Banking on Blockchain: September 7, 2018

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Associate Consultant
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Posted on September 7, 2018

Welcome to Navigator’s weekly update “Banking on Blockchain”. Each week, we put together a curated list of the latest news highlights and announcements for blockchain in Canada and around the world.

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Canada in Focus

The Government of Canada has delayed the update on crypto regulations from this fall until 2020. The delay is a result of the elections expected in the country in 2019. Once the regulations are updated, it will take a 12 month period for them to become effective. The Blockchain Association of Canada says that the delay is good news for the economy and that the best approach to crypto regulation may be for government to observe and intervene as little as possiblle.

Wasaga Beach Ontario has fallen victim to a cyber attack as members of the Town’s administration noticed unusual messages on their computers. The Town was plagued by Rasomeware, requesting the equivalent of $144,100 CAD in Bitcoin. While some of the data was recovered, the Town did pay nearly $35,000 in Bitcoin, an additional $37,000 in consulting fees, and incur productivity losses of over $250,000.

While ransomeware attacks are causing some small towns to be fearful of cryptocurrencies, others are embracing the technology. Ocean Falls, British Columbia, a town with a population of less than 100 converted an old mill into a 24-hour bitcoin mine. The remoteness of the region provides the benefit of inexpensive electricity prices, and the town is hoping the new mine will increase its population.

Moving down the coast to Vancouver, the former Chief Operating Officer of Shair.com Global Digital Services Ltd. Jason Bradley Arnold has been accused of taking up to $7 million CAD in cryptocurrency. Shair.Com filed suit against Arnold in July, alleging he had unjustly enriched himself, misappropriated company property and breached his duties to the firm

On the World Stage

Building off their digital ID system in Canada, technology giant IBM is widening their work with self sovereign identify technology, designed to give individuals more control over their personal data. The company is working with the Hu-manity.co #My31 app that just became available on iOS and Android mobile devices. The app’s name is a nod to the idea that legal ownership of one’s data should be a “31st human right” in addition to the 30 already ratified by the United Nations.

As the debate between proof of work and proof of stake continues, the creator of proof of stake based cryptocurrency, Sunny King has returned with an idea to simplify the development and maintenance of blockchains. Supernode proof of stake (SPoS) requires specialized hardware to operate, and is focused on an era that blockchain is used widely in technology. The concept of SPoS isn’t far from delegated proof-of-stake, or DPoS, in that it allows for the concentration of staking pools.

Crypto exchange Gemini founders Cameron and Tyler Winklevoss have won a patent for a cold storage method of storing cryptocurrency involving air-gapped computers, geographically remote vaults, plastic cards and, possibly, papyrus. They plan to develop a network of computers capable of generating accounts for storing cryptocurrencies or cryptocurrency-related exchange-traded products (ETPs). As part of a security measure, the computers would be isolated except when necessary to transfer assets, essentially acting as a cold storage device.

In other news, the Chinese Supreme People’s Court ruled that blockchain can now legally be used to authenticate evidence in legal disputes. Part of the new regulation specifies that internet courts in the country shall recognize the legality of blockchain as a method for storing and authenticating digital evidence, provided that parties can prove the legitimacy of the technology being used in the process.

In Australia, the financial regulator has indicated that it will take a new approach when regulating cryptocurrency exchanges. The Australian Securities and Investments Commission said it is developing a new framework that will apply the principals for regulating market infrastructure providers to crypto exchanges.

 

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