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Dragonchain Great Reddit Scaling Bake-Off Public Proposal
Dragonchain Public Proposal TL;DR:
Dragonchain has demonstrated twice Reddit’s entire total daily volume (votes, comments, and postsper Reddit 2019 Year in Review) in a 24-hour demo on an operational network. Every single transaction on Dragonchain is decentralized immediately through 5 levels of Dragon Net, and then secured with combined proof on Bitcoin, Ethereum, Ethereum Classic, and Binance Chain, via Interchain. At the time, in January 2020, the entire cost of the demo was approximately $25K on a single system (transaction fees locked at $0.0001/txn). With current fees (lowest fee $0.0000025/txn), this would cost as little as $625. Watch Joe walk through the entire proposal and answer questions onYouTube. This proposal is also available on the Dragonchain blog.
Hello Reddit and Ethereum community!
I’m Joe Roets, Founder & CEO of Dragonchain. When the team and I first heard about The Great Reddit Scaling Bake-Off we were intrigued. We believe we have the solutions Reddit seeks for its community points system and we have them at scale. For your consideration, we have submitted our proposal below. The team at Dragonchain and I welcome and look forward to your technical questions, philosophical feedback, and fair criticism, to build a scaling solution for Reddit that will empower its users. Because our architecture is unlike other blockchain platforms out there today, we expect to receive many questions while people try to grasp our project. I will answer all questions here in this thread on Reddit, and I've answered some questions in the stream on YouTube. We have seen good discussions so far in the competition. We hope that Reddit’s scaling solution will emerge from The Great Reddit Scaling Bake-Off and that Reddit will have great success with the implementation.
Dragonchain is a robust open source hybrid blockchain platform that has proven to withstand the passing of time since our inception in 2014. We have continued to evolve to harness the scalability of private nodes, yet take full advantage of the security of public decentralized networks, like Ethereum. We have a live, operational, and fully functional Interchain network integrating Bitcoin, Ethereum, Ethereum Classic, and ~700 independent Dragonchain nodes. Every transaction is secured to Ethereum, Bitcoin, and Ethereum Classic. Transactions are immediately usable on chain, and the first decentralization is seen within 20 seconds on Dragon Net. Security increases further to public networks ETH, BTC, and ETC within 10 minutes to 2 hours. Smart contracts can be written in any executable language, offering full freedom to existing developers. We invite any developer to watch the demo, play with our SDK’s, review open source code, and to help us move forward. Dragonchain specializes in scalable loyalty & rewards solutions and has built a decentralized social network on chain, with very affordable transaction costs. This experience can be combined with the insights Reddit and the Ethereum community have gained in the past couple of months to roll out the solution at a rapid pace.
Response and PoC
In The Great Reddit Scaling Bake-Off post, Reddit has asked for a series of demonstrations, requirements, and other considerations. In this section, we will attempt to answer all of these requests.
A live proof of concept showing hundreds of thousands of transactions
On Jan 7, 2020, Dragonchain hosted a 24-hour live demonstration during which a quarter of a billion (250 million+) transactions executed fully on an operational network. Every single transaction on Dragonchain is decentralized immediately through 5 levels of Dragon Net, and then secured with combined proof on Bitcoin, Ethereum, Ethereum Classic, and Binance Chain, via Interchain. This means that every single transaction is secured by, and traceable to these networks. An attack on this system would require a simultaneous attack on all of the Interchained networks. 24 hours in 4 minutes (YouTube): 24 hours in 4 minutes The demonstration was of a single business system, and any user is able to scale this further, by running multiple systems simultaneously. Our goals for the event were to demonstrate a consistent capacity greater than that of Visa over an extended time period. Tooling to reproduce our demo is available here: https://github.com/dragonchain/spirit-bomb
Source code (for on & off-chain components as well tooling used for the PoC). The source code does not have to be shared publicly, but if Reddit decides to use a particular solution it will need to be shared with Reddit at some point.
Dragonchain’s architecture attacks the scalability issue from multiple angles. Dragonchain is a hybrid blockchain platform, wherein every transaction is protected on a business node to the requirements of that business or purpose. A business node may be held completely private or may be exposed or replicated to any level of exposure desired. Every node has its own blockchain and is independently scalable. Dragonchain established Context Based Verification as its consensus model. Every transaction is immediately usable on a trust basis, and in time is provable to an increasing level of decentralized consensus. A transaction will have a level of decentralization to independently owned and deployed Dragonchain nodes (~700 nodes) within seconds, and full decentralization to BTC and ETH within minutes or hours. Level 5 nodes (Interchain nodes) function to secure all transactions to public or otherwise external chains such as Bitcoin and Ethereum. These nodes scale the system by aggregating multiple blocks into a single Interchain transaction on a cadence. This timing is configurable based upon average fees for each respective chain. For detailed information about Dragonchain’s architecture, and Context Based Verification, please refer to the Dragonchain Architecture Document.
An interesting feature of Dragonchain’s network consensus is its economics and scarcity model. Since Dragon Net nodes (L2-L4) are independent staking nodes, deployment to cloud platforms would allow any of these nodes to scale to take on a large percentage of the verification work. This is great for scalability, but not good for the economy, because there is no scarcity, and pricing would develop a downward spiral and result in fewer verification nodes. For this reason, Dragonchain uses TIME as scarcity. TIME is calculated as the number of Dragons held, multiplied by the number of days held. TIME influences the user’s access to features within the Dragonchain ecosystem. It takes into account both the Dragon balance and length of time each Dragon is held. TIME is staked by users against every verification node and dictates how much of the transaction fees are awarded to each participating node for every block. TIME also dictates the transaction fee itself for the business node. TIME is staked against a business node to set a deterministic transaction fee level (see transaction fee table below in Cost section). This is very interesting in a discussion about scaling because it guarantees independence for business implementation. No matter how much traffic appears on the entire network, a business is guaranteed to not see an increased transaction fee rate.
Dragonchain uses Docker and Kubernetes to allow the use of best practices traditional system scaling. Dragonchain offers managed nodes with an easy to use web based console interface. The user may also deploy a Dragonchain node within their own datacenter or favorite cloud platform. Users have deployed Dragonchain nodes on-prem on Amazon AWS, Google Cloud, MS Azure, and other hosting platforms around the world. Any executable code, anything you can write, can be written into a smart contract. This flexibility is what allows us to say that developers with no blockchain experience can use any code language to access the benefits of blockchain. Customers have used NodeJS, Python, Java, and even BASH shell script to write smart contracts on Dragonchain. With Docker containers, we achieve better separation of concerns, faster deployment, higher reliability, and lower response times. We chose Kubernetes for its self-healing features, ability to run multiple services on one server, and its large and thriving development community. It is resilient, scalable, and automated. OpenFaaS allows us to package smart contracts as Docker images for easy deployment. Contract deployment time is now bounded only by the size of the Docker image being deployed but remains fast even for reasonably large images. We also take advantage of Docker’s flexibility and its ability to support any language that can run on x86 architecture. Any image, public or private, can be run as a smart contract using Dragonchain.
Flexibility in Scaling
Dragonchain’s architecture considers interoperability and integration as key features. From inception, we had a goal to increase adoption via integration with real business use cases and traditional systems. We envision the ability for Reddit, in the future, to be able to integrate alternate content storage platforms or other financial services along with the token.
LBRY - To allow users to deploy content natively to LBRY
MakerDAO to allow users to lend small amounts backed by their Reddit community points.
STORJ/SIA to allow decentralized on chain storage of portions of content. These integrations or any other are relatively easy to integrate on Dragonchain with an Interchain implementation.
Cost estimates (on-chain and off-chain) For the purpose of this proposal, we assume that all transactions are on chain (posts, replies, and votes).
On the Dragonchain network, transaction costs are deterministic/predictable. By staking TIME on the business node (as described above) Reddit can reduce transaction costs to as low as $0.0000025 per transaction. Dragonchain Fees Table
How to run it
Building on Dragonchain is simple and requires no blockchain experience. Spin up a business node (L1) in our managed environment (AWS), run it in your own cloud environment, or on-prem in your own datacenter. Clear documentation will walk you through the steps of spinning up your first Dragonchain Level 1 Business node. Getting started is easy...
Download Dragonchain’s dctl
Input three commands into a terminal
Build an image
More information can be found in our Get started documents.
Dragonchain is an open source hybrid platform. Through Dragon Net, each chain combines the power of a public blockchain (like Ethereum) with the privacy of a private blockchain. Dragonchain organizes its network into five separate levels. A Level 1, or business node, is a totally private blockchain only accessible through the use of public/private keypairs. All business logic, including smart contracts, can be executed on this node directly and added to the chain. After creating a block, the Level 1 business node broadcasts a version stripped of sensitive private data to Dragon Net. Three Level 2 Validating nodes validate the transaction based on guidelines determined from the business. A Level 3 Diversity node checks that the level 2 nodes are from a diverse array of locations. A Level 4 Notary node, hosted by a KYC partner, then signs the validation record received from the Level 3 node. The transaction hash is ledgered to the Level 5 public chain to take advantage of the hash power of massive public networks. Dragon Net can be thought of as a “blockchain of blockchains”, where every level is a complete private blockchain. Because an L1 can send to multiple nodes on a single level, proof of existence is distributed among many places in the network. Eventually, proof of existence reaches level 5 and is published on a public network.
Dragonchain is open source and even though the platform is easy enough for developers to code in any language they are comfortable with, we do not have so large a developer community as Ethereum. We would like to see the Ethereum developer community (and any other communities) become familiar with our SDK’s, our solutions, and our platform, to unlock the full potential of our Ethereum Interchain. Long ago we decided to prioritize both Bitcoin and Ethereum Interchains. We envision an ecosystem that encompasses different projects to give developers the ability to take full advantage of all the opportunities blockchain offers to create decentralized solutions not only for Reddit but for all of our current platforms and systems. We believe that together we will take the adoption of blockchain further. We currently have additional Interchain with Ethereum Classic. We look forward to Interchain with other blockchains in the future. We invite all blockchains projects who believe in decentralization and security to Interchain with Dragonchain.
While we only have 700 nodes compared to 8,000 Ethereum and 10,000 Bitcoin nodes. We harness those 18,000 nodes to scale to extremely high levels of security. See Dragonchain metrics.
Some may consider the centralization of Dragonchain’s business nodes as an issue at first glance, however, the model is by design to protect business data. We do not consider this a drawback as these nodes can make any, none, or all data public. Depending upon the implementation, every subreddit could have control of its own business node, for potential business and enterprise offerings, bringing new alternative revenue streams to Reddit.
Costs and resources
Summary of cost & resource information for both on-chain & off-chain components used in the PoC, as well as cost & resource estimates for further scaling. If your PoC is not on mainnet, make note of any mainnet caveats (such as congestion issues).
Every transaction on the PoC system had a transaction fee of $0.0001 (one-hundredth of a cent USD). At 256MM transactions, the demo cost $25,600. With current operational fees, the same demonstration would cost $640 USD. For the demonstration, to achieve throughput to mimic a worldwide payments network, we modeled several clients in AWS and 4-5 business nodes to handle the traffic. The business nodes were tuned to handle higher throughput by adjusting memory and machine footprint on AWS. This flexibility is valuable to implementing a system such as envisioned by Reddit. Given that Reddit’s daily traffic (posts, replies, and votes) is less than half that of our demo, we would expect that the entire Reddit system could be handled on 2-5 business nodes using right-sized containers on AWS or similar environments. Verification was accomplished on the operational Dragon Net network with over 700 independently owned verification nodes running around the world at no cost to the business other than paid transaction fees.
This PoC should scale to the numbers below with minimal costs (both on & off-chain). There should also be a clear path to supporting hundreds of millions of users. Over a 5 day period, your scaling PoC should be able to handle: *100,000 point claims (minting & distributing points) *25,000 subscriptions *75,000 one-off points burning *100,000 transfers
During Dragonchain’s 24 hour demo, the above required numbers were reached within the first few minutes. Reddit’s total activity is 9000% more than Ethereum’s total transaction level. Even if you do not include votes, it is still 700% more than Ethereum’s current volume. Dragonchain has demonstrated that it can handle 250 million transactions a day, and it’s architecture allows for multiple systems to work at that level simultaneously. In our PoC, we demonstrate double the full capacity of Reddit, and every transaction was proven all the way to Bitcoin and Ethereum. Reddit Scaling on Ethereum
Solutions should not depend on any single third-party provider. We prefer solutions that do not depend on specific entities such as Reddit or another provider, and solutions with no single point of control or failure in off-chain components but recognize there are numerous trade-offs to consider
Dragonchain’s architecture calls for a hybrid approach. Private business nodes hold the sensitive data while the validation and verification of transactions for the business are decentralized within seconds and secured to public blockchains within 10 minutes to 2 hours. Nodes could potentially be controlled by owners of individual subreddits for more organic decentralization.
Billing is currently centralized - there is a path to federation and decentralization of a scaled billing solution.
Operational on-premises capabilities
Operational deployment to any datacenter
Over 700 independent Community Verification Nodes with proof of ownership
Operational Interchain (Interoperable to Bitcoin, Ethereum, and Ethereum Classic, open to more)
Usability Scaling solutions should have a simple end user experience.
Users shouldn't have to maintain any extra state/proofs, regularly monitor activity, keep track of extra keys, or sign anything other than their normal transactions
Dragonchain and its customers have demonstrated extraordinary usability as a feature in many applications, where users do not need to know that the system is backed by a live blockchain. Lyceum is one of these examples, where the progress of academy courses is being tracked, and successful completion of courses is rewarded with certificates on chain. Our @Save_The_Tweet bot is popular on Twitter. When used with one of the following hashtags - #please, #blockchain, #ThankYou, or #eternalize the tweet is saved through Eternal to multiple blockchains. A proof report is available for future reference. Other examples in use are DEN, our decentralized social media platform, and our console, where users can track their node rewards, view their TIME, and operate a business node. Examples:
Transactions complete in a reasonable amount of time (seconds or minutes, not hours or days)
All transactions are immediately usable on chain by the system. A transaction begins the path to decentralization at the conclusion of a 5-second block when it gets distributed across 5 separate community run nodes. Full decentralization occurs within 10 minutes to 2 hours depending on which interchain (Bitcoin, Ethereum, or Ethereum Classic) the transaction hits first. Within approximately 2 hours, the combined hash power of all interchained blockchains secures the transaction.
Free to use for end users (no gas fees, or fixed/minimal fees that Reddit can pay on their behalf)
With transaction pricing as low as $0.0000025 per transaction, it may be considered reasonable for Reddit to cover transaction fees for users. All of Reddit's Transactions on Blockchain (month) Community points can be earned by users and distributed directly to their Reddit account in batch (as per Reddit minting plan), and allow users to withdraw rewards to their Ethereum wallet whenever they wish. Withdrawal fees can be paid by either user or Reddit. This model has been operating inside the Dragonchain system since 2018, and many security and financial compliance features can be optionally added. We feel that this capability greatly enhances user experience because it is seamless to a regular user without cryptocurrency experience, yet flexible to a tech savvy user. With regard to currency or token transactions, these would occur on the Reddit network, verified to BTC and ETH. These transactions would incur the $0.0000025 transaction fee. To estimate this fee we use the monthly active Reddit users statista with a 60% adoption rate and an estimated 10 transactions per month average resulting in an approximate $720 cost across the system. Reddit could feasibly incur all associated internal network charges (mining/minting, transfer, burn) as these are very low and controllable fees. Reddit Internal Token Transaction Fees Reddit Ethereum Token Transaction Fees When we consider further the Ethereum fees that might be incurred, we have a few choices for a solution.
Offload all Ethereum transaction fees (user withdrawals) to interested users as they wish to withdraw tokens for external use or sale.
Cover Ethereum transaction fees by aggregating them on a timed schedule. Users would request withdrawal (from Reddit or individual subreddits), and they would be transacted on the Ethereum network every hour (or some other schedule).
In a combination of the above, customers could cover aggregated fees.
Integrate with alternate Ethereum roll up solutions or other proposals to aggregate minting and distribution transactions onto Ethereum.
Users should be able to view their balances & transactions via a blockchain explorer-style interface
From interfaces for users who have no knowledge of blockchain technology to users who are well versed in blockchain terms such as those present in a typical block explorer, a system powered by Dragonchain has flexibility on how to provide balances and transaction data to users. Transactions can be made viewable in an Eternal Proof Report, which displays raw data along with TIME staking information and traceability all the way to Bitcoin, Ethereum, and every other Interchained network. The report shows fields such as transaction ID, timestamp, block ID, multiple verifications, and Interchain proof. See example here. Node payouts within the Dragonchain console are listed in chronological order and can be further seen in either Dragons or USD. See example here. In our social media platform, Dragon Den, users can see, in real-time, their NRG and MTR balances. See example here. A new influencer app powered by Dragonchain, Raiinmaker, breaks down data into a user friendly interface that shows coin portfolio, redeemed rewards, and social scores per campaign. See example here.
Exiting is fast & simple
Withdrawing funds on Dragonchain’s console requires three clicks, however, withdrawal scenarios with more enhanced security features per Reddit’s discretion are obtainable.
Interoperability Compatibility with third party apps (wallets/contracts/etc) is necessary.
Proven interoperability at scale that surpasses the required specifications. Our entire platform consists of interoperable blockchains connected to each other and traditional systems. APIs are well documented. Third party permissions are possible with a simple smart contract without the end user being aware. No need to learn any specialized proprietary language. Any code base (not subsets) is usable within a Docker container. Interoperable with any blockchain or traditional APIs. We’ve witnessed relatively complex systems built by engineers with no blockchain or cryptocurrency experience. We’ve also demonstrated the creation of smart contracts within minutes built with BASH shell and Node.js. Please see our source code and API documentation.
Scaling solutions should be extensible and allow third parties to build on top of it Open source and extensible APIs should be well documented and stable
Third-party permissionless integrations should be possible & straightforward Smart contracts are Docker based, can be written in any language, use full language (not subsets), and can therefore be integrated with any system including traditional system APIs. Simple is better. Learning an uncommon or proprietary language should not be necessary.
Advanced knowledge of mathematics, cryptography, or L2 scaling should not be required. Compatibility with common utilities & toolchains is expected. Dragonchain business nodes and smart contracts leverage Docker to allow the use of literally any language or executable code. No proprietary language is necessary. We’ve witnessed relatively complex systems built by engineers with no blockchain or cryptocurrency experience. We’ve also demonstrated the creation of smart contracts within minutes built with BASH shell and Node.js.
Bonus Points: Show us how it works. Do you have an idea for a cool new use case for Community Points? Build it!
Community points could be awarded to Reddit users based upon TIME too, whereas the longer someone is part of a subreddit, the more community points someone naturally gained, even if not actively commenting or sharing new posts. A daily login could be required for these community points to be credited. This grants awards to readers too and incentivizes readers to create an account on Reddit if they browse the website often. This concept could also be leveraged to provide some level of reputation based upon duration and consistency of contribution to a community subreddit.
Dragonchain has already built a social media platform that harnesses community involvement. Dragon Den is a decentralized community built on the Dragonchain blockchain platform. Dragon Den is Dragonchain’s answer to fake news, trolling, and censorship. It incentivizes the creation and evaluation of quality content within communities. It could be described as being a shareholder of a subreddit or Reddit in its entirety. The more your subreddit is thriving, the more rewarding it will be. Den is currently in a public beta and in active development, though the real token economy is not live yet. There are different tokens for various purposes. Two tokens are Lair Ownership Rights (LOR) and Lair Ownership Tokens (LOT). LOT is a non-fungible token for ownership of a specific Lair. LOT will only be created and converted from LOR. Energy (NRG) and Matter (MTR) work jointly. Your MTR determines how much NRG you receive in a 24-hour period. Providing quality content, or evaluating content will earn MTR.
Security. Users have full ownership & control of their points.
All community points awarded based upon any type of activity or gift, are secured and provable to all Interchain networks (currently BTC, ETH, ETC). Users are free to spend and withdraw their points as they please, depending on the features Reddit wants to bring into production.
Balances and transactions cannot be forged, manipulated, or blocked by Reddit or anyone else
Users can withdraw their balance to their ERC20 wallet, directly through Reddit. Reddit can cover the fees on their behalf, or the user covers this with a portion of their balance.
Users should own their points and be able to get on-chain ERC20 tokens without permission from anyone else
Through our console users can withdraw their ERC20 rewards. This can be achieved on Reddit too. Here is a walkthrough of our console, though this does not show the quick withdrawal functionality, a user can withdraw at any time. https://www.youtube.com/watch?v=aNlTMxnfVHw
Points should be recoverable to on-chain ERC20 tokens even if all third-parties involved go offline
If necessary, signed transactions from the Reddit system (e.g. Reddit + Subreddit) can be sent to the Ethereum smart contract for minting.
A public, third-party review attesting to the soundness of the design should be available
To our knowledge, at least two large corporations, including a top 3 accounting firm, have conducted positive reviews. These reviews have never been made public, as Dragonchain did not pay or contract for these studies to be released.
Bonus points Public, third-party implementation review available or in progress
Compatibility with HSMs & hardware wallets
For the purpose of this proposal, all tokenization would be on the Ethereum network using standard token contracts and as such, would be able to leverage all hardware wallet and Ethereum ecosystem services.
Minting/distributing tokens is not performed by Reddit directly
This operation can be automated by smart contract on Ethereum. Subreddits can if desired have a role to play.
One off point burning, as well as recurring, non-interactive point burning (for subreddit memberships) should be possible and scalable
This is possible and scalable with interaction between Dragonchain Reddit system and Ethereum token contract(s).
Fully open-source solutions are strongly preferred
Dragonchain is fully open source (see section on Disney release after conclusion).
Whether it is today, or in the future, we would like to work together to bring secure flexibility to the highest standards. It is our hope to be considered by Ethereum, Reddit, and other integrative solutions so we may further discuss the possibilities of implementation. In our public demonstration, 256 million transactions were handled in our operational network on chain in 24 hours, for the low cost of $25K, which if run today would cost $625. Dragonchain’s interoperable foundation provides the atmosphere necessary to implement a frictionless community points system. Thank you for your consideration of our proposal. We look forward to working with the community to make something great!
Disney Releases Blockchain Platform as Open Source
The team at Disney created the Disney Private Blockchain Platform. The system was a hybrid interoperable blockchain platform for ledgering and smart contract development geared toward solving problems with blockchain adoption and usability. All objective evaluation would consider the team’s output a success. We released a list of use cases that we explored in some capacity at Disney, and our input on blockchain standardization as part of our participation in the W3C Blockchain Community Group. https://lists.w3.org/Archives/Public/public-blockchain/2016May/0052.html
In 2016, Roets proposed to release the platform as open source to spread the technology outside of Disney, as others within the W3C group were interested in the solutions that had been created inside of Disney. Following a long process, step by step, the team met requirements for release. Among the requirements, the team had to:
Obtain VP support and approval for the release
Verify ownership of the software to be released
Verify that no proprietary content would be released
Convince the organization that there was a value to the open source community
Convince the organization that there was a value to Disney
Offer the plan for ongoing maintenance of the project outside of Disney
Itemize competing projects
Verify no conflict of interest
Change the project name to not use the name Disney, any Disney character, or any other associated IP - proposed Dragonchain - approved
Obtain legal approval
Approval from corporate, parks, and other business units
Approval from multiple Disney patent groups Copyright holder defined by Disney (Disney Connected and Advanced Technologies)
Trademark searches conducted for the selected name Dragonchain
Obtain IT security approval
Manual review of OSS components conducted
OWASP Dependency and Vulnerability Check Conducted
Obtain technical (software) approval
Offer management, process, and financial plans for the maintenance of the project.
Meet list of items to be addressed before release
Remove all Disney project references and scripts
Create a public distribution list for email communications
Remove Roets’ direct and internal contact information
Create public Slack channel and move from Disney slack channels
Create proper labels for issue tracking
Rename internal private Github repository
Add informative description to Github page
Expand README.md with more specific information
Add information beyond current “Blockchains are Magic”
Add getting started sections and info on cloning/forking the project
Add installation details
Add uninstall process
Add unit, functional, and integration test information
Detail how to contribute and get involved
Describe the git workflow that the project will use
Move to public, non-Disney git repository (Github or Bitbucket)
Obtain Disney Open Source Committee approval for release
On top of meeting the above criteria, as part of the process, the maintainer of the project had to receive the codebase on their own personal email and create accounts for maintenance (e.g. Github) with non-Disney accounts. Given the fact that the project spanned multiple business units, Roets was individually responsible for its ongoing maintenance. Because of this, he proposed in the open source application to create a non-profit organization to hold the IP and maintain the project. This was approved by Disney. The Disney Open Source Committee approved the application known as OSSRELEASE-10, and the code was released on October 2, 2016. Disney decided to not issue a press release. Original OSSRELASE-10 document
Summary: Everyone knows that when you give your assets to someone else, they always keep them safe. If this is true for individuals, it is certainly true for businesses. Custodians always tell the truth and manage funds properly. They won't have any interest in taking the assets as an exchange operator would. Auditors tell the truth and can't be misled. That's because organizations that are regulated are incapable of lying and don't make mistakes. First, some background. Here is a summary of how custodians make us more secure: Previously, we might give Alice our crypto assets to hold. There were risks:
Alice might take the assets and disappear.
Alice might spend the assets and pretend that she still has them (fractional model).
Alice might store the assets insecurely and they'll get stolen.
Alice might give the assets to someone else by mistake or by force.
Alice might lose access to the assets.
But "no worries", Alice has a custodian named Bob. Bob is dressed in a nice suit. He knows some politicians. And he drives a Porsche. "So you have nothing to worry about!". And look at all the benefits we get:
Alice can't take the assets and disappear (unless she asks Bob or never gives them to Bob).
Alice can't spend the assets and pretend that she still has them. (Unless she didn't give them to Bob or asks him for them.)
Alice can't store the assets insecurely so they get stolen. (After all - she doesn't have any control over the withdrawal process from any of Bob's systems, right?)
Alice can't give the assets to someone else by mistake or by force. (Bob will stop her, right Bob?)
Alice can't lose access to the funds. (She'll always be present, sane, and remember all secrets, right?)
See - all problems are solved! All we have to worry about now is:
Bob might take the assets and disappear.
Bob might spend the assets and pretend that he still has them (fractional model).
Bob might store the assets insecurely and they'll get stolen.
Bob might give the assets to someone else by mistake or by force.
Bob might lose access to the assets.
It's pretty simple. Before we had to trust Alice. Now we only have to trust Alice, Bob, and all the ways in which they communicate. Just think of how much more secure we are! "On top of that", Bob assures us, "we're using a special wallet structure". Bob shows Alice a diagram. "We've broken the balance up and store it in lots of smaller wallets. That way", he assures her, "a thief can't take it all at once". And he points to a historic case where a large sum was taken "because it was stored in a single wallet... how stupid". "Very early on, we used to have all the crypto in one wallet", he said, "and then one Christmas a hacker came and took it all. We call him the Grinch. Now we individually wrap each crypto and stick it under a binary search tree. The Grinch has never been back since." "As well", Bob continues, "even if someone were to get in, we've got insurance. It covers all thefts and even coercion, collusion, and misplaced keys - only subject to the policy terms and conditions." And with that, he pulls out a phone-book sized contract and slams it on the desk with a thud. "Yep", he continues, "we're paying top dollar for one of the best policies in the country!" "Can I read it?' Alice asks. "Sure," Bob says, "just as soon as our legal team is done with it. They're almost through the first chapter." He pauses, then continues. "And can you believe that sales guy Mike? He has the same year Porsche as me. I mean, what are the odds?" "Do you use multi-sig?", Alice asks. "Absolutely!" Bob replies. "All our engineers are fully trained in multi-sig. Whenever we want to set up a new wallet, we generate 2 separate keys in an air-gapped process and store them in this proprietary system here. Look, it even requires the biometric signature from one of our team members to initiate any withdrawal." He demonstrates by pressing his thumb into the display. "We use a third-party cloud validation API to match the thumbprint and authorize each withdrawal. The keys are also backed up daily to an off-site third-party." "Wow that's really impressive," Alice says, "but what if we need access for a withdrawal outside of office hours?" "Well that's no issue", Bob says, "just send us an email, call, or text message and we always have someone on staff to help out. Just another part of our strong commitment to all our customers!" "What about Proof of Reserve?", Alice asks. "Of course", Bob replies, "though rather than publish any blockchain addresses or signed transaction, for privacy we just do a SHA256 refactoring of the inverse hash modulus for each UTXO nonce and combine the smart contract coefficient consensus in our hyperledger lightning node. But it's really simple to use." He pushes a button and a large green checkmark appears on a screen. "See - the algorithm ran through and reserves are proven." "Wow", Alice says, "you really know your stuff! And that is easy to use! What about fiat balances?" "Yeah, we have an auditor too", Bob replies, "Been using him for a long time so we have quite a strong relationship going! We have special books we give him every year and he's very efficient! Checks the fiat, crypto, and everything all at once!" "We used to have a nice offline multi-sig setup we've been using without issue for the past 5 years, but I think we'll move all our funds over to your facility," Alice says. "Awesome", Bob replies, "Thanks so much! This is perfect timing too - my Porsche got a dent on it this morning. We have the paperwork right over here." "Great!", Alice replies. And with that, Alice gets out her pen and Bob gets the contract. "Don't worry", he says, "you can take your crypto-assets back anytime you like - just subject to our cancellation policy. Our annual management fees are also super low and we don't adjust them often". How many holes have to exist for your funds to get stolen? Just one. Why are we taking a powerful offline multi-sig setup, widely used globally in hundreds of different/lacking regulatory environments with 0 breaches to date, and circumventing it by a demonstrably weak third party layer? And paying a great expense to do so? If you go through the list of breaches in the past 2 years to highly credible organizations, you go through the list of major corporate frauds (only the ones we know about), you go through the list of all the times platforms have lost funds, you go through the list of times and ways that people have lost their crypto from identity theft, hot wallet exploits, extortion, etc... and then you go through this custodian with a fine-tooth comb and truly believe they have value to add far beyond what you could, sticking your funds in a wallet (or set of wallets) they control exclusively is the absolute worst possible way to take advantage of that security. The best way to add security for crypto-assets is to make a stronger multi-sig. With one custodian, what you are doing is giving them your cryptocurrency and hoping they're honest, competent, and flawlessly secure. It's no different than storing it on a really secure exchange. Maybe the insurance will cover you. Didn't work for Bitpay in 2015. Didn't work for Yapizon in 2017. Insurance has never paid a claim in the entire history of cryptocurrency. But maybe you'll get lucky. Maybe your exact scenario will buck the trend and be what they're willing to cover. After the large deductible and hopefully without a long and expensive court battle. And you want to advertise this increase in risk, the lapse of judgement, an accident waiting to happen, as though it's some kind of benefit to customers ("Free institutional-grade storage for your digital assets.")? And then some people are writing to the OSC that custodians should be mandatory for all funds on every exchange platform? That this somehow will make Canadians as a whole more secure or better protected compared with standard air-gapped multi-sig? On what planet? Most of the problems in Canada stemmed from one thing - a lack of transparency. If Canadians had known what a joke Quadriga was - it wouldn't have grown to lose $400m from hard-working Canadians from coast to coast to coast. And Gerald Cotten would be in jail, not wherever he is now (at best, rotting peacefully). EZ-BTC and mister Dave Smilie would have been a tiny little scam to his friends, not a multi-million dollar fraud. Einstein would have got their act together or been shut down BEFORE losing millions and millions more in people's funds generously donated to criminals. MapleChange wouldn't have even been a thing. And maybe we'd know a little more about CoinTradeNewNote - like how much was lost in there. Almost all of the major losses with cryptocurrency exchanges involve deception with unbacked funds. So it's great to see transparency reports from BitBuy and ShakePay where someone independently verified the backing. The only thing we don't have is:
ANY CERTAINTY BALANCES WEREN'T EXCLUDED. Quadriga's largest account was $70m. 80% of funds are in 20% of accounts (Pareto principle). All it takes is excluding a few really large accounts - and nobody's the wiser. A fractional platform can easily pass any audit this way.
ANY VISIBILITY WHATSOEVER INTO THE CUSTODIANS. BitBuy put out their report before moving all the funds to their custodian and ShakePay apparently can't even tell us who the custodian is. That's pretty important considering that basically all of the funds are now stored there.
ANY IDEA ABOUT THE OTHER EXCHANGES. In order for this to be effective, it has to be the norm. It needs to be "unusual" not to know. If obscurity is the norm, then it's super easy for people like Gerald Cotten and Dave Smilie to blend right in.
It's not complicated to validate cryptocurrency assets. They need to exist, they need to be spendable, and they need to cover the total balances. There are plenty of credible people and firms across the country that have the capacity to reasonably perform this validation. Having more frequent checks by different, independent, parties who publish transparent reports is far more valuable than an annual check by a single "more credible/official" party who does the exact same basic checks and may or may not publish anything. Here's an example set of requirements that could be mandated:
First report within 1 month of launching, another within 3 months, and further reports at minimum every 6 months thereafter.
No auditor can be repeated within a 12 month period.
All reports must be public, identifying the auditor and the full methodology used.
All auditors must be independent of the firm being audited with no conflict of interest.
Reports must include the percentage of each asset backed, and how it's backed.
The auditor publishes a hash list, which lists a hash of each customer's information and balances that were included. Hash is one-way encryption so privacy is fully preserved. Every customer can use this to have 100% confidence they were included.
If we want more extensive requirements on audits, these should scale upward based on the total assets at risk on the platform, and whether the platform has loaned their assets out.
There are ways to structure audits such that neither crypto assets nor customer information are ever put at risk, and both can still be properly validated and publicly verifiable. There are also ways to structure audits such that they are completely reasonable for small platforms and don't inhibit innovation in any way. By making the process as reasonable as possible, we can completely eliminate any reason/excuse that an honest platform would have for not being audited. That is arguable far more important than any incremental improvement we might get from mandating "the best of the best" accountants. Right now we have nothing mandated and tons of Canadians using offshore exchanges with no oversight whatsoever. Transparency does not prove crypto assets are safe. CoinTradeNewNote, Flexcoin ($600k), and Canadian Bitcoins ($100k) are examples where crypto-assets were breached from platforms in Canada. All of them were online wallets and used no multi-sig as far as any records show. This is consistent with what we see globally - air-gapped multi-sig wallets have an impeccable record, while other schemes tend to suffer breach after breach. We don't actually know how much CoinTrader lost because there was no visibility. Rather than publishing details of what happened, the co-founder of CoinTrader silently moved on to found another platform - the "most trusted way to buy and sell crypto" - a site that has no information whatsoever (that I could find) on the storage practices and a FAQ advising that “[t]rading cryptocurrency is completely safe” and that having your own wallet is “entirely up to you! You can certainly keep cryptocurrency, or fiat, or both, on the app.” Doesn't sound like much was learned here, which is really sad to see. It's not that complicated or unreasonable to set up a proper hardware wallet. Multi-sig can be learned in a single course. Something the equivalent complexity of a driver's license test could prevent all the cold storage exploits we've seen to date - even globally. Platform operators have a key advantage in detecting and preventing fraud - they know their customers far better than any custodian ever would. The best job that custodians can do is to find high integrity individuals and train them to form even better wallet signatories. Rather than mandating that all platforms expose themselves to arbitrary third party risks, regulations should center around ensuring that all signatories are background-checked, properly trained, and using proper procedures. We also need to make sure that signatories are empowered with rights and responsibilities to reject and report fraud. They need to know that they can safely challenge and delay a transaction - even if it turns out they made a mistake. We need to have an environment where mistakes are brought to the surface and dealt with. Not one where firms and people feel the need to hide what happened. In addition to a knowledge-based test, an auditor can privately interview each signatory to make sure they're not in coercive situations, and we should make sure they can freely and anonymously report any issues without threat of retaliation. A proper multi-sig has each signature held by a separate person and is governed by policies and mutual decisions instead of a hierarchy. It includes at least one redundant signature. For best results, 3of4, 3of5, 3of6, 4of5, 4of6, 4of7, 5of6, or 5of7. History has demonstrated over and over again the risk of hot wallets even to highly credible organizations. Nonetheless, many platforms have hot wallets for convenience. While such losses are generally compensated by platforms without issue (for example Poloniex, Bitstamp, Bitfinex, Gatecoin, Coincheck, Bithumb, Zaif, CoinBene, Binance, Bitrue, Bitpoint, Upbit, VinDAX, and now KuCoin), the public tends to focus more on cases that didn't end well. Regardless of what systems are employed, there is always some level of risk. For that reason, most members of the public would prefer to see third party insurance. Rather than trying to convince third party profit-seekers to provide comprehensive insurance and then relying on an expensive and slow legal system to enforce against whatever legal loopholes they manage to find each and every time something goes wrong, insurance could be run through multiple exchange operators and regulators, with the shared interest of having a reputable industry, keeping costs down, and taking care of Canadians. For example, a 4 of 7 multi-sig insurance fund held between 5 independent exchange operators and 2 regulatory bodies. All Canadian exchanges could pay premiums at a set rate based on their needed coverage, with a higher price paid for hot wallet coverage (anything not an air-gapped multi-sig cold wallet). Such a model would be much cheaper to manage, offer better coverage, and be much more reliable to payout when needed. The kind of coverage you could have under this model is unheard of. You could even create something like the CDIC to protect Canadians who get their trading accounts hacked if they can sufficiently prove the loss is legitimate. In cases of fraud, gross negligence, or insolvency, the fund can be used to pay affected users directly (utilizing the last transparent balance report in the worst case), something which private insurance would never touch. While it's recommended to have official policies for coverage, a model where members vote would fully cover edge cases. (Could be similar to the Supreme Court where justices vote based on case law.) Such a model could fully protect all Canadians across all platforms. You can have a fiat coverage governed by legal agreements, and crypto-asset coverage governed by both multi-sig and legal agreements. It could be practical, affordable, and inclusive. Now, we are at a crossroads. We can happily give up our freedom, our innovation, and our money. We can pay hefty expenses to auditors, lawyers, and regulators year after year (and make no mistake - this cost will grow to many millions or even billions as the industry grows - and it will be borne by all Canadians on every platform because platforms are not going to eat up these costs at a loss). We can make it nearly impossible for any new platform to enter the marketplace, forcing Canadians to use the same stagnant platforms year after year. We can centralize and consolidate the entire industry into 2 or 3 big players and have everyone else fail (possibly to heavy losses of users of those platforms). And when a flawed security model doesn't work and gets breached, we can make it even more complicated with even more people in suits making big money doing the job that blockchain was supposed to do in the first place. We can build a system which is so intertwined and dependent on big government, traditional finance, and central bankers that it's future depends entirely on that of the fiat system, of fractional banking, and of government bail-outs. If we choose this path, as history has shown us over and over again, we can not go back, save for revolution. Our children and grandchildren will still be paying the consequences of what we decided today. Or, we can find solutions that work. We can maintain an open and innovative environment while making the adjustments we need to make to fully protect Canadian investors and cryptocurrency users, giving easy and affordable access to cryptocurrency for all Canadians on the platform of their choice, and creating an environment in which entrepreneurs and problem solvers can bring those solutions forward easily. None of the above precludes innovation in any way, or adds any unreasonable cost - and these three policies would demonstrably eliminate or resolve all 109 historic cases as studied here - that's every single case researched so far going back to 2011. It includes every loss that was studied so far not just in Canada but globally as well. Unfortunately, finding answers is the least challenging part. Far more challenging is to get platform operators and regulators to agree on anything. My last post got no response whatsoever, and while the OSC has told me they're happy for industry feedback, I believe my opinion alone is fairly meaningless. This takes the whole community working together to solve. So please let me know your thoughts. Please take the time to upvote and share this with people. Please - let's get this solved and not leave it up to other people to do. Facts/background/sources (skip if you like):
The inspiration for the paragraph about splitting wallets was an actual quote from a Canadian company providing custodial services in response to the OSC consultation paper: "We believe that it will be in the in best interests of investors to prohibit pooled crypto assets or ‘floats’. Most Platforms pool assets, citing reasons of practicality and expense. The recent hack of the world’s largest Platform – Binance – demonstrates the vulnerability of participants’ assets when such concessions are made. In this instance, the Platform’s entire hot wallet of Bitcoins, worth over $40 million, was stolen, facilitated in part by the pooling of client crypto assets." "the maintenance of participants (and Platform) crypto assets across multiple wallets distributes the related risk and responsibility of security - reducing the amount of insurance coverage required and making insurance coverage more readily obtainable". For the record, their reply also said nothing whatsoever about multi-sig or offline storage.
In addition to the fact that the $40m hack represented only one "hot wallet" of Binance, and they actually had the vast majority of assets in other wallets (including mostly cold wallets), multiple real cases have clearly demonstrated that risk is still present with multiple wallets. Bitfinex, VinDAX, Bithumb, Altsbit, BitPoint, Cryptopia, and just recently KuCoin all had multiple wallets breached all at the same time, and may represent a significantly larger impact on customers than the Binance breach which was fully covered by Binance. To represent that simply having multiple separate wallets under the same security scheme is a comprehensive way to reduce risk is just not true.
Private insurance has historically never covered a single loss in the cryptocurrency space (at least, not one that I was able to find), and there are notable cases where massive losses were not covered by insurance. Bitpay in 2015 and Yapizon in 2017 both had insurance policies that didn't pay out during the breach, even after a lengthly court process. The same insurance that ShakePay is presently using (and announced to much fanfare) was describe by their CEO himself as covering “physical theft of the media where the private keys are held,” which is something that has never historically happened. As was said with regard to the same policy in 2018 - “I don’t find it surprising that Lloyd’s is in this space,” said Johnson, adding that to his mind the challenge for everybody is figuring out how to structure these policies so that they are actually protective. “You can create an insurance policy that protects no one – you know there are so many caveats to the policy that it’s not super protective.”
The most profitable policy for a private insurance company is one with the most expensive premiums that they never have to pay a claim on. They have no inherent incentive to take care of people who lost funds. It's "cheaper" to take the reputational hit and fight the claim in court. The more money at stake, the more the insurance provider is incentivized to avoid payout. They're not going to insure the assets unless they have reasonable certainty to make a profit by doing so, and they're not going to pay out a massive sum unless it's legally forced. Private insurance is always structured to be maximally profitable to the insurance provider.
The circumvention of multi-sig was a key factor in the massive Bitfinex hack of over $60m of bitcoin, which today still sits being slowly used and is worth over $3b. While Bitfinex used a qualified custodian Bitgo, which was and still is active and one of the industry leaders of custodians, and they set up 2 of 3 multi-sig wallets, the entire system was routed through Bitfinex, such that Bitfinex customers could initiate the withdrawals in a "hot" fashion. This feature was also a hit with the hacker. The multi-sig was fully circumvented.
Bitpay in 2015 was another example of a breach that stole 5,000 bitcoins. This happened not through the exploit of any system in Bitpay, but because the CEO of a company they worked with got their computer hacked and the hackers were able to request multiple bitcoin purchases, which Bitpay honoured because they came from the customer's computer legitimately. Impersonation is a very common tactic used by fraudsters, and methods get more extreme all the time.
A notable case in Canada was the Canadian Bitcoins exploit. Funds were stored on a server in a Rogers Data Center, and the attendee was successfully convinced to reboot the server "in safe mode" with a simple phone call, thus bypassing the extensive security and enabling the theft.
The very nature of custodians circumvents multi-sig. This is because custodians are not just having to secure the assets against some sort of physical breach but against any form of social engineering, modification of orders, fraudulent withdrawal attempts, etc... If the security practices of signatories in a multi-sig arrangement are such that the breach risk of one signatory is 1 in 100, the requirement of 3 independent signatures makes the risk of theft 1 in 1,000,000. Since hackers tend to exploit the weakest link, a comparable custodian has to make the entry and exit points of their platform 10,000 times more secure than one of those signatories to provide equivalent protection. And if the signatories beef up their security by only 10x, the risk is now 1 in 1,000,000,000. The custodian has to be 1,000,000 times more secure. The larger and more complex a system is, the more potential vulnerabilities exist in it, and the fewer people can understand how the system works when performing upgrades. Even if a system is completely secure today, one has to also consider how that system might evolve over time or work with different members.
By contrast, offline multi-signature solutions have an extremely solid record, and in the entire history of cryptocurrency exchange incidents which I've studied (listed here), there has only been one incident (796 exchange in 2015) involving an offline multi-signature wallet. It happened because the customer's bitcoin address was modified by hackers, and the amount that was stolen ($230k) was immediately covered by the exchange operators. Basically, the platform operators were tricked into sending a legitimate withdrawal request to the wrong address because hackers exploited their platform to change that address. Such an issue would not be prevented in any way by the use of a custodian, as that custodian has no oversight whatsoever to the exchange platform. It's practical for all exchange operators to test large withdrawal transactions as a general policy, regardless of what model is used, and general best practice is to diagnose and fix such an exploit as soon as it occurs.
False promises on the backing of funds played a huge role in the downfall of Quadriga, and it's been exposed over and over again (MyCoin, PlusToken, Bitsane, Bitmarket, EZBTC, IDAX). Even today, customers have extremely limited certainty on whether their funds in exchanges are actually being backed or how they're being backed. While this issue is not unique to cryptocurrency exchanges, the complexity of the technology and the lack of any regulation or standards makes problems more widespread, and there is no "central bank" to come to the rescue as in the 2008 financial crisis or during the great depression when "9,000 banks failed".
In addition to fraudulent operations, the industry is full of cases where operators have suffered breaches and not reported them. Most recently, Einstein was the largest case in Canada, where ongoing breaches and fraud were perpetrated against the platform for multiple years and nobody found out until the platform collapsed completely. While fraud and breaches suck to deal with, they suck even more when not dealt with. Lack of visibility played a role in the largest downfalls of Mt. Gox, Cryptsy, and Bitgrail. In some cases, platforms are alleged to have suffered a hack and keep operating without admitting it at all, such as CoinBene.
It surprises some to learn that a cryptographic solution has already existed since 2013, and gained widespread support in 2014 after Mt. Gox. Proof of Reserves is a full cryptographic proof that allows any customer using an exchange to have complete certainty that their crypto-assets are fully backed by the platform in real-time. This is accomplished by proving that assets exist on the blockchain, are spendable, and fully cover customer deposits. It does not prove safety of assets or backing of fiat assets.
If we didn't care about privacy at all, a platform could publish their wallet addresses, sign a partial transaction, and put the full list of customer information and balances out publicly. Customers can each check that they are on the list, that the balances are accurate, that the total adds up, and that it's backed and spendable on the blockchain. Platforms who exclude any customer take a risk because that customer can easily check and see they were excluded. So together with all customers checking, this forms a full proof of backing of all crypto assets.
However, obviously customers care about their private information being published. Therefore, a hash of the information can be provided instead. Hash is one-way encryption. The hash allows the customer to validate inclusion (by hashing their own known information), while anyone looking at the list of hashes cannot determine the private information of any other user. All other parts of the scheme remain fully intact. A model like this is in use on the exchange CoinFloor in the UK.
A Merkle tree can provide even greater privacy. Instead of a list of balances, the balances are arranged into a binary tree. A customer starts from their node, and works their way to the top of the tree. For example, they know they have 5 BTC, they plus 1 other customer hold 7 BTC, they plus 2-3 other customers hold 17 BTC, etc... until they reach the root where all the BTC are represented. Thus, there is no way to find the balances of other individual customers aside from one unidentified customer in this case.
Proposals such as this had the backing of leaders in the community including Nic Carter, Greg Maxwell, and Zak Wilcox. Substantial and significant effort started back in 2013, with massive popularity in 2014. But what became of that effort? Very little. Exchange operators continue to refuse to give visibility. Despite the fact this information can often be obtained through trivial blockchain analysis, no Canadian platform has ever provided any wallet addresses publicly. As described by the CEO of Newton "For us to implement some kind of realtime Proof of Reserves solution, which I'm not opposed to, it would have to ... Preserve our users' privacy, as well as our own. Some kind of zero-knowledge proof". Kraken describes here in more detail why they haven't implemented such a scheme. According to professor Eli Ben-Sasson, when he spoke with exchanges, none were interested in implementing Proof of Reserves.
And yet, Kraken's places their reasoning on a page called "Proof of Reserves". More recently, both BitBuy and ShakePay have released reports titled "Proof of Reserves and Security Audit". Both reports contain disclaimers against being audits. Both reports trust the customer list provided by the platform, leaving the open possibility that multiple large accounts could have been excluded from the process. Proof of Reserves is a blockchain validation where customers see the wallets on the blockchain. The report from Kraken is 5 years old, but they leave it described as though it was just done a few weeks ago. And look at what they expect customers to do for validation. When firms represent something being "Proof of Reserve" when it's not, this is like a farmer growing fruit with pesticides and selling it in a farmers market as organic produce - except that these are people's hard-earned life savings at risk here. Platforms are misrepresenting the level of visibility in place and deceiving the public by their misuse of this term. They haven't proven anything.
Fraud isn't a problem that is unique to cryptocurrency. Fraud happens all the time. Enron, WorldCom, Nortel, Bear Stearns, Wells Fargo, Moser Baer, Wirecard, Bre-X, and Nicola are just some of the cases where frauds became large enough to become a big deal (and there are so many countless others). These all happened on 100% reversible assets despite regulations being in place. In many of these cases, the problems happened due to the over-complexity of the financial instruments. For example, Enron had "complex financial statements [which] were confusing to shareholders and analysts", creating "off-balance-sheet vehicles, complex financing structures, and deals so bewildering that few people could understand them". In cryptocurrency, we are often combining complex financial products with complex technologies and verification processes. We are naïve if we think problems like this won't happen. It is awkward and uncomfortable for many people to admit that they don't know how something works. If we want "money of the people" to work, the solutions have to be simple enough that "the people" can understand them, not so confusing that financial professionals and technology experts struggle to use or understand them.
For those who question the extent to which an organization can fool their way into a security consultancy role, HB Gary should be a great example to look at. Prior to trying to out anonymous, HB Gary was being actively hired by multiple US government agencies and others in the private sector (with glowing testimonials). The published articles and hosted professional security conferences. One should also look at this list of data breaches from the past 2 years. Many of them are large corporations, government entities, and technology companies. These are the ones we know about. Undoubtedly, there are many more that we do not know about. If HB Gary hadn't been "outted" by anonymous, would we have known they were insecure? If the same breach had happened outside of the public spotlight, would it even have been reported? Or would HB Gary have just deleted the Twitter posts, brought their site back up, done a couple patches, and kept on operating as though nothing had happened?
In the case of Quadriga, the facts are clear. Despite past experience with platforms such as MapleChange in Canada and others around the world, no guidance or even the most basic of a framework was put in place by regulators. By not clarifying any sort of legal framework, regulators enabled a situation where a platform could be run by former criminal Mike Dhanini/Omar Patryn, and where funds could be held fully unchecked by one person. At the same time, the lack of regulation deterred legitimate entities from running competing platforms and Quadriga was granted a money services business license for multiple years of operation, which gave the firm the appearance of legitimacy. Regulators did little to protect Canadians despite Quadriga failing to file taxes from 2016 onward. The entire administrative team had resigned and this was public knowledge. Many people had suspicions of what was going on, including Ryan Mueller, who forwarded complaints to the authorities. These were ignored, giving Gerald Cotten the opportunity to escape without justice.
There are multiple issues with the SOC II model including the prohibitive cost (you have to find a third party accounting firm and the prices are not even listed publicly on any sites), the requirement of operating for a year (impossible for new platforms), and lack of any public visibility (SOC II are private reports that aren't shared outside the people in suits).
Securities frameworks are expensive. Sarbanes-Oxley is estimated to cost $5.1 million USD/yr for the average Fortune 500 company in the United States. Since "Fortune 500" represents the top 500 companies, that means well over $2.55 billion USD (~$3.4 billion CAD) is going to people in suits. Isn't the problem of trust and verification the exact problem that the blockchain is supposed to solve?
To use Quadriga as justification for why custodians or SOC II or other advanced schemes are needed for platforms is rather silly, when any framework or visibility at all, or even the most basic of storage policies, would have prevented the whole thing. It's just an embarrassment.
We are now seeing regulators take strong action. CoinSquare in Canada with multi-million dollar fines. BitMex from the US, criminal charges and arrests. OkEx, with full disregard of withdrawals and no communication. Who's next?
We have a unique window today where we can solve these problems, and not permanently destroy innovation with unreasonable expectations, but we need to act quickly. This is a unique historic time that will never come again.
How To End The Cryptocurrency Exchange "Wild West" Without Crippling Innovation
In case you haven't noticed the consultation paper, staff notice, and report on Quadriga, regulators are now clamping down on Canadian cryptocurrency exchanges. The OSC and other regulatory bodies are still interested in industry feedback. They have not put forward any official regulation yet. Below are some ideas/insights and a proposed framework.
Typical securities frameworks will cost Canadians millions of dollars (ie Sarbanes-Oxley estimated at $5m USD/yr per firm). Implementation costs of this proposal are significantly cheaper.
Canadians can maintain a diverse set of exchanges, multiple viable business models are still fully supported, and innovation is encouraged while keeping Canadians safe.
Many of you have limited time to read the full proposal, so here are the highlights:
Effective standards to prevent both internal and external theft. Exchange operators are trained and certified, and have a legal responsibility to users.
Regular Transparent Audits
Provides visibility to Canadians that their funds are fully backed on the exchange, while protecting privacy and sensitive platform information.
Establishment of basic insurance standards/strategy, to expand over time. Removing risk to exchange users of any hot wallet theft.
Background and Justifications
Cold Storage Custody/Management After reviewing close to 100 cases, all thefts tend to break down into more or less the same set of problems: • Funds stored online or in a smart contract, • Access controlled by one person or one system, • 51% attacks (rare), • Funds sent to the wrong address (also rare), or • Some combination of the above. For the first two cases, practical solutions exist and are widely implemented on exchanges already. Offline multi-signature solutions are already industry standard. No cases studied found an external theft or exit scam involving an offline multi-signature wallet implementation. Security can be further improved through minimum numbers of signatories, background checks, providing autonomy and legal protections to each signatory, establishing best practices, and a training/certification program. The last two transaction risks occur more rarely, and have never resulted in a loss affecting the actual users of the exchange. In all cases to date where operators made the mistake, they've been fully covered by the exchange platforms. • 51% attacks generally only occur on blockchains with less security. The most prominent cases have been Bitcoin Gold and Ethereum Classic. The simple solution is to enforce deposit limits and block delays such that a 51% attack is not cost-effective. • The risk of transactions to incorrect addresses can be eliminated by a simple test transaction policy on large transactions. By sending a small amount of funds prior to any large withdrawals/transfers as a standard practice, the accuracy of the wallet address can be validated. The proposal covers all loss cases and goes beyond, while avoiding significant additional costs, risks, and limitations which may be associated with other frameworks like SOC II. On The Subject of Third Party Custodians Many Canadian platforms are currently experimenting with third party custody. From the standpoint of the exchange operator, they can liberate themselves from some responsibility of custody, passing that off to someone else. For regulators, it puts crypto in similar categorization to oil, gold, and other commodities, with some common standards. Platform users would likely feel greater confidence if the custodian was a brand they recognized. If the custodian was knowledgeable and had a decent team that employed multi-sig, they could keep assets safe from internal theft. With the right protections in place, this could be a great solution for many exchanges, particularly those that lack the relevant experience or human resources for their own custody systems. However, this system is vulnerable to anyone able to impersonate the exchange operators. You may have a situation where different employees who don't know each other that well are interacting between different companies (both the custodian and all their customers which presumably isn't just one exchange). A case study of what can go wrong in this type of environment might be Bitpay, where the CEO was tricked out of 5000 bitcoins over 3 separate payments by a series of emails sent legitimately from a breached computer of another company CEO. It's also still vulnerable to the platform being compromised, as in the really large $70M Bitfinex hack, where the third party Bitgo held one key in a multi-sig wallet. The hacker simply authorized the withdrawal using the same credentials as Bitfinex (requesting Bitgo to sign multiple withdrawal transactions). This succeeded even with the use of multi-sig and two heavily security-focused companies, due to the lack of human oversight (basically, hot wallet). Of course, you can learn from these cases and improve the security, but so can hackers improve their deception and at the end of the day, both of these would have been stopped by the much simpler solution of a qualified team who knew each other and employed multi-sig with properly protected keys. It's pretty hard to beat a human being who knows the business and the typical customer behaviour (or even knows their customers personally) at spotting fraud, and the proposed multi-sig means any hacker has to get through the scrutiny of 3 (or more) separate people, all of whom would have proper training including historical case studies. There are strong arguments both for and against using use of third party custodians. The proposal sets mandatory minimum custody standards would apply regardless if the cold wallet signatories are exchange operators, independent custodians, or a mix of both. On The Subject Of Insurance ShakePay has taken the first steps into this new realm (congratulations). There is no question that crypto users could be better protected by the right insurance policies, and it certainly feels better to transact with insured platforms. The steps required to obtain insurance generally place attention in valuable security areas, and in this case included a review from CipherTrace. One of the key solutions in traditional finance comes from insurance from entities such as the CDIC. However, historically, there wasn't found any actual insurance payout to any cryptocurrency exchange, and there are notable cases where insurance has not paid. With Bitpay, for example, the insurance agent refused because the issue happened to the third party CEO's computer instead of anything to do with Bitpay itself. With the Youbit exchange in South Korea, their insurance claim was denied, and the exchange ultimately ended up instead going bankrupt with all user's funds lost. To quote Matt Johnson in the original Lloyd's article: “You can create an insurance policy that protects no one – you know there are so many caveats to the policy that it’s not super protective.” ShakePay's insurance was only reported to cover their cold storage, and “physical theft of the media where the private keys are held”. Physical theft has never, in the history of cryptocurrency exchange cases reviewed, been reported as the cause of loss. From the limited information of the article, ShakePay made it clear their funds are in the hands of a single US custodian, and at least part of their security strategy is to "decline to confirm the custodian’s name on the record". While this prevents scrutiny of the custodian, it's pretty silly to speculate that a reasonably competent hacking group couldn't determine who the custodian is. A far more common infiltration strategy historically would be social engineering, which has succeeded repeatedly. A hacker could trick their way into ShakePay's systems and request a fraudulent withdrawal, impersonate ShakePay and request the custodian to move funds, or socially engineer their way into the custodian to initiate the withdrawal of multiple accounts (a payout much larger than ShakePay) exploiting the standard procedures (for example, fraudulently initiating or override the wallet addresses of a real transfer). In each case, nothing was physically stolen and the loss is therefore not covered by insurance. In order for any insurance to be effective, clear policies have to be established about what needs to be covered. Anything short of that gives Canadians false confidence that they are protected when they aren't in any meaningful way. At this time, the third party insurance market does not appear to provide adequate options or coverage, and effort is necessary to standardize custody standards, which is a likely first step in ultimately setting up an insurance framework. A better solution compared to third party insurance providers might be for Canadian exchange operators to create their own collective insurance fund, or a specific federal organization similar to the CDIC. Such an organization would have a greater interest or obligation in paying out actual cases, and that would be it's purpose rather than maximizing it's own profit. This would be similar to the SAFU which Binance has launched, except it would cover multiple exchanges. There is little question whether the SAFU would pay out given a breach of Binance, and a similar argument could be made for a insurance fund managed by a collective of exchange operators or a government organization. While a third party insurance provider has the strong market incentive to provide the absolute minimum coverage and no market incentive to payout, an entity managed by exchange operators would have incentive to protect the reputation of exchange operators/the industry, and the government should have the interest of protecting Canadians. On The Subject of Fractional Reserve There is a long history of fractional reserve failures, from the first banks in ancient times, through the great depression (where hundreds of fractional reserve banks failed), right through to the 2008 banking collapse referenced in the first bitcoin block. The fractional reserve system allows banks to multiply the money supply far beyond the actual cash (or other assets) in existence, backed only by a system of debt obligations of others. Safely supporting a fractional reserve system is a topic of far greater complexity than can be addressed by a simple policy, and when it comes to cryptocurrency, there is presently no entity reasonably able to bail anyone out in the event of failure. Therefore, this framework is addressed around entities that aim to maintain 100% backing of funds. There may be some firms that desire but have failed to maintain 100% backing. In this case, there are multiple solutions, including outside investment, merging with other exchanges, or enforcing a gradual restoration plan. All of these solutions are typically far better than shutting down the exchange, and there are multiple cases where they've been used successfully in the past. Proof of Reserves/Transparency/Accountability Canadians need to have visibility into the backing on an ongoing basis. The best solution for crypto-assets is a Proof of Reserve. Such ideas go back all the way to 2013, before even Mt. Gox. However, no Canadian exchange has yet implemented such a system, and only a few international exchanges (CoinFloor in the UK being an example) have. Many firms like Kraken, BitBuy, and now ShakePay use the Proof of Reserve term to refer to lesser proofs which do not actually cryptographically prove the full backing of all user assets on the blockchain. In order for a Proof of Reserve to be effective, it must actually be a complete proof, and it needs to be understood by the public that is expected to use it. Many firms have expressed reservations about the level of transparency required in a complete Proof of Reserve (for example Kraken here). While a complete Proof of Reserves should be encouraged, and there are some solutions in the works (ie TxQuick), this is unlikely to be suitable universally for all exchange operators and users. Given the limitations, and that firms also manage fiat assets, a more traditional audit process makes more sense. Some Canadian exchanges (CoinSquare, CoinBerry) have already subjected themselves to annual audits. However, these results are not presently shared publicly, and there is no guarantee over the process including all user assets or the integrity and independence of the auditor. The auditor has been typically not known, and in some cases, the identity of the auditor is protected by a NDA. Only in one case (BitBuy) was an actual report generated and publicly shared. There has been no attempt made to validate that user accounts provided during these audits have been complete or accurate. A fraudulent fractional exchange, or one which had suffered a breach they were unwilling to publicly accept (see CoinBene), could easily maintain a second set of books for auditors or simply exclude key accounts to pass an individual audit. The proposed solution would see a reporting standard which includes at a minimum - percentage of backing for each asset relative to account balances and the nature of how those assets are stored, with ownership proven by the auditor. The auditor would also publicly provide a "hash list", which they independently generate from the accounts provided by the exchange. Every exchange user can then check their information against this public "hash list". A hash is a one-way form of encryption, which fully protects the private information, yet allows anyone who knows that information already to validate that it was included. Less experienced users can take advantage of public tools to calculate the hash from their information (provided by the exchange), and thus have certainty that the auditor received their full balance information. Easy instructions can be provided. Auditors should be impartial, their identities and process public, and they should be rotated so that the same auditor is never used twice in a row. Balancing the cost of auditing against the needs for regular updates, a 6 month cycle likely makes the most sense. Hot Wallet Management The best solution for hot wallets is not to use them. CoinBerry reportedly uses multi-sig on all withdrawals, and Bitmex is an international example known for their structure devoid of hot wallets. However, many platforms and customers desire fast withdrawal processes, and human validation has a cost of time and delay in this process. A model of self-insurance or separate funds for hot wallets may be used in these cases. Under this model, a platform still has 100% of their client balance in cold storage and holds additional funds in hot wallets for quick withdrawal. Thus, the risk of those hot wallets is 100% on exchange operators and not affecting the exchange users. Since most platforms typically only have 1%-5% in hot wallets at any given time, it shouldn't be unreasonable to build/maintain these additional reserves over time using exchange fees or additional investment. Larger withdrawals would still be handled at regular intervals from the cold storage. Hot wallet risks have historically posed a large risk and there is no established standard to guarantee secure hot wallets. When the government of South Korea dispatched security inspections to multiple exchanges, the results were still that 3 of them got hacked after the inspections. If standards develop such that an organization in the market is willing to insure the hot wallets, this could provide an acceptable alternative. Another option may be for multiple exchange operators to pool funds aside for a hot wallet insurance fund. Comprehensive coverage standards must be established and maintained for all hot wallet balances to make sure Canadians are adequately protected.
Current Draft Proposal
(1) Proper multi-signature cold wallet storage. (a) Each private key is the personal and legal responsibility of one person - the “signatory”. Signatories have special rights and responsibilities to protect user assets. Signatories are trained and certified through a course covering (1) past hacking and fraud cases, (2) proper and secure key generation, and (3) proper safekeeping of private keys. All private keys must be generated and stored 100% offline by the signatory. If even one private keys is ever breached or suspected to be breached, the wallet must be regenerated and all funds relocated to a new wallet. (b) All signatories must be separate background-checked individuals free of past criminal conviction. Canadians should have a right to know who holds their funds. All signing of transactions must take place with all signatories on Canadian soil or on the soil of a country with a solid legal system which agrees to uphold and support these rules (from an established white-list of countries which expands over time). (c) 3-5 independent signatures are required for any withdrawal. There must be 1-3 spare signatories, and a maximum of 7 total signatories. The following are all valid combinations: 3of4, 3of5, 3of6, 4of5, 4of6, 4of7, 5of6, or 5of7. (d) A security audit should be conducted to validate the cold wallet is set up correctly and provide any additional pertinent information. The primary purpose is to ensure that all signatories are acting independently and using best practices for private key storage. A report summarizing all steps taken and who did the audit will be made public. Canadians must be able to validate the right measures are in place to protect their funds. (e) There is a simple approval process if signatories wish to visit any country outside Canada, with a potential whitelist of exempt countries. At most 2 signatories can be outside of aligned jurisdiction at any given time. All exchanges would be required to keep a compliant cold wallet for Canadian funds and have a Canadian office if they wish to serve Canadian customers. (2) Regular and transparent solvency audits. (a) An audit must be conducted at founding, after 3 months of operation, and at least once every 6 months to compare customer balances against all stored cryptocurrency and fiat balances. The auditor must be known, independent, and never the same twice in a row. (b) An audit report will be published featuring the steps conducted in a readable format. This should be made available to all Canadians on the exchange website and on a government website. The report must include what percentage of each customer asset is backed on the exchange, and how those funds are stored. (c) The auditor will independently produce a hash of each customer's identifying information and balance as they perform the audit. This will be made publicly available on the exchange and government website, along with simplified instructions that each customer can use to verify that their balance was included in the audit process. (d) The audit needs to include a proof of ownership for any cryptocurrency wallets included. A satoshi test (spending a small amount) or partially signed transaction both qualify. (e) Any platform without 100% reserves should be assessed on a regular basis by a government or industry watchdog. This entity should work to prevent any further drop, support any private investor to come in, or facilitate a merger so that 100% backing can be obtained as soon as possible. (3) Protections for hot wallets and transactions. (a) A standardized list of approved coins and procedures will be established to constitute valid cold storage wallets. Where a multi-sig process is not natively available, efforts will be undertaken to establish a suitable and stable smart contract standard. This list will be expanded and improved over time. Coins and procedures not on the list are considered hot wallets. (b) Hot wallets can be backed by additional funds in cold storage or an acceptable third-party insurance provider with a comprehensive coverage policy. (c) Exchanges are required to cover the full balance of all user funds as denominated in the same currency, or double the balance as denominated in bitcoin or CAD using an established trading rate. If the balance is ever insufficient due to market movements, the firm must rectify this within 24 hours by moving assets to cold storage or increasing insurance coverage. (d) Any large transactions (above a set threshold) from cold storage to any new wallet addresses (not previously transacted with) must be tested with a smaller transaction first. Deposits of cryptocurrency must be limited to prevent economic 51% attacks. Any issues are to be covered by the exchange. (e) Exchange platforms must provide suitable authentication for users, including making available approved forms of two-factor authentication. SMS-based authentication is not to be supported. Withdrawals must be blocked for 48 hours in the event of any account password change. Disputes on the negligence of exchanges should be governed by case law.
Continued review of existing OSC feedback is still underway. More feedback and opinions on the framework and ideas as presented here are extremely valuable. The above is a draft and not finalized. The process of further developing and bringing a suitable framework to protect Canadians will require the support of exchange operators, legal experts, and many others in the community. The costs of not doing such are tremendous. A large and convoluted framework, one based on flawed ideas or implementation, or one which fails to properly safeguard Canadians is not just extremely expensive and risky for all Canadians, severely limiting to the credibility and reputation of the industry, but an existential risk to many exchanges. The responsibility falls to all of us to provide our insight and make our opinions heard on this critical matter. Please take the time to give your thoughts.
Daily analysis of cryptocurrencies 20191129(Market index 31— Fear state)
https://preview.redd.it/c494hahvyl141.png?width=1920&format=png&auto=webp&s=f0251270befb79739c668ae66be79440601e4c2d BoJ’s CBDC Research Report: Specific Design Of CBDC To Vary According To PurposeOn Nov 29, the Bank of Japan released the Central Bank Digital Currency (CBDC) research report, which analyzed and discussed the main legal arguments of the CBDC. The report concludes that the legal discussion of CBDC will involve a wide range of laws, such as the Bank of Japan Act, the Civil and Commercial Law, the Administrative Law and Competition Law, etc. Certainly, the specific design of the CBDC will vary greatly depending on the purpose of issuing. If the issue of the CBDC is discussed, more in-depth legal discussions are needed. Russia May Ban Cryptocurrency PaymentsAs reported, the Russian Central Bank and the Federal Financial Monitoring Service are preparing to ban the use of cryptocurrencies to pay for goods and services. The initiative aims to combat crime in the cryptocurrency field. The Russian Central Bank has not confirmed that it is preparing relevant draft laws, but said it is ready to support. Russia’s Ministry of Finance holds a similar position. New EU Bill On The Fourth Money Laundering Directive Allows Banks To Hold And Sell BitcoinA new proposed bill on the European Union fourth Money Laundering Directive will allow banks to buy, hold and sell Bitcoin. The amendment on the directive comes to ease stringent rules that prohibited banks from either offering virtual asses or providing custody services. The move is an excellent relief for financial institutions in the region. NatWest Forms Blockchain Consortium To Streamline Home Buying In UKNational Westminster Bank, commonly known as NatWest, is a significant retail and commercial bank in the United Kingdom looking to streamline the process of home buying in the UK. Currently, it takes an estimated three months to finalize a purchase. Still, the hopes are through a new distributed ledger technology consortium with Coadjute and leading property software providers, this process might cut down to three weeks. https://preview.redd.it/vod6weyiyl141.png?width=504&format=png&auto=webp&s=9dc1222d34cd33584919666f9001da8a0890149f Yesterday, bitcoin climbed above the key $7,300 and $7,400 resistance levels against the US Dollar. Moreover, there was a close above the $7,400 level and the 100 hourly simple moving average. It opened the doors for more gains above the $7,500 level. Finally, the price tested the next key resistance near $7,700 (as pointed out in the weekly forecast). A high was formed near $7,676 and the price is currently correcting lower. It traded below the $7,600 and $7,550 levels. Besides, there was a break below the 23.6% Fib retracement level of the upward wave from the $6,855 swing low to $7,676 high. However, the $7,400 support area seems to be acting as a strong buy zone. If there is a break below the $7,400 support, the price could test the $7,300 and $7,295 support levels. Review previous articles:https://firstname.lastname@example.org
Encrypted project calendar（November 29, 2019）
Zenon (ZNN):29 November 2019 Awareness Fund Payout “Distribution of the fund takes place every Friday until Pillars Lock-in Phase is completed.”Tael (WABI);29 November 2019 Founders AMA “Three days to go until our Founders #AMA, this Friday, hosted by@binance.”
Encrypted project calendar（November 30, 2019）
Ethos (ETHOS):30 November 2019 (or earlier) Rebranding “In November, we unveil the broker token, a dynamic utility token to power our commission-free crypto trading and broker platform, Voyager.”Digitex Futures (DGTX):30 November 2019 Public Testnet Launch “…We can expect to see the world’s first zero-commission futures trading platform live on the Ethereum public testnet from 30th November.”Monero (XMR):30 November 2019 Protocol Upgrade “Preliminary information thread regarding the scheduled protocol upgrade of November 30.”Chiliz (CHZ):30 November 2019 (or earlier) Fiat to CHZ Exchanges “We will add another two fiat to $CHZ exchanges in November…”Skrumble Network (SKM):30 November 2019 (or earlier) P2P & Group Calling “P2P & Group Video Calling,” during November 2019.Aergo (AERGO):30 November 2019 (or earlier) Mainnet 2.0 Upgrade Mainnet 2.0 Protocol update by end of November.Akropolis (AKRO):30 November 2019 (or earlier) Beta Release “All functionality has been deployed to mainnet.”Nash Exchange (NEX):30 November 2019 (or earlier) Mobile Strategy Phase 2 “Phase 2 of our mobile strategy will be live soon with our wallet and portfolio app hitting stores in November!”Akropolis (AKRO):30 November 2019 (or earlier) Beta Release “All functionality has been deployed to mainnet.”Pakcoin (PAK):30 November 2019 Staking Mobile App Android app for staklet is going to be launched on November 30th.
Encrypted project calendar（December 1, 2019）
Auxilium (AUX):01 December 2019 AUX Interest Distribution Monthly interest distribution by Auxilium Interest Distribution Platform for coinholders. Also supports charity.I/O Coin (IOC):01 December 2019 Pos Reward Halving IOC block reward halving is happening on December 1st 2019.ABBC Coin (ABBC)01 December 2019 Migration Requests Start “Migration requests from the #AladdinPro Wallet will be accepted starting on December 1, 2019.”
Encrypted project calendar（December 2, 2019）
Bitcoin (BTC):02 December 2019 CME Futures BTCX19 Bitcoin Futures Contract (BTCX19) settles on December 02, 2019.Waves (WAVES):02 December 2019 Waves Exchange Launch “As of November 18, users will be able to import their accounts and seed phrases, and, on December 2, the new exchange will be launched.”BZLCOIN (BZL):02 December 2019 New Website New website and pre-launch “Patron”.Decentraland (MANA):02 December 2019 Creator Contest “Announcing the Creator Contest, from Dec 2–15. Submit your most creative interactive scenes for a share of $50k USD worth of prizes up.”Bitcoin (BTC);02 December 2019 CME Futures BTCX19 Bitcoin Futures Contract (BTCX19) settles on December 02, 2019.
Encrypted project calendar（December 3, 2019）
Aeternity (AE):03 December 2019 Sofia, Bulgaria Meetup “Come hear@noyyyand@emintroducing the project, followed by talks by Karol Skočik, Juraj Hlista, and Stephan Verbücheln.”Quant (QNT)03 December 2019 QuantX London Conference “QuantX is a half-day event being curated by Quant Network with an audience of 100 industry professionals from across the fintech…”
Encrypted project calendar（December 4, 2019）
Aeternity (AE)04 December 2019 Sofia Hackathon “The next aeternity blockchain hackathon will be held in Sofia, Bulgaria, on December 4th, 2019!”
Encrypted project calendar（December 5, 2019）
***OKB (OKB)：***05 December 2019 OKEx Cryptour Kyiv Ukr “Join us in Kyiv as we journey through Ukraine for our OKEx Cryptour!”Horizen (ZEN)05 December 2019 Weekly Insider Team updates at 4:30 PM UTC/ 11:30 AM EDT: Engineering, Node network, Product/UX, Helpdesk, Legal, BD, Marketing, CEO Closing thoughts, AMA.
Encrypted project calendar（December 6, 2019）
TenX (PAY):06 December 2019 COMIT Hackathon “The #hackathon will be held over the weekend of 6–8 Dec at the TenX HQ in Singapore.”Noah Coin (NOAH)06 December 2019 Japan Roadshow — Sendai “As you know, we are organizing the trip to the cities of Japan in December.”
Encrypted project calendar（December 7, 2019）
Storm (STORM):07 December 2019 Loyalty Program Registration for our fourth and last loyalty program will end on December 7th!MediBloc [ERC20] (MEDX):07 December 2019 Token Swap Deadline “Please submit your swap before 7th of December 23:59(UTC+9).”OKB (OKB);07 December 2019 OKEx Talks 2019 Calabar “Join us on 7 Dec for our first OKExTalks in Calabar, where we will be discussing ‘Digital Assets and Tokenization’.”Dash (DASH);07 December 2019 Open House “.. Dash Core Group will be hosting the Dash Evolution Open House on Dec 7th… in Scottsdale, AZ, from 1pm to 5pm MST.”Noah Coin (NOAH);07 December 2019 Japan Roadshow — Tokyo “As you know, we are organizing the trip to the cities of Japan in December.”
Encrypted project calendar（December 8, 2019）
Noah Coin (NOAH)08 December 2019 Japan Roadshow — Nagoya “As you know, we are organizing the trip to the cities of Japan in December.”
Encrypted project calendar（December 10, 2019）
OKB (OKB)10 December 2019 OKEx Talks — Rotterdam “Join us on 10 Dec to explore “Decentralized Finance” & the benefits & opportunities it presents.”.Newscrypto.io (NWC)10 December 2019 (or earlier) Platform Redesign Updates: Brand new Landing page, New Trading Tools and Updated School Program.IOTA (MIOTA)10 December 2019 Karlsruhe Meetup “Come learn about the IOTA technology! Dec 10 at 6PM CEST.”OKB (OKB)10 December 2019 OKEx Talks — Rotterdam “Join us on 10 Dec to explore “Decentralized Finance” & the benefits & opportunities it presents.”.Newscrypto.io (NWC)10 December 2019 (or earlier) Platform Redesign Updates: Brand new Landing page, New Trading Tools and Updated School Program.
Encrypted project calendar（December 11, 2019）
Waves (WAVES)11 December 2019 Annual Meetup ‘See you in Berlin on December 11, 2019!”Cindicator (CND)11 December 2019 Event for CND Ecosystem “New horizons of the CND ecosystem,” with “More details to be released” at 14:00 UTC.IOTA (MIOTA)11 December 2019 Berlin Meetup “Join us for the “2019 recap & 2020 outlook” MeetUp, organized by IOTA &@iotashop.”Cosmos (ATOM)11 December 2019 Cosmos Hub 3 Chain “Cosmonauts, buckle up & get ready for the hub upgrade to the Cosmos Hub 3 chain. A new proposed date is set for Dec 11 at…”
Stellar Lumens HODL alert: 2017 Round up, Partnerships, Lumens vs. Other Cryptos
Welcome everyone! The future of Stellar Lumens is bright! Today we will look at the accomplishments of Stellar.org in 2017. . . 2017 Round Up • IBM / Stellar Partnership • Kik Messenger’s KIN coin to move from Ethereum to Stellar in 2018 • Stellar ATM introduced in Singapore • Jed McCaleb confirms IBM/Stellar has 30 banks on board (Youtube Video) • Lightyear.io enables forward thinking financial entities to easily join the Stellar ecosystem. • IBM adds 8 new validators from 8 different countries onto the Stellar network (article) • Forbes calls Stellar “venmo, but on a global scale - and for larger bodies like banks and corporations.” • Stellar Lumens Is Up 6,300% Since March and Is Aiming for Big Blockchain Partners (article) • Many new partnerships (listed below) that will be using the Stellar network in 2018. • Binance and GoPax Exchanges Adds Stellar • Ledger Nano S support is now available for Lumens (XLM) • The next coin to break into the top 10 cryptos (article) . . 2017 Partnerships & Financial Institutions • IBM - is an American multinational technology company headquartered in Armonk, New York, United States, with operations in over 170 countries. IBM partnered with Stellar to help financial institutions address the processes of universal cross-border payments, designed to reduce the settlement time and lower the cost of completing global payments for businesses and consumers. • SatoshiPay - a web payment system that helps online publishers monetize digital assets like news articles, videos, or PDFs in tiny increments without friction. • EXCH.ONE - is a FinTech software company based in Switzerland currently working to integrate its platform and its first technology adopter Euro Exchange Securities UK Ltd. into the Stellar network. This addition to the Stellar network will bring access to currency markets of South and Central America,UK and a number of EU countries. • Novati (ASX:NOV) - is an Australian-based software technology and payment services provider. Novatti is currently working to integrate it’s platform into the Stellar network with the ultimate aim to build a global money transfer solution to provide cross border, cross currency and cross asset payments. • Pundi X - is an Indonesia based fintech company that provides POS device, debit card, multi-currency wallet that empowers individuals to buy and sell cryptocurrency at any physical store in the world. They say "buying cryptocurrency should be as easy as buying a bottled water." • MoneyMatch - is a Malaysia based fintech startup that provides a fully-digital peer-to-peer currency exchange platform for customers to transfer and exchange foreign currencies with complete ease and at great value. The company plans to integrate with the Stellar network and enable pay in and pay out from Malaysia. • Streami - is a Korea based fintech company that offers blockchain enabled cross-border remittance service and recently launched a cryptocurrency exchange. The partnership extends both on the exchange side and remittance operations. • Neoframe - is developing and marketing trading solutions for big brokerage firms in Korea and extends its business to blockchain based applications. Neoframe developed high performance centralized cryptocurrency exchange as well as secure wallet solutions and is working with big financial players. The company is planning to launch a remittance business for ASEAN countries (Thailand, Vietnam, Indonesia, Malaysia, Philippines, Singapore, Myanmar (Burma), Cambodia, Laos, Brunei) using Stellar. • SureRemit($RMT) - is a Nigeria based global non-cash remittances company. SureRemit leverages the Stellar blockchain platform to connect immigrants abroad directly with merchants that provide the services needed by their loved ones back home. With Remit tokens, immigrants all over the world can access digital shopping vouchers that can be spent on goods and services at accepting merchants wherever they are. • Cowrie Integrated Systems - is a Nigerian based Value Added Service Provider. Cowrie provides services at the intersection between telecoms and finance. Cowrie recently joined the Stellar network to bring novel fintech services to the African market. • Smartlands - is a Stellar-based platform designed to create a new class of low-risk tokens, secured by real, profitable assets in the real-world economy. Smartlands is designed to promote investments in the agricultural sector by allowing investment in individual projects, agricultural companies or indexes of groups of projects. These investments will be fully collateralized by agricultural real estate, other productive assets such as fruit or nut trees or, in some cases, the actual crop. • Klick-Ex - is an award winning regional cross-border payments system delivering financial infrastructure for emerging markets. It has been responsible for dramatic uptake in digital financial services in unbanked regions of the world, and lowering costs for banks, central banks and consumers in low liquidity currencies. Its key presence is in the Pacific and Europe, and it is a founding member of www.APFII.org processing more than 775,000 transactions per second, per billion of population (source). • Mobius - Mobius connects any app, device, and data stream to the blockchain ecosystem. Our simple and easy to use bidirectional API allows non-blockchain developers to easily connect resources to smart contracts and more. The Mobius MVP acts like Stripe for Blockchain by introducing innovative standards for cross-blockchain login, payment, smart contract management, and oracles. The Mobius Team includes David Gobaud, Jed McCaleb (Stellar.org founder), Jackson Palmer (creator of Dogecoin), and Chandler Guo (notorious Bitcoin & blockchain investor). • Chaineum - Chaineum, the first French ICO Boutique, will use the Stellar network for upcoming ICOs. “Chaineum is positioned as the first “ICO Boutique” in France, providing a range of end-to-end services to companies and international start-ups wishing to develop with this new funding mechanism. Chaineum is preparing 8 ICOs by the end of 2017, for European, North American and Asian companies, of which cumulative amount could reach € 200 million." (source) • Poseidon Foundation - Poseidon will simplify the carbon credit market with the creation of an ecosystem built on Stellar.org’s blockchain technology. This technology will prevent double counting of carbon and will be consistent across jurisdictions, making it easier for companies to deliver and measure progress towards their climate targets or other goals such as deforestation-free commitments. • Remitr - Remitr is a global platform for cross border payments, licensed in Canada. Remitr uses the Stellar network for international settlements for businesses as well as other payment partners. Remitr’s own payout network of 63 countries, comprising several currencies, is extended onto the Stellar network. • MSewa Software Solution (MSS) - MSewa Software Solution (MSS) Payments provides a one-stop digital payment service available across the Globe. MSS Payments aims at serving the consumers (Banked, Unbanked and Underbanked) with mobile banking facilities on the move from anywhere by transferring funds in their mobile phone. • PesaChoice - PesaChoice is a leader in international bill payment services for the African diaspora. PesaChoice aims at making international bill payment process easy, seamless, secure, with reasonable and competitive service fees, and up to date technological advances. • SendX - Singapore based SendX, in partnership with Stellar, is the better way to move money worldwide. The SendX team believes that the future of transactions is decentralized and distributed, bringing true equity to everyone across the value chain. • VoguePay - VoguePay, with offices in the United Kingdom and Nigeria, is partnering with Stellar to become the cheapest and most efficient way to send money between the United Kingdom and Nigeria. In the coming months, they expect to expand this service to other selected African countries. • HashCash - Hashcash consultants build financial solutions for banks and financial institutions over blockchain. We leverage the Stellar platform to build products that vastly improve the remittance and payments experience for banks and their customers. Transfers happen lightning fast at a fraction of current rates and operational cost is significantly reduced. HashCash is headquartered in India, with operations across South Asia and the Gulf. . . Stellar Lumens vs Other Cryptocurrencies • Lumens vs. Bitcoin: Jed McCaleb spoke at Distributed Markets in 2017 about the advantages, but more importantly, the disadvantages of Bitcoin. Listen to the talk here. Jed said, “Bitcoin is this awesome innovation. The first thing it does is converts a real world resource, electricity, into a digital asset. So it takes something from the real world and puts it into the digital realm. The second thing it does is provides immutable public record. It’s basically a database that everyone can see but no one change arbitrarily… That’s great, Bitcoin solves the double spin problem [ of proving possession and transmitting volume]… [However, to fix the problems of bitcoin] you might think well maybe we’ll just kind of keep adding [software] to Bitcoin until we get there, but that’s not really the way software works. You want to have the design from the beginning and solve these simple issues. Bitcoin was designed to be a new currency, it wasn’t really designed to be this unifying universal payment network. So that’s what Stellar does. It solves these three remaining issues.” • Lumens vs. Bitcoin #2: According to wired.com, "Bitcoin mining guzzles energy - and it's carbon footprint just keeps growing." Wired says "Today, each bitcoin transaction requires the same amount of energy used to power nine homes in the US for one day... The total energy use of this web of hardware is huge—an estimated 31 terawatt-hours per year. More than 150 individual countries in the world consume less energy annually. And that power-hungry network is currently increasing its energy use every day by about 450 gigawatt-hours, roughly the same amount of electricity the entire country of Haiti uses in a year." Because Stellar is based on a consensus algorithm rather than mining, it takes much less energy to run the Stellar network. The Poseidon Foundation decided to build their platform on Stellar rather than Ethereum or Bitcoin because of this (twitter source). • Lumens ICO tokens vs. Ethereum ICO tokens: According to Stellar.org, "traditionally, ICO tokens have been issued on the Ethereum network in the form of ERC20 tokens. ERC20 tokens are easy to issue and are infinitely customizable using Ethereum’s smart contracting language. However, recent events have highlighted and exacerbated some weaknesses of the network, including slow transaction processing times for the network during ICOs and increasingly expensive gas prices (by fiat standards) for transactions and smart contract execution. Moreover, many organizations require only basic tokens; they adopt the risk of Ethereum’s Turing complete programming language without taking advantage of many of its benefits." "While Ethereum has the most expressive programming capabilities, we believe Stellar is the best choice for ICOs that do not require complex smart contracts. Stellar’s primary goal is to facilitate issuing and trading tokens, especially those tied to legal commitments by known organizations, such as claims on real-world assets or fiat currency." • Stellar vs. Ethereum #2: The median transaction time on Stellar is 5 seconds, compared to approximately 3.5 minutes on Ethereum (source). Stellar has a negligible transaction fee (.00001 XLM ~= $0.0000002) with no gas fee for computation, while depending on the complexity of the computation, the median cost for a transfer on the Ethereum network is $0.094. Security: While both Stellar and Ethereum run on a decentralized network, the Stellar network has fewer security pitfalls. Stellar uses atomic transactions comprised of simple, declarative operations while Ethereum uses turing complete programming capabilities which produces less auditable code and greater risk of exploitable vulnerabilities(source). Recently, a security flaw in the Ethereum network froze millions of dollars. According to Mobius ariticle written by David Gobaud, "On November 6, 2017, Github user deveps199 'accidentally' triggered a bug in Parity, a popular Ethereum mult-sig wallet, that froze more than $152 million in Ether across 151 addresses. The bug impacted several token sales including Polkadot, which has had ~$98 million out of its recent $145 million sale frozen." "Mobius had none of its ongoing pre-sale Ether frozen because we do not trust Ethereum’s Smart Contract based multi-sig wallets given the vast Turing complete attack surface and did not use one. Security broadly is one of the main reasons the MOBI token that powers the DApp Store is a Stellar Protocol token and not an Ethereum token." • Lumens vs. Ripple: According to Wall Street Bitcoin Exchange, "Many investors like to compare the company [Stellar] to Ripple, and there are a lot of similarities, being that some of the founders worked on the Ripple team. In what can now be looked at as another blockchain development drama that plays out on chat boards and in interviews all across the globe. Stellar declared they fixed Ripple’s problems with their hard fork, however, Ripple has failed to admit to any of the flaws in its design that the Stellar team has pointed out." The article concludes by saying, "We Choose XLM Over XRP For 2018. That is why we are going with Stellar Lumens over Ripple in our portfolio for the rest of 2017 and 2018. After holding Ripple for a long time this year, it just never seems to make the big break like other names with bigger market caps like Bitcoin Cash, Dash, and Litecoin have. While we are holding on most all our larger market caps, we feel that Stellar Lumens will be one of the break out coins for 2018." . . Conclusion The stellar.org team is doing an amazing job making partnerships and pioneering the use of blockchain technology for various types of transactions. What we are seeing is a new technology that can actually be used to solve real-world problems. As a community, we need to continue supporting Stellar and we will quickly see it power transactions across the world. What are your thoughts about Stellar? What do you see in the future of Stellar? Any important news you want to share? Comment below.
Posted by Xalat on July 13, 2018 Tokens Listing Q: Which coins will be listed on the exchange initially? A: Initially it will be the basic, big coins, but then we will roll out a ton after, especially ERC20. Have a bunch of listings and ICO clients that will come out quickly as well. So at start: BTC — Bitcoin BCH — Bitcoin Cash ETH- Ethereum LTC — Litecoin TIO — TradeToken USDT — May be available right at launch or at the very least within 2–3 days following launch. ERC20 — we are looking at rolling out maybe 200 as soon as possible, but priority is on listing clients and ICO clients. EOS and XRP soon. Q: When will the exchange support FIAT? A: Soon, there is no regulatory issue, just want to scale into features. Q: Will we have any kind of voting system for new coin listings? Can you tell us anything about your plans on how new listings will be done? Would TIO owners have any privileges over others? A: We are not looking to limit coins by any means, just need a controlled process to roll them out. Regulations and Jurisdictions Q: Can you speak on the progress with regards to regulations in the various jurisdictions? Which jurisdictions is trade.io currently focusing on, or which is top priority at the moment? A: Working on HK, Singapore, Switzerland, Malta right now as the bigger ones. Smaller ones as well. We are meeting with regulators in the US as well. Q: Are u also considering India? A: India is unclear as to regulations right now. Q: Will trade.io move to comply with the SEC and other regulatory bodies worldwide as they ask for information on customer protections, etc? A: Already started, meetings already happening. We will do what we can to eliminate insider trading, wash trading, bots, fake volumes, all the bad things that hurt customers and plague other exchanges. Roadmap Q: When is the new Road-map being published? A: After exchange and LP launches. LP Q: When will the LP fully launch? After 30 days of exchange? And the profit of the LP will count from the 1st day of exchange launch? A: There is only a full version of LP, there is no beta version of LP. Profit starts immediately, LP will launch after 30 days i.e. profits start from next week at launch of the exchange. ICO consultancy revenues will be included regardless when exchange launches. Q: Will there be something which tells the day’s profit with detail for transparency before LP launch? A: There will be a LP distribution amount widget, but not promising that before LP launch. Q: How much can we expect from LP daily payouts in the first month? Nothing at all? Something more than current airdrops program? Or much more than current airdrops? A: The exchange needs to ramp and generate volume, then the LP will have meaningful distributions. Q: There were some thoughts that the running costs would eat up the revenues that was already generated from consultancy arm that would left very few to be distributed. Could you tell us this is not the case? And in general, costs to be subtracted from LP is only direct costs that affects it, could you confirm that as well? A: You mean operations? No that is covered from our 50%. TIO Token Q: After the exchange has been launched, how is the price movement of TIO expected to react? Do you not have any estimation for it? A: Impossible to know, however, we are actively exploring moving TIO to exclusively be traded on trade.io exchange and de-list from other exchanges, for more control over price manipulation. Q: What’s the solution in the future to avoid something like Bitforex? A: They picked us up on their own. It is impossible to prevent a supposed decentralized exchange from listing TIO Q: What measures will be taken to boost the trading volume of TIO token after launch of exchange. With the LP, the volume might be very low as it is today? A: If you look at the token economics of TIO, it is designed to be more like a Berkshire Hathaway than a high volume penny stock. The goal is to drive value, not volume. The more value we create, and with low float, this will be good for price. Q: Will TIO be trade-able with other commodities listed under FX Primus ? A: Most likely not, as its a crypto asset so it will be traded against other cryptos. trade.io Exchange Q: What is the ETA for decentralized exchange? A: There is no ETA at this time, we’re fully focused on making sure we have a flawless centralized exchange and execute on the liquidity pool. Q: Will trade.io offer margin trading? A: We will. Working with risk management to get it structured. Q: What about futures and options? A: Talking to some vendors specifically about this as possible partners. Q: Will trade.io have algo trading? A: Talking to a partner on that currently as well Q: Why limit the launch to just 1000 initially? A: The limitation to 1000 is not really for technology reasons, its more to allow customer support to get feet under them before we pummel them. It’s 1000 on Day 1, looking to open up to many thousands, within only a few days following launch. There is no level of training that can prepare support/finance, etc. once live users come through the door. This is not our first rodeo with running brokerages, so we understand its a completely different ballgame once the bright lights are on. Q: What about Blossom wallet? A: That wallet is under development, which makes it easier to participate in ICOs, have KYC, etc. Q: Are MEW or other wallets going to be integrated in such a way as to make it possible to be able to participate in the LP without having them on the exchange? If this is actually possible that is. Will Private Keys be made available to the holders of the wallets in trade.io? A: Not sure on security on that. May be part of hybrid DEX solution. Also, transaction fees would be high, since every transaction would be recorded on BC, cant really use ledger. Not ideal overall. Q: Will trade.io place their own buy and sell orders to maintain liquidity? A: We will keep risk low initially, but over time us and outside (institutional) providers will be doing this. Partnerships Q: What are the plans with FX Primus? A: The current initiative with FXP, is to accept TIO as a deposit method, then eventually allow TIO to be traded on the platform. Q: Are there any updates on the Angel Investors Program? What roles do Kosmos, Plutus VC and Blockway Capital play in the Angels Investors Program? A: We are sending them deals to look at where they know we already did KYC, took a first pass, etc. They are also bring us deals to look at as well. Security Q: Can u please tell us about the security measures taken for exchange. As these days many exchanges are being hacked even the so called best exchange i.e. Binance , Bancor etc. A: We have in-house, outside team, Cloudflare, Fireeye, etc. To elaborate, virtually all client assets are kept in cold storage as well. Q: Are there plans to provide insurance against hacking? If wallets get hacked is it guaranteed that owners will get all their tokens back? One suggestion is that part of the undistributed funds from the LP (due to tiers with percentages less than 100%) can be used to offer such insurance, If necessary…if not, could be retained by the company …Security is obviously of the utmost importance especially if trade.io is targeting institutional investors. This insurance would bring extra peace of mind. A: We are looking for answers on that, so I like the suggestion. Nothing definitive yet. We will explore insurance and other things, but same answer for all of crypto, there is nothing like FDIC yet. join trading revolution. join trade.io sign up here: https://trade.io/l/lb1x
Tokens Listing Q: Which coins will be listed on the exchange initially? A: Initially it will be the basic, big coins, but then we will roll out a ton after, especially ERC20. Have a bunch of listings and ICO clients that will come out quickly as well. So at start: BTC – Bitcoin BCH – Bitcoin Cash ETH- Ethereum LTC – Litecoin TIO – TradeToken USDT – May be available right at launch or at the very least within 2-3 days following launch. ERC20 – we are looking at rolling out maybe 200 as soon as possible, but priority is on listing clients and ICO clients. EOS and XRP soon. Q: When will the exchange support FIAT? A: Soon, there is no regulatory issue, just want to scale into features. Q: Will we have any kind of voting system for new coin listings? Can you tell us anything about your plans on how new listings will be done? Would TIO owners have any privileges over others? A: We are not looking to limit coins by any means, just need a controlled process to roll them out. Regulations and Jurisdictions Q: Can you speak on the progress with regards to regulations in the various jurisdictions? Which jurisdictions is trade.io currently focusing on, or which is top priority at the moment? A: Working on HK, Singapore, Switzerland, Malta right now as the bigger ones. Smaller ones as well. We are meeting with regulators in the US as well. Q: Are u also considering India? A: India is unclear as to regulations right now. Q: Will trade.io move to comply with the SEC and other regulatory bodies worldwide as they ask for information on customer protections, etc? A: Already started, meetings already happening. We will do what we can to eliminate insider trading, wash trading, bots, fake volumes, all the bad things that hurt customers and plague other exchanges. Roadmap Q: When is the new Road-map being published? A: After exchange and LP launches. LP Q: When will the LP fully launch? After 30 days of exchange? And the profit of the LP will count from the 1st day of exchange launch? A: There is only a full version of LP, there is no beta version of LP. Profit starts immediately, LP will launch after 30 days i.e. profits start from next week at launch of the exchange. ICO consultancy revenues will be included regardless when exchange launches. Q: Will there be something which tells the day’s profit with detail for transparency before LP launch? A: There will be a LP distribution amount widget, but not promising that before LP launch. Q: How much can we expect from LP daily payouts in the first month? Nothing at all? Something more than current airdrops program? Or much more than current airdrops? A: The exchange needs to ramp and generate volume, then the LP will have meaningful distributions. Q: There were some thoughts that the running costs would eat up the revenues that was already generated from consultancy arm that would left very few to be distributed. Could you tell us this is not the case? And in general, costs to be subtracted from LP is only direct costs that affects it, could you confirm that as well? A: You mean operations? No that is covered from our 50%. TIO Token Q: After the exchange has been launched, how is the price movement of TIO expected to react? Do you not have any estimation for it? A: Impossible to know, however, we are actively exploring moving TIO to exclusively be traded on trade.io exchange and de-list from other exchanges, for more control over price manipulation. Q: What’s the solution in the future to avoid something like Bitforex? A: They picked us up on their own. It is impossible to prevent a supposed decentralized exchange from listing TIO Q: What measures will be taken to boost the trading volume of TIO token after launch of exchange. With the LP, the volume might be very low as it is today? A: If you look at the token economics of TIO, it is designed to be more like a Berkshire Hathaway than a high volume penny stock. The goal is to drive value, not volume. The more value we create, and with low float, this will be good for price. Q: Will TIO be trade-able with other commodities listed under FX Primus ? A: Most likely not, as its a crypto asset so it will be traded against other cryptos. trade.io Exchange Q: What is the ETA for decentralized exchange? A: There is no ETA at this time, we’re fully focused on making sure we have a flawless centralized exchange and execute on the liquidity pool. Q: Will trade.io offer margin trading? A: We will. Working with risk management to get it structured. Q: What about futures and options? A: Talking to some vendors specifically about this as possible partners. Q: Will trade.io have algo trading? A: Talking to a partner on that currently as well Q: Why limit the launch to just 1000 initially? A: The limitation to 1000 is not really for technology reasons, its more to allow customer support to get feet under them before we pummel them. It’s 1000 on Day 1, looking to open up to many thousands, within only a few days following launch. There is no level of training that can prepare support/finance, etc. once live users come through the door. This is not our first rodeo with running brokerages, so we understand its a completely different ballgame once the bright lights are on. Q: What about Blossom wallet? A: That wallet is under development, which makes it easier to participate in ICOs, have KYC, etc. Q: Are MEW or other wallets going to be integrated in such a way as to make it possible to be able to participate in the LP without having them on the exchange? If this is actually possible that is. Will Private Keys be made available to the holders of the wallets in trade.io? A: Not sure on security on that. May be part of hybrid DEX solution. Also, transaction fees would be high, since every transaction would be recorded on BC, cant really use ledger. Not ideal overall. Q: Will trade.io place their own buy and sell orders to maintain liquidity? A: We will keep risk low initially, but over time us and outside (institutional) providers will be doing this. Partnerships Q: What are the plans with FX Primus? A: The current initiative with FXP, is to accept TIO as a deposit method, then eventually allow TIO to be traded on the platform. Q: Are there any updates on the Angel Investors Program? What roles do Kosmos, Plutus VC and Blockway Capital play in the Angels Investors Program? A: We are sending them deals to look at where they know we already did KYC, took a first pass, etc. They are also bring us deals to look at as well. Security Q: Can u please tell us about the security measures taken for exchange. As these days many exchanges are being hacked even the so called best exchange i.e. Binance , Bancor etc. A: We have in-house, outside team, Cloudflare, Fireeye, etc. To elaborate, virtually all client assets are kept in cold storage as well. Q: Are there plans to provide insurance against hacking? If wallets get hacked is it guaranteed that owners will get all their tokens back? One suggestion is that part of the undistributed funds from the LP (due to tiers with percentages less than 100%) can be used to offer such insurance, If necessary…if not, could be retained by the company …Security is obviously of the utmost importance especially if trade.io is targeting institutional investors. This insurance would bring extra peace of mind. A: We are looking for answers on that, so I like the suggestion. Nothing definitive yet. We will explore insurance and other things, but same answer for all of crypto, there is nothing like FDIC yet
Jim Preissler, CEO AMA Session On Telegram, Friday 13 July 2018 - Everything!
For those of you who like to go through everything in their correct order to get context, here is the full AMA from beginning to end. Knock yourself out. Jim Preissler, [14.07.18 00:01] Hi everyone Scarlet ~ trade.io Admin, [14.07.18 00:01] [In reply to Henry] The first 1000 will receive email either on 16 or 17, but before exchange actually launch. Dustin McDaniel, [14.07.18 00:01] Jim in the house! ?? Crypto Bling, [14.07.18 00:01] Hi jim trade.io, [14.07.18 00:01] Hello Jim! Scarlet ~ trade.io Admin, [14.07.18 00:01] [ GIF ] TSas, [14.07.18 00:01] Hello Jim S Aggarwal, [14.07.18 00:02] Hello jim Satish, [14.07.18 00:02] Wassup man! Jim Preissler, [14.07.18 00:02] Been busy getting ready for the launch and signing some more partnerships for us Hiro S, [14.07.18 00:02] Hi Jim Jim Preissler, [14.07.18 00:02] Good morning / afternoon / evening / go to bed to all of you! Dustin McDaniel, [14.07.18 00:03] [In reply to Jim Preissler] [ GIF ] Le Tai, [14.07.18 00:03] Hi Jim Jim Preissler, [14.07.18 00:03] [In reply to Dustin McDaniel] yeah, thats exactly how I feel Ro$€, [14.07.18 00:04] Nice to hear the new partnerships S Aggarwal, [14.07.18 00:05] Hey S Aggarwal, [14.07.18 00:05] Jim can u tell me which all coins will be listed intialy?? Jim Preissler, [14.07.18 00:06] [In reply to S Aggarwal] Initial will be the basic, big coins, but then will roll out a ton after, especially ERC20 Jim Preissler, [14.07.18 00:06] Have a bunch of listings and ICO clients that will come out quickly as well trade.io, [14.07.18 00:06] Hi Jim, here's a question and a suggestion from Phil(@PhilWall10):
When the calculator will be available for the lp pool?
I would like to see a 1% bonus for the first day that the exchange is Trading ,just for investors that held over 25,000 Tio's something like that would be nice.
Zeep, [14.07.18 00:06] hi Jim S Aggarwal, [14.07.18 00:07] [In reply to Jim Preissler] I am asking for those 10 basis ones Jim Preissler, [14.07.18 00:07] [In reply to S Aggarwal] is there a particular one that you are driving towards? S Aggarwal, [14.07.18 00:07] Eos S Aggarwal, [14.07.18 00:07] Xrp Paul Johnson -trade.io, [14.07.18 00:08] I can help out here, as the list came up a short time ago: BTC - Bitcoin BCH - Bitcoin Cash ETH- Ethereum LTC - Litecoin TIO - TradeToken USDT - May be available right at launch or at the very least within 2-3 days following launch TSas, [14.07.18 00:08] Jim, here's a question: What are the plans with FX Primus? Jim Preissler, [14.07.18 00:08] [In reply to S Aggarwal] Both those require testing, ERC20 will be sooner S Aggarwal, [14.07.18 00:08] [In reply to Jim Preissler] K Dustin McDaniel, [14.07.18 00:09] Jim, Can you speak any on the progress with regards to regulations in the various jurisdictions? Which jurisdictions is trade.io currently focusing on, or which is top priority at the moment? S Aggarwal, [14.07.18 00:09] Also can u please tell me approx figures u have earned out of ico consultantancy..? Just to have a idea about profit in ico S Aggarwal, [14.07.18 00:10] Also what is your status for regulatory licences?? Jim Preissler, [14.07.18 00:10] [In reply to Dustin McDaniel] Working on HK, Singapore, Switzerland, Malta right now as the bigger ones. Smaller ones as well. We are meeting with regulators in the US as well HODL Droid, [14.07.18 00:10] [In reply to Dustin McDaniel] Same question + will TIO be tradeable with other comodities listed under FX Primus ? Jimmy Choo, [14.07.18 00:10] Hello, Jim. My question is : After the exchange has been launched, how is the price movement of TIO in the future? S Aggarwal, [14.07.18 00:10] Are u also acuiring one for india?? Ro$€, [14.07.18 00:10] I want to ask when can we have the new Roadmap? S Aggarwal, [14.07.18 00:11] [In reply to S Aggarwal] @JimPreissler Scarlet ~ trade.io Admin, [14.07.18 00:11] Lets hold until Jim clears these questions. Jim Preissler, [14.07.18 00:12] [In reply to Jimmy Choo] you tell me Ro$€, [14.07.18 00:12] [In reply to Jim Preissler] :)) Jim Preissler, [14.07.18 00:12] [In reply to S Aggarwal] India is unclear as to regulations right now Jim Preissler, [14.07.18 00:12] [In reply to Ro$€] After exchange and LP launches Le Tai, [14.07.18 00:13] When exchange platform support fiat? Thank you Jim Preissler, [14.07.18 00:13] [In reply to HODL Droid] @biggiepaul will get back to you S Aggarwal, [14.07.18 00:14] [In reply to S Aggarwal] @JimPreissler please answer this as well Jimmy Choo, [14.07.18 00:14] [In reply to Jim Preissler] Do you not have any estimation for it? Jim Preissler, [14.07.18 00:14] [In reply to Le Tai] soon, there is no regulatory issue, just want to scale into features Paul Johnson -trade.io, [14.07.18 00:14] [In reply to HODL Droid] Most likely not, as its a crytpo asset so it will be traded against other cryptos. Ro$€, [14.07.18 00:15] [In reply to Jim Preissler] Can you clearer on that? Will we have connect with bank account, convert directly into fiat? S Aggarwal, [14.07.18 00:15] @JimPreissler what is the ETA for decentralised exchange?? Hai Nguyen, [14.07.18 00:15] Hi Jim, could you tell me when LP will full launch? After 30 days of exchange? And the profit of LP will count from the 1st day of exchange launch? Morbidus, [14.07.18 00:16] Will Trade.io move to comply with the SEC and other regulatory bodies worldwide as they ask for information on customer protections, etc? TSas, [14.07.18 00:16] [In reply to TSas] Answer pls Jim Paul Johnson -trade.io, [14.07.18 00:16] Guys, kindly hold off on the rapid fire q's, pls let Jim answer one at a time Jim Preissler, [14.07.18 00:16] [In reply to Hai Nguyen] profit starts immediately, LP will launch after 30 days Hai Nguyen, [14.07.18 00:17] [In reply to Jim Preissler] Full launch or Beta launch? Paul Johnson -trade.io, [14.07.18 00:17] [In reply to Jimmy Choo] Impossible to know, however, we are actively exploring moving TIO to exclusively to be traded on trade.io exchange and delist from other exchanges, for more control over price manipulation. Jim Preissler, [14.07.18 00:17] [In reply to Morbidus] Already started, meetings already happening. We will do what we can to eliminate insider trading, wash trading, bots, fake volumes, all the bad things that hurt customers and plague other exchnges Paul Johnson -trade.io, [14.07.18 00:18] [In reply to S Aggarwal] There is no ETA at this time, we're fully focused on making sure we have a flawless centralized exchange and execute on the liquidity pool. Jim Preissler, [14.07.18 00:18] [In reply to Hai Nguyen] there is no more beta, full launch is next week Dustin McDaniel, [14.07.18 00:18] [In reply to Jim Preissler] ???? Hai Nguyen, [14.07.18 00:19] [In reply to Jim Preissler] I mean the about the LP Morbidus, [14.07.18 00:19] [In reply to Jim Preissler] great thanks Crypto Bling, [14.07.18 00:19] [In reply to Jim Preissler] Sweet???? Tommy Vu, [14.07.18 00:19] [In reply to Jim Preissler] ?????? Jim Preissler, [14.07.18 00:19] [In reply to Hai Nguyen] profits start accumulating next week Ro$€, [14.07.18 00:19] [In reply to Paul Johnson -trade.io] Whats solution in the future to avoid sth like Bitforex? S Aggarwal, [14.07.18 00:19] @JimPreissler will Tio offer margin trading?? " Not giving away CS, CAS and TIO", [14.07.18 00:19] When 1 tio Zeep, [14.07.18 00:19] how much coin exchange? Jim Preissler, [14.07.18 00:19] [In reply to Ro$€] they picked us up on their own S Aggarwal, [14.07.18 00:20] And What about futures and options (F&O)[email protected] Jim Preissler, [14.07.18 00:20] [In reply to S Aggarwal] We will, working with risk mgmt to get it structured Paul Johnson -trade.io, [14.07.18 00:20] [In reply to Ro$€] Impossible to prevent a supposed decentralized exchange from listing TIO Jim Preissler, [14.07.18 00:20] [In reply to S Aggarwal] Talking to some vendors specifically about this as possible partners Jimmy Choo, [14.07.18 00:20] [In reply to Paul Johnson -trade.io] Thank you, Jim. Hope exchange is a hit. ?? Paul Johnson -trade.io, [14.07.18 00:21] [In reply to Hai Nguyen] LP not sooner than 1 month following exchange launch Paul Johnson -trade.io, [14.07.18 00:21] [In reply to Jimmy Choo] It will be unlike anything anyone has seen yet. Dustin McDaniel, [14.07.18 00:21] [In reply to Jim Preissler] Maybe question is about the launch only being for 1000 people. Is LP being targeted launching 30 days after July 17th? or after it is fully available unlimited> S Aggarwal, [14.07.18 00:21] @JimPreissler will Tio have algo trading?? Zeep, [14.07.18 00:21] jim. how much coin exchange? Jim Preissler, [14.07.18 00:22] [In reply to Dustin McDaniel] the limitation to 1000 is not really for technology reasons, its more to allow customer support to get feet under them before we pummel them Hiro S, [14.07.18 00:22] Jim, I know this a tough one, but there is a lot of specuative thoughts around what LP will share when it starts, and I saw way too optimistic, in my view. Today, the expectation of nothing will be distributed on the first month and lots will be distributed that will make TIO moon are two events of equal probability, at least for me. Can give us a better directions that any of this outcome is not a 50/50 probability? Or being more direct, how much can we expect from LP daily payouts in the first month? Nothing at all? Something more than current airdrops program? Or much more than current airdrops? thank you. Jim Preissler, [14.07.18 00:22] [In reply to S Aggarwal] talking to a partner on that currently as well Hai Nguyen, [14.07.18 00:22] [In reply to Jim Preissler] I mean which version of LP will launch after 30 days of exchange full launch? Beta version LP or full version LP? I see the new road map on trade.io website, it has beta LP. Paul Johnson -trade.io, [14.07.18 00:23] [In reply to Hai Nguyen] there is only a full version of LP, there is no beta version of LP Zeep, [14.07.18 00:23] jim. how much coin list on exchange? Dustin McDaniel, [14.07.18 00:23] [In reply to Jim Preissler] Fantastic S Aggarwal, [14.07.18 00:23] @JimPreissler just a confirmation that u have wavied trading fee but we will get other income like spread in lp for 17 july to 17 aug (30 days after launch)?? Crypto Bling, [14.07.18 00:23] [In reply to Jim Preissler] Nice???? Jim Preissler, [14.07.18 00:23] [In reply to Hiro S] The exchange needs to ramp and generate volume, then the LP will have meaningful distributions Grimlock, [14.07.18 00:24] [In reply to Paul Johnson -trade.io] not sooner or not later? Hai Nguyen, [14.07.18 00:24] [In reply to Paul Johnson -trade.io] ??, thank you. Paul Johnson -trade.io, [14.07.18 00:24] [In reply to Dustin McDaniel] Note, that its 1K on Day 1, looking to open up to many thousands, within only a few days following launch Jim Preissler, [14.07.18 00:24] [In reply to Zeep] depends on volume and user base of the coin. send details to [[email protected]](mailto:[email protected]) TSas, [14.07.18 00:24] Jim, what are the plans with FX Primus? Paul Johnson -trade.io, [14.07.18 00:25] [In reply to TSas] Hey Tsas, i can help with that one. Jim Preissler, [14.07.18 00:25] [In reply to S Aggarwal] correct, only trading fee waived initially Paul Johnson -trade.io, [14.07.18 00:25] [In reply to TSas] The current initiative with FXP, is to accept TIO as a deposit method, then eventually allow TIO to be traded on the platform. Ro$€, [14.07.18 00:25] Which users will have profit from LP in the first 2 months? Only the first 1000? Any new formula to calculate S Aggarwal, [14.07.18 00:26] [In reply to Jim Preissler] Thanks for confirmation Paul Johnson -trade.io, [14.07.18 00:26] [In reply to Grimlock] Definitely not sooner, and might be later. Dustin McDaniel, [14.07.18 00:26] [In reply to Paul Johnson -trade.io] Thank you, now knowing that is is limited release based mainly to help support team, it is a lot clearer.. Gives assurance that team is confident on the technology side TSas, [14.07.18 00:26] [In reply to Paul Johnson -trade.io] ?? thanks Paul Johnson -trade.io, [14.07.18 00:26] [In reply to Paul Johnson -trade.io] No worries though, as revenue generated will be calculated from Day 1 of the launch Jim Preissler, [14.07.18 00:27] Obviously, the success of the LP is directly tied to success of exchange Grimlock, [14.07.18 00:27] [In reply to Jim Preissler] and vice versa i suppose Jim Preissler, [14.07.18 00:27] [In reply to Dustin McDaniel] People harder to scale then tech Paul Johnson -trade.io, [14.07.18 00:27] [In reply to Dustin McDaniel] Correct, there is no level of training that can prepare support/finance, etc. once live users come through the door. This is not our first rodeo with running brokerages, so we understand its a completely different ballgame once the bright lights are on. S Aggarwal, [14.07.18 00:28] @JimPreissler will there be something which tells the days profit with its details for transperancy before lp launch? Dustin McDaniel, [14.07.18 00:28] [In reply to Paul Johnson -trade.io] so, revenue generated to this point, through ICO consultancy, etc... is not included in LP? Only what is generated after exchange launch? S Aggarwal, [14.07.18 00:28] [In reply to Dustin McDaniel] They said eariler it will be included Ro$€, [14.07.18 00:28] [In reply to Dustin McDaniel] As i remember, it is included Jim Preissler, [14.07.18 00:28] [In reply to S Aggarwal] There will be a LP distribution amount widget, but not promising that before LP launch Paul Johnson -trade.io, [14.07.18 00:29] [In reply to Dustin McDaniel] I stand corrected, you're correct, ICO consultancy rev's will be included regardless when exchange launches. Jim Preissler, [14.07.18 00:29] [In reply to Dustin McDaniel] its included Dustin McDaniel, [14.07.18 00:29] You guys ROCK!! Crypto Bling, [14.07.18 00:29] [In reply to Dustin McDaniel] +1 Grimlock, [14.07.18 00:29] ???????????????????????????? Ro$€, [14.07.18 00:29] Which users will get it and how? Tommy Vu, [14.07.18 00:30] [In reply to Crypto Bling] ?? Jimmy Choo, [14.07.18 00:30] [In reply to Dustin McDaniel] +10 Paul Johnson -trade.io, [14.07.18 00:30] [In reply to Crypto Bling] [ Photo ] S Aggarwal, [14.07.18 00:30] Is there any hardware wallet also as a gift from selfkey partnership?? S Aggarwal, [14.07.18 00:30] Like airdrop Jim Preissler, [14.07.18 00:30] [In reply to S Aggarwal] ? not sure of Q Ro$€, [14.07.18 00:31] My question pls Jim Hai Nguyen, [14.07.18 00:31] How is about Blossom wallet? Ro$€, [14.07.18 00:31] [In reply to Ro$€] .. S Aggarwal, [14.07.18 00:32] Can u please tell security measures taken for exchange... As these days many exchanges are being hacked even the so called best exchange i.e. binance , bancor etc Jim Preissler, [14.07.18 00:32] [In reply to Hai Nguyen] That wallet is under development, which makes it easier to participate in ICOs, have KYC, etc. Dustin McDaniel, [14.07.18 00:32] [In reply to S Aggarwal] And on that note.... Are there plans to provide insurance against hacking? If wallets get hacked is it guaranteed that owners will get all their tokens back? One suggestion is that part of the undistributed funds from the LP (due to tiers with percentages less than 100%) can be used to offer such insurance, If unnecessary...if not, could be retained by the company …Security is obviously of the utmost importance especially if trade.io is targeting institutional investors. This insurance would bring extra peace of mind. Johnson, [14.07.18 00:33] Jim, what measures will be taken to boost the trading volume of TIO token after launch of exchange. With liquidity pool, I think the volume might be very low as it is today DeviLpaL ~ trade.io Moderator, [14.07.18 00:33] Hold on guys. Let jim answer Q one by one Hiro S, [14.07.18 00:33] There was some thoughts that running costs would eat up the revenues that was already generated from consultancy arm that would left very few to be distributed. COuld you tell us this is not the case? And in general, costs to be subracted from LP is only direct costs that affects it, could you confirm that as well? thank you. Jim Preissler, [14.07.18 00:33] [In reply to S Aggarwal] We have inhouse, outside team, cloudflare, fireeye, etc. S Aggarwal, [14.07.18 00:34] [In reply to Dustin McDaniel] I think the undistributed profit (as for those having less than 100%) will add to profit of next day Grimlock, [14.07.18 00:34] [In reply to Jim Preissler] the important question is still: in case of any hacking, are we guaranteed our tokens back? Paul Johnson -trade.io, [14.07.18 00:34] [In reply to Jim Preissler] To elaborate, virtually all client assets are kept in cold storage as well. Jim Preissler, [14.07.18 00:34] [In reply to Dustin McDaniel] We are lookng for ans on that, so I like the suggestion. Nothing definative yet Dustin McDaniel, [14.07.18 00:35] [In reply to S Aggarwal] I believe any undistributed for the day would be retained daily Ro$€, [14.07.18 00:35] [In reply to Grimlock] Agree, noone can say i am unhackable Dustin McDaniel, [14.07.18 00:36] [In reply to Jim Preissler] Thank you Paul Johnson -trade.io, [14.07.18 00:36] [In reply to Ro$€] There is no company in the universe that is "unhackable" DeviLpaL ~ trade.io Moderator, [14.07.18 00:36] Ro$€: Which users will have profit from LP in the first 2 months? Only the first 1000? Any new formula to calculate Jim Preissler, [14.07.18 00:36] [In reply to Johnson] if you look at the token economics of TIO, it is deisgned to be more like a berkshire hathaway than a high volume penny stock. The goal is to drive value, not volume. The more value we create, and with low float, this will be good for price S Aggarwal, [14.07.18 00:37] [In reply to Dustin McDaniel] At the end what to do with it ...it will keep on accumulating .... Better to distribute Jim Preissler, [14.07.18 00:37] [In reply to Paul Johnson -trade.io] We are not skimping in any areas or security, it is a high priority S Aggarwal, [14.07.18 00:38] [In reply to S Aggarwal] I think jim should clarify on this Ray Zhang, [14.07.18 00:38] Any news about the license? Ro$€, [14.07.18 00:38] [In reply to Grimlock] I would like to ask what the solution if that ever happens. For sure, i dont want it :) but i want to know S Aggarwal, [14.07.18 00:38] Do we have any security feature like bnt had to freeze [email protected] Jim Preissler, [14.07.18 00:39] [In reply to S Aggarwal] what was the orig Q again :) Hiro S, [14.07.18 00:39] [In reply to Jim Preissler] I definitely like that. ;) S Aggarwal, [14.07.18 00:40] [In reply to Jim Preissler] The question is that... What will happen to the undistributed profit due to people having less than 100% profit share in lp?? S Aggarwal, [14.07.18 00:40] [In reply to S Aggarwal] @Guitarplyr Dustin McDaniel, [14.07.18 00:40] [In reply to Jim Preissler] concerning undistributed LP profits, they do not roll over, correct? Retained daily by the company? Soroush, [14.07.18 00:41] Talking about licenses, Jim, can you tell us which one is your top priority? US, Swiss, FX? Hiro S, [14.07.18 00:41] [In reply to Jim Preissler] I simpatize with this “insurance” would be also a nice promo tool on top of all top security measures and if security play its roles it will be an asset that company will have anyway. Jim Preissler, [14.07.18 00:41] [In reply to Ro$€] We will xplore insurance and other things, but same ans for all of crypto, there is nothing like FDIC yet Dustin McDaniel, [14.07.18 00:41] [In reply to Dustin McDaniel] Or put into seperate fund, to provide insurance, buy back and burn programs, etc... :) Jim Preissler, [14.07.18 00:42] [In reply to S Aggarwal] cover down days is the main use Jim Preissler, [14.07.18 00:42] [In reply to Dustin McDaniel] those can all be considered Jim Preissler, [14.07.18 00:43] [In reply to Soroush] scroll up a bit S Aggarwal, [14.07.18 00:43] [In reply to Dustin McDaniel] This will be nice i think first to set aside 10%profit for buy and burn Tio and to distribute 50-50 (i.e. 45% of total ) to mgt and lp S Aggarwal, [14.07.18 00:43] @JimPreissler Dustin McDaniel, [14.07.18 00:43] [In reply to Jim Preissler] Its why I love this company, project, and vision so much Ro$€, [14.07.18 00:43] [In reply to Soroush] U r bit late buddy Hiro S, [14.07.18 00:45] [In reply to Hiro S] @JimPreissler can u comment on this pls. I think if LP is able to share good profits on first days that would be good marketing and this may possible because of accumulated revenues. samy101, [14.07.18 00:45] This is promising and time to buy more Tio’s. Jim Preissler, [14.07.18 00:45] [In reply to S Aggarwal] too early to be planning or discussing buybacks at this point, most don't fully understand the long term ramifications of this anyway. Most crypto doing this haven't thought it all the way through, but that is discussion for another day Den, [14.07.18 00:46] Hello guys, hi Jim! Got a question about negative days for LP. I don't really understand how it can be, exchange should stop trading and other revenue streams should be off for that day? Oliver, [14.07.18 00:46] Are you guys familiar with Ian Balina? He was hinting to an exchange partnership in his last video. The company will sponsor his world tour and meetup. It is not binance so I was hoping it could be TIO haha Oliver, [14.07.18 00:46] *that's for Jim or BD Johnson, [14.07.18 00:46] Jim, regarding trading TIO on competitors exchange. Are there plan to get TIO de-listed from other centralized exchange? This is necessary to avoid price manipulation. Also, is it possible that these exchange refuse to de-list TIO when you request? Ro$€, [14.07.18 00:47] [In reply to Johnson] Thats answered, up buddy Jim Preissler, [14.07.18 00:47] [In reply to Den] There is risk making markets and providing liquidity Jim Preissler, [14.07.18 00:48] [In reply to Johnson] They could refuse S Aggarwal, [14.07.18 00:48] [In reply to Oliver] +1 S Aggarwal, [14.07.18 00:49] @JimPreissler is that exchange he is saying TIO Hugo Cruz, [14.07.18 00:49] What r the rewards for someone the buys TIO now before launch of exchange? S Aggarwal, [14.07.18 00:49] [In reply to Hugo Cruz] Capital gains Scarlet ~ trade.io Admin, [14.07.18 00:49] [In reply to Hugo Cruz] Capital appreciation. S Aggarwal, [14.07.18 00:49] [In reply to Scarlet ~ trade.io Admin] U are late S Aggarwal, [14.07.18 00:49] Haha Scarlet ~ trade.io Admin, [14.07.18 00:50] I know.. Hugo Cruz, [14.07.18 00:50] [In reply to S Aggarwal] Thats wut they said when bitcoin was 20k. Ro$€, [14.07.18 00:50] [In reply to DeviLpaL ~ trade.io Moderator] One more time Jim :) Q still Scarlet ~ trade.io Admin, [14.07.18 00:51] [In reply to Hugo Cruz] 30 cents vs 20k, c'mon man. Jim Preissler, [14.07.18 00:51] [In reply to Oliver] I am going to find that Bitconnect guy! BITTTCOONNNEECTTT! S Aggarwal, [14.07.18 00:51] [In reply to Johnson] @JimPreissler please answer this Oliver, [14.07.18 00:51] [In reply to Jim Preissler] hahahaha Jim Preissler, [14.07.18 00:51] [In reply to Ro$€] We are only limiting to 1000 until customer service, and any other issues are under control Leo Elias, [14.07.18 00:52] [In reply to Jim Preissler] [ ?? Sticker ] Dmitry K, [14.07.18 00:52] [In reply to Jim Preissler] [ GIF ] Dustin McDaniel, [14.07.18 00:52] Are MEW or other wallets going to be integrated in such a way as to make it possible to be able to participate in the LP without having them on the exchange? If this is actually possible that is. Will Private Keys be made available to the holders of the wallets in trade.io? Dustin McDaniel, [14.07.18 00:52] [In reply to Jim Preissler] ?????? Oliver, [14.07.18 00:52] [ GIF ] Jim Preissler, [14.07.18 00:53] [In reply to Johnson] yes, we will try to pull down elsewhere. no guarantees they will do it though S Aggarwal, [14.07.18 00:53] [In reply to Dustin McDaniel] It will make no sense for company. To share profit withour using assets Ro$€, [14.07.18 00:53] [In reply to Jim Preissler] That was cleared up, but how to distribute the LP profits from Ico, which custumers? Or we need the formular till LP launched? Dustin McDaniel, [14.07.18 00:54] [In reply to S Aggarwal] Asking mainly for other community members who are looking for answers from managment S Aggarwal, [14.07.18 00:54] [In reply to Dustin McDaniel] Np Jim Preissler, [14.07.18 00:55] [In reply to Dustin McDaniel] yeah, also not sure on security on that as well. May be part of hybrid DEX solution Jim Preissler, [14.07.18 00:56] [In reply to S Aggarwal] And transaction fees would be high, since every transaction would be recorded on BC, cant really use ledger. Not ideal overall Dustin McDaniel, [14.07.18 00:56] Couple more questions from community members... Are there any updates on the Angel Investors Program? What roles do Kosmos, Plutus VC and Blockway Capital play in the Angels Investors Program? Dustin McDaniel, [14.07.18 00:56] [In reply to Jim Preissler] Thank you for those answers Jim Preissler, [14.07.18 00:57] [In reply to Dustin McDaniel] We are sending them deals to look at where they know we already did KYC, took a first pass, etc. They are also bring us deals to look at as well Jim Preissler, [14.07.18 00:58] couple more minutes, then going to lunch! S Aggarwal, [14.07.18 00:58] Will Tio place there own buy and sell orders toaintain liquidity?? Grimlock, [14.07.18 00:58] [In reply to Jim Preissler] one last question from me, Grimlock, [14.07.18 00:58] are you confident that we are all going to the moon? Grimlock, [14.07.18 00:59] ?? Dustin McDaniel, [14.07.18 00:59] [In reply to Grimlock] ?????? Satish, [14.07.18 00:59] ???????? S Aggarwal, [14.07.18 00:59] [In reply to S Aggarwal] @JimPreissler Jim Preissler, [14.07.18 00:59] [In reply to Grimlock] how much trading are you going to do :) Hiro S, [14.07.18 01:00] [In reply to Hiro S] @JimPreissler can comment on that pls, thank you. Soroush, [14.07.18 01:00] Jim, will we have any kind of voting system for new coin listings? Can you tell us anything about your plans on how new listings will be done? Would TIO owners have any privileges over others? Jim Preissler, [14.07.18 01:00] [In reply to S Aggarwal] We will keep risk low initially, but over time us and outside (insitutional) providers will be doing this Grimlock, [14.07.18 01:00] [In reply to Jim Preissler] am just going to hold. buckle up and sit tight. is that alright with you? S Aggarwal, [14.07.18 01:00] [In reply to Jim Preissler] Very less ... As i am all in in TIO and now dont have any penny to trade Jim Preissler, [14.07.18 01:01] [In reply to Hiro S] You mean operations??? No that is covered from our 50% Dustin McDaniel, [14.07.18 01:01] Any fear that the initial 1000 will be doing no trading since they are loyal TIO holders, and all-in already? ?????? S Aggarwal, [14.07.18 01:02] [In reply to Dustin McDaniel] Yes???? S Aggarwal, [14.07.18 01:02] [In reply to S Aggarwal] . Hiro S, [14.07.18 01:02] [In reply to Jim Preissler] ok, it is clearer now. thank you. Jim Preissler, [14.07.18 01:02] [In reply to Dustin McDaniel] then we add more Leo Elias, [14.07.18 01:03] Uscitizen when ? Jim Preissler, [14.07.18 01:03] [In reply to Hiro S] An "expenese" would be an affiliate commission or something like that, not operations Jim Preissler, [14.07.18 01:04] [In reply to Soroush] we are not looking to limit coins by any means, just need a controlled process to roll them out Hiro S, [14.07.18 01:04] [In reply to Jim Preissler] understand even better now. :) S Aggarwal, [14.07.18 01:04] [In reply to Jim Preissler] Good... So approx how many coins before lp launch?? Jim Preissler, [14.07.18 01:04] [In reply to Leo Elias] hopefully soon, been talking to FINRA and SEC Jim Preissler, [14.07.18 01:05] [In reply to S Aggarwal] We will get to EOS and XRP pretty soon :) S Aggarwal, [14.07.18 01:05] Haha S Aggarwal, [14.07.18 01:06] [In reply to Jim Preissler] I want others too as have economic interest via lp Jali, [14.07.18 01:06] [Forwarded from .] Ok Tnx Got it Leo Elias, [14.07.18 01:06] [In reply to Jim Preissler] [ ?? Sticker ] Dustin McDaniel, [14.07.18 01:06] [In reply to Jim Preissler] ???? Johnson, [14.07.18 01:07] I Missed response on licenses, can someone please repost? S Aggarwal, [14.07.18 01:07] [In reply to S Aggarwal] @JimPreissler any estimate Ro$€, [14.07.18 01:08] Any plan that we can store Tio in hardware wallet like Ledge Nano? Jim Preissler, [14.07.18 01:08] [In reply to S Aggarwal] ERC20 - we are looking at rolling out maybe 200 as soon as possible, but priority is on listing clients and ICO clients Dustin McDaniel, [14.07.18 01:08] [In reply to Johnson] Working on HK, Singapore, Switzerland, Malta right now as the bigger ones. Smaller ones as well. We are meeting with regulators in the US as well S Aggarwal, [14.07.18 01:08] [In reply to Jim Preissler] K Jim Preissler, [14.07.18 01:08] [In reply to S Aggarwal] And for you, EOS and XRP S Aggarwal, [14.07.18 01:09] [In reply to Jim Preissler] Thanks trade.io, [14.07.18 01:09] [In reply to Johnson] I'll PM you Soroush, [14.07.18 01:09] [In reply to Jim Preissler] Consider Tezos too plz, right now they only have two low-key exchanges available with high fees Jim Preissler, [14.07.18 01:09] [In reply to Soroush] sure Jim Preissler, [14.07.18 01:09] Maybe they can pay us to list them :) Jack, [14.07.18 01:10] hi Jim, which kind of wallet we are using after exchange go live? Jim Preissler, [14.07.18 01:10] OK, I have a hot lunch date with my 5 year old. I will be back on here in a bit. Thanks everyone!!! Jack, [14.07.18 01:10] cos Blossom is under development Hiro S, [14.07.18 01:11] Thank you Jim, very quality AMA! trade.io, [14.07.18 01:11] Thanks Jim! S Aggarwal, [14.07.18 01:11] Thanks jim for ama @JimPreissler Johnson, [14.07.18 01:11] Thanks Jim! Enjoy your lunch Ro$€, [14.07.18 01:12] Thank you Grimlock, [14.07.18 01:12] ok guys, AMA is over. Time to load up your TIO bags and check in! Jack, [14.07.18 01:12] [In reply to Jack] hi @Trade_IO, could you answer this? trade.io, [14.07.18 01:13] For your Q's please drop Admins a PM. We will collect your Q's and forward it to Jim. The AMA with Jim will also be uploaded on our Reddit page. Thank you! ???, [14.07.18 01:13] Jim,I strongly recommend that you develop app!! Paul Johnson -trade.io, [14.07.18 01:13] Thanks Jim, Admin, and of course the TIOnauts...great dialogue as usual
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