Morpheus Arrested in Arizona

Anarchist Morpheus has been arrested by a multi-agency task force in Arizona.

A brief reading of Morpheus’s previous crimes indicated that he might not even have been arrested in a different state.

He has been arrested for various marijuana “felonies” and also arrested on gun charges.

The founding fathers may have smoked marijuana and certainly used guns. Morpheus’s troubles seem to come from trying to do the same thing in the 21st century in the wrong state.

Additionally Morpheus’s current criminal behavior may involve trading bitcoin. But he seems to have been a good bitcoin trader and has made money for clients.

Some of these clients have left positive comments on his website.

“Awesome to work with!” one of his customers wrote in a review.

Another wrote: “MorpheusTitania is a great trader! He went above and beyond on my last trade. There was a mix-up and he waited for over an hour before we could meet. You can trade with confidence …

Morpheus’s real name is Thomas Mario Costanzo.

OneCoin Is Reduced in Germany by Regulators

Germany is one step behind as regulators usually are.

The country’s regulators have added to their OneCoin crackdown by issuing new cease and  desist orders.

This should not be the case. The German Federal Financial Supervisory Authority (BaFin) is passing judgement on One Coin without a trial.

This is one thing that is wrong about regulation generally. It acts based on its own authority and without larger judicial decisions.

In this case it has issued new cease-and-desist orders to holding companies connected to OneCoin – Onecoin Ltd, Dubai and OneLife Network Ltd – because it believes OneCoin is fraudulent.

It has ordered them to “dismantle their internet based ‘OneCoins’ trading system” and to “end all sales promotion activities” in Germany effective immediately.

OneCoin is an investment scheme centered around a purported digital currency, for which packages of “tokens” are sold that can later be exchanged. The operation has long been accused of operating a pyramid scheme, as participants are encouraged by advocates to find other buyers.

OneCoin has been around for a while, since at least the beginning of 2016, and is perhaps the second largest token  trading system now available. For German regulators to crack down on OneCoin now is – at least – is too little too late.

In fact, regulatory crackdowns are usually too late. Regulators are almost always slow, sometimes by months and sometimes by years.

“Buyer beware” is the best idea and is one that should be encouraged bur regulators won’t do that because it impedes their own authority.

In the case of Onecoin, no one that we know of has tried to bring them to trial or made the case that they are actually doing something that is criminal – and thus resulting in judicial action.

All that has happened is that regulatory authorities have exercised their own judgement without any formal, judicial input from Onecoin to penalize them.

At root and  heart this is what regulation is all about, the almost unlimited exercise of certain kinds of authority without a trial or any of the other accouterments of what passes for the West’s judicial systems.

If regulators want to penalize OneCoin, let them try to take it to a formal court rather than unilaterally imposing penalties on OneCoin that are systemically unwarranted.


Fintricity Partner Speaks Out on Blockchain

Florian Krueger is partner at Fintricity in London. He is an experienced board-level executive with a successful track record in strategy planning, business & market development, product management, sales and contract negotiation. Being a European at heart, he specializes on Global Customer Satisfaction. His working experience includes time in Italy, UK, Germany, Iceland, France, Spain, the US and the Netherlands. Language skills: German, French, Italian, Spanish and English with bits and pieces from other languages. The Fintricity team holds a wealth of first-hand digital transformation experience, which makes us unique. We are technologists, futurists, solution architects and marketeers driven by client success.

BCN: You’ve initiated a blockchain group … why?

Florian Krueger: Actually, we are a company that deals with all things digital. We are looking for the right kind of data, various kinds of data. That involves blockchain which is really a distributed technology.

BCN: A distributed ledger?

Florian Krueger: With blockchain, you have multiple data bases on multiple servers. But there’s an evolution taking place today because basically everyone can have can have a blockchain node to the degree they wish. Some nodes are more complete than others. Some leave things out. Not everyone has to have the same amount of data on the server or computer. So a company can be partially public and partially private. You can have more information on a main server and less on another.

BCN: A median approach in a sense.

Florian Krueger: Blockchain, in fact, allows people to make contracts without the middleman. That is the way things are headed. Ethereum is one system that supports this. People can download a system based on his own public or private chain.

BCN: But the expense may be considerable …

Florian Krueger: The question has little or nothing to do with expense. It’s not whether bandwidth is minimal or is maxed out. The difference is that you have possibilities to do things differently. Software is not expensive. Memory is already sizeable. Say you are an insurance company and you can define criteria as you wish. Again, assuming it is there, you can download what you want.

BCN: Can you give a detailed example?

Florian Krueger: Say you are Steve Miller and you have access to a blockchain. Your insurance firm has said it will give you a discount if you can prove your health. You download your information once and you are done. You have no further interaction to prove your health which has been validated by the blockchain. If another company wants to offer you a further discount or a different package, you are still installed on the chain and therefore the contract can be done immediately. You don’t need to go back to the clerk.

BCN: Let’s probe fintech. Are people interested in fintech mostly because it will make them money?

Florian Krueger: Yes, good question. Sadly the reason, is money. But in actuality the smartest thing about blockchain is its reinvention. It’s not simply a step forward, a slight elaboration. It’s a logical first step for something else that is quite different. Say you want to drill at home and have no drill. So you go to a company that rents drills. There is no such drill rental company right now but there will be as blockchain expands. Companies will rent out every kind of thing in the future in my view. You simply build a smart contract on top of a blockchain ledger and you begin. Everything can be brought back the drill and the financial transaction that takes place. It will provide new business for people in numerous areas. It hasn’t happened yet but it will take place.

BCN: Are regulations being passed against blockchain?

Florian Krueger: The regulators are trying to regulate as they always do. Cryptocurrencies sit on top of blockchain and the real question we need to ask is how to regulate in a way that is most productive. Ultimately, from a consumer standpoint – relative to regulation – you have to select the right employees and try to moderate what is taking place. But a lot of it has to do with technology. Recording one’s digital identity is a good place to start.

BCN: Is that all?

Florian Krueger: Marketing by itself is more questionable. I love the idea of Humaniq but I wonder if there is not too much marketing involved. What they’re doing is brilliant, but I wonder if a company that is less involved with marketing might eventually be as successful or even more successful.

BCN: What about the dark web?

Florian Krueger: The dark web has increased amounts of money laundering and drug dealing. Part of the reason is perceived value. There’s lots of cybercurrency moving in and out and other people see that and gain the impression that the dark web is a most valuable place.  The perception of value leads to the reality. Of course there are reasons why people would use the dark web anyway but the perception of reality is one reason.

BCN: Is it possible that blockchain will be let alone for a while?

Florian Krueger: Blockchain technology is visible in and of itself. It helps create goods and services that have never been seen before as I’ve already explained. But here is another example. A car salesman can create a new business on the Internet. He could perhaps develop health care leads in his spare time. Right now nothing much would happen because he is in the car-selling business. But, post blockchain he could trade leads using tokens emerging from the monetization of the blockchain and cryptocurrencies. He would basically trade the leads for tokens.

BCN: What would regulators do?

Florian Krueger: Regulators might not do anything if it is a private transaction between two people. On the other hand, you could invite the regulators into the transaction. If you built a company from the health care leads, you could have the regulation put in place and the company regularly scrutinized. The regulators would stay there and would serve as a reminder to customers that everything you were doing was OK.

BCN: The regulation becomes a guarantee of good business.

Florian Krueger: Yes, the regulator might not know what to do with his access but that’s not the point. Simply by having the regulator there, you would be increasing the viability of what you were involved with.

BCN: It is not just healthcare –

Florian Krueger: This goes for any kind of business. It is not health care. Oil and gas, anything. Red tape is an issue over time to be sure. But over time, it will be more and more an issue controlled by the consumer not the authority.

BCN: Can you expand on that?

Florian Krueger: I mean the data will be owned by individuals and the responsibility will lie with the individual to take care of himself and his data. The data will not, as now, be the property of large companies. This is a huge change. You will own what is applicable to you. The shift to digital information will make it possible. People will be more and more in charge of their own affairs.

BCN: That is certainly an interesting perspective. Thanks much for your time

Florian Krueger: My pleasure. Thank you.

Uruguay to Track Its Wine Like Beef

Decanter magazine tells us  “Sommeliers worldwide should be paying attention, because the program [involved in the tracking of beef] is currently being expanded to the country’s 300-or-so wine properties and 3,500 growers.”

Beef in Uruguay is tracked via the chipping of cows and Uruguay is the only country that has such a pervasive program. Now the program is moving to wines.

Currently less than 5% of its bottles are exported, and Uruguay hopes that the tracking of bottles will help with exports. Uruguay’s main wine regions – estates like Garzon – have made a smoother tasting version of Tannat that should appeal to international markets.

The country plans to have 100% traceability in place by next year. It will offer drinkers information on every aspect of the wine’s manufacture, including the bottling and the farm it comes from.

This sort of labeling is controversial in some quarters but Uruguay’s national association of vinyards is behind the move and the program is moving ahead rapidly.

The Cryptocurrency Revolution

Cryptocoinsnews has published an article on whether we are in the throes of an industrial revolution

Mark Carney said, “When Horace Jones was re-imagining Old Billingsgate Market, Britain was in the throes of its Second Industrial Revolution – a time of mass innovation that changed the way people lived, worked and interacted.”

Robots are here, for instance. Microsoft, for example, has showcased an IoT robot with “human like” abilities.

Meanwhile, real sense cameras  “create a high level of computer intelligence about the environment and objects within it, making [it] capable of autonomous behavior.”

Machines are replacing humans not only in the front office but in the back office as well.

Smart Money will mobilise the power of data to significantly improve decisions concerning policy-making for the control of money supply for the public good, including the development of new Fintech services in the UK’s Digital Economy.

This, is not easy to do. But Maker DAO, and others are working on it. It won’t happen soon but it will take place along with much else.

And  it will happen faster than we may believe.

R3 Shrinks Again as Morgan Departs

R3 is upset and maybe that’s because it has realized in aggregate what the current round of departures really mean.

Goldman Sachs and now JP Morgan have exited the consortium and, ultimately, there may be fewer banks in the future than there are now.

That’s because if central banks build cryptocurrencies and blockchain general ledgers then they may not need a large distribution arm. They may do some direct communication and lending to individuals.

Central banks would have to be larger than they are now, but so what. So called private banks already work for central banks. All you would have to do is absorb them.

Thus the amount of banks, even commercial banks, may be whittled down. Goldman left and now JP Morgan has officially departed as well. Banco Santander exited last year with Goldman.

JP Morgan was one of the founding members of R3. R3 managing director Charley Cooper was quoted as saying, “JP Morgan parted ways with R3 to pursue a very distinct technology path which is at odds with what the global financial services industry, represented by our 80-plus members, have chosen.”

JP Morgan is an “outlier” currently but is also one of the banks that will likely survive any downsizing. Some other R3 banks may not be so lucky.

Nevada Advances Blockchain

Senators in the state of Nevada have unanimously backed a proposal that would block local authorities from instituting taxes or fees on blockchain use.

According to public records, after just over a month of deliberation, the Senate advanced the measure following a 21-0 vote, with zero abstentions.

As CoinDesk reported last month, it’s the first measure of its kind that would prevent local officials from charging money to use a distributed ledger or a smart contract tied to one. Sen. Ben Kieckhefer initially submitted the measure on 20th March.

The bill stipulates:

“A local governmental entity shall not: (a) Impose any tax or fee on the use of a blockchain or smart contract by any person or entity; (b) Require any person or entity to obtain from the local governmental entity any certificate, license or permit to use a blockchain or smart contract; or (c) Impose any other requirement relating to the use of a blockchain or smart contract by any person or entity.”

Other elements of the bill would clear the way for smart contracts and blockchain signatures to become acceptable records under state law, similar to a measure that was signed into law last month in neighboring Arizona.

The bill now moves to the Assembly – the lower chamber of Nevada’s bicameral legislature – for further consideration.

Australian Blockchain Emphasizes Standards and Regulation

What’s a regulatory priority: According to Standards Australia it’s getting bockchain terminology right. A Roadmap has been published by the group that says terminology is the first standard that must be developed.

Standards Australia hopes to identify technological vocabulary necessary for blockchaim and then prioritise development of those standards.

Blockchain technology, the underlying system that facilitates bitcoin trading, is a shared, distributed ledger that can store the complete transaction history of not just cryptocurrency but other kinds of records as well.

Once the terminology is settled, other issues can be made clearer. Additionally, the standards body indicated that interoperability among systems was another major blockchain goal.

“The emergence of new and exciting applications of blockchain and distributed ledger technologies present far-reaching opportunities for Australia and its international partners,” said Standards Australia CEO Dr Bronwyn Evans.

Blockchain has the potential to support efficient and secure real-time transactions across a large number of sectors; from enabling efficient and accurate financial services to providing visibility along the supply chain, and from streamlining government services to delivering confidence in identity accuracy to consumers, blockchain and DLTs have the capacity to revolutionise the way we do business.

Regulation and standards both play a big role though it is not quite clear why the standards body puts such a heavy emphasis on regulation.

Bitcoin Is Good With Fiat in South Korea

‘Bitcoin and Fiat Currency Can Coexist,’ according to South Korean’s central bank. South Korean central bank has put out a paper on cryptocurrencies comparing them to traditional fiat currencies

The paper is called “Crowding out in a Dual Currency Regime,” and is  written by Kihoon Hong, Kyounghoon Park, and Jongmin Yu.

“The rise of cryptocurrencies could have a significant impact on our monetary system as they are privately issued currencies, thus not regulated by central banks,” say the paper’s authors. One such cryptocurrency is bitcoin.

High costs of using fiat currency increase the demand for digital currency. Similarly, high costs of using digital currency relative to fiat currency raise the demand for fiat currency. In a world of imperfect currencies with uncertain costs associated with the use of a currency, it is unlikely that the relative costs of using digital currency will be low enough to drive out and accordingly crowd out fiat currency entirely.

Results should allow “the co-existence of both currencies.” South Korea has the fifth-highest bitcoin trading volume and the Korean Financial Services Commission (FSC) may soon regulate bitcoin.

The government is interested in cryptocurrencies and the paper is aimed  at helping officials comprehend the new technology.


Internet Giant Tencent Wants Blockchain

Chinese internet company Tencent is constructing blockchain services.

The firm, which has already made services like QQ and WeChat, is building the system for “shared economies,” among other reasons and is known as “TrustSQL.”

Tencent said that it would leverage its technological resources and sees it as a way to work with other firms.

Tencent published a white paper that delineated its plans and called on the Chinese government to play an even greater role in the Internet.

The involvement of government in the development and regulation of block chains is necessary and should encourage in-depth research on blockchain technology and block-chain applications.”

China already plays a very big role in the Chinese Internet and basically sorts through services to see what will go up and what won’t. Now there are calls for China to involve itself directly in the regulation of blockchain.

What China cannot do is prevent people from using such services on a peer to peer basis. It’s ultimate lack of control over the Internet will likely become an increased problem as time goes on.