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Winklevoss Capital Partner Sterling Witzke: Dollar Is Not Designed for the Internet, but Stablecoins Are

Winklevoss Capital partner Sterling Witzke spoke to Cointelegraph about the future of stablecoins, regulatory clarity in U.S. and a fair price for Bitcoin

Sterling Witzke has been working at Winklevoss Capital — a venture capital firm set up by the famous Winklevoss twins — for five years now. As a professional investor, she is very interested in financing early stage crypto and blockchain projects. She believes that stablecoins are perfectly designed for the needs of internet payments and will steadily gain popularity as the industry evolves.

We talked to Sterling Witzke about the future of fiat-pegged cryptocurrencies, the necessity of proper legal frameworks and the future of the maturing crypto industry.

Clarity is always good for an ecosystem

Ana Berman: How do you think, what will 2019 bring in terms of regulation? The question is related to the ads that Gemini recently launched, which said, in particular, “Crypto needs rules.” Don’t you think it undermines the whole idea of decentralization?

Sterling Witzke: The short answer is no. As you know from the slogans, Gemini is very pro-thoughtful regulation and believes that consumers in the crypto space deserve the same protection as consumers in other industries.

It’s all about making fair outcomes for all. It doesn’t undermine the original ethos of crypto to have regulations. The distinction comes with the companies that are built on top of the protocol. So, at the protocol level, it’s absolutely correct that you don’t need any more regulation and rules, because those are already built in.

You’ve got the math and the cryptography that dictates the rules on the protocol. The difference is that the applications and companies built on top of those protocols are run by humans, and we all know they are fallible. That’s where the oversight comes into play.

AB: The United States Securities and Exchange Commision (SEC) has recently claimed that crypto will be its top examination priority in 2019. Do you believe the SEC will take some important steps this year?

SW: I hope so. I think that regulatory clarity, especially on things like security tokens versus utility tokens, is needed to get us towards mass adoption. I know there are several companies that were thinking about raising capital, but are now a bit hesitant because they just aren’t quite sure how to operate in a gray area. Such firms want to ask for permission rather than forgiveness, which is our model also, and thus we appreciate that. But I think that clarity is always good for an ecosystem.

AB: Many entrepreneurs participate in crypto initiatives, like draft bills, round tables, etc. Is Winklevoss Capital interested in proposing some regulation or maybe discussing it with legislators?

SW: Tyler and Cameron are very involved and proactively working with regulators to help form the way that these rules are made, which I think is very important. We don’t want government to come down with a heavy hand, as they might not understand the intricacies of the ecosystem.

I am not involved in the regulatory side, but Tyler and Cameron have been very active in the space for a long time. One of the most recent initiatives is the Virtual Commodities Association [VCA], which is a self-regulatory organization started by Gemini. I believe that its current executive director, Maria Filipakis, is actually from the the New York Department of Financial Services [DFS]. So, there is a lot of ongoing communication and collaboration with regulators to try to move this case forward.

Investors are dipping their toes in crypto, no one is taking the plunge

AB: As far as we know, Winklevoss Capital is mostly focused on the investments and the institutional side of the business. Do you believe there will be more Wall Street involvement in 2019? What do you expect in terms of institutional investments?

SW: I don’t think that 2019 is necessarily the year. The end of 2017 was so crazy. People tend to think of the space as moving at lightning speed, but the underlying development doesn’t move that fast. I think it takes a while for institutions to get comfortable. There needs to be a better custody, and any kind of healthy debt and credit markets to get those institutions really excited.

So, I don’t think that I would make a prediction that 2019 is necessarily the year. I think that a lot of investors are thoughtfully dipping their toes in, but I don’t really see anyone completely taking the plunge.

Crypto markets face healthy corrections, as any emerging industry

AB: CNBC’s Brian Kelly once compared crypto regulations to a ski track. Someone has to put a warning sign on a dangerous one, and the skier then decides whether to take risk or not. Do you think it is a relevant description of what’s going on?

SW: I think that is a nice sentiment. The majority of me believes in free markets and free will. Everyone should be able to invest in what they want to invest in. But the fact is that we have some responsibilities to protect people.

I grew up in South Dakota, for example, and crypto has not really made a splash in the Midwest, yet. In the end of 2017, I had lots of friends who bought Bitcoin at $18,000 or $19,000 and kind of lost their shirts. For such a new market, we need the same protections as we do with public equities. The precedent is already here, and there is really no difference.

AB: You just mentioned the bubble of December 2017. Do you think it was a necessary process — let’s say, a sign of development?

SW: One hundred percent. I think that lots of new industries need irrational exuberance to garner excitement and really get the word out there. Thousands more people now know of Bitcoin. That said, there’s no reason why Bitcoin should have been $19,000.

That was all irrational exuberance, bubble — whatever you want to call it. You could maybe argue that this is an overly healthy correction, but I think that a healthy correction was 100 percent necessary. It’s part of the traditional cycle of a new industry emerging.

It was necessary to move this base forward, because it got rid of a lot of bad actors. From the end of 2017 to the beginning of 2018, we saw every Joe Blow creating an ICO [initial coin offering] just to raise, in some instances, hundreds of millions of dollars, and then take off and drink a Mai Tai on the beach. But their investors lost everything. The people that are left and active in the space are really in it for the long term. They see the fundamental effect that blockchain will have globally for the next 100 years. These people are in the industry for the long term.

Bitcoin is a store of value, not a speculative asset

AB: What, in your opinion, is a fair price for Bitcoin?

SW: I won’t make any price predictions, but I am happy where we are, because we’re in a build phase in the ecosystem. I think that the speculators that drove the price up are now sitting on the sidelines. And again, the people that are left truly believe in an ecosystem and think of Bitcoin as a store of value rather than a speculative asset.

AB: So, the ongoing price correction, let’s say, when Bitcoin hovers around $3,500, is more or less a fair process, right?

SW: I think it’s a fair process. And we’ll probably be at these price levels for a while. There is a lot of underlying infrastructure work to be done with things like scalability, user experience, etc. Maybe not on the underlying infrastructure part, but on the top layer. People aren’t going to use these applications if we can’t make it foolproof and extremely easy to use.

Stablecoins are designed for internet payments

AB: As per recent studies, the era of ICO craziness is now over. Many believe the future is in tokenized assets and stablecoins. Do you share this stance?

SW: The short answer is yes. The dollar has been a great form of payment for a long time, but it was not designed for the internet age we are currently in. We need a stable currency that works with the blockchain and the internet. Fiat-pegged stablecoins bring us ability to purchase assets or to be paid dividends in assets that are not volatile.

The craziest example of using something like Bitcoin as a form of payment is the pizza that was bought for 10,000 BTC back in the day. At that time, it was $20, and now it is about $3 million. So, we need something like a fiat-backed stablecoin to be able to facilitate transactions on the blockchain. It’s a currency designed for crypto.

That said, I’ll give my plug for the Gemini dollar [GUSD]. The Gemini dollar is 100 percent backed by the U.S. dollar, and it’s the only stablecoin that has actually released their banking partner, State Street, and are very upfront about that. State Street can say, “Yes, with 100 percent certainty we have 100 percent of the dollars that back GUSD.”

AB: Can you please tell us something about Winklevoss Capital’s blockchain plans for 2019?

SW: Winklevoss Capital invests in both blockchain and nonblockchain-related startups. So on the traditional venture capital side, we invest in early stage companies, both seed and Series A across industries. We’ve done a little bit of everything from e-commerce to IT hardware, and international logistics, and everything else.

On the blockchain side of things, we think about investing very similarly. We’re not trying to be a hedge fund, we’re not flipping public tokens. We sat out of the ICO craze, we’ve already discussed. We’re looking for a really long-term companies and founders that are trying to build a company for the next decades. We’re investing very patient capital with a seven to 10 years’ time horizon. We’re focused very much on infrastructure. As I mentioned, we think that scalability solutions for things like smart contracts are really interesting.

There’s so many interesting applications, like the ability to prove identity and bank the unbanked, which involves 2 billion people that don’t have an official form of ID or can’t get a bank account. If you think about 2 billion people coming online, not a single existing protocol can handle that.

You can also think of Bitcoin doing seven to 10 transactions a second, Ethereum doing 10 to 15, as a maximum — that’s just not feasible. So, we’re looking at solutions that can solve that problem.

Blockchain will be in focus next years

AB: Could you please name any particular companies you’ve already worked with or would like to invest into?

SW: Not yet, unfortunately. It’s something that I’m actively looking for but have not found, yet. We have not made any investments in this space. I think it’s an area of focus over the next year. I’m hopeful that more and more entrepreneurs will be focusing on that problem because it’s massive.

There are so many applications for a blockchain in the U.S. and in developed countries — to make markets more efficient, to fix what I would call First World problems, etc. But, at the end of the day, when we’re talking about addressing the bottom of the pyramid and applications for that, there is a huge quality of life difference that can be more impactful. I’m looking forward to more entrepreneurs focusing on those applications.

AB: Apart from the social application of blockchain, could you mention some areas that are interesting? What are the most promising industries for blockchain?

SW: I think that remittances are also interesting, but this is a social application as well. Gaming is an industry that is really promising. If you think about developers, they’ve been operating digital economies for a decade. Nobody understands the digital supply and demand economics better than gaming developers, and so that feels like a natural adaptation of blockchain — things like nonfunctional goods within games.

Imagine a kid that spends all his time developing this gaming character and another person that really loves playing a game like Fortnite, for example, but doesn’t have the same amount of time to dedicate to it. In that case, the kid could sell the character to someone who’s willing to pay. And, actually, that’s a good use case for stablecoins — defensible goods within gaming.

AB: How many years do we need for mass adoption?

SW: Most likely, several. There is a lot that needs to happen to the underlying infrastructure, and an amazing amount of things that needs to happen to usability before the average consumer is really using applications.

The interview was conducted at the sidelines of the Crypto Finance Conference in St. Moritz, Switzerland, in January 2019. The panel Sterling Witzke took part in was called “From anarchy to adoption — are we selling out or really creating a better world?”

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2019 Will See Entry of More Institutional Players in Crypto, Says Asia Fintech PwC Leader

The fintech and crypto leader for Asia at PricewaterhouseCoopers (PwC) believes that many institutional players will enter the crypto space in 2019.

Henri Arslanian, the Asia fintech and crypto leader of PricewaterhouseCoopers (PwC) Hong Kong, has predicted that many institutional players will enter the crypto industry in 2019. Arslanian made this claim during an interview with Bloomberg published on Dec. 24.

When asked about his outlook on crypto for the next year, Arslanian said that he thinks “there’s a lot of exciting things that the crypto ecosystem is looking forward to in 2019.” Arslain explained that he expects the next year to be different from 2018 because of the increasing regulatory clarity.

Arslanian also declared that he expects “many more big banks” to enter the space, some by launching their own solutions, others by partnering with or investing in crypto companies. This involvement, he explains, will bring in “institutional level expertise” which — according to him — is much needed in the industry.

PwC is an international network of companies that provide consulting and auditing services. The company — which has its headquarters in London — was founded in 1849 and is one of the “big four” accounting companies. Their Hong Kong office has accepted Bitcoin (BTC) as payment for its advisory services since late 2017.

There have been already some announcements by major institutions, seemingly backing Arslanian’s claims. As Cointelegraph reported earlier this month, Nasdaq — the world’s second-largest stock exchange — has confirmed its plans to launch Bitcoin futures in the first half of 2019.

Also, the Intercontinental Exchange (ICE), operator of 23 exchanges including the New York Stock Exchange (NYSE), announced that they plan to launch their Bakkt digital asset platform on Jan. 24, 2019.

However, there have been recently reports this year that several Wall Street giants have postponed their plans to move into crypto amid the falling prices of cryptocurrencies.

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Roger Ver Unfazed By Bitcoin Crash, Maintains Crypto Has Value

Roger Ver, CEO of and the de-facto face of the Bitcoin Cash (ABC) project, recently met with Bloomberg in an exclusive video. Ver, known for his hate for centralized entities, and radical libertarian thought process, and penchant for the Austrian brand of economics, maintained that cryptocurrencies still have value, even in spite of 2018’s dismal market trend.

Crypto Champion Roger Ver Still Undoubtedly Bullish

Roger Ver, one of the crypto industry’s earliest proponents, has long been a leading champion of this innovation. While he may have strayed to the ‘dark side’ (in the eyes of some) since August 1st, 2017’s infamous Bitcoin hard fork, he continues to laud cryptocurrencies for their groundbreaking potential and ability to disrupt centralized players.

He recently took this passion to the streets of Tokyo, Japan, where he was met by Bloomberg to conduct an interview regarding crypto’s most recent happenings.

The Bloomberg host, evidently referencing reports that November 2018 has been Bitcoin’s worst month in years (some say seven), noted that markets have been “chilly,” before asking Ver if a “floor has been reached.” The ardent CEO, quick to the draw, exclaimed that “nobody knows.” Ver then joked that this unpredictability regarding “up, down, or sideways” movements are just a part of cryptocurrencies’ inherent “fun.”

Doing his best to egg his interviewee on, the host went on to ask Ver about his “gut feeling.” The Bitcoin Cash proponent, who lauds BCH as the true digital cash, doing his best to specify a prediction, responded by stating:

I’m a fundamentals investor, so I’m investing [due to] fundamental [factors]. [In the] long-term, the future is brighter than ever [for cryptocurrencies]. There’s more awareness, there’s more adoption, and there’s more stuff happening all over the world. So, of course, I’m incredibly bullish on the entire crypto-coin ecosystem.

In spite of Ver’s positive comments on the cryptosphere, the host, who didn’t seem all too sold on crypto, asked Ver if the $530 million hack of CoinCheck and/or a notable Japanese Bitcoin Ponzi scheme have undermined this innovation’s viability or credibility. Interestingly, Ver turned the question right on its head, noting:

If anything, I think its brought additional awareness to the ecosystem. The fact that such big players (institutions) are involved, and hackers are trying to hack it, means that cryptocurrencies are worth something. if it wasn’t worth anything, or if it wasn’t useful, hackers wouldn’t waste their time… So, if anything, it’s just a bullish signal that cryptocurrencies are here to stay for the long-term.

Ver: Self-Regulation Makes Sense

The host went on to touch on the Japanese Financial Services Agency (FSA), the nation’s equivalent of the SEC, and the approval it gave to Japan Virtual Currency Exchange Association (JVCEA) to self-regulate local crypto exchanges. Ver was asked if such a move is logical, and unsurprisingly, the anti-government commentator said that self-regulation makes sense.

The chief explained that the industry knows itself best, making self-regulation presumably better for all parties. He added that in the end, the JVCEA will be incentivized to establish proper guidelines, as the firms in the consortium have a vested interest in the continued success of cryptocurrencies. More specifically, presumably drawing hints from the countless Japanese exchange hacks, Ver added that “not letting bad things happen to their users” is evidently a good choice.

Speaking out against regulatory measures imposed by bureaucrats, Ver noted:

To think that a politician in some government office somewhere knows more about how cryptocurrencies work and how to keep them safe from hackers, I think is just naive. So of course its the industry participants, that know the most and have the most skin in the game.

Concluding his comments, touching on what could send cryptocurrencies assets higher over the long haul, noted:

I think we need to build the tools to make it easier to use cryptocurrencies, as money, to buy and sell things, and to pay their bills, and pay their rent, and even pay their taxes.

Title Image Courtesy of @gebhartyler on Unsplash

The post Roger Ver Unfazed By Bitcoin Crash, Maintains Crypto Has Value appeared first on Ethereum World News.

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The SEC's Hester Peirce Isn't a Bitcoin Champion, Just a Regulatory Realist

Regulators like the Securities and Exchange Commission shouldn’t be acting as gatekeepers to new technologies like bitcoin, according to Commissioner Hester Peirce.

Peirce’s remarks, made during an interview with CoinDesk, follow the agency’s decision to confirm the 2017 rejection of a bitcoin-tied exchange-traded fund backed by Cameron and Tyler Winklevoss, which reinforced the argument made in a publicly-issued dissent published alongside last week’s announcement.

According to Peirce –  who was sworn into office this past January and previously served as a staffer in the U.S Senate – the decision actually does a disservice to investors who are operating in the market.

“From my perspective, we need to be mindful of what our role is, and it’s not to be the ones who decide which innovations and which technologies get through and which ones’ don’t,” Peirce told CoinDesk.

She added:

“I think that’s a very dangerous position to put ourselves in, and I think it really does harm investors because it denies them opportunity.”

Perhaps unintentionally, Peirce’s dissent made her a kind of hero in the eyes of the crypto community, netting comparisons to the effect comments made by Commodity Futures Trading Commission (CFTC) chief J. Christopher Giancarlo had on his own social media following earlier this year.

In the days following what were perceived as his positive remarks about the technology, Giancarlo was quickly dubbed “Crypto Dad,” a nickname that’s now been extended to Peirce, who some have sought to label the “Crypto Mom” of seemingly supportive U.S. regulators.

But according to Peirce, her statement on Friday wasn’t intended as a remark in support of bitcoin; rather it’s in defense of new technologies and the people who invest time and resources in developing them.

“I’m not taking a view whether bitcoin is going to succeed or fail. I’m excited by the fact that people are thinking of new ways to do things,” Peirce told CoinDesk. “Bitcoin is one of those things, blockchain is one of those things, other cryptocurrencies – but again I’m not weighing on any particular innovation or any particular asset.”

Requirements satisfied

According to Peirce, the Winklevoss proposal was worthy of approval.

In both interview and in her Friday statement, Peirce argued that Bats BZX Exchange, the exchange that filed the proposed rule change and pushed for a review following the rejection by agency staff in March 2017, had satisfied the requirements as dictated by the Securities Exchange Act.

She argued that it was wrong for the agency to focus on manipulation in the spot market for bitcoin and that the risks in question were taken into consideration when BZX made its pitch to the SEC.

“I think the exchange, in making a decision to list this particular product, had looked into whether it thought investors were interested in it, and if investors are interested in it, I don’t see why we should stop them from having access to it.”

Indeed, in her Friday statement, Peirce contended that “approval of this order would demonstrate our commitment to acting within the scope of our limited role in regulating the securities markets.”

“If someone is trying to raise money for a legitimate project, as long as the person explains what he’s trying to do and what he’s going to do with the money that reveals everything material that investors need to know – I don’t think we should stand in the way,” she later told CoinDesk.

Nothing to follow?

Support or not, Peirce’s remarks earned her a big boost in Twitter followers, which as of the time of writing stands at roughly 15,800. Data from analytics site SocialBlade shows that at the start of the month, her follower count was at 1,275, representing a 1,139 percent increase.

And while she clarified that she’s not an advocate for bitcoin or cryptocurrencies, she said she finds the work around the technology “really exciting.”

“It’s not that I’m supporting any one asset, it’s just that I’m supporting the ingenuity and the creativity and the curiosity that’s motivating people to invest their time and money in these new technologies,” she said. “I think that’s exciting. But again, I can’t weigh in on any particular asset, including bitcoin.”

But according to Peirce, the crypto-faithful who are following her shouldn’t expect too many fireworks.

She concluded:

“It’s that my guess is that most of those followers will find most of my tweets very boring. Most of them are about very dull regulatory things.”

Hester Peirce image via YouTube/Elizabeth Warren

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Ethereum (ETH) Named king of Crypto by Kevin O’Leary, reaches $500.00

It is the best second day of the week possible for crypto-enthusiasts as the digital assets finally make it above the very resistant levels. Bitcoin [BTC] flies past the $7,300 as ETH follows above $500.00 against the US Dollar. However, Kevin O’Leary strongly believes that Ethereum in the end will turn the real leader of the crypto-verse.

Bull’s have taken the Helm – Ethereum Supporter

It has been a long fight against the bears and at some point traders felt like L. DiCaprio in The Revenant movie. However, with the weeks beginning, bulls are having their saying and not letting down at all. Various leading coins by market capitalization are welcoming the double-digit gain in the last 24-hours.

Source: coinmarketcap

It seems the monthly long work of the crypto-team could be paying off even for the enthusiast finally as the blockchain infrastructure made major development.

Kevin O’Leary

During an interview for CNBC’s Fast Money, the co-founder of O’leary Funds and SoftKey has added that Ethereum is getting closer and closer to surpassing Bitcoin and be the next in lead of the crypto-verse.

As of July, there exists more than 1,500 decentralized applications (dapps) on Ethereum, ranging from prediction platforms like Augur to decentralized exchanges such as IDEX, equipped with developers who have a shared vision to commercialize the blockchain across various multi-trillion dollar industries.

According to O’Leary, the talk in the crypto-community has drastically shifted over Ethereum with much optimism surrounding it. The dialogue for the Smart-Contract-welcoming environment is intensifying heavily.

“By the way, the dialogue I’ve noticed on bitcoin over the last 60 days has dramatically changed. It started to sound like the pioneer with arrows in its back because people are saying its not the definitive platform anymore. Maybe Ethereum is becoming the new platform. All of the sudden, Bitcoin? What’s Bitcoin? That is not good for Bitcoin investors. Just a personal opinion, but i were long Bitcoin right now, I would start to worry about it,” O’Leary said.


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Nasdaq 'Would Consider' Creating a Crypto Exchange, Says CEO

The CEO of Nasdaq suggested Wednesday that the company could open a cryptocurrency exchange in the future.

The subject came up in an interview with CNBC, during which CEO Adena Friedman expressed openness to the idea.

“Certainly Nasdaq would consider becoming a crypto exchange over time,” Friedman remarked, adding:

“If we do look at it and say ‘it’s time, people are ready for a more regulated market,’ for something that provides a fair experience for investors… I believe that digital currencies will continue to persist it’s just a matter of how long it will take for that space to mature. Once you look at it and say, ‘do we want to provide a regulated market for this?’ Certainly Nasdaq would consider it.”

While Nasdaq is unlikely to launch such a service anytime soon, the company is no stranger to the tech itself. In addition to playing home to several blockchain-focused ETFs as well as public companies that are focused on the technology, Nasdaq has a long-standing relationship with blockchain startup Chain.

And as previously reported, the company has worked on technology applications, as demonstrated through patent filings. For example, the company was awarded a patent in October for a data-matching system that employs blockchain as a means to track trades and clearing positions.

Nasdaq sign image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Tim Draper: “Everybody Wants to Leave California”

Cointelegraph had a chance to talk to Tim Draper, American venture capital investor and businessman, founder of Draper University for entrepreneurs as well as Draper Associates, a VC firm that invested in Tesla, Skype, Baidu, and many other companies.

Tim Draper has been involved in different crypto projects, from the purchase of seized Bitcoins from the Silk Road marketplace website in 2014 to advocating Tezos in 2017.

He shared his thoughts with Cointelegraph on Blockchain adoption, regulations in the US and China, and why he wants to leave California.

Who needs Blockchain integration the most?

Government needs it the most. No question. Worst service, biggest industry, highest cost. Government is clearly people. The size of an industry tends to be the number of people involved. Government is affecting the most people and it is providing the worst service at the highest cost. And the Blockchain can remedy that by creating a whole virtual layer of governance.

That could be the beginning of where governments have to compete for us so that their services increase, improve and the costs go down. Your taxes will go down, and your education, and your health care and whatever – it will go up, it will be better.

But other industries that are going to benefit, anything that’s tied to data or the individual, so identity will be very important because anybody who’s affected by data is going to have a much improved situation because that data will be on the Blockchain, permanently there, tied to each individual. And once that’s the case that can help with all sorts of other industries: whether it’s healthcare, or commerce, or improve retail experience – it could be any number of different things that could be helped just because they will have better data on you.

How to push adoption further?

We, who are in the industry, are pushing as hard and fast as we possibly can. And it’s just that there are all these uncertainties, created by the governments that are run by the grandparents of the people who are creating this new industry. And they don’t get it. It is very frustrating for the people who are creating the industry.

So you have these regulators who are 70-80 years old and they are the ones telling these twenty-year olds what they should be doing. But they’re the same people who have given them huge education debt, poor education, not appropriate for their work life. And now they’re trying to tell them not to do something. That is actually creating a whole new economy.

I mean if I’m a millennial, I’m deeply in debt, I have an education that’s not appropriate to the jobs that I have to go find – I’m kind of lost. But there’s this big opportunity all of a sudden. There’s Bitcoin, there’s crypto, there’s a whole new world out there. That hasn’t been destroyed by the regulators. Now the regulators are coming in, they’re making it very difficult on people.

But any country that gets highly regulated gets poorer, more poverty. And any country that’s free – gets richer. And I think the US is trying to figure this out.

How do different countries handle crypto regulations?

I know Japan has figured out. Make it free – make us rich. Japan thinks I have to control and regulate. I mean, China says I’ve got to control and regulate and they’re going to create a bunch of poverty. And it usually takes twenty years by that time they have moved on. But they are ruining the lives of many people by putting in too many controls, or too many restrictions, or too many regulations.

So when you see the FDA or the SEC or FASB – any of these big institutional regulators come in heavy-handed. They are destroying the potential for growth and wealth in their country.

You ask the question about what is keeping this from happening. It’s the uncertainty created

by all of these regulators. That is slowing down progress; it is not allowing enough of creativity to flourish. And they’re in competition with all the other countries and regulators of the world. And so the lighter touch – the more likely you and I are to move to those countries, or to work with those countries, or to be a part of those countries.

On ICO regulation in the US

My advice to the SEC is go ahead – regulate them all. But make it a one-page document that anyone can fill out. Don’t make it so that these two girls and a dog have to go hire a million dollars worth of legal  work to just get approved. It makes no sense. Just have them go ahead and register, so you have the data that you need. But then let them go and then if they start affecting too many people they become a problem then go ahead and come in and say: “Okay, now you have to go our next level of regulation” or something else.

But ease in. Let’s let these things flourish. Who knows, what creativity is going to come out of these ICOs.

When the Internet came along the governments were trying to shut it down. And all of a sudden think of what’s happened with the Internet: all our lives are so much fuller and more interesting, and more dynamic. And I remember I’d spend hours waiting for somebody to come pick me up when my car broke down. Now if your car breaks down – you leave it on the side of the road. You go boom, I got an Uber – it all happens so quickly, that never would have happened if the Internet hadn’t happened. So this is and if we hadn’t let the Internet go, let it be free, the freer – the richer. Freedom equals prosperity, regulation equals poverty.

On businesses moving away from the US

Everybody wants to leave California. Anybody in business wants to leave California. Because even though the weather’s awesome and their friends are probably here – all of the incentives are to leave.

That’s why I want to flee California. I want a fresh start. And also to leave the US but that’s different set of incentives.

The taxes are higher here, the services are worse, educations worse, the roads are poor. You go to Texas – they have no personal income tax, they have great roads, they have a free government encouraging innovation. You need that.

New York, they have the problem that California does. They are over regulated, they’re on top of each other, they don’t let anybody do anything without filling out forms to do it.

But it’s a good thing about the States because they have to now compete for us, used to be pretty much all the states were competing and felt that way and they worked hard to provide good service to you. When was the last time, a bureaucrat said to you “What can I do to make your life better? How can I improve your business environment? How can I improve?”

They used to do that 25 years ago, I walked into a government office with my father and they said, “How do I improve your business environment? How do I make your home life better? How can I improve your child’s education?” That was the attitude that government had and that’s why my father has such great feelings about the government. And why and the reason I don’t  – is because I saw that switch. Like all of a sudden it went from ‘what can I do’ for you to ‘what are you going to do for me’.

It was about 20 years ago. 20 years ago all of a sudden it was like – “Have you filled out form 12 CB? I’m sorry, oh, and I think you have to talk to this regulator too. Because I don’t think we’re going to allow you to have a party there!”

On Chinese policy of  “yes” Blockchain, “no” crypto

China’s old government under Wen Jiabao was free. They said: a few of you will get rich first – let’s create a harmonious environment, let’s grow, let’s have free markets. That was awesome and it created 40 years of prosperity. And China is like one of the most advanced countries in the world now.

Well now they have the opposite. They have a control freak government, or at least the guy at the top and that permeates the government. They’re not letting money out, they’re not letting people use crypto, they’re not letting people use Bitcoin to pay.

And what that does is – it pushes out all the best entrepreneurs, pushes them to wherever. And it creates more poverty there because all of those people then are constrained. If you’re constrained – you’re poorer. If they say you can’t move – you’re going to starve. And that’s pretty much what too much regulation will do for you. And so that’s China.

Well, it makes no sense. I mean if you’re going to run something on the Blockchain, you’re going to need Bitcoin to do it. If you’re going to do something in Bitcoin – it’s using the Blockchain. These are intertwined.

Now, there are some other Blockchains being created, which is great. Competitive Blockchains. I’m a believer. And, you know, having competition because I as a consumer end up with the better service. But somehow trying to separate those and say oh we’re gonna allow all the technology in, we’re just not going to let you use it. What are they thinking? They’re basically saying: yeah, go keep creating stuff – we’re not going to let you use it and we’re not going to let you have money leave our country.

So where’s the benefit for an entrepreneur there? That’s why they’re all buying houses in Palo Alto. All the Chinese are saying: well, let’s get out of there. Or they’re moving to Japan where they’re welcome. All the young people are moving to Japan. They’re saying: “Well, wow, this government accepts Bitcoin as a national currency! I want to be a part of that!”

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On projects in Kazakhstan

I talked to the Prime Minister of Kazakhstan. And I told him about Estonia and all of these interesting virtual governance thing that can happen. And I said that Kazakh means free. It should be free country. You want this to be free because you’ll end up with a wealthier, more prosperous country.

And, why not have a certain number of Kazakhs, but then a billion virtual Kazakhs. And have them all be a part of your world and compete with all those virtual countries for them.

And he was all for it. So I thought that was going to happen. Now, some lower down regulator has now tried to heavily regulate crypto and that it’s a proposal. It’s not law. And hopefully he’ll just be slapped down and, you know, sent on his merry way. He’s like the old world regulator, who doesn’t get that you’ve got to have a very light touch when you’re regulating an ICO.

It should not be the equivalent of an IPO. An IPO affects hundreds of thousands of people. The companies are worth tens of billions of dollars. An ICO is usually, you know, two girls and a dog.

It’s not like we have to protect everybody from themselves. It’s just people getting going.

Who is listening to him? This guy just opened up! He opened up all that information, he made it dangerous. So, wait, this is totally counter what I thought would be his philosophy, which is: we’re open, transparent, this is the way the world should be, it’s open, and transparent, and decentralized, and whatever… Bitcoins perfect for that. So he’s, I don’t know, why you even listening to that guy?

Do we listen to the guy who runs the biggest bank in the world? When he says, we shouldn’t use Bitcoin – well why listen to that? Because the guy is realizing that people are taking pieces 1 percent, 2 percent, 5 percent of their money out of his bank and putting it into crypto. So he’s totally disinterested, and he is very nervous that he’s going to lose all those customers. And he will. Over time he will.

It just feels like crypto generally will replace all fiat. Because it’s just better currency and all the best engineers in the world are working on that. They’re not working on how to improve services for the dollar.

Crypto vs fiat

It is a hundred trillion dollar market. So that means, that we have a long way to go in a crypto market. We’re now in the hundreds of billions, it’s like it’s got a thousand times on what it is now to go.

Bitcoin vs other cryptocurrencies

I like competition. I think it’s great. I think Bitcoin is clearly the leader. And it will be the standard by which all the other currencies will have to compete. It’ll be the equivalent of Microsoft. But it could end up being Yahoo for search, you know, where Google came in and got a bigger share. So things can happen! But, when you have that front position and whenever there’s a new technology you add it to that currency.

It’s very likely that Bitcoin will be the largest and biggest currency because they have a network effect. It grows as the network grows.

On universal cryptocurrency and price volatility

I like the idea that they’ll all have to compete with each other. And I like the idea that they’ll all be tradable into each other. And, you know, and now they’re tradable into fiat too. But I think that’ll be less important over time, I think more important – more companies like you can get a Kentucky Fried Bitcoin bucket, which is only available to be paid for in Bitcoin in Canada. And then there are all these houses and yachts and whatever – that are all only available in Bitcoin,you can’t pay dollars for them. I think more and more that’ll happen. And we’ll be in a position where people laugh at you if you try to pay fiat currency for your coffee.

Whenever I hear this volatility question, I think, one Bitcoin is still just worth one Bitcoin. It is very stable. All these other currencies, these fiat currencies, there are volatile against it. Falling away. Over time.

And so, when they say volatility, I think they are panicking: they go up, they go down. One Bitcoin is still one Bitcoin and it will continue to be. And so I think, I am not really thinking that it is volatilizing, I am thinking that it is Bitcoin and it should be spent, as you need to spend it.

This interview was conducted at the Global Blockchain Forum, in Santa Clara, US, in collaboration with Cointelegraph news editor, Olivia Capozzalo.

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Dogecoin’s Creator Jackson Palmer: 2018 Is Shaping Up To Be The ‘Year Of The Fork’

Known to the crypto community as the creator of Dogecoin, Jackson Palmer,  product manager at Adobe by profession and coder by passion,  told Cointelegraph how he sees the future of the cryptocurrency, started as a parody and broke the $1 bln market cap in the beginning of 2018, shared his thoughts on the cryptocurrency community, and disclosed some plans for the future.

Being the one behind the idea of Dogecoin when it launched in 2013, however, Jackson made explicit his dislike for some parts of its community and culture in the following years. He started stepping back from the project in late 2014.

Cointelegraph: Looking back at the whole thing, can you tell if it was ultimately worth it?

Jackson Palmer: I started stepping back from Dogecoin and the community after a scammer, who I and others had been trying to call out as dangerous for a while, finally ran away with a lot of money from the community. Anyone who dared to raise suspicion of this character prior to that point would face a lot of criticism and negative energy online, myself included – so I’d already kind of been shouted out of the community in some sense.

This really taught me the power of greed and how many people are willing to see movements like cryptocurrency through rose-tinted goggles so long as they’re making money. Self-reflection and skepticism is at a low during these periods of mania. After our suspicions were unfortunately proven correct, I honestly just didn’t have a strong incentive to return to the fractured community in a meaningful way given everything I’d witnessed, so I stepped away entirely and handed over the keys to the Github repo etc.

Assessing whether it was “worth it” is hard… I think Dogecoin represents a good case study and hope it is utilized as a learning experience to reflect on for anyone in or newly entering the cryptocurrency space. If simply its existence or its story can help bring some more rational, fact-based thought to the hype-fueled crypto industry then I think that’s worth it.

CT: Despite not participating in the project directly anymore, do you still see a future for Dogecoin?

JP: I think we’re rapidly racing towards an over saturation of cryptocurrencies, crypto-assets and tokens, to the point that their value and inherent utility inversely approaches zero. 2018 is shaping up to be the “year of the fork” and with each fork of the original Bitcoin code I feel like every other crypto-token is slightly dissolved.

Even if just from a consumer perspective, it’s very confusing. Dogecoin is ultimately just another fork of the Bitcoin source code, which changed up the variables slightly. From a purely technological standpoint, anyone could fork that and “improve” it tomorrow by further tweaking the variables – so I think its “future” is the same as every other distributed ledger out there… pretty uncertain, easily disrupted and definitely not in a unique advantageous position to succeed.

CT: Any idea what the current core devs are working on?

JP: The devs are working on a new release that essentially brings the code base up to date with the Bitcoin code base, which Dogecoin has always ultimately been derived from. This release includes mostly under-the-hood performance and security improvements, which are important given the last major release was back in 2015.

New projects

As for Jackson himself, he is currently working as group product manager at Adobe and recently launched a YouTube channel where he uploads educational videos on cryptocurrencies and related topics.

“My YouTube channel is mostly a passion-project to try and share the learnings I’ve personally accrued over the years. With 2017 bringing back a resurgence in interest in cryptocurrency I was facing a lot of questions everyday from friends and strangers alike. Rather than repeat those conversations over and over, I’ve found it useful to record my thoughts and share them publicly in video format.

In the process, we’ve built a fun community of people who are passionate about the technology behind cryptocurrency and I really enjoy their shared objective thinking and skepticism about all of these projects. The channel has brought people together in pursuit of education, and I’m really proud of that. Shout out to my subscribers and amazing supporters on Patreon!”

Crypto community

Jackson keeps following the crypto community and comments important events in his Twitter. Commenting about the way crypto industry has been developing in recent years Jackson mentioned how sad he was about the way it’s moving right now. “Sadly, I think many of the negative traits that were present in the space back in 2013 have only been amplified in the 2017-18 cryptocurrency community. The bulk of recent interest in the technology was not driven by its ability to solve real-world problems or provide actual utility to users – rather it was purely driven by the pursuit of making a quick buck. Obviously that’s not sustainable, but we’ve seen literally thousands of projects spun up to try and exploit the attention that greed has brought in.”

Several times Jackson even expressed his dislike how much the crypto community loves easy money – the spirit that seems to be stronger than ever these days.

“I think it’s critical that distributed ledgers and Blockchain technology move from being a novel technical solution in search of a problem to actually providing value back to society, outside of making a few early adopters rich.

This is going to require a large cultural shift in the community, a weeding out of blatant scams and a refocusing of development away from complex, shiny objects to simple, practical solutions to actual problems. The long-lasting, meaningful technologies in this world are those which better humanity, not those which put a few lucky kids in Lamborghinis.”

CT: And here comes the goofy question: are you a dog or a cat person?

JP: Dogs, definitely. Cats really seem to dislike me for some reason.

Jackson Palmer, along with other opinion leaders of the crypto industry, will be attending Global Blockchain Forum, which will take place in Santa Clara, US, on April 2-3, 2018. Cointelegraph will participate in the event as a media partner.

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China’s Crypto Innovators Not Fazed By Bans Or Strict Regulations, See ‘Promising Future’

While China has spent the past year implementing a series of prohibiting regulations that have made it almost impossible for the cryptocurrency industry to thrive within the country, Chinese crypto enthusiasts have not let government regulation prevent them from moving forward with crypto and Blockchain innovation.

Operating in China within the limits of the many restrictions related to crypto  — from the ban of Initial Coin Offerings (ICOs) and domestic fiat-crypto exchanges in September 2017, to the additional January ban of “exchange-like services”, to the February ban of foreign exchanges — is reportedly not impossible.

However, in light of these restrictions, many of China’s top exchanges and other crypto businesses have been forced to relocate to places with more tolerant policies, generally still within Asia, such as Hong Kong, Japan, South Korea, and Singapore.

However, there are some Chinese innovators that see a future in the country’s crypto and Blockchain markets, regardless or in spite of current limitations for operating there. These entrepreneurs are doing their best to develop their crypto and Blockchain projects specifically with a Chinese audience in mind.

In late January 2018 at the Blockchain Connect conference held in San Francisco, Cointelegraph got the chance to talk to two such Chinese crypto entrepreneurs, Yi Lu, one of the founders of media company SV Insight –– the company hosting the conference –– and Xiahong Lin, founder of Blockchain prediction market platform Bodhi, one of the event’s sponsors.

SV Insight – bridging the gap between the US and China

Lu of SV Insight told Cointelegraph that the San Francisco conference was designed with the goal of uniting the Blockchain communities of the US and China. Lu, also Chief Growth Officer of SV Insight and lead of its parent company, Blockchain content discovery platform U Network, also talked about the US-China based media company. With half of its staff in the Bay Area, and half in Beijing, SV Insight’s dual location sets it up to form bonds between the two countries.

CT: From the position of being both an American and a Chinese media company, what was the overall goal in setting up the Blockchain Connect conference?

Lu: I think we are trying to bridge…so China and the US are two powerhouses in Blockchain, and at SV insights our mission is always bridging the gap between US and China. So we are bringing the top speakers from US and China, bringing in these communities to share their opinions. They can actually set a tone for the future of Blockchain.

CT: Brad Garlinghouse, the CEO of Ripple (XRP), also spoke at the conference. Ripple is known for its appeal to traditional financial institutions, due to its willingness to work within existing regulatory frameworks. How do you see Ripple working in the Chinese market?

Lu: I believe [Garlinghouse] spoke about how to promote Ripple in the Asian markets. I think that is one thing that is very interesting because you have an audience with a lot of users and token holders in China. But Ripple doesn’t have much business in China, they probably can’t promote [Ripple] to the Chinese market [due to regulations].

CT: Do you think a similar Blockchain conference could ever happen in China?

Lu: Yes, if we got a chance, and if the policy allowed it, we definitely could do that, maybe bring some top speakers to China. We are also open to partnering up with some team in China to set up another conference.

Bodhi – a prediction market for a Chinese audience

Bodhi is a decentralized prediction market built on the Qtum Blockchain, where users place bets using the platform’s native Bodhi Token (BOT). Prediction markets make it possible to invest in and trade the probability of the outcome of a certain event –– anything from elections, sales of a company, or sports results, to price fluctuations of commodities, or even changes in the weather. Some other examples of decentralized, Blockchain-based prediction market platforms include Canada-based Stox and US-based Augur, both of which use the Ethereum Blockchain.

Cointelegraph spoke with Lin, the founder of Bodhi, about his project, why he wants to work in China, and the future of crypto regulation globally.

CT: First off, can you tell us a little about what Bodhi is, and how the prediction market works?

Lin: Yes. It’s like betting. But when you say “betting”, then people start to ask, “are you gambling?” My answer is always “no,” because gambling is just one of the use cases of betting.

Actually, we as humans  predict or bet on a lot of things. Like when you invest in something, you bet that some company is going to be successful in the future. Or when you fly and you purchase flight insurance, you bet that the flight may be delayed, that’s why you purchase the insurance. Or you can do stock trading or sometimes you do futures and options trading, then that means you are predicting the price will go beyond or go below a certain point. So all these use cases are not about gambling – it’s about your investment, it’s about trading, or it’s about insurance, right?

So you can create a lot of different kinds of usage, financial usage, more like sports-betting usage on top of Blockchain that will enable transparency and prevent black box manipulation.

Because Bodhi is a very cheap platform – you only pay a very small transaction fee – we enable a very low maintenance cost to let users rely on this trustworthy platform and to bet with each other. In summary, we are building this transparent and very cheap prediction market to serve a better protocol for the financial system. That’s what Bodhi is.

CT: Why is Bodhi built on the Qtum blockchain in particular?

Lin: There are a couple of reasons why Bodhi is built on Qtum. One is that we tried to build this prediction market for China. Essentially our product is a startup. To open this market, we needed to find a China-ecosystem-friendly Blockchain. Qtum has a partially Chinese team, which will help us to build it and cooperate together to make this product for China. That’s one thing.

The second thing is, I was a long term Blockchain participant. I’ve worked with Bitcoin since 2011, and in 2014 I started working with Ethereum and participated in the Ethereum crowdsale. I also was the first one to introduce these technologies to China. As a lot of people know, I am an Ethereum fan, but again, the reason why we built Bodhi on Qtum is just because we want to target China’s markets.

CT:  Is it really about having Qtum team partly in China? Why does that matter?

Lin: I think this is a very important question because a lot of people question my choice, like, why [Qtum], since they think Ethereum is a global platform and it’s accessible from everywhere. I may argue it’s just like Google, right? Google is also like the king of internet, a global platform, but you can’t have only one single search engine for the whole world.  Even Google itself comes with multiple languages and multiple URLs to serve different regions.

You may say, oh, Google is not serving the whole world because sometimes it’s blocked [as in China], but what about Reddit? Reddit is accessible to anyone, but again, language matters. It’s beautiful, the English language, but Chinese or other language users cannot use it directly.

That’s why for me, in the future Blockchain world, we’ll have multiple chains where different Blockchains will serve different functions.

Also, even if they are on the same chain serving the same function, you will have multiple Blockchains in different regions, different countries, because essentially language, business or culture are all about being local. It is local, it is not something universal. That’s why Qtum is almost the only choice for us right now.

I totally believe trend wise for us right now, when I look back in 2011 – it’s Bitcoin, and in 2014 – it’s Ethereum. Now what’s the next big thing?

I think trend wise, I believe all those great products will be flourishing in China, and that’s why we choose to target that direction.

Because for the past three years we learned about so many tokens and if you look at the list, none of them are from China. Most of them are built by a lot of Western world geniuses and employees, and that’s why I believe China is a great market, or a market with a great potential.

There will be huge growth, a promising future if you build something especially for China. So that’s a trend that I see. Actually, you can tell now by where we are in 2018 that China is a really huge market. It participates in a lot of projects and investments. I think this is just a beginning and it will have a lot of future.

CT: How do you see Bodhi developing within China’s strict regulatory atmosphere?

Lin: In terms of regulation, you may know that we used to be a very popular product in China, we’ve got a lot of fans, [partially] because I was a long-term crypto player. So I got great early supporters. We did a pre-ICO in August [2017] quite successfully.

However, in September [2017] there was China’s ICO ban. It made almost every project refund everything to users. We are a company based in San Francisco, and we have a coalition in Singapore – actually, we consulted with a lot of our lawyers. They said you are fine to keep those [pre-ICO] funds, because it was before the regulation and you are out of China.

But eventually I decided to refund everything because I don’t want to change my vision [of working in China].

Again, we are a startup, we are not doing a meaningless project to just simply open something and hope that somebody will use it. I want to be fully compliant with China’s regulations because we are targeting China, and China’s markets. So we decided to fully refund it.

But what’s next? I want to build this successfully and make it usable for China. That’s why we still need funds, right? That’s why we eventually came up with this idea about the Initial Exchange Offering (IEO) [selling a portion of a company’s tokens to investors via exchanges, instead of directly to investors via ICO]. Those early investors are free to trade those tokens and we keep it [some tokens].

You are still an ICO because you are doing the same thing, only you’re on an exchange. I really hope our project will be a really decentralized project and the token will be held by the whole community of users.

The difference between ICO and IEO is the timing. It’s before or after. We are after.  

CT: Since you’ve been in the Chinese market for a long time, do you think the public there is more interested in making money with cryptocurrency by trading, or are people also investing in Blockchain technology?

Lin: Honestly, most crypto investors are now investing in crypto token projects. They don’t have strong interest in equity, traditional investment. That’s not true if you look in terms of the whole market in the whole world. They are still some other VCs investing in those Blockchain economies, but what I’m saying is that the majority of investors [in China] in this area right now are only participating in these token sales.

CT: What is your vision for the future of crypto regulation?

Lin: As an industry creator or industry contributor, I don’t want the [crypto] industry to become a bubble or just hype that eventually will fade away. I truly hope there will be more, for example, regulation or community-driven projects that can help prevent certain bad, crazy things from happening.

Somehow I’m kind of someone who believes that the crowdsale itself is not regulatable. It’s a smart contract; you put A-token in, B-token out. It’s really hard to check. But you could regulate the project owner, the people who built the project, or you can regulate the exchange to have enough KYC as well as prevent money laundering, for example. You can even regulate those people who participate in this area to provide KYC.  

I think in general that [regulation] is a good thing. A lot of people think that regulation is a bad thing. For me, I think it’s necessary and it’s doable through the project owner, exchange, participants in this area. I truly believe with that the industry will grow in the right direction, instead of the way [now], where people believe you will get a fast investment return in a short time, which I think is not healthy.

These interviews were conducted in collaboration with Cointelegraph news editor, Olivia Capozzalo.

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“It's Impossible to Refund the Stolen Amount”: Interview with BitGrail’s Francesco Firano

Cointelegraph talked to Francesco Firano, CEO of BitGrail, the Italian exchange apparently hit by a cyber attack that would have caused the loss of a considerable amount of Nano tokens (formerly known as Raiblocks).

BitGrail froze trading on Thursday, Feb. 8. The exchange stated that 17 mln Nano had been stolen in the hack, an amount worth about $187 mln at the time the losses were discovered.

The statements of the developers of Nano on the matter, mixed with the understandable anger of users affected by the theft and the dissemination of confusing information, have generated a climate of strong hostility towards the team of BitGrail, then resulted in serious threats and intimidating messages.

“All those who threaten me with death, could they do it neatly under this tweet? It starts to get tiresome looking in all my posts,” Francesco The Bomber (@bomberfrancy) 11 February 2018

Today, Feb. 13, the BitGrail team has published an update on their website and the status of the investigations. The statement reads:

“We reiterate that we have filed a regular complaint to the competent authorities reporting the information regarding the hacks and the exploited bugs (not attributable to our software).”

BitGrail, explained, that during the communications with the developers of Nano, they have managed to set a good dialogue.

“We have filed a further complaint about aggravated defamation in the press (as the newspapers all over the world have reported their defamatory statements) against the developers of Nano.”

Cointelegraph: How does the BitGrail team respond to allegations that it tried to cover up the theft through requests to the Nano team?

Francesco Firano: We, unlike them, have nothing to hide. We are not forced to defame, making accusations without evidence. I can see they’re very stressed by this matter.

CT: What progress are you making towards the resolution of this matter?

FF: First of all, we are trying to understand how to proceed from a legal standpoint. Once we understand what we can and cannot do legally, we’ll proceed.

CT: How would you comment on the reaction from the international community on this matter?

FF: No comment, it comments itself.

CT: Have you planned a possible solution already for the funds lost by your customers?

FF: When it’s ready, we’ll communicate it to our customers.

CT: Do you expect to find a refund solution for the customers, even if the Nano team decides not to cooperate?

FF: No, it’s impossible to refund the stolen amount.

CT: We learned that someone published your personal home address online. Can you confirm this actually happened? Have you been threatened?

FF: Threats and addresses are in plain sight by now in my posts everywhere.

CT: Some members of the community asked if your team already knew about the security flaw and if you were working to fix it. What would you say to these users?

FF: Baseless and malicious accusations are done by the Nano dev team. The truth is their block explorer is dated Jan. 19, the date of the theft. Since RaiBlocks have no timestamps on the chain, we cannot really find out when it actually happened other than rely on the block explorer, which, as already shown by the private conversation they disclosed, is totally unreliable.

CT: Why did you ask the Nano team for ledged modification?

FF:  I’ll report an extract of the chat that the Nano team disclosed without authorization.

“The Bomber, [08.02.18 19:30]

are you thinking about how we can solve this situation?

The Bomber, [08.02.18 19:32]

One solution can be, I give you BitGrail with all wallets and db, and you fork the burned transaction to refund users

The Bomber, [08.02.18 19:32]

the alternative is that this money is probably lost forever

The Bomber, [08.02.18 19:39]

guys, I understand it’s a shock to everyone, but we must try to solve the problem and communicate something to users.”

As you can see, our only intention is to refund the users who took some serious damage. And, as our conversation shows, I proposed to take a step back and let them manage the entire exchange until the resolution of the problem.

Instead, the Dev Team started to spread statements where they accused me of wanting to cover up the whole thing.

CT: In some posts, users say that the transfer of Nano may have started way before your announcement. What would you say to these users?

FF: First, they don’t have the complete data (it is only available to us and law enforcement authorities). And secondly, we cannot rely on the official explorer developed and managed by the Nano dev (proved flawed), which is, to this day, the only way to determine the date of the transactions.

The interview was conducted in collaboration with Cointelegraph Italian franchisee, Matteo Vena and Cointelegraph managing editor, Lucrezia Cornèr.