Debate on Blockchain Decentralization Is Revived by Facebook and Telegram

Alexander Salazar
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0
Debate on Blockchain Decentralization Is Revived by Facebook and Telegram

Telegram will launch a decentralized blockchain, thus distancing itself from cryptocurrencies such as Libra. Facebook plans to offer a financial service, whilst Telegram focuses on technology.

A growing number of social media companies and messaging applications decide to embark on the blockchain industry and launch their cryptocurrencies, of which the most prominent are Facebook and Telegram. The venture reveals that the eternal versus between centralized and decentralized blockchains is also present in the companies of this industry.

The interest of the sector in cryptocurrencies is very obvious. First, Kik (the instant messaging application founded in 2010) started planning the launch of its token Kin, then in 2017 Telegram revealed the details of a future blockchain, and finally in 2019 Facebook confirmed that it would also join the stablecoin market.

Firms like Facebook and Telegram have decided to innovate and take advantage of an industry that generates good profits. However, although these two companies provide similar services, they have diametrically opposite ways of addressing and developing their new blockchain products. While Facebook has decided to create a cryptocurrency based on the governance of an association, Telegram prefers to work on a project for collective development

Two Different Visions

As Bitcoin founded the ecosystem, the community adopted much of the ideology of this group as their own. In this sense, independence, privacy and, therefore, the decentralization of power are unquestionable principles in the ecosystem. Under this view, the emergence of blockchain platforms with centralized governance is very controversial, since they go against the peer-to-peer (P2P) financial ideal that Bitcoin introduces.

However, because Bitcoin is open source and blockchain technology has an increasing impact on a financial level, many companies are adopting these networks under the governance of a few to maintain greater control over their projects. Facebook is an example of how a social media company may be interested in blockchain technology but not in its decentralized operation.

A few months ago, the board decided that its cryptocurrency would be managed by a group, called the Libra Association, composed of over 20 companies in the financial and digital commerce sector. The entity has a board of directors and an executive team, who make decisions about the fate of Libra.

The Facebook project has received strong criticism due to this decision since users believe that Facebook and its affiliated companies could condition its operation. The censorship of transactions and the development of the crypto asset unilaterally are some of the concerns that are visible in centralized governance.

Most companies prefer to develop centralized blockchains to continue to maintain control over their projects. After all, it is a product that, in most cases, has been launched to generate profits or benefits. However, other firms do not seem so interested in generating profits having total control over the network that they created.

Telegram announced in recent days that its TON blockchain will be fully decentralized. The board not only decided that the project will not have a foundation or management entity, but will also stop contributing to its development after the launch. Telegram’s decision causes surprise after the flood of criticism that Facebook received in 2019.

By Alexander Salazar

Agreement with Brazilian Cryptocurrency Exchange Houses Is Rejected by Banco Bradesco

Alexander Salazar
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0
Agreement with Brazilian Cryptocurrency Exchange Houses Is Rejected by Banco Bradesco

Bradesco highlights its attachment to anti-money laundering policies in Brazil. The ABCB appealed the decision of the Administrative Council of Economic Defense.

It was reported that the Brazilian bank Bradesco refuses an agreement with exchange houses, following the decision of the Administrative Council of Economic Defense (CADE) in the case of the closing of the bank accounts of these cryptocurrency exchange companies.

In early January, the banking institution rejected a statement from the Brazilian Association of Cryptocurrencies and Blockchain (ABCB) and requested CADE’s mediation to reach an agreement. The objective of this agreement would be to stop the closing of accounts between Brazilian banks and exchange houses in the South American country.

In its appeal, filed at the end of December, the ABCB argued that CADE’s ruling was full of “darkness”, “contradictions” and “omissions.” Bradesco’s response establishes a defense of CADE, assuring that such accusations are not justified.

Additionally, Bradesco explained that the position of the Brazilian Association of Cryptocurrencies and Blockchain regarding the regulation of the sector “is not consistent” with CADE’s vision in this respect.

Besides, the bank argued to maintain concerns regarding the policies of exchange houses against money laundering. This coincides with CADE’s position in its recent ruling. In that statement, the regulatory body emphatically dismissed the ABCB’s lawsuit for the closing of bank accounts.

Case Closure

CADE’s statement dates from December 26th and establishes the closing of the case. The agency considered that the banks that closed cryptocurrency exchange accounts did not act unfairly. According to CADE’s investigation, “there is no evidence of antitrust crimes as a result of the rejection of some banks to establish contracts with certain cryptocurrency exchange houses.”

The agency also noted in its ruling that the archiving of the investigation “does not have the power to validate future behavior regarding checking accounts and other services related to cryptocurrencies” by banks. In other words, from its decision, it was closed to future mediation.

The decision of the regulatory body contradicted a report by the former president of CADE, Paulo Furquim de Azevedo, according to which there were enough elements to consider that the banks had incurred “illegal antitrust” in their action against the exchange houses.

Previously, ABCB had sued six banks for practices that restricted the market for cryptocurrency exchange platforms. Faced with this complaint, CADE opened the investigation, which finally closed at the end of last year after postponing the decision.

Until now, the only one of those banks to express its opinion has been Bradesco. The others involved in the investigation were the Bank of Brazil, Itaú Unibanco, Santander Brasil, Banco Inter, and Sicredi.

Another Request Dismissed

In the same tone as CADE, the Court of Justice of São Paulo dismissed an appeal filed by the exchange house Mercado Bitcoin after the closing of accounts that it maintained in the Bank of Brazil.

The aforementioned court justified its decision because the banking institution had notified the closure 30 days in advance and had not committed any legal abuses. Additionally, the judicial body considered that the Bank of Brazil did not engage in practices that threaten free competition in its actions against Bitcoin Market.

By Alexander Salazar

Baidu Launched a Blockchain ​​Network and A New Cryptocurrency in China

Maria Rodríguez
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Baidu Launched a Blockchain ​​Network and A New Cryptocurrency in China

Baidu expects to boost the digital commercial sector in China using its new blockchain network and its Xuperchain cryptocurrency.

The renowned online search engine Baidu recently announced that it will launch a new cryptocurrency called Xuperchain to the Chinese market. The company hopes Xuperchain will be supported by a blockchain network that has been created by the same company.

The blockchain network will operate in China with all the benefits that the company provides. Besides, the network will use master nodes to facilitate and conduct the operations.

According to media reports in China, the new blockchain system will be high performance, so Baidu managed to develop a blockchain network that will have the capacity to perform approximately 10,000 operations per second, as well as having the ability to support all the necessary applications that wish to join the platform.

In another sense, according to the documents related to the platform, the Xuperchain is an open-source blockchain network. This means that all people who wish to review all technical aspects of programming and specifications can do so through the company’s website, GitHub.

Some details of the platform’s programming reveal that it will have its block finder, which means that it will be possible to track all the activities conducted in smart contracts. It was also known that the search engine could be supported and programmed with GO or Solidity.

Another interesting detail related to the project that will soon be enabled for users in China is that several consensus mechanisms can be managed within the processing of the blocks, using PBFT and DPoS as support.

Birth of Xuperchain

The Xuperchain project is being developed after the initiative was proposed as an engine to boost the digital development of governance methods in the Chinese territory, in the middle of 2019.

This is part of a more elaborate and old plan, of public development, that was known in 2016, where the objective was to modernize the entire industry and administrative processes of the government. The 2016 plan proposed to use blockchain solutions and tools to face problems in China about new technologies in the world.

For the creation of this project, Baidu executives assured that they already have available more than 50 registered patents. They plan to use them to develop new services and products which would be designed to be used within the blockchain network.

The growth and accelerated acceptance of this technology gained strength after last year President Xi Jinping made favorable statements, as he suggested private companies and all public entities to make efforts to adopt blockchain technology in their processes; thus, improve their management and operability models.

Although the opinion on cryptocurrencies in the Asian country remains questionable and that cryptocurrencies’ free movement may be subject to strong restrictions, everything suggests that this initiative may change some paradigms willing to this technology, and open new commercial fields to one of the largest economies in the world.

By María Rodríguez

Illinois Legalizes Blockchain Contracts

Maria Rodríguez
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Illinois Legalizes Blockchain Contracts

States like Vermont and Arizona, in the US, also take advantage of technologies such as smart contracts to improve the services of their companies.

Illinois is one of the states that conducted investigations related to cryptocurrencies and blockchain technology to take advantage of this platform which stores and shares information securely.

As part of this process of investigation, to make possible a future and positive adoption, the Blockchain Technology Act of Illinois explains basic concepts such as blockchain, cryptographic hash, smart contract, electronic record, as well as some basic rules related to blockchain’s world.

Said law, sponsored by Keith R. Wheeler, who is a republican member of the Illinois House of Representatives, entered into force last January 1st, 2020.

The Blockchain Technology Act could work as a base for blockchain-based contracts. Also, it is just at this point where the state is working currently. These contracts are now a viable and admissible alternative to paper-based records.

“A smart contract, record or signature may not be denied legal effect or enforceability solely because a blockchain was used to create, store or verify the smart contract, record or signature”, the law reads in part.

Now, Illinois is another region of the United States which recognizes smart contracts in legal settings. One of the firsts states in accepting this technology was Vermont, which recognized smart contracts in 2016. It made blockchain records admissible in court. After that, Arizona, one year later, approved similar legislation recognizing blockchain firms.

What Is the Law About?

The Illinois law gives the same legal recognition already enjoyed by paper contracts to blockchain contracts and agreements so that they are recognized by the state as legally binding.

It also shields the blockchain industry from local government interference since many users prefer the decentralization that blockchain technology offers. This means that cities and towns cannot impose taxes and regulations or require licensing or permits on blockchain systems or for those who use them.

“The law ensures that businesses and individual community members will not have to navigate a patchwork of local blockchain regulation,” said Alison Mangiero, President of blockchain technology company TQ Tezos and who proposed this special bill for Illinois to adopt blockchain technology.

The Benefits

Backers of the law in Illinois consider that it is a means of providing companies and businesses with a legal framework for embracing new technologies. Governor J.B. Pritzker signed the measure into law in August.

Mangiero agrees. She said legal certainty and stability will allow firms to focus their efforts on developing new uses for the technology, including facilitating transactions.

Tatyana Ruderman, counsel at InfoLawGroup’s Chicago offices, said the law could help companies looking to utilize blockchain-based records systems. But she said the law’s wording is vague in some parts. For this reason, she predicts this law could face a legal challenge in the future.

“The law is likely to be tested in courts by parties who later want to try and invalidate a blockchain transaction”, she said.

Ruderman added the Illinois law’s success may be hindered by its borders. This is because if another state, like neighboring Indiana, does not recognize smart contracts, it does not mean that other states will recognize smart contracts too.

“It may not make sense for businesses that operate outside Illinois to implement blockchain-based contract management only in Illinois and not elsewhere (…) This may be an area where it makes sense for the industry to come together and agree on some standards to fill the gaps”, she explained.

By María Rodríguez

States like Vermont and Arizona, in the US, also take advantage of technologies such as smart contracts to improve the services of their companies.

Illinois is one of the states that conducted investigations related to cryptocurrencies and blockchain technology to take advantage of this platform which stores and shares information securely.

As part of this process of investigation, to make possible a future and positive adoption, the Blockchain Technology Act of Illinois explains basic concepts such as blockchain, cryptographic hash, smart contract, electronic record, as well as some basic rules related to blockchain’s world.

Said law, sponsored by Keith R. Wheeler, who is a republican member of the Illinois House of Representatives, entered into force last January 1st, 2020.

The Blockchain Technology Act could work as a base for blockchain-based contracts. Also, it is just at this point where the state is working currently. These contracts are now a viable and admissible alternative to paper-based records.

“A smart contract, record or signature may not be denied legal effect or enforceability solely because a blockchain was used to create, store or verify the smart contract, record or signature”, the law reads in part.

Now, Illinois is another region of the United States which recognizes smart contracts in legal settings. One of the firsts states in accepting this technology was Vermont, which recognized smart contracts in 2016. It made blockchain records admissible in court. After that, Arizona, one year later, approved similar legislation recognizing blockchain firms.

What Is the Law About?

The Illinois law gives the same legal recognition already enjoyed by paper contracts to blockchain contracts and agreements so that they are recognized by the state as legally binding.

It also shields the blockchain industry from local government interference since many users prefer the decentralization that blockchain technology offers. This means that cities and towns cannot impose taxes and regulations or require licensing or permits on blockchain systems or for those who use them.

“The law ensures that businesses and individual community members will not have to navigate a patchwork of local blockchain regulation,” said Alison Mangiero, President of blockchain technology company TQ Tezos and who proposed this special bill for Illinois to adopt blockchain technology.

The Benefits

Backers of the law in Illinois consider that it is a means of providing companies and businesses with a legal framework for embracing new technologies. Governor J.B. Pritzker signed the measure into law in August.

Mangiero agrees. She said legal certainty and stability will allow firms to focus their efforts on developing new uses for the technology, including facilitating transactions.

Tatyana Ruderman, counsel at InfoLawGroup’s Chicago offices, said the law could help companies looking to utilize blockchain-based records systems. But she said the law’s wording is vague in some parts. For this reason, she predicts this law could face a legal challenge in the future.

“The law is likely to be tested in courts by parties who later want to try and invalidate a blockchain transaction”, she said.

Ruderman added the Illinois law’s success may be hindered by its borders. This is because if another state, like neighboring Indiana, does not recognize smart contracts, it does not mean that other states will recognize smart contracts too.

“It may not make sense for businesses that operate outside Illinois to implement blockchain-based contract management only in Illinois and not elsewhere (…) This may be an area where it makes sense for the industry to come together and agree on some standards to fill the gaps”, she explained.

By María Rodríguez

Colombia Will No Longer Have the Service of Cryptocurrency Exchange Daexs

Willmen Blanco
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0
Colombia Will No Longer Have the Service of Cryptocurrency Exchange Daexs

The startup will be dedicated to developing a new version of its platform. Users with funds in their system must withdraw them before January 21st.

It was reported that the Colombian cryptocurrency exchange Daexs will close operations on January 21st due to the interruptions occurring to the platform in recent weeks. Founded in 2016, but after a year of operations, the company urged its users to withdraw funds in fiat currencies or cryptocurrencies before that date.

The company said that the reasons for the closure include service failures due to the growth in the number of users and because they will be dedicated to creating a new version of their platform. In a statement, released on Tuesday, January 7th, the startup said the following:

“At Daexs, our priority is to offer an excellent experience to our users. We have decided this in order to develop a new version of our platform, which will allow us to overcome the unavailability events occurring recently, due to the increase in users, thus meeting our customers’ demand and requirements and strengthening our local and international competitiveness.”

However, it was not clear how long the cryptocurrency exchange house will remain non-operational, since the press release mentions an “indefinite temporary closure” for both Daexs Exchange and Daexs Pay, its payment solution. It could be deduced that the company will not offer the service again until its platform remains stable.

Withdrawal of Funds

Those users that do not withdraw their funds before the closure date must follow another protocol to obtain their cryptocurrencies or fiat currencies. That involves submitting a photocopy of the identity card or passport, an image of the document and a message authorizing the delivery of their funds from Daexs, plus the date of the request, the bank account number or the wallet address.

The service provider Daexs has had problems, at least since last November 26th, when the exchange house announced on its Twitter account that its website was undergoing maintenance. A new interruption was reported on December 21st, which would have accelerated the decision to stop offering the service until further notice.

Based in Medellín, Daexs was used to exchange cryptocurrencies such as Bitcoin, Ether, Litecoin, Dash and Tether for its users in Colombia and Panama, who could inject funds with Colombian pesos and US dollars.

Colombia and cryptocurrency exchange houses have experienced fluctuations over the years, since there are startups that have opened their doors to then close and open them again for regulatory reasons. Such are the cases of the Buda.com and Panda Exchange crypto exchanges. The first one reopened in July last year after 11 months of inactivity whilst the second announced that month that it would reactivate its operations with Colombian pesos.

The coffee-producing country could be considered as one of the emerging markets for cryptocurrencies in Latin America. In a survey conducted by the Paxful crypto exchange, it was reported that 86.5% of Colombians are familiar with cryptocurrencies. Besides, according to Coin ATM Radar, in the country there are about 57 cryptocurrency ATMs, the highest figure for the region.

By Willmen Blanco

Phishing with the Image of Binance CEO Generated Bitcoin Losses

Willmen Blanco
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0
Phishing with the Image of Binance CEO Generated Bitcoin Losses

A scammer posed on Instagram as Binance CEO Changpeng Zhao. More than $700,000.00 thousand were stolen through this fraud.

José Armas, a Venezuelan that lives with his family in Florida, the United States, was forced by the economic situation of his country to emigrate about 2 years ago. As a trader, he regularly buys and sells financial assets, making the most of the operations. However, he was recently the victim of a phishing fraud that took away all his funds, which consisted of about 91.57 BTC, approximately USD 716,000 at the time of writing this article.

Armas related how he became a victim of one of the methods that are most used by cybercriminals to scam and obtain confidential information fraudulently. At the same time, he said that his story could alert other people, who must also know the importance of implementing techniques to protect themselves.

The Instagram post of Changpeng Zhao’s photo led Armas to want to have a conversation with the founder of the exchange Binance. As he did not take the proper precautions, he lost all his funds, which had been the product of the study and time spent to take advantage of the fluctuation of Bitcoin’s market.

How It all Occurred

Excited by the creativity of his son, who is beginning to demonstrate business skills, Armas posted a photo of the boy in his Instagram story. At just 9 years old, he installed a lemonade and cookies stand that received bitcoins as a form of payment. The photo was commented by family and friends, who applauded his entrepreneurial attitude.

The excited father also received a reaction from an Instagram account identified with the name of renowned Changpeng Zhao, who barely answered the story with an applause emoticon. Upon observing the reaction of the alleged CZ, Armas asked him to comment on the photo posted on his profile, to which he agreed.

Subsequently, both held a conversation about Binance in which Armas said that for two years he has been a user of the exchange. Gradually, he gained confidence and agreed to answer all the questions that the alleged Changpeng Zhao asked him.

The scammer contacted him through a private message and began by talking to him kindly. He then sent him a link to a webpage that he is promoting, which deals with rewards for wallet-to-wallet transactions. After downloading and opening the application on one of his computers, the thief hacked all his computers, including his cell phone.

What Armas did not notice is that, apparently, CZ does not have an Instagram account. Although there are several accounts with his name, none is verified, which is the mechanism that Instagram uses to confirm that the account of a public character, brand or celebrity is authentic.

The Venezuelan trader advises being very careful with those people contacted through social networks. Those who keep cryptocurrencies stored in large quantities should find a way to not have everything in a single wallet for security and, if possible, use external wallets of the Tresor type.

By Willmen Blanco

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