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US Lawmakers to Visit Switzerland to Discuss Crypto, Facebook’s Libra

A delegation of the United States House of Representatives will visit Switzerland on cryptocurrency concerns, with Facebook’s stablecoin Libra being in the focus.

A delegation of the United States House of Representatives will visit Switzerland on cryptocurrency concerns, with Facebook’s not-yet-released stablecoin Libra being in the focus.

As local weekly news outlet NZZ am Sonntag reported on Aug. 17, a six-member delegation from the House Financial Services Committee is going to meet with Swiss Federal Data Protection and Information Commissioner (FDPIC) Adrian Lobsiger to exchange views about digital currencies.

A spokesperson told NZZ am Sonntag that Libra will be the focal point of the dialogue between the regulator and U.S. lawmakers. The delegation is led by the chairwoman of the House Financial Services Committee, Maxine Waters, who previously requested that Facebook halt Libra’s development until the purported risks it poses could be properly understood.

Swiss regulation

The visit from U.S. legislators aims to clarify regulatory issues surrounding Libra. In hearings before the House Financial Services Committee in July, some representatives expressed their discomfort with the coin being regulated from Switzerland. 

In the hearings, Facebook’s David Marcus assured Representative Bill Huizenga that Facebook had been in touch with the Swiss Financial Market Supervisory Authority.

The head of communications at the FDPIC, Hugo Wyler, subsequently said that Facebook had not contacted the regulator regarding the registration of its cryptocurrency project. The FDPIC then sent a letter to the Libra Association — the stablecoin’s proposed governing body — asking for details about Libra:

“The FDPIC stated in his letter that as he had not received any indication on what personal data may be processed, the Libra Association should inform him of the current status of the project so that he could assess the extent to which his advisory competences and supervisory powers would apply.”

During a hearing before U.S. House of Representatives in mid-July, Marcus fielded questions as to why the company had chosen to register its Libra Association in Switzerland rather than the U.S. “The choice of Switzerland,” Marcus claimed, had “nothing to do with evading regulations or oversight.” Marcus argued that the jurisdiction is an international place conducive to doing business.

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10 Global Enterprises Looking to Issue Their Own Cryptos

Ten enterprises taking a shot at creating their own cryptocurrency to leverage the power of blockchain to drive their businesses to the next level…

The growing popularity of cryptocurrency has led to a revolution in the digital currency industry. Enterprises that were of noncrypto origin now have or plan to have their own crypto product. The 10 years of cryptocurrency’s existence has led to an unprecedented ease of transactions. It has also brought transparency into the e-commerce world. This article discusses 10 of the biggest enterprises in the world, without a cryptocurrency background, that have already created or are in the process of investing resources to develop a digital currency they can call their own.

1. Facebook

Facebook is reportedly completing efforts to release its own digital currency. Information from Ross Sandler, an internet analyst at Barclays, predicted that the social media giant’s development of a cryptocurrency would potentially generate as much as $19 billion in additional revenue.

The digital currency, Libra, is a project co-founded by Facebook and the Libra Association. This association was also a part of Facebook’s numerous projects. The group expects Libra to “empower billions of people.” The aim is to use the currency to assist billions of adults without access to bank accounts. Facebook and Libra hope to provide such adults with a currency they can use for transactions. The white paper of Libra describes how project’s wallet provider, Calibra, would function. The white paper says: 

“Facebook created Calibra, a regulated subsidiary, to ensure separation between social and financial data and to build and operate services on its behalf on top of the Libra network.”

It is noteworthy, though, that Facebook won’t be in charge of the cryptocurrency. Instead, it is just one of the Libra stakeholders. However, the social media giant would allow users to use the coin for transactions on its platform.

2. JPMorgan Chase

JPMorgan Chase is a multinational company based in the United States specializing in investment banking and financial services. JPMorgan Chase is currently rated the world’s sixth-largest bank, with total assets of $2.535 trillion. Recently, the financial institution has also turned its attention to the cryptocurrency industry. It is putting the finishing touches on its efforts to create a digital currency for its customers and others. Speaking to Yahoo Finance, JPMorgan Chase’s blockchain chief, Umar Farooq, said:

“We have always believed in the potential of blockchain technology and we are supportive of cryptocurrencies as long as they are properly controlled and regulated. As a globally regulated bank, we believe we have a unique opportunity to develop the capability in a responsible way with the oversight of our regulators.”

The company also reported that some engineers have already created a coin known as the JPMCoin. This digital token will be used for transaction settlements between the bank’s wholesale payments clients. Showing support for the currency, irrespective of his negative attitude toward Bitcoin, CEO Jamie Dimon as well as other top executives at the bank believe that blockchain and regulated digital currencies on it have a promising future they want to explore. This underscores the bank’s desire to create a cryptocurrency for its users. 

The financial institution has outlined three primary uses of the coin. These are: 

  • International payments, exclusively for large corporate clients. 
  • Service for securities transactions. 
  • Usage by large organizations that utilize the company’s treasury services business. The objective is to replace their dollars with the new coin. 

3. Walmart

Another big company that is considering the digital currency idea is Walmart. The chain store recently applied for a patent for its own cryptocurrency. Previously, Cointelegraph reported that the company may be looking for an alternative payment solution for its users and employees. 

Walmart explains that it hopes to provide a “vendor payment sharing system.” The system will process any payment for the products sold by the retail store or services it renders to its customers. The currency will be a fiat-backed stablecoin, most likely pegged to the U.S. dollar. The core aim is to speed up transactions while making it a useful tool to pay for food — maybe becoming the perfect replacement for credit or debit cards. Customers could also benefit from another critical function of the coin because, if bonded together with artificial intelligence (AI), it would suggest purchases to customers, taking their preferences and budget into consideration. Although Walmart has yet to name the coin, rumors are flying around that it will be called WalmartCoin.

4. AirAsia

Coming from the East is the low-budget airline AirAsia. The airline has also confirmed its willingness to explore the fintech sector with its intention to launch its own cryptocurrency: BigCoin. Tony Fernandes, AirAsia’s founder and CEO, shed light on the company’s desire to own its cryptocurrency. The chief executive explained that the airline plans to explore new markets, starting with the launch of a cryptocurrency with an initial coin offering (ICO).

The CEO went on to tell the world how the company intends to use the coin. He said that the airline would transfer its Big Points loyalty program to the blockchain. He noted: 

“We have a product that can be a currency in Big Loyalty, we’re building a payment platform so the two can marry quite nicely. We have an ecosystem that enables you to use that currency. There’s no point having a currency that can’t be used.” 

This is a part of the founder’s efforts to make the company go cashless, and it comes as a response to the fact that the majority of Southeast Asian residents don’t work in their home countries. As a result, they move a vast sum of money across the borders via remittances. 

If AirAsia succeeds in floating its digital currency, it will go down in history as the first airline to achieve this feat. Then, customers can conveniently use the coin to pay for seat upgrades, flight meals and other related services. The goal is to make that available within the next three to six months

5. Mitsubishi UFJ Financial Group (MUFG)

News from Japan’s biggest bank shows that Mitsubishi UFJ Financial Group intends to launch a cryptocurrency through its banking arm, the Bank of Tokyo-Mitsubishi UFJ. After devoting a few years to its development, the financial giant will test the MUFG Coin on about 100,000 accounts in 2019. 

According to Cointelegraph Japan, Kanetsugu Mike, the president of MUFG, revealed the bank’s desire to release a digital currency before the year runs out. Customers are expected to download the bank’s app. Once they do, the balance in their accounts will automatically be converted into digital currency. 

“Users will be able to use the currency to make payments at places like restaurants, convenience stores and other shops, as well as to transfer the currency to other participants’ accounts.”

If this becomes a reality, MUFG will become the largest financial company with a cryptocurrency designed for use exclusively with the institution. The bank is currently the fifth-largest in the world and the largest in Japan.

Related: 10 Blockchain Ideas That Are Out-of-This-World, or May Change It

6. Arias Intel Corp.

Arias Intel Corp. is a technology company with interests in mobile gaming and media. In 2018, the company announced that it was developing a proprietary cryptocurrency, iNEO. The company wanted to create a cryptocurrency that could be used as a standard medium of exchange. Thus, users can use the digital currency to fund smart contract transactions. Additionally, they will be able to use it for purchasing goods and services.

Initially, the coin will be integrated with the apps and mobile games in the company’s portfolio. The coin will also have an Application Programming Interface (API) and some other open-source interfaces. The company aims to give other developers a platform on which they can create other revenue opportunities for the tech giant. According to the company, it wishes to leverage the power of blockchain technology to solve security and payment issues, two of the biggest challenges companies have to deal with. 

They hope to use the features of blockchain technology to solve compliance and banking problems the cannabis industry currently faces. This is in addition to the ease it provides for supply chain verification. To achieve its goals, Arias Intel Corp. will build the iNEO Protocol, a blockchain system that will enable transactional management by merchants. A point of sale system and the iNEO app will support this quest. The iNEO app enables users to spend their digital currency with ease. Computer code will generate all transactions and funds. Thus, they can’t be monitored, tampered with, managed by a third party or manipulated.

7. Amazon

Amazon, a giant in retail, is rumored to be in the process of creating a proper digital currency, as suggested by its recent patenting activity as well as the recent registration of crypto-related domains, which include AmazonCryptocurrency.com, AmazonEthereum.com and AmazonCryptocurrencies.com.

Furthermore, the company is already using what is describes as a “digital currency” called the Amazon Coin. Although this coin is not a traditional cryptocurrency, and acts more like a gift card, it may further suggest that this product is a trial for a blockchain-backed solution in the future. Binance crypto Exchange CEO, Changpeng Zhao (aka CZ) does believe that Amazon will inevitably have to create its own crypto.

Amazon’s native crypto may eventually help with handling the sale of more than 12 million products listed on the website worldwide. It is also believed that the currency could pave the way for processing more than 600 transactions per second, the actual number of sales Amazon makes per second during its peak sales hours.

It is also hoped that other Amazon — services such as Twitch, Amazon Prime and Audible — will accept the cryptocurrency as well. Once the coin is adopted across its several platforms, it is believed that the retail store won’t have any need to keep its region-specific fiat currencies and websites. 

8. Tencent 

Another Asian enterprise with interest in cryptocurrency, Tencent, has launched its coin, QQ Coin.The Chinese conglomerate is a household name in Asia. It is behind WeChat, a chatting platform with some 1 billion daily users. The instant messaging service, QQ, is another project created by the Chinese company. Every month, QQ has over 800 million active users. 

In 2005, Tencent launched QQ Coins, which the company initially developed to make online payments for its serves and games easier for its users. Over 200 million people were using the coin in April 2014.

9. Google

After several years of pessimism and hesitation, Google has also joined the growing list of enterprises that are contemplating getting involved in cryptocurrency in the future, which may lead to them creating their own cryptocurrency. It was reported that the company intended to approach Ethereum founder Vitalik Buterin for assistance with the blockchain project. When he turned them down, Google made a move for Charles Hoskinson and Duncan Coutts, IOHK CEO and its director of engineering respectively.

The tech giant may gradually be preparing the ground for its digital currency. The company is also interested in Cardano, a digital currency that is known for its scalability, sustainability and robustness. Either way, Google’s interest in having a coin it can call its own is indisputable. 

Cameron and Tyler Winklevoss, the founders of cryptocurrency exchange platform Gemini, expressed their optimism that Google will join other members of FANG (i.e., Facebook, Amazon, Netflix and Google) to launch its own cryptocurrency. They told CNBC during an interview in July that: “Our prediction is every FANG company will have some cryptocurrency project within the next two years.” 

10. Rakuten 

Rakuten has also indicated its desire to join the cryptocurrency race. Dubbed the “Japanese Amazon,” Rakuten announced its coin, Rakuten Coin, at the Mobile World Congress held in Barcelona in 2018. According to Hiroshi Mikitani, the company’s CEO, Rakuten is also making a move to adopt a “borderless” currency although the company has yet to fix a date for the release. Some of these services and businesses include: 

  • Online shopping. 
  • Professional sports. 
  • Banking.
  • Media.
  • Credit card and payments. 
  • Marketing and data analysis.

Once the Rakuten Coin is out, consumers of these services will be able to make transactions with the digital currency. Mikitani added, “Basically, our concept is to recreate the network of retailers and merchants. We do not want to disconnect [them from their customers] but function as a catalyst.” 

More enterprises likely to adopt blockchain

Though several enterprises have maintained a neutral position with regard to the use of blockchain, the recent involvement of top players in blockchain is likely to play a pivotal role in helping others change their minds and participate as well.

For instance, some experts believe that things are going to change for the better in the foreseeable future. One of those who holds this opinion is Paul Richard Brody, principal and global blockchain leader at Ernst & Young. He told Cointelegraph: 

“There are really two journeys going on here — one is enterprise acceptance of blockchains in general, and the other is the journey from centralized, permissioned services towards truly decentralized, public blockchains. The last year has seen a huge leap in both, and for most encouragingly, a huge shift in the number of users who see the future belonging to public blockchains. I don’t see any movement on enterprise adoption of cryptocurrencies, however. Enterprise users are most interested in fiat currency tokens so they can transact on blockchains without using crypto.”

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China’s Digital Currency Is Ready, Central Bank Says

A senior official at the People’s Bank of China says the country’s digital currency is ready after five years of research.

The People’s Bank of China (PBoC) has claimed that its digital currency “can now be said to be ready.”

According to PBoC deputy director Mu Changchun, a prototype that adopts blockchain architecture has been successfully developed after five years of research.

His announcement, made at the China Finance 40 Forum, was reported by local news site Shanghai Securities News on August 10.

Two-tier operating system

Mu said issuing a digital currency using a pure blockchain architecture would be difficult to achieve in a country as big as China because retailers require high concurrency performance.

The digital currency is also going to adopt a two-tier operating system to cater to the nation’s “complex economy with a vast territory and a large population,” with PBoC on an upper level and commercial banks on a secondary level. According to Mu, this will improve accessibility, enhance adoption rates among the public, and promote innovation among commercial entities.

According to the PBoC executive, the digital currency is designed to be suitable for “small-scale retail high-frequency business scenarios.”

A threat to the United States?

As reported by Cointelegraph on Aug. 9, the PBoC has been planning to get ahead of the U.S. and Facebook’s Libra by issuing a national cryptocurrency, as American politicians slam the brakes on the social network’s stablecoin because of regulatory concerns.

However, despite the upbeat remarks by Mu, it remains unclear exactly when China’s digital currency will actually launch.

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Who Is David Marcus: Bitcoin Believer Turned Facebook’s Libra Boss

David Marcus, the man who has come to personify the seismic change in the global financial system, has come a long way to the helm of Facebook’s Libra…

David Marcus, the man spearheading Facebook’s blockchain effort, has gotten a tremendous amount of spotlight lately. The rapid emergence of Libra has dominated the coverage of other crypto-related developments, as it became apparent that the social media giant’s inroad into the realm of digital assets will have most serious consequences for both the blockchain sector and the global financial system in general.

While previously the crypto industry has hardly ever had one key spokesperson — which is perhaps a natural and welcome state of affairs for a domain wherein decentralization is the most cherished of values — Libra’s newfound position at the center of global-level regulatory debate about the future shape of finance propels the project’s charismatic head to serve as the envoy for the whole cryptocurrency space.

Like it or not, old-school legislators in the United States and beyond are used to dealing with specific people representing interest groups and industry associations, so Marcus’ two appearances before the U.S. Congress have likely rendered him not just “Mr. Facebook Cryptocurrency,” but simply “Mr. Cryptocurrency” in the eyes of many people in high offices. But how did a Paris-born, Geneva-raised college dropout end up in this capacity of prominence?

From Geneva to Silicon Valley

Born into a Romanian-Iranian family in Paris, the future head of Libra was raised in Switzerland, where he attended the University of Geneva. Like so many of his future tech industry colleagues, he left school long before earning a degree in order to focus on an entrepreneurial career. At aged 23, Marcus founded his first startup — a telecom carrier — which was acquired by a larger integrated communications corporation after four years under his leadership. His first experience with payments came after he established a mobile media monetization company, Echovox, whose feats, among others, included facilitating SMS voting for big-name TV shows.

Zong, a spin-off from Echovox, has successfully establishing a payments network that allowed users to make purchases through mobile carrier billing. Putting up such a service on a large scale took Marcus negotiating with hundreds of mobile operators and thousands of merchants. It was Zong’s success that projected Marcus to the position of PayPal’s vice president of mobile upon the payment behemoth’s acquisition of the startup. It came in handy that PayPal had been bracing to ramp up its mobile services, for which task Marcus’ experience proved invaluable. In 2012, he was promoted to be the company’s president, directing the explosive growth of one of the world’s largest payment platforms.

In 2014, Mark Zuckerberg seduced Marcus to join Facebook as the head of messaging products. Marcus cited his willingness to go back to managing smaller teams (PayPal counted some 15,000 employees at the end of his term) and to build consumer-facing products and services in a more energetic startup-like environment. Under his leadership, Facebook Messenger substantially grew in terms of the number of active users and saw several improvements in its functionality — including the introduction of tools facilitating the interaction between retailers and their customers, such as chatbots supporting payments.

Marcus led Messenger for four years before the entirely new chapter of his career opened with Facebook’s announcement of him taking charge of the newly established exploratory blockchain task force — the initiative now known as Libra.

Early adopter

David Marcus is believed to be among the first in the world of big tech to start experimenting with cryptocurrencies, as Asaf Fybish, co-founder of blockchain marketing firm GuerrillaBuzz, told Cointelegraph:

“David Marcus is actually considered as one of the first top Silicon Valley executives to adopt and support bitcoin. In 2013, at the LeWeb conference in Paris, Marcus stated the fact that he is a big fan of bitcoin and owns a stash of it. He called bitcoin a store of value and a distributed ledger. Getting this type of support back in 2013 was pretty exciting and we can tell that David has a sense when it comes to blockchain and cryptocurrencies in particular.”

“Digital Gold,” a book authored by journalist Nathaniel Popper, mentions Marcus alongside the founders of the Gemini digital currency exchange (i.e., Cameron and Tyler Winkelvoss), co-chairman of Fortress Investment Group Peter Briger, and entrepreneur Wences Casares as high-profile technology executives invested in Bitcoin since at least 2013. Popper claims that Marcus got so fascinated by the original digital asset that he at some point considered quitting PayPal to launch a cryptocurrency exchange.

In April 2013, Marcus admitted that PayPal was looking into possible ways to incorporate Bitcoin in the payment company’s operations, saying: 

“So I’ve been spending a lot of time looking at it, and it’s truly fascinating actually: the way that the currency’s been designed, and the way that inflation is built in to pay for miners, and all that is truly fascinating. I think that for us at PayPal, it’s just a question whether Bitcoin will make its way to PayPal’s funding instrument or not.”

Later the same year, speaking at the aforementioned LeWeb conference, Marcus opined that cryptocurrencies had a greater chance of revolutionizing the payments industry within the next 10 years than, say, NFC tap-to-pay technology.

Although it initially might have seemed that the move to Facebook had lured Marcus much farther away from his cryptocurrency aspirations than he was at PayPal, destiny took him full circle to end up at the helm of the social platform’s blockchain project just a few years later. Some people in the industry draw direct comparisons between Libra and the payments network Marcus once managed. Ruud Feltkamp, CEO and co-founder of crypto trading platform Cryptohopper, told Cointelegraph:

“Here at Cryptohopper, we often asked ourselves: why is nobody creating the ‘PayPal of Crypto’? Great to see it’s actually their former president that is now leading Libra. Regardless of what you think of Facebook, their entrance marks the start of the big companies entering crypto. Next up, Google?”

While at PayPal, Marcus remained in a wait-and-see mode, saying in a 2014 interview that it was critical for a payments company present in more than 90 countries to understand the regulatory implications of starting to accept cryptocurrency across all its jurisdictions. At the time, apparently, he couldn’t see a realistic way to make it happen, as PayPal lacked the consumer base and economic power that enabled Facebook to come up with a global cryptocurrency plan five years after.

Scaling blockchains

One of Marcus’ main competences is gracefully cutting through the miles of red tape that inevitably accompany scaling a global payment system to millions of dollars worth of transactions per minute: He enthusiastically spoke about that facet of his work as early as in 2012. Even before the Libra appointment, this skill had won him a position on the Coinbase board of directors, as the crypto trading platform was scrambling toward the end of 2017 to handle a surge in both crypto prices and the number of crypto investors.

Marcus expressed his enthusiasm for this chance to help Coinbase “democratize access to cryptocurrencies, and deliver on the mission to create an open financial system for the world.” However, his tenure with the exchange only lasted for several months before he had to step down in a move that signaled Facebook’s stepping-up its own blockchain effort.

Prior to unveiling Libra, Marcus projected Facebook’s cautious stance on cryptocurrency — for example, citing the functional hurdles in the way of blockchain-enabled payments — saying:

“Payments using crypto right now is just very expensive, super slow, so the various communities running the different blockchains and the different assets need to fix all the issues, and then when we get there someday, maybe we’ll do something.”

He also sided with Zuckerberg in the wake of the controversial decision to ban all crypto-related ads, supporting the view that most of them were a scam anyway and that the ban has been necessary in order to protect users.

Stephanie So, co-founder and chief development officer of blockchain security startup Geeq, observed to Cointelegraph that Marcus is well qualified for his job, but that this should not eliminate concerns over Libra’s governance model:

“I would say that David Marcus clearly has spent his career running and understanding the payments industry. If there were to be a play for a group of private corporations to start an alternative global currency to dominate  retail transactions, Marcus’ experience in finance at the rate of billions of transactions and dollars, and with world regulators might make sense.”

So also agrees with the views that Marcus outlined in his hearing before the U.S. Congress. She said:

“I also agree with what he apparently stated in his Congressional testimony: blockchain technology is inevitable. However, as you know, blockchain technology is not well understood. In spite of most blockchains’ ideological tendencies toward inclusion and self-governance, there are reasons blockchain has not been widely adopted yet, and that is because there are potentially major gaps in their security models, which means (or should mean) that traditional financial institutions should not be ready to move to blockchain yet.” 

The real “mensch”

Unlike many tech executives that hold prominent positions in Silicon Valley for decades without openly expressing their views out in the public, Marcus never shied away it — and in quite a passionate fashion. Hill Ferguson, Marcus’ colleague at Zong and then at PayPal, once testified to the Financial Times that the Libra boss is not missing a human element in him, “He can be a great, persuasive person around a vision but he combines that with being a genuinely solid person — or a ‘mensch’, as he would say — and he really is that in the truest sense of the word.”

A notorious, inadvertent expression of how Marcus takes what he does to heart emerged in 2014, when the then-PayPal president lambasted the company’s employees for their reluctance to use PayPal’s own products, calling it “unacceptable” and implying that those who didn’t use the app or forgot the password would be better off to “find something that will connect with your heart and mind elsewhere.”

In another instance, Marcus took to social media to express his rather strong opinions amid the 2018 spat between Facebook management and Brian Acton, the co-founder of WhatsApp. Referring to Acton, Marcus wrote that he found “attacking the people and company that made you a billionaire, and went to an unprecedented extent to shield and accommodate you for years, low-class.”

Overall, a review of Marcus’ record suggests that, regardless of one’s feelings toward Facebook and Libra, he is fairly well qualified to represent the crypto space before the world’s powerful. While his early involvement with Bitcoin attests to the authenticity of his pro-crypto claims, Marcus’ experience with the global payments market and pro-consumer orientation gives hope that he might at least make an honest attempt to steer Libra in the direction of social good.

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Telegram Vs. Facebook: The Ultimate Showdown for Crypto Supremacy

Last month, Facebook rocked the world with its big Libra announcement. Now, only one platform has the power to challenge them: the Telegram Open Network.

Last month, Facebook rocked the world with its blockbuster Libra announcement. Even a year ago, the idea that an iconic United States company would launch a digital currency or that a sitting president would tweet about it seemed insane. 

Welcome to the new normal.

The Libra announcement sent politicians scrambling, hit the mainstream media like a hurricane, and left many crypto influencers wondering if the social network giant just turned 90% of altcoins worthless. What tiny crypto project with a few dozen programmers can stand against the combined might of not just Facebook but also the titans of the tech and payment processing world, such as Uber, Lyft, Paypal, Visa and Mastercard?

But there’s a new hope on the horizon. One company on the planet has the power to take on the social media monster and win: Telegram.   

If Libra is the Empire Strikes Back, Telegram is A New Hope

While Facebook has 1.8 billion users, Telegram raised $1.7 billion.

While Facebook has the unwashed masses who’ve never held a Bitcoin, Telegram has the entire crypto community that lives and breathes altcoins for breakfast.

While Mark Zuckerberg is the poster child for the internet as a surveillance economy, Pavel Durov, the founder of Telegram, is a fight-the-power renegade, with digital privacy being a focus throughout his career.

While Zuckerburg looks like someone doing a bad impression of Data from Star Trek, Durov looks like he just stepped off the stage of Magic Mike.

If you’re a pioneering member of the crypto community, you might have looked with scorn on the Telegram fundraiser, which beat the initial coin offering regulatory backlash by raising all of its money from private accredited investors, rather than crowdsourcing it from the people. Maybe you only read the short Telegram white paper that looks and reads more like slick marketing than a detailed deep dive?

You should take a closer look.

TON vs. Libra

The Dark Knight Rises

The more you look, the more you realize there’s a lot to root for if you’re longing for a legitimate top contender to take on Libra — i.e., the nightmare of cyberpunks.  

Start with Pavel Durov.  

The man built two successful companies, including VKontakte (aka VK), a Facebook-equivalent that is especially popular in Russia, and he followed that up with Telegram. That means he knows how to build real, working, scalable platforms when most crypto projects can’t even get their testnets off the ground. He’s also an antihero and iconoclast with a philosophy of radical individualism and self-sovereignty that matches the cypherpunk ethos that launched Bitcoin and a thousand other crypto ships. 

Even better, he backs that philosophy up with action.  

Currently, Facebook faces a $5 billion fine from the Federal Trade Commission for protecting users’ data the way the mob “protects” small businesses. Durov, on the other hand, refused to create a backdoor to Telegram when the Russian Supreme Court demanded it — and even as American companies like Apple, which normally stand tough on privacy, caved and yanked Telegram from the app store. While Zuckerberg built his company on surveillance as a business model, Durov built his company on privacy. 

If you only skimmed the brief white paper for TON, you might have missed that Durov isn’t alone. He’s backed by a bevy of math geniuses and hardcore programmers, who started coding in diapers and won strings of gold medals at the International Math Olympiad while you were watching Saturday morning cartoons. One of those folks is Pavel’s brother Nikolai Durov, chief technology officer of Telegram, who solved cubic equations at the age of eight, started coding at nine and wrote his first operating system at 13 — in assembly language.  

Nikolai Durov also wrote the much longer and more comprehensive technical white paper, which weighs in at a whopping 132 pages. It’s a dense, complex and ambitious outline for the new Telegram Open Network (TON) platform. However, some have bashed it as a fantasy for promising a sci-fi utopia that solves every single problem in crypto. 

It’s not the first time Telegram faced criticism for its architectural choices, with Gizmodo’s William Turton once writing an article with the headline “Why You Should Stop Using Telegram Right Now.” The article hits Telegram hard for choosing client-server encryption instead of end-to-end encryption by default. Even though Telegram defends its choice of architecture, as it gives people the best of both worlds with the choice of secret chats, the criticism continues to dog the company to this day.

Some redditors even panned the white paper as nothing but a bunch of buzzwords and hand-waving.

But read through it closely and you’ll realize that, if Telegram pulls off even a quarter of what is  proposed, it could prove revolutionary.  

If it works, TON will solve the issues surrounding scaling, storage and decentralized identity as well as protect the platform against constant assault from hostile powers. Yes, the paper is a grab bag of ideas — some of them unique and some taking inspiration from a wide spectrum of sources — but building on other people’s good ideas isn’t a bad thing, it’s a virtue.  

It’s only a problem for people suffering from not-invented-here syndrome, a debilitating mental disease that makes people think they have all the answers and that nobody else has any idea worth doing.  

While Libra’s white paper frequently drops the term Blockchain — a total of 40 times in the 26-page text — apparently in an attempt to stretch its meaning far enough so that a “cryptographically authenticated database” can also be called one,  the TON team knows the difference between a blockchain and a hole in the wall. It is looking to deliver a massively sharded and scalable system that sends and receives not only money, but encrypted messages and a killer sticker collection that makes the emojis from WhatsApp’s messenger look like ASCII art. It wants to do all that while enabling robust peer-to-peer encrypted storage for your important documents and even allows for decentralized virtual private networks

While Facebook soaks up the punishment and pressure from hysterical governments and politicians who say with a straight face that they’re worried that Libra’s wallet — which is compliant with Know Your Customer and Anti-Money Laundering laws — can be used for “terrorism,” Telegram’s team wisely stays out of the spotlight, just like Satoshi Nakamoto did with Bitcoin. If you want to build a platform in peace, it is better to do your work in private and not draw the attention of publicity-seeking politicians trying to get reelected in battleground states.

Governments love cutting off the head of the snake. If you don’t give them a head to cut off, then they don’t know where to strike.

But even with all that going for them, does Telegram have the power to build a true platform for e-commerce and the decentralized applications of tomorrow? Can it stand against the titanic forces behind Facebook’s nascent digital currency and the masters of the e-commerce universe backing it? 

That is the trillion dollar question, as the platforms that win the day might end up controlling a massive chunk of the world economy and could make or break nations, companies and people. With so much at stake, it’s going to be a war.

The Man in the Arena

To win, it will take a hero.  

The might of the world’s old-guard is nearly absolute. Nation states print money, and printing money is the power of God.  

To break the stranglehold, you need to build a perfect platform: one that’s easy to use, scales massively and is impossible to bring down — a Hydra with a thousand regenerating heads. It must have all the features of the old financial system and new ones that nobody can resist. It’s got to bring in people and businesses with ease so that it grows too big to fail.  

The age of surveillance capitalism is upon us, and it’s growing stronger every day. It’s a dragon that’s eaten the world.

Facebook is the dragon’s head.  

If there’s anything that can bring that dragon crashing from the skies, the early odds go to Telegram. 

While Libra can and will leverage Facebook’s 1.7 billion users to rapidly accelerate adoption, Telegram’s user base of over 200 million people is a growing force in its own right.

And even with fewer users, Telegram has one major advantage: Most Facebook users wouldn’t know a Bitcoin from a casino chip. On the other hand, Telegram is well known for its vibrant, technically savvy community — including most of the world’s crypto-faithful, who host their user groups and do their day-to-day business there.  

That means if TON drops a bunch of coins in its Telegram-attached wallet, a bigger percentage of those users will probably know how to spend, save and send that money, while Facebook’s users might start ringing the support lines, wondering how to reset the password on their private key.

That’s not to say Telegram’s team is perfect by any means. It has faced intense criticism for a hand-waving white paper that promises much without telling people exactly how it will work. Beyond that, there has mostly been radio silence from the team since its mega ICO. There is a private beta, but it’s closed to the wider public for now. In the end, the project might prove too ambitious even for a talented team with a lot of capital on hand.  

The company is also running out of time to deliver. If its team is going to succeed, it needs to step up now. The stakes have never been higher. People willingly sacrifice privacy for convenience without a second thought. The original crypto dream of self-sovereignty is slowing warping into a terrifying Black Mirror episode, in which blockchains don’t enable privacy but rather ubiquitous surveillance on an unprecedented scale. Blockchain analytic tools peer deeply into transactions, and the SEC is looking for teams and tools dedicated to blockchain analysis. Facebook will happily give third parties that convenience and a two-way mirror into all of our lives.

Telegram might not be the hero we expected — or even the one we wanted — but it may be our last, best hope for a future that doesn’t turn into a dystopian nightmare of panopticoins.  

The crypto revolution started idealistically with a twinkle in Satoshi’s eye. There’s always a certain naivety in revolutions. You have to be crazy to take on entrenched adversaries. The kings of the world have the money, the guns and the legal hammers, and they’re willing to use them at all costs to keep a firm grip on the royal scepter.

But some revolutions find a way..

Daniel Jeffries is an author, futurist and thinker. He’s written four science fiction novels, and he wrote his first story about Bitcoin in 2014 for Bitcoin Magazine, when a young writer named Vitalik Buterin was planning a little idea called Ethereum on the writers’ Skype channel.

The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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New Jersey Issues Stop Orders to Two ICOs in Operation Cryptosweep

The New Jersey Bureau of Securities has identified two companies believed to be offering fraudulent ICOs and ordered them to stop.

The Bureau of Securities in New Jersey has issued two emergency orders to the companies Zoptax and Unocall to end their initial coin offerings (ICOs). The Bureau alleges that the token offerings qualify as fraudulent unregistered securities offerings.

The Office of the Attorney General in New Jersey announced the Bureau’s orders in a news release on Aug. 7. In the case of Zoptax, the report states that the company is offering the cryptocurrency Zoptax Coins through a website-conducted ICO. The website apparently states that the ICO has a soft cap of $500,000, as well as a hard cap goal of $3.4 million. 

In addition to being unlawfully unregistered as a security, the Bureau claims that Zoptax made “materially false and misleading statements and/or omitting to state material facts in connection with the offer and sale of its securities.” These reportedly include the allocation of ICO funds, pertinent information on the entities behind Zoptax, as well as pertinent location details such as the company’s physical address and principal place of business.

Likewise, the Bureau judged that the company Unocall had misled its prospective investors in the same manner. Unocall is also offering a website-conducted ICO, as well as opportunities in its ‘Staking Program’ which purportedly provides guaranteed interest of 0.18% to 0.88% per day. 

The firm is reportedly conducting its ICO in order to raise funds for developing its ecosystem that would allow for trading its native tokens, altcoins and fiat money through the company’s UNOpay Mobile Wallet.

According to Bureau Chief Gerold, recent events with Libra and a spike in the Bitcoin (BTC) price have caused a new wave of suspicious investment solicitations:

“With the price of Bitcoin increasing over the last few months and the announcement of Facebook’s Libra, there has been a sharp increase in public solicitations to invest in crypto-related products that appear on their face to be suspect […] The two actions today are a reminder to investors that investing in cryptocurrencies or crypto-related products have significant risks and investors must do their diligence before investing.”

Operation Cryptosweep

The orders from the Bureau to Zoptax and Unocall are part of the ongoing Operation Cryptosweep, which is described in the announcement as “an international crackdown on fraudulent Initial Coin Offerings (“ICOs”) and crypto currency-related investment schemes” launched by the The North American Securities Administrators Association (NASAA) in April 2018. 

The operation is a coordinated effort between state and provincial securities regulators in the United States and Canada. As previously reported by Cointelegraph, NASAA commented in August 2018 that Operation Cryptosweep had already conducted over 200 ICO investigations in the months since it launched.

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Online Sentiment Toward Crypto Market in 2019 — Attitudes Are Positive

A study reveals that more than 80% of all crypto related posts on Reddit are positive in nature, sentiment toward crypto on a rise in recent years…

Despite all of the bad press that the digital asset industry continues to receive on an almost daily basis, it appears as though the overall sentiment of the online communities in regard to this burgeoning domain is still pretty positive. For example, Comparitech — a research firm that provides its consumers with a host of specialized data that allows one to make more informed decisions — recently used a machine learning-based analysis tool to study more than 48K Reddit posts to determine which cryptocurrencies were viewed most favorably by the masses. Not only that, the study also took into consideration a total of 7,500 crypto/blockchain-related articles from a variety of different national and international media outlets.

All of the posts, tweets and articles analyzed by the researchers were scored on the basis of their positive/negative sentiment — primarily in relation to other articles included in the study. In this regard, there were a few notable trends that jump out at the reader upon first glance. While over 85% of the analyzed Reddit posts were deemed to be positive in nature, articles published by various mainstream media publications such as HuffPost, Business Insider and The International Business Times were, by and large, dismissive of the crypto market.

To get a better overview of the matter, Cointelegraph has reached out to Craig Russo, owner of Peer, a Boston-based startup that is behind the popular crypto and gaming media outlet SludgeFeed. When asked about what the overall sentiment of the average social media user toward the crypto industry (at large) was like, Russo pointed out:

“While there will always be different camps or schools of thought on the crypto industry, the overall sentiment across social media continues to be bullish, both on future price growth and mainstream adoption of the technology.”

A similar point of view is also shared by Sritanshu Sinha, an independent crypto author and analyst, whose work has been shared online by the likes of John McAfee and Kim DotCom. Sinha pointed out that the overall reception that the crypto industry has received thus far on forums such as Reddit and Twitter has been quite warm. He is also quick to point out that, since the Reddit community as a whole views itself as being anti-establishment, the platform’s users are usually drawn to crypto much more than your average investor. Similarly, in the case of Twitter, he believes that there are a few independent analysts who have hundreds of thousands of followers and therefore have the power to influence the community toward fostering a positive view regarding various altcoins/digital offerings.

Has the public views on crypto changed over the years?

Another pertinent question is how the crypto industry’s general perception has evolved since the novel asset class came into the spotlight a few years back. For example, it is no secret that all through 2018, investor confidence in this space has been dwindling. However, Russo believes that Bitcoin’s (BTC) financial upswing over the last eight months has been a turning point for the industry, especially across different social media outlets. Further elaborating on his views, Russo added: 

“This is in stark contrast to those invested in the altcoin markets, as many are in disbelief towards the poor performance of their assets. The regulatory environment definitely plays into the latter, as increasing pressure from the U.S. government has undoubtedly hurt investor interest in Bitcoin alternatives (i.e., Binance shutting down to U.S. customers).”

When compared to the previous years, the general sentiment toward the crypto sector has certainly become less hostile. For example, back in 2017, a time when Bitcoin was witnessing astronomical growth, the industry was still facing a lot of heat from many financial experts of differing pedigree. And while the market, at the time, was replete with countless scams (especially Twitter bots) such activities have largely died out now. 

As mentioned earlier, a host of recent surveys seem to suggest that more than 80% of all crypto talk online is positive. This number seems abnormally large for an industry that is usually on the receiving end of a lot of criticism from various traditional media outlets. Sharing his thoughts on the subject, Sinha pointed out:

“80% seems about right. Mostly, because that’s the nature of evangelism. Most of us on social media seems to be crypto-evangelists. However, positive sentiments and bull markets are highly correlated and they seem to be feeding off each other to create a positive feedback loop. If I have to prophesize, the 80% positive sentiment will not be the case during a bear run. Then the voices of the skeptics will become louder and sentiments will turn increasingly negative.”

Tweet interpreters are being used to gauge global investor interest

A number of hedge funds and asset managers are currently turning to software developers to help them interpret and harness sentiment signals to their advantage. Speaking to Reuters on the subject, Bin Ren — CEO of Elwood Asset Management — was quoted as saying that this latest trend of identifying price clues from tweets and other social media messages is slowly turning into an “arms race for money managers.”

To put things into perspective, it can be seen that the costs involved with conducting such types of research analyses are quite steep. As per Andrea Leccese, president of New York-based investment firm Bluesky Capital, a simple bot-driven Twitter data exploration can cost firms anywhere between $500,000-$1 million.

Will increasing regulations stifle the industry’s growth?

Ever since Facebook announced its decision to enter the digital asset market — via its much-hyped stablecoin offering called Libra, which is backed by the Libra Foundation — the regulatory noose surrounding this space seems to have tightened considerably. However, contrary to popular belief, a number of crypto analysts seem to believe that increased regulations can be a good thing for the industry. 

Cointelegraph spoke to Mohanned Halawani, the founder and CEO of Crypto PR, one of the first blockchain-specialized communication firms. He seems to be quite optimistic and believes that some of the latest regulations are actually quite advantageous for prospective investors, especially those regarding security token offerings (STOs) and initial coin offerings (ICOs). Halawani went on to add:

“The SEC has facilitated the emergence of Security Token Offerings which it felt was a more worthy investment vehicle when compared to traditional Initial Coin Offerings… Security tokens allow their investors to get information about the issuer on a fully transparent framework, providing complete visibility on all token allocations. Thanks to the regulatory benefits of these assets, authorities are beginning to their raise their standards among tradable asset classes and even support their implementation.”

Similar opinions are also provided by Joe Mercurio, project manager for Comparitech, who believes that the goal behind these regulations is to ultimately make consumers and businesses more comfortable with using cryptocurrencies on a regular basis. Mercurio shared his thoughts with Cointelegraph:

“I think that government entities will eventually adopt blockchain technology and new cryptocurrencies will begin to emerge. That said, I do believe that the market will remain volatile.”

Whether we like it or not, government regulations are crucial for any financial commodity — be it crypto or otherwise — to gain mainstream acceptance. And while these rules and guidelines may appear to hamper an asset’s growth at times, a majority of these regulations are a step in the right direction. Also, because Bitcoin and other digital currencies are basically tools for individual financial freedom, governments do not want to give up financial control over their citizens.

Simply put, when we see the history of such revolutionary technologies getting adopted by countries en masse’, we are sadly faced with a long and painful path that eventually leads to widespread human well-being.

How much of a role does social media play in shaping the public’s opinion on crypto?

Mercurio, whose core field of work includes the analysis of tweets and other online content to gauge public sentiment, is of the belief that there currently exists a strong correlation between the volume of social media posts related to a particular digital asset and its price. As part of his research, he claims to have often observed spikes in online articles when the price of a specific cryptocurrency changes. Mercurio went on to add:

“Social media posts remain more positive during times of price fluctuation compared to media coverage overall. Online enthusiasm regarding crypto has been overwhelmingly warm. We found that cryptocurrency-related subreddits were 55% more likely than media publications to have content with positive sentiment toward various cryptocurrencies.” 

In a similar vein, to look at the impact that social media influencers have on the crypto industry, we can turn to a few high-profile individuals such as Elon Musk and LA Chargers’ star Russell Okung, both of whom have been advocating for the widespread adoption of crypto for quite some time now. In fact, Okung has sent out several requests to the NFL, asking the league (since the start of 2019) to provide its employees with the option of getting paid in crypto — a petition that is backed by fellow NFL star Matt Barkley.

Looking ahead

It thus appears as though the crypto market will continue to grow, mainly because people want to find newer economic avenues that are free from the involvement of any corporations or government-controlled agencies. However, a lot of this growth will depend on the use cases that emerge from this space. Also, as social media continues to play an ever-increasing role in arenas such as politics and public affairs, there is no reason to doubt its utility when it comes to crypto adoption.

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Facebook Hires Former Aide to US Sen. Mike Crapo to Lobby for Libra

Susan Stoner Zook, former assistant to Senate Banking Committee Chair Mike Crapo, will be part of Facebook’s Libra lobbying team.

Facebook hired former assistant of United States Republican senator Mike Crapo, Susan Stoner Zook, to join the lobbying team for its Libra stablecoin.

Facebook doubles down on Libra lobbying

News outlet Politico reported on Aug. 5 that Zook had been hired onto Facebook’s team of lobbyists working to win lawmakers over to Libra. Per the report, she wrote in an email that she will focus her work at the company on lobbying Republican senators.

As Cointelegraph reported in July, Crapo stressed the importance of building an overarching regulatory framework for data protection — not just for Facebook, but for all Internet companies looking to launch their own cryptocurrencies, á la the Financial Stability Oversight Council for banks. Still, he did not rule out Libra’s deployment. He noted:

“We’ve got to look at how we structure data protection in the United States […] We need to move to a comprehensive approach. What that structure exactly is, I can’t tell you.” 

The U.S. Senate’s recent hearings on cryptocurrencies had some senators say that they are in favor of the U.S. leading in crypto and blockchain, while others pointed out their doubts.

During the hearing, Senator Sherrod Brown of Ohio pointed out that Facebook has “proved over and over that they can not be trusted.” Brown, on the other hand, stated that Facebook intends to undermine the U.S. dollar and payment systems, trying to pass it all off as innovation.