Monday, March 2, 2020

Lloyd's of London to offer crypto insurance / BIS: CBDC is not focusing on cross-border payments / KPMG: Crypto needs to secure assets to grow

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Rebecca

Market Watch: The start of the working week is showing positive results for crypto prices with most coins across the board in the green.

  • Bitcoin: $8,807 (⬆️ 2.02%) // $160.7 billion market cap.
  • Ethereum: $227 (⬆️ 1.88%) // $24.9 billion market cap.
  • XRP: $0.235 (⬆️ 0.69%) // $10.3 billion market cap.
  • Bitcoin Cash: $324 (⬆️ 2.88%) // $5.9 billion market cap.
  • Top 100 Winner: Swipe: $1.23 (⬆️ 16.52%) // $74 million market cap. 
  • Top 100 Loser: DxChain Token: $0.001 (⬇️ 9.91%) // $74 million market cap. 

Prices are as of 3:10 p.m. ET.

1. Insurance giant Lloyd's of London has announced that it is offering a new insurance policy to protect cryptocurrency held in online hot wallets against hacks. In an announcement released today, the company stated that the liability policy was created by Lloyd's syndicate Atrium along with crypto firm Coincover, with limits from as little as $1,275. The policy is backed by a number of other Lloyd's insurers, including TMK and Markel, all of whom are members of Lloyd's Product Innovation Facility (PIF). Matthew Greaves, underwriter at Atrium, said that there is a "growing demand" for insurance that can protect crypto assets, adding: "It is a testament to Lloyd's that the market has put together an innovative solution to mitigate these new risks and protect against theft – from physical as well as online vaults – thereby providing customers with peace of mind that their assets are safe." -LLOYD'S OF LONDON

2. A report from the Bank for International Settlements (BIS) has found that no central bank digital currency (CBDC) projects are focusing on cross-border payments. The quarterly review, "International banking and financial market developments," looked at CBDC plans, in addition to significant global issues within the market such as the recent coronavirus. According to the BIS, there are 17 governments researching CBDCs, including Brazil, Iceland, Israel, and Norway. Yet, in the BIS's opinion, none of these projects are looking into cross-border payments despite many highlighting that CBDCs provide faster and less risky cross-border payments. The report went on to say that: "Regarding the focus on cross-border interlinkages, no CBDC project has an explicit focus on payments beyond the central bank's jurisdiction." -BIS

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3. Crypto exchange Bitfinex has announced that it will delist 46 crypto trading pairs due to low liquidity on its platform. In a blog post today, the exchange said that from March 6, 2020, at 10 a.m. UTC, 27 coins traded with Ether will cease trading. These include the likes of AidCoin (AID/ETH), Credits (CSX/ETH), Seer (SEE/ETH), and Statis Euro (EUS/ETH). A further 16 altcoins traded with Bitcoin will also be delisted. These include CommerceBlock (CBT/BTC), BLOCKv (VEE/BTC), Hydro Protocol (HOT/BTC), and Medicalchain (MTN/BTC). Bitfinex stated that "the removal of these trading pairs is a common measure that serves to consolidate and improve liquidity on Bitfinex." -BITFINEX

4. Accounting organization KPMG has said that the crypto market needs to improve how it secures its assets if it wants the market to grow. According to the company, $9.8 billion has been stolen by hackers since 2017 due to poor security measures or poorly written code. Yet, due to an increase in institutional investors adopting Bitcoin and Ether, there is an increasing need for crypto assets to be safeguarded more than ever, KPMG noted. Sal Ternullo, co-leader of KPMG's crypto-asset services and co-author of the report, said: "Institutional investors especially will not risk owning crypto assets if their value cannot be safeguarded in the same way their cash, stocks and bonds are." -BLOOMBERG

What do you think of this report? Do you believe that's what the crypto market needs to achieve for it to increase its value from its current $253 billion? Hit reply and let me know! We may feature your answer in an upcoming issue (with your permission, of course). -Rebecca

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5. Brad Garlinghouse, CEO of Ripple, has said in an interview that Ripple wouldn't be profitable without selling XRP. That's according to a statement to the Financial Times, which was in response to a question where he was asked where the company's cash flow comes from. In it, he said: "Well XRP is one source. I don't know how to answer that because if you took away our software revenues, that would make us less profitable. If you took away all our XRP, that makes us less profitable." -FINANCIAL TIMES

6. The Republic of the Marshall Islands (RMI) has selected blockchain firm Algorand for its national digital currency, the Marshallese sovereign (SOV). It was first announced back in February 2018. In an announcement today, SFB Technologies, the company that develops SOV's blockchain infrastructure, will see the digital currency circulated alongside the U.S. dollar, which will "help the Marshall Islands efficiently operate in the global economy." According to Jim Wagner, co-founder and CTO of SFB Technologies, Algorand was chosen "after extensive market research" and that due to its "unique features the platform has the functionality required to issue, manage and distribute the SOV on a global level." -ALGORAND

7. Tom Lee, co-founder of Fundstrat Research, has said on Twitter that the stock market is "starting to look like crypto charts." Lee was responding to a tweet from a researcher, who noted that the S&P 500 had wiped out 140 days of growth in a matter of days. The drop in market prices comes amid fears over the novel coronavirus, which has seen investors dump shares as anxiety over it grows. -@FUNDSTRAT/TWITTER

8. Jon Cuncliffe, the deputy governor for financial stability at the Bank of England (BoE), has said in a speech that a crypto-economy could see bank credit "weaken or indeed disappear." Delivering a speech at the London School of Economics at the end of February, the deputy governor indicated that the inclusion of stablecoins on social media could see people putting their money they would hold in banks into stablecoin wallets, adding that this "would be a change with profound economic consequences." -CROWDFUND INSIDER

9. Charles Hoskinson, CEO of IOHK, has said on Twitter that "crypto is the best hedge in the world against a global pandemic." At the end of February, Hoskinson, a crypto enthusiast, mathematician, and entrepreneur, said that "should SARS-CoV-2 get big, the stock market is done and governments will collapse." He added that things that live in the "digital world are resistant to this and will benefit from the social change." His comments come at a time when the Dow Jones dropped 1,200 points last week amid fears over the coronavirus. -IOHK_CHARLES/TWITTER

10. Japanese technology company LINE announced that it has launched its BITFRONT crypto exchange in the U.S., which will provide a fiat-to-crypto and crypto-to-crypto market for the U.S. dollar. BITFRONT will be run by the U.S. subsidiary of LVC Corporation. The platform supports five cryptocurrencies: Bitcoin, Etherum, Bitcoin Cash, Tether, and LINE's digital currency, LINK. According to Youngsu Ko, CEO of LVC Corporation, "this is a major leap toward achieving the mass adoption of blockchain." -LINE

This newsletter was written and curated by Rebecca Campbell. She has been writing and reporting on various industries for the past 10 years, more specifically tech in the last three. Connect with her on Twitter.

Edited by Beth Duckett, staff writer at Inside.

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Elastos Foundation EOY Report and Exploring elastOS: The DID dApp

The Elastos Foundation publishes the End Of Year Report to provide transparency and updates on the state of the project as a whole. Elastos believes in proactive communication and will publish another Financial Report to accompany this document next week. 

This Report covers February 2019 through January 2020, or Lunar New Year 2019 through Lunar New Year 2020. 

elastOS: The Gateway to the SmartWeb, Released For Android Devices

Within elastOS, the DID dApp allows users to create multiple W3C-compliant decentralized identities called, DIDs. This article defines DIDs, their unique characteristics, the problems they solve, and the current and future status of the DID dApp. 

The Problem of Online Identity
In the physical world, identities are generally issued by local or federal governments. Upon receiving these physical identities (birth certificate, passport, ID card), citizens store them securely and use them for proof-of-identity in almost all physical scenarios. 

However, on the internet identity is a much more complicated issue. The process of providing a physical identity for online use cases can be tedious, risky, and oftentimes unnecessary. Most internet users have dozens of online identities, and in some cases, a different one for each application. While some of these identities can be used for multiple platforms (e.g. a Facebook login), all of them are centrally controlled by a third party. This system of centralized online identity is not only burdensome for a user to keep track of, but it is also vulnerable to security breaches. With centralized identities, users give up what data can be stored, shared, sold, and hacked, all while having to maintain the equivalent of a giant ring of keys.

DIDs enable an online experience where a user can have one identity for all applications, and where no central authority controls any such identities. With a decentralized identity protocol, life online is simpler and more convenient, and data can be owned and kept private. 


What is a DID?

A DID is a default string identifier that possesses several unique properties:

  • A DID can (but does not have to) be stored on the blockchain, thus rendering all of its operations and transactions fully verifiable (document signatures, authentication, etc.).
  • A DID can attach credentials – those are, pieces of information related to the DID owner – which can be kept privately on user's device or published on the blockchain for public and permanent visibility.
  • A DID is neutral, and thus does not depend on a singular service provider such as Google or Facebook to authenticate and store personal information. Every service or application can share the same DID info, and no one owns the DID (and its content) except the user that registered it.
  • A DID provides a standard process to store information, effectively streamlining dApp interactions. The Friends dApp leverages this standardization, as it allows users to retrieve a list of dApps used by their friends simply by virtue of accessing their DIDs. This process functions effectively because dApps register a standard credential on the DID Sidechain for all users.


 

6 Reasons Why We Need DIDs
1. Users entirely and exclusively own their identity. 
In centralized identification systems, the identity providers (e.g. Facebook) own users' identities and related information. In addition to having the opportunity to act maliciously, the centralized entities that  control such identity systems are vulnerable to hacks whereby user identities and data are leaked to unknown organizations and individuals. But with Decentralized IDs, users possess exclusive control over their identity and related operations for functions like authentication and document signatures on third party websites. With Decentralized IDs, no other service interaction is required.

2. ID and personal information are separated.
In centralized identity systems, an "identity" comprises an individual's person and personal information, such as age, name, address, and phone number. But using DIDs, an individual's person and personal information are separate, as a DID is by default a meaningless string identifier, and pieces of personal information are credentials related to the DID. Credentials are totally private on the user device, and only that user can decide which to share, and with whom to share it with.

3. Better privacy.
In centralized identity systems, when a user signs in to third-party services (e.g. signing in on a third party website using a Google account), his or her activities are recorded by the identity provider – most often, Google or Facebook. By way of this mechanism, identity providers know everything their users do, and all of the platforms where they do them – a truly zero-privacy model. In DID systems, both DIDs and credentials are controlled by the user directly from his or her device and there is no third party identity provider; thus, user activities remain opaque to service provider.

4. Separation between private and public information.
Because DID is supported by a public blockchain ledger, information can be stored privately on a device as well as publicly. As DID credentials respect a rather standardized format, other dApps – or some crawlers – can retrieve such information from the blockchain. Each user decides whether to store his or her decentralized Twitter ID (a yet to be invented dApp), freelance business phone number, and ELA address publicly. By simply scanning his or her DID QR code, a user can selectively share anything or everything at any moment. For centralized identity providers of present, these features are infeasible.

5. DID is standardized and transferrable.
Whether a DID is created with Microsoft or Elastos, it respects the same W3C standard specifications. As such, even if say, a university issues a diploma as a DID credential to a specific user's Microsoft DID, the DID owner can later transfer the Microsoft DID into the Elastos ecosystem, and Elastos dApps will be able to access the diploma.

6. DIDs are more secure
Even if you share your DID and credentials with a service provider, the service provider cannot use your DID and credentials to represent you nor do anything malicious or otherwise on your behalf. A DID guarantees this through its cryptography and design. However, in a centralized identity system, you cannot guarantee this level of security. 


Features In the 1.0.6 DID dApp Version

  • Generate a single user, and generate multiple DIDs for each user
  • Create a DID locally on a device
  • Manage a profile (=credentials)
  • Publish the DID and related credentials on-chain
  • Import a previously saved DID
  • Support inter-dApp functions to:
    • Deliver credentials to other dApps on their request (ex: to implement third party sign in)
    • Sign data for other dApps 
    • Register application profiles (related to the Friends dApp)
  • Always selects the appropriate DID for inter-dApp functions. Users can select a different DID for different dApps (generally, this may be of appeal for privacy-related purposes)
  • Fingerprint / passwordless support


 
Next Steps

  • Ability to integrate external credentials received from third parties into DID profiles (e.g., a university issues a diploma and the user saves it in his or her profile for later use)
  • Related service: automatic email verification service and real identity check service to enable the attachment of confirmed verifications to DIDs. Therefore, third party dApps will be able to use certified information, such as identity checks, email address confirmation, and more.
  • Backup and restore full DIDs in secure, private locations – not only the DID key itself, but published and private credentials, and more.
  • Password changes
  • Onboarding screens for improved user on-board experience.


 
Comparing DID Sign-In with Traditional Facebook Authentication

  • Let's imagine a user wants to sign in to his or her favorite news website.
  • Facebook sign in:
    • Click "sign in with Facebook" on the news website page.
    • Facebook handles the sign in process on its servers, and it knows which news website is requesting the user's facebook identity when the user visits that news website.
  • DID sign in:
    • Click "sign in with Facebook" on the news website page.
    • The elastOS DID dApp handles the authorization request. Only the news website communicates with the DID dApp, not Elastos Foundation nor anyone else has the opportunity to retrieve information relating to this communication.
    • The elastOS DID dApp directly sends the appropriate DID info to the news website.
    • In this case, the user's mobile device acts as a Facebook authentication server of sorts. The user is "Facebook", and only the user knows what he or she does with his or her identity.


 
The Future Role of DIDs in elastOS and the Elastos Ecosystem

  • DIDs have been introduced to elastOS only recently, but they are going to be omnipresent throughout the Elastos ecosystem, as they represent the best way to identify a user.
  • DIDs will then become integral to the fundamental operations of elastOS. In the future, it is very likely that elastOS will prompt each user to create a DID upon its initial launch, as a mandatory condition to accessing the ecosystem, much like when Windows and MacOS are first launched.


 
Use Cases Enabled by the DID dApp

  • Standardized credentials are essential.
  • In a scenario where an official organization integrates DIDs and has the ability to confirm the real identity of a user, such verifications can be stored on the DID Sidechain and are immutable. All third-party dApps that trust the validating organization can request that a user provide such a validated identity, without conducting any independent verification. For example, if a flight booking dApp needs a user's real identity, it will not have to request the user to verify his or her identity repeatedly; rather, it will be able to use the validated credential delivered by the certification organization. To receive the relevant credential, the flight book dApp will request it from the DID dApp in elastOS.
  • As the process to store credentials on chain is standardized, DID usage enables the possibility for apps to start communicating with each other through this new immutable storage. As such, new applicative use cases may emerge soon after the initial dApps have been built.


The Internet is Ready For DIDs

The internet is ready for a simpler, safer, and more interoperable solution to identity. DIDs issued by Elastos make for a  seamless user experience where user data is safely managed for all applications within elastOS, without taking control away from the user. No more endless sign-ins. No more hacks. No more exposed sensitive information. At Elastos, we believe that what you do online should be tied to an identity that only you control. Blockchain-based identity systems create the essential user experience for the modern individual – an experience where privacy, autonomy, ownership, and convenience replace a clunky system that has left our data exposed and outside our control for far too long. 

 

Copyright © *2019 Elastos Foundation, All rights reserved.

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