Canadian regulators striking balance with Initial Coin Offerings

Initial Coin Offerings(ICOs) have raised US$1.5 billion this year alone, compared to US$100 million in all of 2016This FOMO-inspiring figure is thanks to the until recently near-complete absence of any securities regulations. In most cases, companies have raised funds entirely in Bitcoin and Ether, and did not put investors through any Know Your Customer/Anti-Money Laundering (KYC/AML) process.

But regulation is coming, and depending on the jurisdiction, companies who have held ICOs in the past could be held to existing securities laws, and this could put a chill on the red-hot ICO market. At the heart of if and how to regulate an ICO is one question; Is a token a security?

Bitcoin Exchange Bitfinex Adds NEO, Price Soars As China Hints ICO Story Not Over – CoinTelegraph

CoinTelegraphBitcoin Exchange Bitfinex Adds NEO, Price Soars As China Hints ICO Story Not OverCoinTelegraph“Bitfinex is excited to support the NEO ecosystem and the team behind the token, and to experience first hand the growth and development of the project,” it commented. Altcoins have staged a broad comeback in the days following the initial crackdown in …Bitcoin Exchange Bitfinex Adds NEO, Price Recovers After China's ICO BanCoinspeakerNEO Price on Target to Hit $30 and More in the Coming DaysThe MerkleMiami mansion is up for sale, priced at 1400 BitcoinsRealtyBizNewsall 115 news articles »

Second Life Creator Uses Blockchain Tech to Enhance New VR Gaming Experience

Second Life Creator Uses Blockchain Tech to Enhance New VR Gaming Experience

High Fidelity, a next-generation platform for virtual worlds currently in open beta, is the brainchild of Philip Rosedale, the creator of Second Life. Readers who don’t know what Second Life is are excused because it’s not on the media’s radar these days. But 10 years ago Second Life was often hailed as the Next Big Thing in social media.

In Second Life, players can create an avatar and explore a huge 3D virtual world created by the users themselves. The expectation was that the “Metaverse” imagined by science fiction writer Neal Stephenson in his cult novel Snow Crash (1992) would soon materialize and billions of users would flock to Second Life.

Therefore, a strong presence on Second Life would be a strategic need for all sorts of businesses and organizations, from online retailers and advertisers to universities and government agencies. This perception created a thriving Second Life development and consulting sector, and some companies (this writer owned one) made good money for a couple of years.

Then, Second Life faded into oblivion, sort of. In hindsight, the problem was that Second Life isn’t immersive enough (users don’t really have the impression of “being there”) and it is too difficult to master.

High Fidelity wants to change that by supporting highly immersive Virtual Reality (VR) interfaces, including VR headsets like the Oculus Rift, sensors for hand and body motion, and 3D audio. Rosedale hopes that a fully immersive 3D world, like the OASIS world described in a more recent cult novel (Ernest Cline’s Ready Player One, 2011), will be both more appealing and easier to use than Second Life. For example, if you want to shake another avatar’s hand, you just do it, instead of having to remember a Ctrl-Alt-Something command.

Another important difference is that High Fidelity is much less centralized than Second Life, and it allows creators to host independent virtual worlds using their own equipment and infrastructure.

As for Second Life, it’s still there and business hasn’t entirely disappeared. While the big corporations and organizations are mostly gone or inactive, there’s a thriving virtual retail market for things like design avatars, virtual clothes, gadgets and prefabs. It’s small business, but some developers earn a living on the Second Life Marketplace. Of course, counterfeited and pirated virtual goods represent a problem.

Second Life virtual goods are priced in Linden dollars, a virtual currency fully integrated with the Second Life platform. Introduced long before 2009, the Linden dollar is not a blockchain-based cryptocurrency.

Now, Rosedale has a cryptocurrency in the works dubbed HFC for the High Fidelity Marketplace and a whole ecosystem including externally-operated servers. Contrary to the Linden dollar, which is only a payment means, the HFC will leverage blockchain technology’s ability to track transactions and ownership.

“We are getting ready to deploy blockchain software to create a new currency for virtual worlds, called HFC,” says Rosedale. “In addition to providing the basis for in-world transactions, the HFC blockchain will also be used to store information about the ownership of digital assets in virtual worlds. We plan to use this aspect of the blockchain to provide an open way to protect intellectual property by embedding certification, affirming item ownership into the blockchain.”

In another post, Rosedale provides more details on the intellectual property protection mechanisms envisioned for High Fidelity. “This system will work across an open network of many different servers, does not need to use ineffective DRM systems, and is not dependent on or controlled by any central agency (other than the initial first registration of unique assets),” he explains.

According to High Fidelity, the open, permissionless nature of the Bitcoin and Ethereum blockchains cause limited throughput (transactions per second) and high transaction fees, which makes them unsuitable for HFC. Therefore, Rosedale’s team is developing a public but “permissioned” blockchain, where only a subset of trusted participants can verify transactions. It could be argued, however, that High Fidelity is being too quick in dismissing new scaling solutions that could lead to higher throughput and lower fees in the Bitcoin and Ethereum blockchains.

Rosedale notes that the Linden dollar, not based on a blockchain, shows remarkable stability in price, with much less volatility than blockchain-based cryptocurrencies. High Fidelity plans to achieve a similar stability “through active management […] voting, smart contracts and other mechanisms to regulate the monetary policy.”

The High Fidelity community is encouraged to provide feedback on HFC. “We’ve been discussing and getting feedback on these designs in our ongoing community meetings in High Fidelity,” says Rosedale.

More information is available on related discussion threads in the High Fidelity Forums.

The post Second Life Creator Uses Blockchain Tech to Enhance New VR Gaming Experience appeared first on Bitcoin Magazine.

Blockchain Asset Weekly (7 September 2017)

Gatecoin news & views

How does China’s restrictions on ICOs affect Gatecoin?

Following the People’s Bank of China (PBOC) announcement which declared restrictions on token sales or initial coin offerings (ICOs) conducted in Mainland China, Gatecoin would like to clarify how this affects our business:

  • Gatecoin is based in Hong Kong, a Special Administrative Region (SAR) of the People’s Republic of China, which has separate legal and regulatory frameworks to those of the Mainland. Therefore we are not subject to any of the directives described in the PBOC’s announcement.
  • We have not supported any blockchain token projects based in Mainland China and was not in the process of doing so. Nor do we have the intention to support blockchain token projects based in Mainland China until future regulatory developments.

Read our full statement for additional thoughts on how this will affect global token markets.

How does Hong Kong’s SFC statement on ICOs impact Gatecoin?

A day after the declaration from China, Hong Kong’s Securities and Futures Commission (SFC) also issued a statement on ICOs, which thankfully was much similar to the announcements published by Singapore’s MAS and the U.S.’s SEC rather than the PBOC’s.

In short, depending on the structure and nature of a blockchain token they may be regarded as a security in Hong Kong and therefore subject to local securities regulations. So, given that we are based in Hong Kong how might this statement impact us?

  • Since we enable the secondary market trading of blockchain tokens issued through a crowd sale process, we may be required to comply with the SFC’s licensing and conduct requirements.
  • As we have listed certain tokens which may be categorized as securities by the SFC, we may be required to de-list these or prevent our users based in Hong Kong from buying and selling these tokens.
  • We may be prevented from underwriting future token sales which are based in Hong Kong if that project has not acquired explicit regulatory approval or exemption from the SFC.

Gatecoin has always been in favor of progressive regulation regarding the activities of crypto-token exchanges in Hong Kong and we look forward to complying with any requirements enforced by the SFC that may apply to our business. We have already reached out to the SFC to request detailed clarification on our specific licensing and conduct obligations. When we have received this clarification we will publish a separate statement accordingly.

As Hong Kong looks to position itself as a regional and global fintech hub and to differentiate itself from the rest of China, we would be eager to work more closely with the SFC to help develop the SAR as a welcoming destination for properly structured blockchain token sales.

Blame Paris Hilton

Paris Hilton, became the latest “celebrity” (seriously, what is she famous for?) to endorse an ICO project which fed the mainstream media’s fascination with calling the crypto bubble. The ICO project in question, LydianCoin is led by a disgraced tech entrepreneur who was convicted of domestic violence.

Gatecoin has no intention of supporting projects backed by “celebrities” purely for the purpose of hype and marketing, especially those founded by convicted criminals. Despite some media speculation, we believe it is very unlikely Paris Hilton’s announcement provoked the PBOC to crack down on ICOs in China.

Other celebrities that have endorsed crypto projects include Floyd Mayweather, Dennis Rodman and Mike Tyson. Yes, the former boxer as seen in The Hangover movies, Mike Tyson.

Source: Quartz

Upcoming token sales

Airswap (AIR)

The Gatecoin team is excited to be supporting Airswap (AIR), a decentralized exchange protocol, on their token sale.

Why we chose to work with Airswap

Decentralized exchanges are highly anticipated applications of blockchain technology. Many projects have already explored the approach of a decentralized exchange e.g. Etherdelta, OasisDEX by Maker, NVO, OmiseGo, 0x etc. However, having on-chain order books or on-chain order cancellation is both extremely slow and costly compared to using a centralized exchange.

Airswap will solve this problem by building a peer to peer (P2P) protocol layer called “Swap” on top of the ethereum blockchain, which uses smart contracts to settle transactions on-chain. Order posting, checking and canceling will be handled through the off-chain layer, using an indexer and oracles (see whitepaper for more details).

We expect Airswap’s platform to be the best fit for market makers and high volume traders. The Airswap team consists of experienced financial technologists and traders, and the project is heavily supported by Consensys — the Google of blockchain.

Gatecoin will be listing the project’s AIR token on our exchange once token transfers are enabled (exact date TBC).

What is the AIR token?

The AIR token will be a membership token. Anyone wanting to use the swap protocol with their ethereum address will need to hold the equivalent of USD 10 in AIR in their wallets to be able to trade. AIR token holders will be subject to a lock-up period of a few weeks, which is designed to prevent people from selling AIR as soon as they have made a transaction through the swap protocol. There will, therefore, be strong incentives for all participants to keep USD 10 of AIR in their ethereum wallets at all times, as long as they intend to use the swap protocol.

AIR token sale details

  • Public sale start: 10-Oct
  • Presale cap: USD 15M
  • Public sale cap: USD 20M
  • Total supply sold: 20%
  • Overall market cap: USD 175M
  • Gatecoin investor discount: 15%
  • Public discount: 0% for all

Benefits of participating through Gatecoin

As a Gatecoin client, you will benefit from the certainty of being able to participate in the token sale with an exclusive 15% discount over the public sale price. This means that you will receive 15% more AIR tokens for your ETH vs. public sales participants.

How to participate through Gatecoin

Please email us at the address listed below. Kindly note that the minimum participation amount for this token sale is ETH 30. Participation will be taken into account on a first come first serve basis. The deadline for participation in the AIR token pre-sale is Sunday, 10 September 2017.

Find out more about Airswap:

tokens@gatecoin.com

Current price and 24h volumes for selected trading pairs on Gatecoin

Weekly Blockchain Asset Performance Comparison (7 September 2017)

Trade now at Gatecoin.com

Voices from our community

How Singapore became a hot ICO destination by David Moskowitz, Co-founder and CEO of Indorse

China was right to clamp down on ICOs by Emad Mostaque, Co-Founder of Ananas

Tokens at the Gate: What’s Coming After the ICOs by Noah Jessop of Founder Collective

Tokens at the Gate: What’s Coming After the ICOs by Noah Jessop of Founder Collective

What we’ve been reading

Go Ahead, Try to Stop Initial Coin Offerings (Bloomberg View)

Six global banks join forces to create digital currency (The Financial Times)

ASIC’s Greg Medcraft says traditional bank accounts may be obsolete in a decade (The Australian Financial Review)

The first ICO unicorns are here (TechCrunch)

The promises and pitfalls of blockchain tokens (EJ Insight)

Follow Gatecoin on Twitter and subscribe to our email newsletter.

Many thanks,

The Gatecoin Team

Risk Disclaimer

Trading blockchain assets such as bitcoin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade blockchain assets you should carefully consider your investment objectives, level of experience, and risk appetite. You should be aware of all the risks associated with the trading of blockchain assets, and seek advice from a licensed financial advisor if you have any specific concerns.


Blockchain Asset Weekly (7 September 2017) was originally published in Gatecoin Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.

InsurTech’s big ticket items: machine learning on the blockchain

I don’t usually tell people that I’m a qualified expert in insurance as it’s not relevant, but I’m mentioning it today as I just presented at a private insurance event. There are lots of interesting nuances in insurance. You and I probably think it’s just that once a year renewal of our auto policy, or maybe the regular premiums we pay for life and pensions. That’s an important part of it and is a challenge as people don’t buy insurance, it has to be sold. Think about it. You don’t wake up and think “oh, I might die today! Better get some life insurance”, but you learn through advisory sales that this is what you need to do.

Then there’s a whole other raft of insurance where the real money is made: commercial insurance. Insuring ships, aircraft, offices and employees is where the big-ticket policies arrive. These are more complicated, as the risks have to be calculated in more depth. Under assess the risk and the insurance company loses; over assess and a competitor might steal the business. Equally, the corporate relationship becomes important in this space, as that’s where the strength of understanding the client comes from.