Říj 04

Gemini Exchange Secures Digital Asset Insurance

The Gemini cryptocurrency exchange announced that customer assets are now covered by insurance. It comes through a consortium of global insurers who were organized by Aon.  


The Gemini digital cryptocurrency has notified customers that insurance for digital assets is now available. A news release said is was arranged by a professional services firm called Aon who organized a collective of leading insurers.

The new virtual asset insurance coverage now stands alongside FDIC insurance for U.S. Dollars.

Head of Risk at Gemini, Yusef Hussain, wrote in an October 3rdMedium post how the company was able to secure coverage “[…] after a series of due diligence roadshows with industry-leading insurers”

Hussain noted how Gemini was able to successfully show investors how it was a secure and safe exchange, and custodian, for users to buy, sell, and store virtual currencies.

Responses on the Medium post were generally positive.

One person noted how the news was great for “people who are on the fence with Crypto-investments in the US.”  Another congratulated Gemini for securing coverage “with a custodial model economically.”

Skepticism About Crypto Industry Insurance

According to Hussain, plenty of insurers have shied away from extending coverage into the cryptocurrency world due to concerns about hacks and perceptions about poor security and internal control standards.

However, Hussain says

Consumers are looking for the same levels of insured protection they’re used to being afforded by traditional financial institutions

Some are speculating Gemini has been working to secure insurance coverage in order to demonstrate to current (and potential) customers how they stand as a safe entity in a cryptocurrency world with many legal grey areas.

The Winklevoss Brothers Push Forward

The insurance announcement looks to be a good start to the month for the Gemini exchange and its co-founders Cameron and Tyler Winklevoss, who received an approval from New York regulators in September for their stablecoin.

Bitcoinist reported in early September how the Gemini dollar, tied to the USD at a 1:1 ratio, would be backed by the firm State Street.

The cryptocurrency has drawn the approval of Bitcoin Foundation founder Charlie Shrem, who remarked how the Winklevoss brothers had built what would come to be the “Golden Gate Bridge, the Verrazzano Bridge” in the field. Shrem also said the stablecoin would span across decades.

Winklevoss

Before tweeting out the Medium post on October 3rd, Gemini made note of how the Gemini dollar is now officially listed on the OEX.com digital exchange.

The exchange looks to be gearing up for major competition with other leading companies like Coinbase and Bithumb in the United Kingdom after reporting by the Financial Times alleged the platform had hired consultants to try and hash out an expansion project in the region.

Currently, Coinbase has secured an e-money license from UK regulators and enjoys a banking partnership with Barclays. Bithumb is currently planning to create an office in the UK by the end of 2018.

What do you think about the new insurance coverage for Gemini customers? Let us know in the comments!


Image courtesy of Bitcoinist archives, Shutterstock, Twitter/@GeminiTrust.

Share
Zář 13

Stablecoins: Retrofitting the Dollar’s Flaws into Cryptocurrency?

There has been much discussion lately regarding so-called stablecoins. But are they really the answer to the general instability of many cryptocurrencies? A recent article in The Guardian suggests that they may ultimately be flawed.


‘Stable’ Coins

The price of Bitcoin 00 and other conventional cryptocurrencies can vary by the hour, making them unsuitable as units of account. Whilst many retailers may accept payment in cryptocurrency, nobody in their right mind would price things directly in Bitcoin due to the fluctuating prices.

Enter stablecoins — offering all the benefits of cryptocurrency, without the awkward instability in value. Since the birth of Tether, there have been a raft of these stablecoins coming to market, all pegged to the dollar, euro, or some other national fiat currency.

Some believe that these are the savior of crypto — including Charlie Shrem, who heaps praise on the Winklevii’s latest offering, Gemini Dollar. Others are not so sure of their credibility.

Fully Collateralized

Some stablecoins are fully collateralized, meaning they are backed by an equivalent amount of fiat currency, held in reserve. Tether is one such coin, pegged to the value of the US Dollar. However, despite assurances that this is 100% backed, many still question the details of the situation.

Even if it is, there are a limited number of reasons why you would rather have Tether than the equivalent fiat. Without increasingly ‘legitimate’ motivations for having them, The Guardian article suggests that few governments would back them.

Still, US Regulators have just approved Gemini Dollars, making the currency only the second regulated stablecoin worldwide. It seems the jury is out on that one.

Global fiat currencies.

Partly or Un-Collateralized

Certain stablecoins are not fully collateralized, so operators hold only a fraction of their liability in reserve. This is the same way that most banks issue fiat currency, and one only has to look back ten years to see how that can pan out.

Any loss of confidence among investors leads to a mass exodus. Unable to cover the liability with the limited reserves, we would see the equivalent of a bank run. The peg then breaks down, decimating the value of the stablecoin.

Ultimately, we do need something to counter the price instability of Bitcoin 00 et al. If there is an increase in cases for use, or if cryptocurrency becomes universally accepted as a method of payment, then perhaps stable coins will fill that role.

Experiments in national cryptocurrencies, such as those of the Marshall Islands, may well spur this on —as may the US approval and associated legitimacy of the Gemini Dollar.

Can stable coins fulfill their promise? We will have to wait and see.

What are your thoughts on the development of stablecoins? Don’t hesitate to let us know in the comments below.


Images courtesy of Shutterstock.

Share
Dub 25

Charlie Shrem: ‘It’s Not About The Technology Anymore, It’s About Power’

· April 25, 2017 · 9:00 am

Bitcoin entrepreneur Charlie Shrem shared his views on the scaling debate, stating that “it’s not about technology anymore, it’s about power.”


Shrem: ‘It’s About Power’

Charlie Shrem, Bitcoin entrepreneur and co-founder of Intellysis, was present in today’s episode of the  Double Down show, dubbed “Does Block Size Matter?” with the usual hosts Max Keiser and Stacy Herbert.

Hard Fork Wars

During the show, Shrem expressed his thoughts regarding the current state of the scaling debate or as Herbert called it, “the Great Blocksize War of 2017.”

Shrem stated:

In reality, it’s not a technical argument anymore. Everyone on both sides of the table say that SegWit is the best technology that we have.

According to Shrem, the scaling debate is no longer about the most viable technology or solution that can be used to scale Bitcoin. Instead, the scaling debate has become a power struggle between two development teams, Bitcoin Unlimited and Bitcoin Core.

“The other side of the debate, which is Bitcoin Unlimited, they agree that SegWit is a great technology,” he continued. “But to them it’s not about technology anymore, it’s about power.”

Shrem went on to say:

They want to remove [Bitcoin Core’s] ability to work on Bitcoin and instead have a closed-membership small group of four to five developers, who they think are the best for the job, run Bitcoin going forward.

A Test for Bitcoin

However, there is a silver lining in this development, which Shrem considers it as an “extremely bullish situation for Bitcoin.” The current block size “drama” is showcasing Bitcoin’s ability to resist a malicious attack on the network.

He noted:

Here you have a group of bad actors who are trying to overtake the Bitcoin network and essentially fork all of bitcoin and force all Bitcoin users to be able to use their developers and their codebase and their everything and it’s not a group of miners that’s preventing this.

Shrem sees the current hash power signaling as a “glorified poll” when it comes to hard fork given that nodes are the ones that validate blocks and they can discard the ones from the hard-forked chain at will, meaning that miners don’t have nearly as much power as they think they do.

This can be observed the UASF proposal, which would bypass the miners completely and leave it up to the nodes to force SegWit into activation.

However, it may not come down to a UASF, as mining pools like F2Pool are beginning to move to SegWit driven by demand from individual users that contribute hashrate to the pool.

Champagne Problem

Not all is gloomy for Bitcoin, however. Amidst all the tension and drama, one must also look at the bright side, which is the reason we’re having this heated debate at all: Bitcoin is growing at an exponential rate.

This is, as Shrem puts it, a “champagne problem,” one that gives us as much to celebrate as it gives us to fight about. 

Bitcoin 2016

“It’s a good problem to have. Bitcoin has grown really quickly. We never expected this to happen so quickly, to be honest. We’re getting towards what they call a ‘champagne problem,’ how do you scale?” he said.

This means that not only is Bitcoin working as intended, but there is also an urgent need for such a currency in the world. Now, it’s only a matter of making sure that Bitcoin can become that currency and still maintain its decentralized and immutable characteristics.

Shrem concluded:

There has always been research and conversations on scaling over the past three years but, to be honest, we didn’t think we’d see this exponential growth in Bitcoin and now it’s time to have that conversation.

Do you agree? Is the scaling debate actually about power and control? Share below!


Images courtesy of Shutterstock, alchetron.com, coin.dance

Show comments

Share
Led 08

Banking on Bitcoin: A Movie About Bitcoin, Its Past & Future

· January 8, 2017 · 3:00 am

1,306 views

The movie, titled “Banking on Bitcoin” has been released on January 6, 2017, in select theaters across the United States. It’s also available on VOD for those who can’t make it to the theaters.


Banking on Bitcoin, The Movie

Bitcoin is one of the most spoken about financial assets of this year. As the cryptocurrency’ price continues to soar, Gravitas Ventures takes moviegoers to a trip through the cryptocurrency’s timeline with its upcoming feature film.

bitcoin-pr-buzz-banking-on-bitcoin-film-1

Banking on Bitcoin is filmed to offer a comprehensive view of Bitcoin’s past as well as the future. The most disruptive technology of this century has been embroiled in an ideological battle between fringe utopists and mainstream capitalism. While Bitcoin has the potential to offer financial liberation to its followers, the mainstream banking and financial institutions and governments are not too happy with it. Banking on Bitcoin offers in-depth coverage of some of the key players in the ecosystem.

Few cryptocurrency heavyweights featured in the film includes the likes of Charlie Shrem, Cameron and Tyler Winklevoss, Barry Silbert, Erik Voorhees, Nathanial Popper, and Alex Winter. It offers an insight into how these personalities think about the revolutionary technology and what they believe lies ahead for it in the future.

Helping Clear Up Misconceptions

Gravitas Venture is one of the leading all rights distributor of independent cinema in the region. The company has working relations with over 500 content partners and it has a long list of movie titles across genres under its belt.

Gravitas Venture and the team behind Banking on Bitcoin are very happy with the outcome of the movie. The movie is expected to offer a better understanding of the cryptocurrency, the principle and ideology behind it, its benefits and more to moviegoers.

Bitcoinist_F2Pool Confusing Statement

The cryptocurrency, since its launch, has been struggling with slow adoption rate due to various misconceptions among the population. The mainstream media hasn’t been helping much either as most of them carry mixed views about the future of money.

Banking on Bitcoin is expected to help clear these misconceptions to an extent and potentially increase the adoption as well.

The movie is available for pre-order on the iTunes store.

You can also check out the trailer below:

Will you be watching Banking on Bitcoin? Let us know in the comments below!


Images courtesy of Shutterstock

Show comments

Share
Bře 30

Charlie Shrem Went To Jail One Year Ago Today

Source: bitcoin

Charlie Shrem Went To Jail One Year Ago Today

One year ago today, former BitInstant CEO and early Bitcoin proponent Charlie Shrem began serving his two-year prison sentence. The former CEO of BitInstant, a popular Bitcoin exchange in the early days of Bitcoin, was arrested at JFK airport in January 2014. He was just 24 year old.

Also Read: Synthetic Cannabis Proliferates On The Dark Web

$1 Million In Laundered Bitcoins

Later convicted of abetting more than $1 million in bitcoin sales to Silk Road users, and also cited as a Silk Road user himself, Shrem faced a detailed case against him. He was charged alongside Robert Faiella, who was known as BTCKing on the Silk Road.

“Hiding behind their computers, both defendants are charged with knowingly contributing to and facilitating anonymous drug sales, earning substantial profits along the way,” DEA agent James Hunt stated.

When arrested, Shrem was the Vice Chairman of the Bitcoin Foundation, which proved a big scandal for the beleaguered and rebranding Foundation. BitInstant, backed by the Winklevoss twins, was offline at the time.

Shrem, who worked as both Chief Executive Officer and Compliance Officer, was charged with operating an unlicensed money transmitting business (as was Faiella); failing to file suspicious activity reports, thusly in violation of the Bank Secrecy Act.

“As alleged, Robert Faiella and Charlie Shrem schemed to sell over $1 million in Bitcoins to criminals bent on trafficking narcotics on the dark web drug site, Silk Road.” Manhattan U.S. Attorney Preet Bharara stated. “Truly innovative business models don’t need to resort to old-fashioned law-breaking, and when Bitcoins, like any traditional currency, are laundered and used to fuel criminal activity, law enforcement has no choice but to act. We will aggressively pursue those who would coopt new forms of currency for illicit purposes.”

IRS Special-Agent-in-Charge Toni Weirauch said: “The government has been successful in swiftly identifying those responsible for the design and operation of the ‘Silk Road’ website, as well as those who helped ‘Silk Road’ customers conduct their illegal transactions by facilitating the conversion of their dollars into Bitcoins. This is yet another example of the New York Organized Crime Drug Enforcement Strike Force’s proficiency in applying financial investigative resources to the fight against illegal drugs.”

The complaint stated that Shrem knew Faiella’s business was on the Silk Road, and knew what the Silk Road was, and had even been a user. Shrem, never shy, often spoke of alcohol and marijuana use: “I won’t hire you unless I drink with you or smoke weed with you—that’s a 100 percent fact,” Shrem once told a reporter for Vocativ.

Charlie Shrem: Bitcoin’s First Felon

The charge of one count of conspiracy to commit money laundering carries a maximum sentence 20 year prison sentence, including the count of operating an unlicensed money transmitting business, a maximum five year prison sentence. Shrem also was charged with the willful failure to file a suspicious activity report, a maximum sentence of five years in prison; overall, he faced thirty years in prison. He received two years, a term he was “content” with and considered a “relatively short sentence.”

On March 25, 2015, five days before reporting to prison, Shrem published a blog called “So, I’m going to prison. Reflection from Bitcoins’ first felon.” He wrote:

“On March 30th, I’ll be self surrendering to Lewisburg Federal Prison Camp in Pennsylvania. It’s been a long hard fight, from getting arrested at JFK airport while landing home, to solitary confinement and being under house arrest the for the past 14 months. When the government indicted me and requested 30 years, I kept my head up with the help of friends, family, and the Bitcoin community. While some distanced themselves, most stood by and fought. I owe my life to those people. Of course I don’t look for sympathy, I did the crime and I will do the time. They say those who stand by you in the bad times, deserve to be with you in the good times. Good times are coming and I look forward to it. I also want to thank those select few in the SDNY District Court and NYSPT for treating me with dignity and respect.”

Its could very well be Shrem is released before his full two years is up, if he’s been on good behavior, which I am sure he has been. Shrem’s arrest came at a time when the War on Drugs is seemingly dwindling. The ambiguity of laundered funds, however, touches a nerve with the American public as it can be associated with terrorism, and likely would make most juries skirmish.

What Shrem plans on doing once he’s out of prison has yet to be seen. The Winklevoss twins, who had invested in BitInstant, publicly separated themselves from Shrem after the arrest. When he comes out, he will be entering into a Bitcoin industry that is much transformed from just one year ago, namely as a result of the entrance of some of the world’s largest financial institutions and technology multinationals into the space.

What do you think about Charlie Shrem’s prison sentence? Let us know in the comments below!


Images courtesy of 

The post Charlie Shrem Went To Jail One Year Ago Today appeared first on Bitcoinist.net.

Charlie Shrem Went To Jail One Year Ago Today

Share