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Swiss banking giant UBS has unveiled a project designed to replicate the entire lifecycle of an international trade transaction on Hyperledger's Fabric blockchain. Built in collaboration with IBM, the trade finance project is still in its earliest stages, but it's arguably already more ambitious than many blockchain prototypes that focus on just a single aspect of the process. Designed to "holistically" combine payment transactions, the prototype merges trade finance transactions, foreign exchange payments and more, into one single, elaborate smart contract. According to UBS's head of product and market development for transaction banking, Beat Bannwart, the effort also involved the full range of UBS professionals who are subject matter experts in these areas. Bannwart told CoinDesk: "We looked at it from a transaction banking point of view, so we involved people from trade, from supply chain finance. But the aim was actually to combine all these different st...

A lesser-known startup has successfully tested an important piece of bitcoin's scaling puzzle. Widely considered to be the best way to boost bitcoin's transaction capacity, the Lightning Network proposes a way to execute the majority of bitcoin transactions without involving the blockchain or compromising the network's decentralized architecture. But, as a relatively new proposal, it's still very much a work in progress. That's one reason why recent tests completed by a French company called Acinq have generated so much excitement. Inspired by a white paper released by bitcoin mining firm Bitfury in July, the Acinq team launched 2,500 Amazon Web Service nodes this month as a way to test a proposed routing system for Lightning-style payments earlier this month. Conducted on 18th September, the test put the routing theory proposed in the white paper into practice. As it showed Lightning nodes could effectively route payments, Bitfury CEO Valery Vavilov argued that the...

It's been a big week for blockchain on Capitol Hill. While only Wednesday, the week has already seen the launch of the Congressional Blockchain Caucus (an effort led by Rep Jared Polis and Rep Mick Mulvaney), and the opening of the DC Blockchain Center, an information hub for policymakers. The two initiatives reflect the growing interest around the technology in the US capitol. Though interest has existed for some time – Polis himself began accepting bitcoin donations in 2014 – recent developments suggest the groundwork is being laid for more activity in the year ahead. Polis said of the new legislative effort: "It's vital for Americans, businesses and members of Congress to learn about blockchain technology so the US can continue to secure its stance as the global leader of ingenuity." 2016 has thus far seen a number of events within the DC area aimed at educating policymakers and legislators, and there's even been action within Congress itself, in the form of a ...

There's a new blockchain buzzword arriving in time for fall – formal verification. The phrase (used to describe the application of mathematics to verify software programs) has so far been evoked sparsely in the press. But if conversation at ethereum's developer summit last week was any indication, it could play an increasing role given the security questions that still surround smart contracts and blockchains more broadly. As evidenced by multiple talks dedicated to the subject at Devcon2, the idea that new assurances could be given to ethereum coders is being widely embraced by its development community. Already, the concept is being proposed as a way to inspire confidence in everything from the ethereum protocol itself to its experimental proof-of-stake blockchain. That this has come to pass is perhaps no surprise given the sudden collapse of The DAO this summer, to date the largest smart contract yet launched on the decentralized application development platform. But while f...

The US Securities and Exchange Commission (SEC) is set to hold a public forum in mid-November during which blockchain and other financial technologies will be discussed. Up for debate is the existing regulatory environment and the impact of technologies like digital currencies. According to the agency, which in recent years has pursued investigations into uses of the tech, the hope is to foster discussion among regulators, business owners and other industry stakeholders. The SEC said: "The proliferation of FinTech innovation has the potential to transform virtually every aspect of our nation's financial markets. The panels will discuss issues such as blockchain technology, automated investment advice or robo-advisors, online marketplace lending and crowdfunding, and how they may impact investors." No information yet has been published regarding the specific agenda or attendees. The event will be held on 14th November at the SEC's headquarters in Washington, DC.

The London police are investigating a digital currency scheme widely believed to be fraudulent. OneCoin, promoted as a digital currency investment opportunity, was cited as a risk to consumers this week by the UK Financial Conduct Authority, one of several finance regulators in the country and the agency that has participated in the licensing of legitimate bitcoin and blockchain service providers. Marketed as a digital currency similar to bitcoin, OneCoin has key differences such as an promotion-heavy pitch focused on selling investment packages and a centralized hub for exchange, storage and transaction logging. Critics have gone so far as to argue that OneCoin, as a currency, doesn't actually exist. In statements, the FCA urged consumers who believe they have been scammed to contact the London police's fraud division. The agency said: "This firm is not authorized by us and we do not believe it is undertaking any activities that require our authorization. However, we are ...

Juzhen Financials, a startup led by China UnionPay veteran Lilin Sun, has raised $23m (¥153m) to develop clearing and settlement solutions based on distributed ledger technology. The Series A funding was led by Wanxiang Holdings and included support from its blockchain-focused investment subsidiary Fenbushi Capital. The funding marks the largest investment round raised yet by an Asia-based blockchain startup, CoinDesk data reveals. As a result, the Shanghai-based startup becomes one of the best positioned blockchain firms to seek to collaborate with banking incumbents on solutions for post-trade, with its potential market including broker-dealers, custodian banks, clearinghouses and exchanges. But while Juzhen's goals are similar in intent to other international firms including New York's Digital Asset Holdings and London's Clearmatics, Lilin noted that he believes China is in need of its own solutions provider. Lilin told CoinDesk: "If you want to change the infrastru...

The president and and chairman of the board of Switzerland's central bank described a financial system "turned on its head" by blockchain and distributed ledgers to kick off the Sibos conference yesterday in Switzerland. Addressing a crowd of some 8,000 financial industry professionals, Thomas Jordan lectured on the history of centralization as a means to provide security and efficiency in the banking industry, from the birth of centralized clearing houses in the 1940s to the advent of the Six Interbank Clearing system (SIC) in 1987. But with blockchain and distributed ledgers "promising first and foremost to reduce cost", Jordan said the Swiss National Bank is now in discussions with market participants, regulators and other central banks about what to do next. Jordan said of blockchain technology and distributed ledgers: "Such systems could render the reconciliation of transactions and balance data between banks and the third-party system obsolete. The pa...

Two brothers in the Netherlands face months in prison after allegedly siphoning power to fuel a small bitcoin mining operation, Dutch authorities say. The case dates back to 2014, when the brothers, whose names were not disclosed, are said to have been caught stealing electricity from a local utility provider in order to power bitcoin mining devices at a location in Rotterdam. Prosecutors said this week that, in total, the brothers mined roughly €200k ($223,000) worth of bitcoin prior to being caught. According to the Openbaar Ministerie, the public prosecutorial service in the Netherlands, the brothers have both been charged with money laundering. One brother, who owned the property in which the devices were kept, has also been charged with stealing power to grow marijuana plants at the same location. Local reports suggest that the younger brother, aged 39, faces up to fifteen months in prison if convicted. The older brother, aged 42, could be sentenced to as many as five months in pr...

Gemini Trading, the bitcoin and ethereum exchange founded by Tyler and Cameron Winklevoss, is set to begin hosting daily bitcoin auctions. While such auctions are commonplace as a way to determine more accurate closing prices for the New York Stock Exchange or Nasdaq, Gemini is positioning the auction as more than a first for its exchange. Tyler Winklevoss told CoinDesk: "It's the first ever end-of-day auction on a bitcoin exchange. It's a pretty standard feature on traditional exchanges that didn't exist on a bitcoin exchange until now." The launch represents the latest effort by the Winklevoss brothers to create investment mechanisms for mainstream investors. Since 2014, the Winklevoss Bitcoin Trust has been working to open the first bitcoin exchange traded fund (ETF) on a major stock exchange. In June, after almost three years, the Trust filed to move their application from Nasdaq to Bats, a move that accelerated progress even if the final decision could still ...

"Okay, ethereum's done, let's go back to ethereum classic." The jokes were frequent during ethereum creator Vitalik Buterin's keynote at the project's Shanghai developer conference, Devcon2, on Monday. There, despite the complexity of the technical changes the project will face in the years ahead (and the controversies in recent past), Buterin conveyed a confidence and personality onstage that was unique among the day's presenters, even as he outlined some of the more nuanced proposals. That scaling was the subject of his talk, entitled "The Mauve Revolution", is not a surprise given the increased relevancy of the issue across all blockchain networks. As more banks and enterprise firms seek to use blockchain systems, the scaling question calls to light the inefficiency of the nascent technology. But the idea that ethereum may be performing below the expectations of this new audience was the frequent butt of Buterin's barbs, with slides featur...

Credit Suisse, Citi and HSBC are among seven financial firms to participate in a data management trial announced today and conducted with support from blockchain firms Axoni and R3CEV. Featuring buy-side and sell-side firms, the multi-month effort envisioned how a distributed ledger prototype could be built to enhance risk management, cost and efficiency issues when managing financial reference data. Also involved was the Securities Industry and Financial Markets Association (SIFMA), a trade group representing US securities firms. According to a release, the prototype used Axoni Core, the startup's proprietary distributed ledger software to simulate the collaborative management of reference data used in corporate bond issuance. The companies said: "The technology enabled participants to interact with reference data after issuance, with any proposed changes requiring validation by the underwriter to ensure the ledger provided a single, immutable record of all data related to th...

The world's second largest blockchain network is set to host its annual developer conference this week. To be held in Shanghai, Devcon2 is expected to draw upwards of 700 attendees, with a lineup featuring many notable developers of the smart contract blockchain. On hand for talks and panels will be ethereum creator Vitalik Buterin, lead Casper developer Vlad Zamfir and creator of the Solidity programming language, Christian Reitwiessner. Also speaking are members of enterprise financial firms, including Microsoft and Thomson Reuters, with more rumored to be in attendance. Given the recent trials and tribulations of the emerging technology, however, the tone of this year's Devcon, seems likely to change. As the project is seeking to bounce back from the events of this summer, which saw a notable project collapse and its community locked in fierce debate, the dialogue is likely to provide color on how its leaders believe it can move forward from past challenges. A look at the sc...

A big piece of ethereum's decentralized "world computer" will be launching its first public testnet in the coming weeks. With the launch of the Swarm testnet, the network will be open for any developer to test the new file storage system and identify and fix potential issues. Developers can also use any ethereum client (whether geth, parity or the python client) for their work. According to developers involved, the move that takes the project one (small) step closer to making its full vision a reality. On the Internet today, centralized servers owned by for-profit companies hold most of the world's data. But Swarm wants to shake this up by building on an old idea – file sharing. You might be familiar with BitTorrent, a similar way of file sharing over a peer-to-peer network. The problem with the network, according to the Swarm team, is that it relies on the generosity of its users, that and it's too slow to use as the base for a new web. Swarm lead developer Vikto...

Ethereum creator Vitalik Buterin will present a new version of the project's 'mauve paper' at a developer conference in Shanghai next week. Scheduled for 19th September, a talk called "Mauve Revolution" will focus on scaling features still in development on the decentralized application platform, including sharding and proof-of-stake. The third version of the paper, it is likely to keep a similar spirit as past editions, which have seen Buterin use a tongue-in-cheek tone to discuss the big-picture developments the project is seeking to enact as it approaches key development milestones. In interview, Buterin said that the talk will discuss the planned transition of ethereum's current code to a new, upgraded version of the platform dubbed "ethereum 2.0", a transition he estimates is about one-third complete. Buterin said it is this "second stage" that the paper will discuss, telling CoinDesk: "The ethereum roadmap now has what I would co...

Distributed ledger settlement startup Ripple has raised $55m in venture capital from a mix of financial industry heavyweights. Participating in Ripple's Series B round are Standard Chartered, Accenture Ventures, SCB Digital Ventures, the venture arm of Siam Commercial Bank and SBI Holdings. Additional investors include Santander InnoVentures, CME Ventures, Seagate Technology and Venture 51. With a growth trajectory that will soon force the settlement startup out of its San Francisco headquarters, much of those funds will be spent on expansion projects including sales and marketing. However, the investment is distinct for Ripple in that some of the funds could also fuel new acquisitions. Ripple president and COO Brad Garlinghouse told CoinDesk: "This gives us a strong balance sheet to also consider acquisitions. There are a lot of small players doing something interesting. Historically, we wouldn't be interested, but going forward we may be." In total, Ripple has raise...

As if running the third-largest bitcoin mining pool wasn't enough, China-based Bitmain announced the launch of its second mining pool yesterday. Unlike the other large mining pools, though, the new offering (launched through its subsidiary BTC.com) will be open sourced to its community of users. According to Bitmain, the pool is not meant as a replacement for its popular Antpool platform (which has roughly 13% of the network's market share) but rather to enhance the stability of the bitcoin network. In interview, Nisthant Sharma, international marketing manager at Bitmain, explained that the goal is to use this software to "promote decentralization of the bitcoin mining network". Sharma told CoinDesk: "We hope that this open-source mining pool will set new benchmarks in terms of stability, efficiency, and service for all mining pools." Sharma explained that, by utilizing the global community, the company believes it can set new technical standards for mining...

Romania's first order-book exchange is closing down. Statements on the BTCXchange website informed users of a possible sale of the service on 18th August, and on 4th September, users were asked to withdraw funds ahead of an expected 12th September shut down. According to Romanian news source Bihon, it remains unclear whether the exchange, the first of its kind in Romania, is still for sale. Owners originally said they would accept offers on the platform through 16th September. In past statements, owner Horea Vuscan expressed his hope the exchange would be acquired as he said it was "highly profitable", though he expressed reservations about continuing in the face of the Bitfinex hack and continued worries about the security of bitcoin exchanges. Vuscan wrote: "I believe that Romania needs a local exchange but I want to retire in this area of business. In conclusion, in respect of clients and community BTCXchange announce that is for sale." The decision marks the...

Europol, the European Union's top law enforcement agency, has co-founded a new working group dedicated to digital currencies. The initiative is being co-led by Interpol, the intergovernmental organization focused on law enforcement issues, and the Basel Institute on Governance, a non-profit group focused on financial crimes in the public and private sectors. The working group, according to an announcement last week, will involve the organization of collaborative workshops and a global network comprised of subject matter experts. Europol said in a statement: "Internet technologies become continuously more advanced, and so do the ways in which criminals utilize them for their illicit and illegal activities. Among these technologies, digital currencies are already transforming the criminal underworld." Europol and Interpol have spent much of the last year collaborating on digital currency issues, a partnership that has seen the two groups organize conferences and training se...

New research has found that unless the price of bitcoin goes up, there will be little room for new miners to compete. In "Minting Money With Megawatts", released this September, Sveinn Valfells of Flux, Ltd and Jón Helgi Egilsson of the University of Iceland conduct a broad analysis of the health of transaction processing on the open public blockchain, ultimately finding that the network could be headed toward further consolidation and centralization. Once a hobby for tech-enthusiasts, the aim of the study was to determine the profitability of bitcoin mining following July's halving, a scheduled network change at which the rewards given to bitcoin miners dropped from 25 BTC to 12.5 BTC. Notably, the researchers found that it is now only possible for new miners to profit when the price of bitcoin is above $600, a figure that was nearly double what it was before the halving. To determine this figure, the researchers analyzed whether a new mining operation could remain small...

The price of bitcoin rose close to 10% this week, pushing higher as bullish market sentiment and low liquidity created an ideal environment for gains. The digital currency enjoyed notable increases during the week, surpassing $600 on Sunday, 4th September, while largely avoiding any significant pullbacks or corrections. Sentiment is so strong "players are not willing to bet against the rise of BTC/USD," according to Petar Zivkovkski, director of operations for Whaleclub. He told CoinDesk: "New short position openings are almost at all-time lows, [which] indicates that the market expects a continued rise." Tim Enneking, chairman of cryptocurrency investment manager EAM, sees similar forces propelling the current market. "Sentiment is generally bullish," he added. Fast start, bullish sentiment Bitcoin prices had a fast start during the week, opening at $571.68 on 2nd September before surging 4.9% to $599.60 the following day, according to CoinDesk USD Bitcoi...

One of the bigger trends in the blockchain world, particularly when it comes to financial services and specifically capital markets operations, has been a need for privacy and confidentiality in the course of daily business. This has meant that blockchain solutions are being designed with this primary need in mind. This has led to all the private blockchain solutions being developed today. When you build for privacy and confidentiality there are tradeoffs that come with that. Mainly you lose transparency, which was the major feature of the the first blockchain: bitcoin. As originally designed, a blockchain is a transparency machine. In this system, the computers are distributed and no one entity controls the network. Not only this, but anyone can be a validator and anyone can write to or read from the network. Clients and validators can be anonymous and all the data gets stored locally in every node (replication). This makes all transaction data public. The security of bitcoin is made ...