share the stance of the author.

Colesa compared Bitcoin to traditional payment systems and financial intermediaries. First, he says that the Bitcoin blockchain processes only 250,000 transactions daily, which is a relatively small volume for a global system. For instance, major Spanish retail system, the Sistema Nacional de Compensación Electrónica (SNCE), reportedly handled around 7.2 million payments daily, as of 2017.

Given that the miners have to approve transactions, Bitcoin payments are slow, and the time required for a transactions is purportedly unpredictable. Thus, the Proof of Work (PoW) in fact limits the capacity of the whole system instead of yielding benefits, Colesa concludes. The report further states that the absence of governance and coordination impedes improvements to the system.

According to Colesa, the combination of private and public keys is a very unreliable system that is vulnerable to various types of fraud and scams. Moreover, the report states that loss of private keys means that users’ funds can never be restored.

The report echoes the stance of some Bitcoin sceptics, such as Nouriel Roubini, who believe that crypto is in fact very centralized. For instance, crypto has commissions for transactions, and the payment speed depends on its rate. The average rate is set by mining pools, which, according to the expert, have enough power to control the system in order to get more rewards. Colesa concludes:

“It is unlikely that Bitcoin in its current modification will have any significant impact on the finance sector as an alternative to traditional payment systems.”

Earlier this month the bank issued a reminder to citizens, warning of the risks related to cryptocurrencies. The document notes that they are not yet regulated in the country, while exchanges are not authorized by the central bank and thus the funds stored there cannot be protected by the government. Moreover, the BDE governor, Pablo Hernández de Cos, has determined that crypto “cannot replace money and is not a means of payment or common exchange.”


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An official from the Bank of Spain believes that Bitcoin is unable to solve the problems of traditional payments systems

Obscure Problems Crypto Users Can Face, Explained

Obscure Problems Crypto Users Can Face, Explained

Issues withdrawing funds? Coins sent to the wrong address? Unconfirmed transactions? We’ve got the answers to these unexpected problems — and more

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2.

Policies will vary depending on the exchange you’re using.

While you might face exorbitant “cross-chain recovery fees” on some platforms, others will be unable to assist you in the quest to recover the tokens transferred. Let’s take a look at the policies of the two largest exchanges to give you a flavor of what to expect:

Binance, by far the biggest crypto exchange by trade volume, has bad news for those who have made an honest mistake. The platform warns that, in such a scenario, it “does not know who controls those addresses and has no means of recovering those coins.” Its best advice — if you know who owns the address — is to get in touch with them and start negotiating a refund. What they won’t tell you is that success rates can be extremely patchy.

Over at OKEx, they take a different approach — but with the caveat that their constant reminders should encourage users to check, double-check and triple-check whether they are sending coins to the correct address. That said, if a mistake still happens, the exchange says: “We promise to help recover the funds. […] even if many other exchanges found it impossible.”

Because of the wild variations in policies, remember these two simple tips. First, copy and paste wallet addresses instead of typing them out manually. As they are long and complicated, there is a high risk of typos. Second, always double-check to ensure the characters match up before you hit the Send button.


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Issues withdrawing funds? Coins sent to the wrong address? Unconfirmed transactions? We’ve got the answers to these unexpected problems — and more

Major Central Bank Institution BIS: Bitcoin Must Depart From Proof-of-Work

Major Central Bank Institution BIS: Bitcoin Must Depart From Proof-of-Work

Bitcoin’s problems are only solvable by departing from proof-of-work, according to research conducted by the Bank for International Settlements

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Bitcoin’s (BTC) problems are only solvable by departing from a proof-of-work (PoW) system, according to research published by the Bank for International Settlement (BIS) on Jan. 21.

According to the paper, when in the future Bitcoin’s block rewards fall to zero — given that only a limited number of new Bitcoin will ever be created — transaction fees alone will not be able to sustain mining expenses. The argument implies that the Bitcoin network would become so slow that it would be virtually unusable, stating:

“Simple calculations suggest that once block rewards are zero, it could take months before a Bitcoin payment is final, unless new technologies are deployed to speed up payment finality.”

The study further notes that while second-layer solutions like the Lightning Network could help, “the only fundamental remedy would be to depart from proof-of-work.” Such a departure, according to the report, would “probably require some form of social coordination or institutionalisation.”

The document’s overall conclusion is that, according to the researchers, “in the digital age too, good money is likely to remain a social construct rather than a purely technological one.”

The Switzerland-based BIS is an organization consisting of 60 central banks, which reportedly account for 95 percent of global GDP.

As Cointelegraph recently reported, another BIS report published on Jan. 8 found that seventy percent of central banks worldwide are conducting research into central bank digital currency issuance.

Another report published by the BIS in September last year found a strong correlation between crypto prices and news of regulatory intervention globally.


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Bitcoin’s problems are only solvable by departing from proof-of-work, according to research conducted by the Bank for International Settlements