Archive for the ‘Uncategorized’ Category

It’s a new era for technology

Monday, October 9th, 2017

The Internet has connected us on a global scale, but it has not truly linked the systems built on the Internet protocol. Imagine a technology where such systems can interoperate and any participants in such systems can liaise with each other in real-time with no need to worry about corruption or fraud in the system.

In essence, that is what the blockchain technology is: a distributed, decentralised immutable ledger which works through peer-to-peer connections allowing all users to transmit data to each other in a secure, encrypted manner and with full oversight and transparency over what is happening on the blockchain to ensure that no one cheats the system.

This technology was successfully pioneered by Bitcoin, which can essentially  be seen as the first real use-case for blockchain technology.

Hello world!

Tuesday, September 12th, 2017

Welcome to WordPress. This is your first post. Edit or delete it, then start writing!

Official statement from Bitmalta regarding the MFSA’s warning on virtual currencies

Monday, July 31st, 2017

In reply to the Malta Financial Services Authority’s (MFSA) warning issued today, the 31st of July, 2017, Bitmalta would like to point out that such a warning would have been justified five years ago in view of the yet-uncertain nature and effect of cryptocurrencies, but not in this day and age when jurisdictions worldwide are readying themselves for acceptance of cryptocurrencies rather than shying away from this technological revolution. 

We are extremely disappointed, to say the least, that whereas Malta’s Prime Minister Dr. Joseph Muscat and Hon. Silvio Schembri, the  Parliamentary Secretary for Financial Services, Digital Economy and Innovation, are actively advocating the adoption of blockchain technologies and cryptocurrencies in Malta, the MFSA are unfortunately still quoting long-since settled risks pertinent to cryptocurrencies and adopting an approach which may be defined as being too cautious. The blockchain technology is firmly rooting itself as “the next big thing”, a disruption which will echo that of the Internet back in the late 90s, and cryptocurrencies are but one single application of such a technology, albeit an important one as they show what can be achieved through the use of blockchain technologies. It is therefore of utmost importance to create incubators for such thriving projects to grow unmolested and study them closely, and  unfortunately the approach adopted by the MFSA is anything but proactive. Cryptocurrencies are here to stay, whether you ban them or not, so it is advisable, even obvious, that measures should be taken to educate the public about them rather than scaremonger. 

The risks cited by the MFSA have been sufficiently covered over the past few years as follows:

Money may be lost on the exchange platform

It is a well-known practice among cryptocurrency holders that funds are best stored on a local PC rather than on an exchange. One of the primary breakthroughs brought about by cryptocurrencies is that they remove the need for any middlemen in transactions, and exchanges should only serve as a temporary means of storage for active trades. Money may also be lost on any other website on which you store e-money too, so that point is moot.

Money may be stolen from your digital wallet

Facebook accounts can also be hacked, and your very identity may be stolen, and anything else connected to the Internet is prone to external attacks. Your data is only as secure as you want it to be, and cryptocurrencies are simply another form of data which is stored onto your computer. If you store your cryptocurrencies on a PC with no security measures in place and no password, for example, then you will be subject to third party attacks. This is another key area in which education would be a godsend, not just for cryptocurrencies but for cyber-security in general. Besides, safe storage solutions such as hardware wallets greatly minimise the risk of any external attacks, as well as multi-signature wallets and additional authentication measures such as Two-Factor Authentication (2FA).

You are not protected when using virtual currencies as a means of payment

Unfortunately neither are you protected when making payment in cash. It all depends on the parties involved in the transaction and the payment channels used. If one were to buy an item using cryptocurrencies from a reputable website with integrated consumer protection, then the applicable risk is the same as if you were to use any other means of payment. If you buy an item from an unknown third party off the dark web, then chances are that whatever means of payment you use, the risks are significantly higher. One should remember that mechanisms such as chargebacks are hotly contested by merchants as a prime avenue for fraud, so there are two sides to the cited argument in the warning.

The value of virtual currency can change quickly, and can even drop to zero

While this statement is partially true, it is likewise possible that the value of the Euro for example due to hyperinflation and unsustainable bailouts. The value of cryptocurrencies is mostly determined through demand and supply, with some cryptocurrencies pegging their value to that of other currencies or commodities, such as Tether which pegs its value to that of the U.S. Dollar (USD). Well-established cryptocurrencies such as Bitcoin have been experienced less volatility as their adoption rate increases, and therefore it is evident that both are correlated and it is simply a matter of time before the issue of volatility diminishes.

Transactions in virtual currencies may be used for criminal activities

The same applies to an even greater extent to transactions in fiat currencies. Suffice it to say that cryptocurrencies rank very low indeed when it comes to use by terrorists. Most cryptocurrencies utilise a public ledger system through which transactions can be tracked, making them a poor choice for money launderers as each and every transaction can be traced once the addresses of the senders/receivers become known. If anything, blockchain technologies allow for a paradigm shift in AML measures as they allow for a much more transparent system than the traditional ones which, safe to say, have been a failure acknowledged by many.

We hope that regulatory authorities such as the MFSA recognise the value and benefits of blockchain technologies as a whole, and that a proactive approach initiated through education is taken so as to enable Malta to become a blockchain hub in practice and not just through words. Bitmalta is readily available for any support in this area, and we would be more than happy to meet with the MFSA in order to address any of their questions and concerns on the subject and furthermore to understand why the MFSA sees a need to (re-)issue such a statement at this particular point in time and how this approach will fit in with the national Blockchain strategy that the Government is working upon. We welcome all cooperation on the matter and advise for a unified approach on the topic.

Official statement from Bitmalta regarding the MGA’s white paper to future proof Malta’s Gaming Legal Framework

Thursday, July 13th, 2017

The Malta Gaming Authority’s (MGA) white paper on the future of the iGaming regulatory framework featured a short but promising piece about the acceptance of cryptocurrencies, recognising them as “fast and cost-effective alternatives to traditional payment mechanisms” while promising the allowance of usage by MGA licensees of such cryptocurrencies.

Bitmalta welcomes this position taken by the MGA which is in line with what the Prime Minister has been stating over the past few weeks when expressing his wishes that Malta becomes one of the leading jurisdictions championing the blockchain technology and cryptocurrencies. Since Malta prides itself as being one of the main hubs for remote gaming, it is only logical that it should support suppliers and operators alike in adopting one of the most promising technological advances of the last decade.

However, this is just but one small step which has been taken in progressing towards full adoption of the blockchain technology and cryptocurrencies, and possibly a late one at that. Other jurisdictions such as the United Kingdom have already legislated in favour of the use of cryptocurrencies by remote gaming operators, and unless Malta wants to play second fiddle to such other jurisdictions, it should ramp up its efforts to embrace such technologies by speeding up the process and employing the services of experts readily available in the Maltese islands who would be more than glad to aid Malta in repeating its resounding success achieved in 2004 when it was the first jurisdiction in Europe to successfully regulate remote gaming. The opportunity is ripe for such another historic advance, which would even dwarf what was achieved in 2004.

Bitmalta offers its full support to the MGA in this decision and believes that while one should never legislate in haste, the excuse that one should preferably err on the side of caution when considering cryptocurrencies has long since expired, and Malta as a jurisdiction should either ride the wave or be buried under it.

Storage wars – Sia vs. Storj vs. Maidsafe

Saturday, July 8th, 2017

Storage services on top of a blockchain have piqued the interest of quite a few developers and investors alike, with the three most popular solutions being Storj, Sia and Maidsafe. Although all three promise a similar product, the means in some instances is quite different to the end and what follows is a short analysis of all three with their strengths and weaknesses.

Sia

Having the largest market cap of all three, Sia took the cryptomarket by storm this year, growing from a price of 24 satoshis and peaking to 844 satoshis, settling down to 435 satoshis at the time of writing. Their solution promises to be fast, ridiculously cheap and secure; uploaded user data is fragmented and distributed among the network, with replication of your data fragments introduced for good measure to protect against any nodes who happen to be offline when you request your data to be “re-assembled” and accessed by you.

Sia utilizes its own native crypto by the name of Siacoin, which is required to buy storage on the Sia network, and likewise the hosts/contributors are rewarded in Siacoin. Hosts set up their own prices, making it a free-for-all market with the best hosts being those who can offer maximum reliability (online availability) for the cheapest prices. The only caveat is that you need to lock up funds in order to buy storage, with any non-utilised funds being returned after 3 months. I can’t say I’m much in favour of this solution; users should be free to have a top-up-as-you-go facility, even in micropayments if need be. That is the beauty of crypto after all.

The fact that they’re going to introduce proof-of-burn for hosts (I’m a big fan of PoB) is a big plus in my book, and having their own blockchain is another one. The UX can do with some streamlining, and their latest development, Obelisk, has been met with criticism rather than praise; ASICs do strengthen the mining “loyalty” of a network but it also concentrates mining power into the hands of fewer people. Still, Siacoin is proving to be a strong project and one of the contenders for best-performing crypto in 2017.

Storj

With the smallest market cap of all three, Storj has been a long-undervalued project in my opinion. It is more enterprise-based than Sia, and has a fixed-pricing pay-as-you-go model which I personally see as being better. Their UX is simple and intuitive and hosting (“farming” in Storj’s instance) is as easy as 1-2-3. Storj also utilizes file-sharding/fragmentation to store data and protect it with end-to-end encryption, but the network leans more towards decentralization rather than distribution as in Sia’s case; Storj utilizes bridges which act as trusted third parties and basically take care of finding farmers to hold your data, essentially acting as middlemen. Yes, one of the strengths of crypto is to eliminate middlemen, but it does allow a much faster and easier solution than Sia’s (albeit less secure than Sia’s).

One of the main bones I have to pick with Storj is their less-than-smooth transition from SJCX, their Counterparty-based token, to STORJ, their Ethereum-based token. The move to the Ethereum blockchain was well conceived but ill-executed, with SJCX tokens still being more valuable than the STORJ ones. I would say that the problems in the transition were mainly two: the STORJ tokens ICO which took place before the transition from SJCX to STORJ, and the pricing of STORJ tokens being a lower one than SJCX’s price at the time, leading to an instant dip of SJCX’s price which caused investors some anguish. If the transition picks up pace a bit and SJCX is weeded out soon, I strongly believe that Storj will pick up the pace again.

Maidsafe

I’ll be straight – I have a bit of a love-hate relationship with this one since it’s taking longer than the Pyramids to build. Good things take a long time to be ready, but this one might just be taking the cake. Still, it’s my favourite project out of all three and it is by far the most ambitious one of them all as well. Maidsafe doesn’t just promise a decentralized storage solution; its aim is to create a new backbone on which data can be stored, accessed, and exchanged. In short, Maidsafe is a new network made up of all the participants who contribute their computing capacity in P2P fashion. dApps (Decentralised Applications) can be built on Maidsafe, with one of the most prominent ones so far being Project Decorum, a social media platform built on the SAFE network.

It is quickly cycling through its alpha testing stages and beta stage is being targeted by the end of 2017. Each testing stage is being meticulously studied, with the latest one having taken place this week (which predominantly focused on the front-end of things; hopefully, that means the back-end is getting somewhere at last!). On the negative side of things, the immensity of Maidsafe’s project is hard to understand even by tech-savvy people, and it is often dismissed as another storage-focused project which is taking too long to deliver on its promises, having spent more time in development than Bitcoin itself. Connecting normal browers to the SAFE network is not a process which beginners can easily follow; however, I have tried out their SAFE Launcher which connects the user to the SAFE network, and the UI is simple and performs well; it then becomes a question of adoption i.e. whether users would actually switch to a custom browser to access the SAFE network.

Maidsafe should be releasing Safecoins as the currency of choice for the platform sometime in the near future, with the existing MAID tokens being exchangeable for the Safecoins. Hopefully their transition from Maidsafe tokens to Safecoin will be a lot smoother than Storj’s.

Conclusion

In reality, comparing Maidsafe to Storj and Sia is not the fairest of comparisons, as Maidsafe’s objective is not storage but creating a new, more secure Internet. Although it is my pick of the bunch, development has been frustratingly slow and has only picked up pace in the last 14 months or so.

Choosing between the two storage-focused coins is difficult. Both have their pros and cons, and both aim at slightly different markets. Until Storj sorts out its tokens debacle I would stay away from it, but be careful not to miss the rollercoaster once it sorts out that. Sia has been more consistent and better-met by the crypto-community, but its slower speeds and transition to ASIC mining have chipped away slightly at its otherwise strong performance. All in all, all three can be rated as SAFE investments (sorry for the pun), with Storj promising the best returns.

7 reasons why Factom will be one of the biggest surprises this year

Saturday, June 3rd, 2017

Right, Waves and Stratis have launched to the moon; they’re obviously good long-term holds, but if you’re looking for the next big puller this year, check out Factom.

1. It utilises the crown jewel of the blockchain technology to its fullest potential – immutability of records. Specifically, data records. In a sense, Factom is the purest blockchain product out there so far; and it’s just starting to sell well. Link: https://www.factom.com/products/harmony

2. Last year, the Department of Homeland Security invested $200,000 in Factom to secure the identity of its devices and avoid tampering as a result. Link: https://www.dhs.gov/science-and-technology/news/2016/06/17/st-awards-199k-austin-based-factom-inc-iot-systems-security

3. Last year, the Bill & Melinda Gates Foundation invested $500,000 in Factom to secure medical records in third world countries, where forgeries and “misplacements” of such records are rampant.

4. Factom is aiming to disrupt the morgage industry by providing a far more secure record system of loan sales, securitization, and non-performing loan trading. Link: https://www.factom.com/news/factom-launches-revolutionary-blockchain-suite-of-mortgage-products

5. In an era where the advent of smart contracts is all but imminent, trust in such smart contracts is of utmost importance. Factom is developing a product to build trust in smart contract oracles which feed real-time information to the underlying smart contract/s. Link: https://www.factom.com/products/acolyte

6. It is working with Smartrac to create a product to store and secure documents on the blockchain. Documents can then be tracked with ease and a bulletproof guarantee against tampering.

7. It has arrived this far without any marketing at all; but that’s about to change. A Factom University is being developed and investors are starting to notice this revolutionary project. Are you in yet? Link: https://www.factom.com/university/tracks

Bubble… Bobble… Bockle… Blockchain

Wednesday, May 24th, 2017

While I was writing this article, the total cryptocurrency market value just ticked over $85 billion. At the start of 2017, the figure was a relatively paltry $18 billion. Some quick maths will show that represents an increase of around 470% in the space of a few months, and naturally that has people running around screaming their head off about a bubble. But does this classify as a bubble?

The most (in)famous bubble is perhaps the tulip bubble which took place towards the end of the 1800s. Tulip flowers and seeds reached stratospheric prices before crashing down… hard. Time and time again, mankind has experienced several bubbles, with the end result being triumphant smart investors who pull out before the crash, and bagholders of the asset in question left with a trade gone terribly wrong.

Analogies can certainly be drawn to the current situation in crypto. A sharp increase in price, feverish enthusiasm and mentions on mainstream media can be indicators of a bubble. However, certain fundamentals are being forgotten; fundamentals which potentially skew the whole bubble argument altogether.

  1. Cryptos are nowhere near being mainstream yet. It is still quite difficult to profitably buy cryptocurrencies without at least an intermediate knowledge of IT and economics, and only a small percentage of businesses accept cryptos as a means of payment.
  2. Most crypto-projects are still in their alpha stages. And that includes Bitcoin, which hasn’t even yet solved its scalability issues. Most recent projects promise a product-delivery date towards the end of 2018/start of 2019, therefore right now prices are mostly based on speculation. If the promises become reality, then that’s a whole different stage altogether
  3. Most people still have no idea what Bitcoin represents. It’s all too easy to be drawn inside the crypto-world and assume that everyone else knows what you know. Try asking someone on the street about what he/she knows about Bitcoin. When you get satisfactory answers on a regular basis, that’s when you should start worrying about a bubble.
  4. Global connections. This can indeed potentially be one of the hugest bubbles ever in history, but I strongly believe we haven’t even started yet. The reason is that we live in a world ruled by social media, where news can get around in an instant and hence no one can truly predict, with full confidence, when and how the crypto-train will stop. It might shoot off like a rocket to die off within a few months, or it might last longer than other bubbles.
  5. Cryptocurrencies have an actual use. Unlike some other bubbles, cryptocurrencies actively set out to solve long-standing problems thanks to innovative and ever-growing uses of the blockchain technology. While most of the cryptos in circulation might have a short shelf-life, others are good candidates for mainstream adoption.

The closest parallel which can be drawn to one particular bubble at this stage is the dotcom bubble which took place at the end of the millennium. All the ingredients above were part of the dotcom concoction, save for the influence of social media – and that should definitely not be taken lightly.

If the total dotcom market cap reached circa $3 trillion in value before bursting… what sort of heights can we expect the crypto-bubble to attain? Time will tell, but one thing is certain – there will be price consolidations, even downward corrections, but the road is long and cryptocurrencies do not look as if they will be stopped any time soon.

A promising week for ICOs

Saturday, April 22nd, 2017

ICOs (Initial Coin Offerings) are the crypto-version of IPOs, with a touch more risk and consequently a lot more to be gained as well. There have been plenty of past successful ICOs such as Waves, Lisk, and Golem. This week, there are at least 3 ICOs which have been heavily promoted and which promise a solid roadmap.

Gnosis

Gnosis is an Ethereum-based blockchain whose main aim is to create a prediction ecosystem similar to that brought about by Augur. Gnosis promises a higher rate of accuracy than Augur and touts Vitalik Buterin as one of its main advisors. Date: 24th April 2017

MobileGo

MobileGo aims to be the first crypto-centric mobile gaming platform and store for in-game purchases; think of it as a decentralised Play Store / Apple store with lower fees and higher returns for developers. Date: 25th April 2017

Encrypto-tel

Encrypto-tel’s blockchain solution aims towards a secure VoIP and B2B communications infrastructure centered on privacy and security for its users. Think of it as a truly private Skype. Date: 24th April 2017

As always – invest at your own risk and never invest more than you can afford. Even more importantly – do your own research!

 

How to trade cryptocurrencies

Monday, April 10th, 2017

The cryptocurrency market has been quite volatile over the past few months, making it a perfect playground for speculation and quick profits. However, it is important to tread carefully and keep the following points in mind:

1. Follow the hype, but don’t ride the train too late. It’s safe to say that when there’s gathering interest around a particular coin, then the time is ripe to make a quick investment in it. I made past mistakes where I researched too much into a coin and ignored the general idea about it from the masses. A prime example is Bitcoin – I knew that the ETF would be rejected for various reasons, the primary of which is the fact that the SEC would not accept an ETF of such a volatile asset, where it pumped around 30% over a short period of time as soon as the ETF decision started nearing. I also sold due to the fact that it is an inherently faulty currency due to transaction malleability. The latter only surfaced months after I had already known about it; in the meantime, the price kept rising due to the hype. However it’s important to keep in mind that if a train is picking up speed, it’s unwise to hop on board as you can hurt yourself. Either jump at the start or near enough to it, or just wait until for the next dump or the next train. Which brings me to…

2. What goes up must go down. That doesn’t mean it will go down to previous levels, and more often than not a higher floor is set. However, it WILL go down after reaching its peak. Buy at the next floor, don’t buy at the peak. Sounds simple? Trust me, it’s more difficult than it sounds.

3. Do your own research. Yes, it contrasts the first point a bit, but it’s important that you do some sort of background research before investing. That way you can avoid pump and dumps and scam ICOs.

4. Trust everyone and no one. It’s impossible to be well-versed on every aspect of a crypto; you need to trust other people. For example I’m a lawyer so I can easily comprehend and spot certain regulatory patterns which would push a coin high, such as accepting a coin as legal tender (BTC in Japan). However, I’m hopeless when it comes to spotting a good developer or not. At the same time, always double-check information – one source is not good enough. There will always be others confirming or rejecting any given point.

5. Thou shalt not love thy investment. Over half of the current cryptocurrencies will die out sooner or later, never to be heard of again. Don’t hold onto your investment with wild dreams of buying a Lamborghini with the returns (unless you have invested the equivalent of one into a coin). Only a handful of coins have true potential to lead the market for months to come, the primary of which are Bitcoin and Ethereum. As for the others…

6. Don’t be greedy. A 10% profit on an investment in a couple of weeks is an unbelievable one compared to the stock markets. If you are well-versed in cryptocurrencies, you might even risk holding on for a higher percentage of returns – you’re more than free to do so. However, don’t hold onto your investment waiting for a 1000% profit return. They do happen but they might not. Of course, if you’re buying to hold long-term because you genuinely believe in the project, then that’s a different matter entirely.

As always: never invest more than you can afford to lose. And never keep all your eggs in one basket!

Bitcoin: the (im)perfect democracy

Sunday, March 26th, 2017

“Democracy is the worst form of government, except for all the others” – Winston Churchill

It has often been said that while representative democracy grants power to the people, it can be quite dangerous if used incorrectly and might even lead to undesired results with the elected representative/s perhaps not being completely up to the task (honestly I’m not looking at you, Donald!). This in turn begs the question of whether the Athenians had got it right the first time round: was direct democracy far more effective than the indirect version?

It is very interesting to note that voting power was pegged to a quantifiable, objective value: land, ergo economic power. Those citizens who owned land effectively owned a piece of the country itself, and therefore it was deemed that it was only in their best own interests to vote diligently, as doing otherwise would mean that would be harming something in which they have a valuable stake: the country itself.

Enter Bitcoin, which follows what I’d call a developed version of Athenian democracy. Bitcoins can only be created through mining, a process where computing power is expended to solve a complex mathematical calculation and in turn be rewarded in Bitcoin. Moreover, miners serve to secure the network against external attacks and verify all the transactions taking place. Retaining such an important role in the network, it is only fair that only miners can vote on any proposed changes to the Bitcoin network. Anyone can become a miner, but to do so you need to possess intermediate technical knowledge as well as requiring an investment in mining hardware. Thus, Bitcoin has added an extra requisite to become a voter in its system apart from economic power, that is technical know-how.

This means that almost all voters in the Bitcoin network know the consequences of their votes and seek to act in the best interest of the network, as doing otherwise would mean losing profits and devaluating the currency which they hold. Of course, such an idyllic form of direct democracy has led to one of the most bitter feuds so far in Bitcoin’s history, namely the Segregated Witness vs. Bitcoin Unlimited war. However, bribery and misinformation had a part in Bitcoin Unlimited’s success so far, and while we can hope to vastly improve systems such as voting thanks to the blockchain technology, doing away with human greed remains a pipe dream.