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Ethereum-Based Augur Enhancement App Veil Closes Up Shop

Veil, an Ethereum-based predictions platform using the Augur marketplace, has shut down.

The Ethereum-based predictions platform Veil is shutting down, according to an official Medium post on July 11.

As of July 11, no new markets will be added to the platform. Trading will be disabled entirely on July 24. Veil co-founder Paul Fletcher-Hill recommended that users redeem open positions, withdraw positions from active markets, and withdraw Veil Ether and convert it to Ether. 

Veil was a type of extension to the Ethereum-based predictions market Augur. Augur is a predictions market — that still exists — that uses smart contracts to let users create and bet on the outcome of any event with the cryptocurrency Ether. 

For instance, the top three bets listed on the Augur market, at press time, are “Will Novak Djokovic be the 2019 Wimbledon Men’s Singles winner?,” “Who will Win the The First Democratic Primary Debate?,” and “Will Serena Williams be the 2019 Wimbledon Women’s Singles winner?”

In April, Augur also added the option to use the stablecoin by MakerDAO, DAI, on its platform.

According to its website, Veil was intended to “bring Augur mainstream” and improve user experience by speeding up its transaction processes. Veil purportedly let users trade on the Augur marketplace faster via the 0x protocol, and provided instant settlement by allowing users to sell their shares to Veil before native finalization of Augur transactions on the blockchain.

In discussing the reasons Veil did not meet its success goals,  Fletcher-Hill noted a number of issues, including that the platform may not have been friendly enough to crypto novices:

“We didn’t offer a good onboarding experience. Crypto as a user base is still early, and we didn’t make it easy enough for users without crypto or a wallet to get started.”

Some other areas of concern he noted include not being decentralized, not being regulated, and perhaps trying to offer too many options as a broad-scale predictions market. Fletcher-Hill wrote:

“… ultimately we failed to find a good fit between what we were building and the market as it exists today. … But today the community of users is small, and we think there are higher impact products and services we can build for the immediate future.”

As previously reported by Cointelegraph, Augur came under fire from Reddit and major crypto exchange Binance due to having an apparent design flaw. The flaw apparently allows users to run scams, of sorts, by issuing predictions with unclear or contradictory conditions for resolution.

Binance also said that low liquidity, barebones functionality, complex mechanics, and an unclear approach to governance were additional issues it saw with Augur.

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Cash, Coins and Casinos: Japan Struggles to Regulate Online Gambling

The Japanese government’s attempts to halt crypto gambling can only last so long, industry experts say.

Despite Japan’s reputation for being one of the most welcoming nations for fintech, online crypto gambling has struggled to take off in light of the country’s strict regulation. In late March, the blockchain-based, decentralized application (DApp) platform Tron announced that it would block gambling DApps in Japan, bringing the issue of regulating crypto gambling back to public attention. Cointelegraph takes a look at the legal and cultural approaches to gambling in Japan, along with how developers believe attempts to halt crypto gambling can only last so long.

Tron complies with Japanese legislation

On March 31, Tron announced in a press release that it would remove gambling DApps in Japan in order to comply with local regulation.

The press release laid bare the firm’s intention to comply with local laws and regulation worldwide. With special mention of Japan, the company said that it does not “encourage or recommend any gambling DApps regarding the Japanese market.” Additionally, Tron suggested that Japanese developers should not attempt to develop any gambling DApps on its platform and for developers to actively block users that are found to have Japanese IP addresses.

Gambling is generally prohibited by the Japanese criminal code, aside from a few regulated, government-approved sectors — such as horse, boat, bicycle and automobile racing.

The company also stated its readiness to work with Japanese law enforcement in the event that any Tron DApps are found to have violated Japanese laws or regulations.

The question of Tron’s commitment to decentralization reared its head once again on May 10, as Lucien Chen, former chief technical officer and co-founder of the company, announced his decision to leave the project, citing excessive centralization among his reasons. Although the former CTO noted his pride in a now-deleted Medium post what the project had achieved so far, Chen said that the project is no longer true to its original mission of decentralizing the web:

“The reason for leaving is very simple. As a technical man, I feel very sad that the TRON has departed from the faith of ‘decentralize the web.’”

Along with stating his belief that real internet applications cannot currently function in the Tron network, Chen also highlighted his concerns with Tron’s delegated proof-of-stake (DPoS), as well as Super Representative governance and block production nodes:

“The DPOS mechanism of Tron is pseudo-decentralized. The top 27 SR nodes (block nodes) have more than 170 million TRX votes, and most of them are controlled by Tron. It’s hard for other latecomers to become block nodes, so they cannot participate in the process of block production.”

Chen will now focus on the launch of his own decentralized blockchain project — dubbed Volume Network — designed to adhere to his ideological principles concerning blockchain and mining practices.

Existing hurdles for blockchain and crypto in Japan

Japan is famously one of the most bullish countries worldwide with regard to both crypto and blockchain, with cryptocurrencies legally considered a means of payment. While the country has a relatively open approach to crypto, some issues do still remain that could possibly hold back more widespread adoption, concerning both gambling and payments.

The first is that Japan has a long-established love affair with cash. According to Nikkei research, roughly 65% of transactions are still carried out via cash, a rate almost double that of other economically developed nations. Japan loves its cash

Another impediment to progress is the high rate of taxation currently imposed on cryptocurrencies in the country. According to research by Cointelegraph Japan, income gained from trading cryptocurrencies currently stands at a tax rate of 55%, although there are attempts underway to lobby the government to lower this to 20%. Profits from crypto trading are currently classified as “miscellaneous income” in Japan, meaning that traders pay between 15% and 55% capital gains tax on top of their annual tax return. The highest bracket of tax generally applies to high earners, or those earning more than 40 million yen ($365,000) per year.

Gambling, cultural attitudes and the law in Japan

In July 2018, Japanese lawmakers passed a controversial bill legalizing gambling resorts after a legal struggle spanning nearly two decades. The new legislation divided politicians and citizens alike, with a Nikkei poll indicating that 53% of the population did not support the bill.

Japan has an increasingly complex relationship with gambling. While the available gambling outlets enjoy a steady stream of customers, the industry is strictly regulated, and revenue is largely used in order to increase the revenues of the government. Despite the illegality of nonregulated gambling, hugely popular slot machines — known as “pachinko” — are being installed in shops across the country and operate in an increasingly prominent legal grey area.

Pachinko Players

Satoshi Ashibe, operator of the online sports betting service Jukebucks.com, gave his private view about the many faces of gambling in Japan and attempts to regulate it:

“The former Horse Racing Law came into force in 1923, and horse racing was legalized. And after the Pacific War, Keirin, boat racing and auto racing 3 races were approved as legalized gambling in order to use the profit for economic reconstruction. Gambling officially licenced in Japan is the only of these four games.

“There are pachinko shops and slot machine shops in rural towns with a population of few thousands, but these games are not gambling ‘legally.’ The police are responsible for the game, and many former police officials work as executives at industry groups. The pachinko industry is the police’s right-of-interest industry, for which ‘illegal’ games are silently accepted.”

While it is clear that, in the eyes of the government, only a select few sports are available to be bet upon, other sports enjoy an illegal, underground following:

“Illegal gambling is also popular in the underground. There are unofficial casinos where you can play baccarat or poker in downtown Tokyo and Osaka. Sports betting for baseball and sumo wrestling is also popular. It is the yakuza that manages these illegal gamblings, but many of the players are general citizens.”

Throughout the decades-long attempt to allow the development of casinos and other gambling institutions in Japan, critics have been keen to highlight the need for anti-addiction measures. Methods include an infrastructure consisting of gamblers, families and doctors to monitor addiction, and the installation of facial recognition software to restrict addicts’ ability to access facilities in gambling establishments.

The spread of gambling addiction as exposure to the industry grows has also had an effect on families. Ray Nault, an academic at Beacon College in Leesberg, Florida, whose career spent working with numerous Japanese universities and the Ministry of Industry and Technology spans several decades, explained that gambling still remains a taboo:

“As with most social ills, the gambling issue is largely masked by taboo. The taboo is related to the familial and social contagion that arises when there is an ‘ill’ member. Families do not speak of gambling addictions, since this is a burden that is to be carried alone, and neighbors and, for example, employers, would never be cognizant of an individual who is caught in the throes of gambling. This means that the family will not actively seek help. In an odd mirroring of this, the relevant department at City Hall also will not ‘advertise’ or openly acknowledge that such help is available in the form of counselling, for example.

“This means that there is also a municipal shielding that occurs, where a family member would have to go in and directly inquire about help. There is the added pressure of loan sharks, who feed on gambling debt, which further isolates the particular families who have someone who gambles excessively. The cultural attitude towards gambling is that it is the fault of the weak individual, and that the consequences are just punishment for such weakness.”

However prevalent the actuality of gambling in Japan may seem, support for the industry is by no means universal. Hesitancy and outright criticism of the industry is present in both the government and public opinion. In light of Tron’s statement of compliance, it appears that the Japanese government is determined to keep a firm grip over legal methods of gambling within its borders. However, it is important to note that, as technology develops and decentralization processes become more widespread, how exactly governments aim to regulate something designed to be free from the constraints of any one government or central authority remains to be seen.

What’s next for crypto gambling in Japan?

Despite the apparent attempts from the government to show a tough stance toward gambling and a desire to develop the industry on its own terms, innovators within the industry still remain cautiously optimistic that both crypto and blockchain gambling are compatible with the new era. European football and American sports such as the NBA now have a dedicated following in Japan. Both sports have a significant betting culture attached to them and this, in turn, has spread to Japan, with most gamblers using online betting services. As Ashibe explained, users face issues common to all international transactions in fiat currencies — i.e., remittances, regulation and commissions:

“The biggest problem when Japanese people play with overseas online gambling companies is the complicatedness of payment and withdrawal. Remittances by banks are strictly regulated, and withdrawals using payment services such as ecopayz are cumbersome.”

Ashibe also explained how he views cryptocurrency as the most obvious way of bridging the gap between international demand and a seamless service:

“I think gambling and blockchain/cryptocurrency are very compatible. Cryptocurrency is the best way to solve these deposit and withdrawal problems and financial regulations. Certainly, buying a cryptocurrency is very troublesome at the moment. You can open an account on the exchange, deposit money from a bank, place an order on the chart, and finally get BTC or ETH, or turn them into Japanese yen. There is also the problem of very high tax rates. However, in the next few years, legal development will progress, and there will be a way to easily exchange Japanese yen for a cryptocurrency without going through such a procedure.”

According to Ashibe, one government officer expressed his personal view to him that it was only a matter of time before online sports betting would be legalized in the country, considering it “essential to export sports content such as soccer and basketball in Japan to global content that can be enjoyed by people overseas.” This statement appears to be in line with the government’s “Japan Revitalization Strategy 2016,” which aims to boost the sports industry’s market size from 5.5 trillion yen (roughly $50 billion) up to 15 trillion yen (nearly $137 billion) in 2025.

Although it appears that the government is prepared to crack down on illegal gambling that takes place physically within the country’s borders, Ashibe said that the attempts to effectively regulate and prevent online, decentralized gambling are much less effective:

“Although Japanese law prohibits the operation of online casinos, it is not expressly prohibited that citizens play in online casinos based overseas. To be precise, no player has been arrested. There have been cases in which illegal casino or sports betting customers managed by Yakuza have been arrested. There are still few Japanese players betting on online gaming, which means that they have been silently accepted.

“Regulations on online gaming are different in each country, but online gaming industry will grow around the world by taking those restrictions one step ahead. That growth can only be achieved with the Internet and cryptocurrency. However, the online gaming industry is quietly growing outside the Japanese FSA and police regulations. I believe it is a matter of time to grow to a market size that regulators can not ignore. I do not know what kind of reaction the Japanese regulatory authorities will show when that happens.”

In light of the growing global demand for sports betting without the restrictions and costs that come with the current fiat-based infrastructure, the prospects for crypto gambling and decentralized applications could be positive using the opportunities given by the Internet and cryptocurrency.

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Tron Supports Gambling DApps Restrictions in Japanese Market to Comply With Regulations

Blockchain-based DApp platform Tron is supporting restrictions for gambling DApp development in the Japanese market.

Blockchain-based decentralized application (DApp) platform Tron pushed to remove gambling DApps in the Japanese market to comply with local regulations, according to a press release published on March 31.

Per the statement, the company intends to adhere to local laws and regulations in the countries it works in. Therefore, the firm has decided to support gambling restrictions for Japan-based users through a series of recommendations for developers, as gambling is generally prohibited by the Japanese criminal code.

In order to remove gamblings DApps from the Japanese market, Tron suggests that Japanese DApp developers not launch any such apps on the company’s platform.

Moreover, developers working with gambling apps as a whole are recommended to block users with Japanese IP addresses. Tron also asks them not to facilitate the use of apps for local gamblers.

According to the release, Tron will further collaborate with the Japanese government and provide them with all necessary data in case of violations.

Tron, the firm behind TRX, the 11th top crypto by market cap, has recently acquired blockchain app store CoinPlay. The company wants to aggregate a wide range of blockchain apps and DApps on one platform, eliminating the need to search for them separately at conventional app stores. Last month, HTC’s blockchain-centric smartphone Exodus announced a partnership with web browser Opera and support for multiple DApps on the phone.

At the end of March, Bloomberg analysts wrote that the Ethereum (ETH) network, built for the development of DApps among other things, is losing ground to platform like EOS and Stellar, with Tron also showing a similar percentage of DApp users to ETH.

Last year, Tron revealed its plans to launch a blockchain gaming fund dubbed TRON Arcade, which is reportedly set to see investment totalling $100 million over the next three years.

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12 Markets Decentralization Can Actually Improve (And Why)

Kyle Samani is a Managing Partner at Multicoin Capital, a thesis-driven cryptofund that invests in tokens reshaping entire sectors of the global economy. The following is an exclusive contribution to CoinDesk’s 2018 Year in Review.  Over the last 20 years, a lot of companies have built large online marketplaces to connect buyers and sellers. Amazon, eBay, […]

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Law Commission of India Recognizes Cryptocurrency as Means of Electronic Payment

The Law Commission of India has recognized cryptocurrency as a means of electronic payment. The pronouncement came during the Commission’s recent feasibility study of the legality of online gambling in the country. Cryptocurrency enthusiasts in India will most likely welcome this news given the negative view held by many government officials towards virtual currencies.

Law Commission Groups Cryptocurrency with Electronic Payment Channels

According to a report issued by the Law Commission:

Gambling transactions should be made cashless, making use of electronic means of payment such as credit cards, debit cards, net-banking, virtual currencies (VC, or cryptocurrency), etc.

The idea of cryptocurrencies gaining any form of recognition is one that appeals to crypto enthusiasts in the country. Commenting on the ruling, Nischal Shetty, the CEO of WazirX, a local cryptocurrency exchange platform said:

It is the first time that a body appointed by the government has given recognition to virtual currencies that they have value and can be used for a transaction. Therefore, it is a very positive sign, especially considering the report has come out after a lot of deliberation.

Presently, virtual currency regulation is a significant topic in India. The Reserve Bank of India (RBI), the country’s apex bank, has prohibited local banks from facilitating cryptocurrency transactions in the country. This situation has led to a public outcry with multiple suits filed to challenge the RBI ban.

The Supreme court after having heard preliminary arguments on the case recently fixed September 11, 2018, as the date for delivering its decision on the matter.

Regulation is Better than Prohibition

The ruling offered by the Law Commission of India throws into sharp relief an important debate of which is more desirable – regulation or prohibition. The Commission’s mandate was the examine the case for legalizing betting while treating match-fixing as a criminal offense.

The same principle could also be applied to the government’s stance on cryptocurrency and the RBI ban. Commenting on this analogy, Tuhina Joshi, an associate at TRA Law, a firm with many cryptocurrency exchange platform clients, said:

The law commission recommends that regulating gambling is preferable to an outright ban. This is the same argument we are making in [the] context of cryptocurrencies.

Do you think the ruling of the Indian law commission will lead to a reversal of the RBI ban? Let us know your thoughts in the comment section below.

Image courtesy of the Law Commission of India

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Police Seize $1.5 Million in Crypto During FIFA Gambling Crackdown

Local police officials in China seized more than $1.5 million worth of cryptocurrencies as part of a crackdown on gambling during the 2018 FIFA World Cup.

Chinese state-run media outlet Xinhua reported on July 11 that authorities first noticed the unnamed gambling platform in May following advertisements that claimed it would “accept international recognized cryptocurrencies including bitcoin, ether and litecoin” in order to draw in users. An investigation was launched soon after, according to the outlet.

The special investigation team discovered that the site, based overseas, utilized a traditional online gambling model coupled with cryptocurrency payments. Xinhua cited “regulatory loopholes” by which the site was able to secure profits by hiding proceeds using those currencies.

All told, over the course of eight months, some 333,000 users used the site, which reportedly saw an estimated transaction volume of at least $1.5 billion.

Now, authorities have arrested six organizers of the site and confiscated $1.5 million worth of cryptocurrencies as well as $750,000 in renminbi deposits from their bank accounts.

A spokesperson from the police department in Guangdong province said that the task force will continue working to”maintain a highly concentrated attention” on cracking down online soccer gambling and advised soccer fans to watch the games “rationally and consciously.”

World Cup Image via Shutterstock

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Scottish ‘Crypto Clinic’ Treats Bitcoin Trading Addicts

A Scottish hospital has created a course of residential treatment for those it deems to be ‘crypto addicts,’ in the UK’s first crypto rehabilitation program.

A Scottish hospital is treating people who are addicted to trading cryptocurrencies in the UK’s first ever ‘crypto clinic,’ the Evening Standard reported today, May 28.

Castle Craig Hospital in Peeblesshire, the Scottish Borders, has created a course of residential treatment for those it deems to be crypto addicts.

Experts told the Evening Standard that crypto trading can become a form of behavioural addiction, with traders obsessively glued to “minute-by-minute” market fluctuations. The devised treatment program is therefore closer to existing methods for treating gambling addictions, rather than to substance abuse programs.

Chris Burn, a gambling therapist at Castle Craig Hospital, was quoted by the Evening Standard as saying:

“The high risk, fluctuating cryptocurrency market appeals to the problem gambler. It provides excitement and an escape from reality. Bitcoin, for example, has been heavily traded and huge gains and losses were made. It’s a classic bubble situation.”

Tony Marini, a former gambling and cocaine addict, is leading some of the center’s new treatments. Marini told the Standard that “introducing life structure is key,” adding:

“I see cryptocurrency trading as a way for people to escape from themselves, into another world, because they don’t like the world they’re in. The first stage of treatment is to join other addicts in group therapy and share their life stories. This helps them identify with each other and realise that they’re not alone.”

Castle Craig said that there are currently no figures for the number of ‘crypto addicts,’ but “around 13 mln” people worldwide are trading in the system.

Last year, Cointelegraph reported on a Bitcoin investor who used his home as collateral for a $325,000 equity loan, in pursuit of making a mid-term profit on the cryptocurrency. Crypto community members, evidently viewing his investment mindset as equivalent to gambling, remarked that the move was “almost like a high school chemistry teacher deciding to begin making and selling crystal meth due to a change in life circumstances.”

From another perspective, there has been some discussion in the UK as to whether declaring your crypto trading to be gambling could help to avoid taxes with the British tax authority HMRC, which generally deems crypto profits as subject either to income or capital gains tax laws.

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eSports Platform To Launch Peer-To-Peer Betting As It Consults Malta’s Government

An eSports platform which allows users to challenge each other instead of betting against a bookmaker is preparing to integrate blockchain technology into its newly relaunched website. This comes as it consults with Maltese officials on how its gaming licence could be extended to incorporate cryptocurrency.

HERO is a Vienna-based company that has the goal of bringing back the social element to betting. It believes that the gaming industry lacks innovation and the nature of online betting needs to change, and gaming has become a system where middlemen take unfair fees and untrustworthy bookmakers rip people off. HERO enables users to challenge one another in a system without odds and unfair conditions.

Its decentralized technology is initially going to be integrated into herosphere.gg, an existing platform specializing in eSports prediction and fantasy that has already amassed more than 200,000 registered users. Herosphere currently offers contests across four games: Dota 2, League of Legends, Counter-Strike: Global Offensive and Overwatch. Following the implementation, users will be able to place their bets using HEROcoin (PLAY) – a brand-new cryptocurrency. The bigger plan is to provide its blockchain technology to any other gaming provider over time.

Christina Roth, Head of Communications for HERO, told Cointelegraph: “Our goal is to reintroduce a social element to betting and make it fun and safe for everyone. We see the blockchain as a huge advantage for our industry, helping us to foster what has always been important to us personally: transparency, fairness, and consumer protection.”

“There is no need for bookmakers anymore”

The HERO Network’s launch comes at an exciting time for the eSports industry. Data from Newzoo suggests global revenues for this sector hit $655 mln in 2017, and this year, revenues of $905 mln are forecast – an increase of 38 percent. Meanwhile, Goldman Sachs is expecting that the market is going to grow by a compound rate of 22 percent in the three years to 2019 – transforming eSports into a “one billion dollar opportunity.”

Major players in the traditional sporting world have been watching the industry flourish with interest, and now, many want in on the action. The NBA recently announced plans to launch its own eSports league in 2018, and broadcasting behemoths such as ESPN have started to show eSports tournaments on their channels. According to research from The Next Level, 2017’s highest-rated show was Madden Challenge on CW, with 670,000 people tuning in. On Twitch, 40 mln hours were spent watching Dota 2 coverage – 21.3 mln of them eSports, according to Newzoo.

Although revenues per eSports fan are modest at the moment, they are growing. In 2016, it was estimated that every enthusiast was worth $3.50 a year – considerably lower than the average $15 that was spent by a basketball fan. However, HERO says expenditure and demand is increasing, with revenues of as much as $11 per fan, per year possible by 2019.

The HERO Network, a fully transparent system, allows the community to create games – with other users making peer-to-peer predictions on the outcome. Smart contracts on the Ethereum blockchain are going to be used for automating the process of buy-ins and payouts, creating transparency and trust when transactions are being made.

Users who create a contest – for example, the opportunity for others to bet on the outcome of an eSports event – will be able to set their own reward, with a customized percentage of the total amount wagered being paid into their account. All contests will also come with something known as a General Reward, with at least 1 percent of the funds in pots across all platforms and providers going back to token holders.

Establishing new connections

HERO, which is based in Austria, has been pioneering legal changes in its home country when launching Austria’s first ICO last September.

“We are not focusing solely on our own product”, Paul Polterauer, CEO of HERO, told Cointelegraph, “but we are interested in enabling change for the industry as a whole.”

Currently, HERO is advising Malta on how cryptocurrencies could be used in the gaming sector and has just finished their feedback on the second draft of the license. The country has a gaming license which is applicable for businesses across the European Union, and is planning to have it ready for application within the next months. “It’s an exciting time for us, but also for the industry”, says Polterauer.

Roth added: “When Malta was looking for stakeholders, they wanted experts who were experienced in dealing with complex regulations and reached out to us.”

The company is on track for its official release of the first use, where herosphere.gg will integrate the HEROcoin within the next weeks and prove an example for other providers.

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.