The Blockchain Brief. The week in five headlines 5767

The blockchain Brief

Coinbase IPO beneficial for cryptocurrency market

The cryptocurrency market may rejoice at the news for good reason.  As Coinbase has been cozying up to regulators and industry, COO Asiff Hirji admitted the company was likely to take “the most obvious path”, and now CNBC’s Ran NeuNer claims the company is set to have an IPO in the near future.

This is big news not just for Coinbase, a hybrid exchange/broker that has forged a large following and excellent industry ties, but for the cryptocurrency market in general as it struggles to gain a wider share of eyes and wallets around the world. It would be the first IPO where the company’s performance is directly tied to the performance of the crypto market, which gives Coinbase much responsibility – and even more visibility.

Bitmain allegedly made false claims in investment pitch

Bitmain may be in a spot of bother, according to CoinDesk, which claims the ASIC designer had “falsely suggesting the company had secured financial backing from Digital Sky Technologies Global and GIC Private Limited” in two versions of its pitch decks. These claimed Bitmain had “recently completed a $400 million Series B round of financing from Sequoia Capital, DST and GIC, with a pre-investment valuation of $12 billion.” Since both are reputable investors, and DST Global’s Yuri Milner is one of the select few who invested early in both Facebook and AirBnB, for instance, these claims will likely have misled investors and may lead to legal action.

The allegations look particularly troubling after a similar story came out August, when a mysterious source claimed SoftBank and Tencent had invested in Bitmain.

What is even less clear is why Bitmain may have resorted to such tactics, when earlier this year it declared $1.1 billion in profit for Q1.

Japan allows crypto exchanges to regulate themselves

After the Mt. Gox hack to the tune of $450 million, Japan struggled to come up with appropriate measures for the crypto market. In January, however, Coincheck suffered an infamous hack that left them short of nearly $500. Now finally an interesting development may offer the market the much-needed solution.

This week, the Japanese Financial Services Agency granted the Japan Virtual Currency Exchange Association (JVCEA) self-regulatory status, allowing it to not just self-regulate in order to “safeguard customer assets (and) prevent money laundering”, but also to provide operational guidelines and monitor compliance. This effectively makes the JVCEA, comprising all sixteen domestic cryptocurrency exchanges, the regulating body and policing arm of the cryptocurrency market.

In other Japan news, caps might soon be set on crypto margin trading in order to minimize risks from speculative investing.

Sony and Alibaba commit to blockchain

After having explored blockchain for a while with its Cloud computing arm, Alibaba is going deeper into blockchain by now offering blockchain-as-a-service to global enterprise markets. The solution has been tested on the Chinese market and will soon roll out to Europe, the United States and several Asian countries.

Sony, too, is expanding its blockchain operations. It recently launched a platform for digital rights management, and has now unveiled an original concept for a cryptocurrency hardware wallet.

This is, the Sony press release states, a “contactless IC card type cryptocurrency ‘hardware wallet technology’” that relies on Sony’s IC card technology.

Sony uses the press release to educate the readers in cryptocurrency security, explaining how keeping money in exchanges or online wallets is unsafe. Their wallet, on the other hand, “includes mutual authentication/encrypted communication technology”, and is “small, portable and useful, unlike typical existing hardware wallets that connect to PCs via USB. In addition, it is possible to securely generate and store a private key with a highly reliable tamper-proof module within the IC card”.

Blockchain insight from non-blockchain companies

We rarely get a chance to hear feedback on blockchain performance from non-blockchain companies, i.e. from companies not committed to promoting or demoting certain features and benefits of this technology.

This week we got a rare glimpse into the other world when Deutsche Bundesbank and Deutsche Börse completed their trial of blockchain settlement technology. The “blockchain based settlement technology research (in short: BLOCKBASTER)” project started in 2016, and the report published now explains how the technology was used and what the conclusions were.

So, what were the conclusions? “Potential disadvantages for DLT-based solutions may be among others high latency (for some technology stacks) and high CPU-usage. Potential advantages may be among others higher resiliency and lower cost of reconciliation due to the joint data base”.

The two financial mammoths do advise that blockchain technology must be adapted to individual use cases, as financial settlements have radically different needs from retail industries, for instance.

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