Why Hashgraph Could Replace The Blockchain – Dublin Meetup Sparks Interest

The first meetup for hashgraph enthusiasts in Dublin happened last night in the Bank of Ireland Workbench in Montrose. Ably fortified by pizza and coffee, approximately 20 people showed up to listen to Conor O’Higgins, content manager in Ireland for hashgraph.

A show of hands at the start showed the audience was already aware of the technology with over half hailing from an engineering background. There were some cryptocurrency traders attending as well.

Conor stepped through the interesting aspects of the technology, talking though the consensus algorithms, Byzantine Emperors and the gossip about gossip protocols. For more information on the technology visit this article. (November 29).

Questions from the meetup concentrated on how hashgraph charged per transactions – looking at the mining approach from Blockchain. O’Higgins pointed out that currently, hashgraph is only deployed in private, permissioned-based networks.

‘Real use examples included CULedger,’ he explained, ‘which is a credit union consortium supported by the efforts of the Credit Union National Association (CUNA) and the Mountain West Credit Union Association (MWCUA).’

Other engineers present were familiar with the Credit Unions example. ‘It’s a situation where individual Credit Unions don’t know or trust each other but they need to transact,’ said one engineer. ‘Hashgraph offers the speed and the security to a largely untrustful community.’

Speed was also a factor for the audience. Another participant, working the FinTech area, said he despaired of blockchain as it was just too slow. He wanted to know if hashgraph could offer an alternative. O’Higgins replied that was one of the key points of the new technology.

Other concerns raised about the current blockchain mining approach, and the concentration of powerful mining corporations in China, were discussed. Would this lead to a semi centralised centre of control or a silo of data just like traditional databases?

It was agreed that hashgraph has the potential to work outside these limiting parameters. ‘The energy costs are minimal based on the tiny size of data exchanged and the graph replacing an ever longer blockchain,’ said O’Higgins. ‘And voting only needs to be a question of polling who knows what and when – again speeding up the process.’

Questions continued until the closure of the meeting promptly at 8pm with the participants keen to come together again.


Will New SEC Regulation Shut Down ICOs? Munchee Forced To Abort ICO


With $2billion raised in ICOs so far this year, it is not surprising that regulatory bodies are not only looking hard at the products and companies, but they are now starting to step in and test the veracity and legality of crypto fundraising.

The U.S. Securities and Exchange Commission (SEC) recently formed a Cyber Unit to fulfil this task. Last month it filed fraud charges against PlexCoin and it also forced Munchee, a distributed restaurant review ecosystem on the blockchain, to abort its ICO.

Earlier in the month, as a result of the SEC Cyber Unit’s warning to Munchee, the ICO was cancelled. It had only run for two days and had attracted 40 investors. On the Twitter account plans were been made to return funds as soon as possible as of November 2.

Munchee had aimed to raise $15million to provide development, grow the management team and market the product.

Now, the sale is stopped, investors refunded and despite tweets from November 2 saying the company hoped to relaunch the ICO, it has gone quiet; unless you count the filing of the ‘cease-and-desist’ papers by the SEC against Munchee yesterday.

This action tallies with a statement made by SEC boss on Monday where Jay Clayton issued a warning to investors to beware of putting their money into cryptocurrencies, saying trading and public offerings in crypto tokens may be a violation of federal securities law.

The warning and now the ‘cease-and-desist’ order would appear to leave no room for any ‘payment’ or ‘utility’ tokens at all in the US.

So how did Muchee fall foul of the SEC?

In a ten page legal document the SEC argued that the MUN tokens were securities as defined by Section2(a)(1) of the Securities Act of 1933 because they were investment contracts.

The document went on further to elaborate that an investment contract is an investment of money in a common enterprise with a reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others.

Much of the evidence was taken from Munchee’s own white paper. The distributed ecosystem allowing restaurant reviews was not under fire, but the token was. Munchee argued that the MUN token, issued as part of the ICO, would rise in value due in part of the work undertaken by the team at Munchee as well as by trading on secondary markets.

Munchee’s arguments to persuade investors to purchase MUN tokens were also directly under fire from the 1933 Securities Act. Across its collateral, Munchee said it would run its business so that MUN Tokens would rise in value.

The Legal papers stated the obvious – that purchasers would reasonably view the MUN token offering as an opportunity to profit if the Muchee project was successful.

Munchee had been bullish in the run up to its ICO. On October 30th in a blog it listed seven reasons why someone should invest with reason number four talking about more users, more value and also burning of excess tokens to maintain value.

An earlier podcast with one of the founders spoke about increasing numbers of reviewers and restaurants coming on board which would raise the token value.

And on Facebook at the same time, a slightly overcooked youtube video projected 199% gains on MUN tokens, and speculated that a $1000 investment in MUN could create a $94,000 return.

The legal document even honed in on the target audience for Munchee’s ICO. It pointed out that Munchee and its agents promoted the MUN token offering in forums aimed at people interested in Bitcoin and other digital agents rather than long term users and partners in the food review ecosystem.

It would seem Munchee was being penalised for adopting strategies of the majority of successful ICOs before – and in future.

However, Munchee’s failure was to offer a utility token which the SEC viewed instead as a security token without registering with the SEC or obtaining an exemption from registration.

As the respondent (Munchee) stopped the sale immediately after the SEC warning there were no civil penalties but the company is now ordered to cease and desist from committing or causing any future violations of the Securities Act.

It looks as though there will not be a resuming of the Munchee ICO any time soon.


The Difference Between A TGE And An ICO, Gabriele Giancola Explains More


We find out more about loyalty programs on the Blockchain delivered by qiibee, a decentralized, Ethereum blockchain-based loyalty ecosystem.

Its name, which is derived from qii for energy and bee for the one of the world’s most important insects, is not the only different thing about this company. It is also looking at a Token Generation Event (TGE) next year.

A TGE is different from an ICO in legal terms according to co-founder and CEO Gabriele Giancola. Incorporated in Zug, the heart of the Crypto Valley outside Zurich, Giancola says that the Swiss like to keep things above board and that hosting a TGE is easier to run than an ICO and certainly it makes issues like regulation much more straightforward. Currently there is a hardcap of 70,000 ETH to be raised in Q2 of next year. The token is a qiibeePoint or QBX.

qiibee is a classic example of a traditional technology solution pivoting onto the blockchain for two main reasons: scalable data capture and security. qiibee began life trying to solve the loyalty program platform. Giancola and his brother, both co founders, looked at the loyalty program space and saw a lot of problems.

Loyalty Programs are big business. The market is estimated to be worth $300billion and research points to 80% of all adults in the Western World belonging to one or more loyalty schemes. However, membership of multiple loyalty programs can have limited value as many accounts are inactive.

Loyalty programs are often fragmented meaning each program operates different terms and conditions. So while the average American may have joined up to 29 programs they will only use less than half of those. Given the large marketing budgets spent to acquire new customers, brands are missing out on a big chance to radically impact on their customer base.

In 2015 qiibee developed a proof of concept pilot with limited numbers: some 20 local brands and 800 customers. As Giancola says: ‘We wanted to see if we could create a unique eco system, a single platform for multiple brands to operate. Back in 2015, it was about homogenisation of the platform and so we scaled it up in 2016.’

2016 saw a huge leap in numbers and brands. With more than 100,000 customers and 900 brands the brothers began to acquire serious feedback. Brands such as Subway and Eat.ch joined the program.

The user base was 45% male, 55% female with a mean age of 25 years. Typically they were on the platform five times a week, averaging 27 minutes per session. The feedback was vital according to Giancola.

‘During the scaled up project we created a lot of data, sensitive data,’ he says. ‘’ That meant we felt the platform was exposed and open to potential hackers. We knew we had a solution to a problem but we needed to find a technology to support it.’

Enter the blockchain. Reduction of risk and cost were both key elements offered by the blockchain.

‘We also discovered that we were not able to provide a loyalty solution that suited every brand,’ says Giancola.  ‘At this point we realised that qiibee was valuable as an independent loyalty platform – that we could bring the benefits of blockchain to brands.’

This ‘aha’ moment tallied with their research. ‘Brands are sometimes too focused on their loyalty program to realise that the customers were feeling pain. This is where we could add value.’

Building an infrastructure upon which brands can add their own applications was a direct extension of their thinking. ‘We wanted to take the headache away from Brands and build in better value to their – combined – loyalty programs,’ he says.

Creating an eco system for loyalty programs also has a very real benefit of eliminating complex and costly liabilities of un-redeemed / outstanding rewards. ‘We discovered that in a real world use case, Mariott International (the hotel chain) had to account for liabilities generated from their loyalty program in the order of $2.6bn or 25% of their total liabilities. This is ungoverned spending. We knew we had a solution.’

The qiibee plan is to build a distributed blockchain application and present SDK (software developer kits) to brands wishing to take part. Core to the qiibee platform is the qiibee token and wallet. Interested brands purchase qiibee tokens and set an internal exchange rate on their rewards.

A customer earns rewards from brands which they can value as qiibee tokens. They can then subscribe to other loyalty programs on the qiibee eco system and spend qiibee tokens across multiple products. They can use the qiibee wallet to exchange out into fiat or other cryptocurrency coins.

The concept is very simple. It is also very attractive to customers who weary of trying to keep track of their different rewards across different companies or platforms. Consolidation of rewards to buy other products is also very appealing to customers.

There are also two other interesting aspects to qiibee.  The first is that brands like what Giancola and his team have done. They respect the background in loyalty research and pilots undertaken. They like the idea of not having to invest in their own blockchain and to piggy back on qiibee. Giancola also reckons the other possible competitors in the industry will probably join up as co-operators.

‘Typically we come up against consultants in this area or software developers looking to create a kick-ass loyalty program for different brands. In either case, we say join us. Join our eco system. It works for us.’

In a second but complementary development the qiibee eco system, with multiple loyalty programs cooperating, can address the secondary issue of changing or rewarding customer behaviours outside of simple spending.

‘We’ve been approached by insurance companies that would like to reward customers for good driving by reducing premiums. Or other brands that want to incentivise customers to do their marketing for them – by sharing content on social media for example,’ says Giancola.

‘When there is an integrated loyalty program that is valuable and switchable between brands, then we will see value added to the system.’

We look forward to their TGE next year and to see if the cryptocurrency investor community reacts any differently to TGEs as opposed to ICOs. With the current SEC action against ICO Munchee, TGEs may be the way to go.

The Crypto Valley Of Zug, Why Switzerland Is The Place To Be For Bitcoin, Ethereum And Blockchain Initiatives


Coming to a city near you…

At first glance it might seem an unusual choice for the hottest tech location in Europe, if not EMEA, but Zug, named for its fishing rights is both a town and canton in Switzerland and home to a little under 30,000 residents. It is an affluent area, a low tax region and a base for several multinational companies. In 2001, it first sparked to international recognition when a disgruntled gunman shot 15 people, including himself, in the Zug Cantonal Parliament in what became known as the Zug Massacre.

This year, Zug was very much back in the news for quite different reasons. In January 2017 a not for profit organisation was formed: the Crypto Valley Association (CVA) headquartered in Zug and formed for the express purpose of attracting and supporting blockchain companies and organisations to Switzerland. Prior to the formal establishment of CVA, the Crypto Valley in Zug had been the brain child of Johann Grevers who based his cryptofinance startup Monetas in Zug in 2013. He outlined all sorts of positive reasons why Switzerland was attractive for blockchain companies and soon attracted broad support from numerous individuals, startups, corporates, service providers, industry associations, educational institutions, governments and regulators.

Grever’s own particular career has been recently mired by his own success. Tezos, which aimed to build a new digital commonwealth, used Grever’s ICO foundation company through which to raise money. They were successful, very successful with $232 million raised (and now worth twice that with inflation), but Grevers and the founders of Tezos are locked in a bitter infight. Sometimes the price of success is too high.

Zug itself carried on as a leading light for crypto companies. Ethereum incorporated in Zug in 2014 and the first bitcoin ATMs were installed. In 2015, Shapeshift located in Zug and in the same year the Swiss Federal council issued a report that bitcoins were regarded as a virtual currency and no further regulations were required.

The following year the Zug tax authority issued guidelines for the accounting and tax treatment of bitcoin and the city of Zug became the first government in the world to officially accept bitcoin payments.

Oliver Bussman, as President of the CVA, is overseeing a membership which is growing at an exponential rate. Since its foundation in January membership has grown to in excess of 500 members and that figure is growing at 30 new members per month. Membership fees are denominated in Swiss Francs (CHF) costing 100 CHF for an individual member and CHF 300 for a corporate.

In an interview with Bitcoin Magazine, Bussmann explained that unlike other ecosystems, such as Silicon Valley, entrepreneurs can expect to find every possible resource necessary for a successful token launch within a 30-mile radius of Crypto Valley.

“We have advisors helping with value proposition and token economy, seasoned legal experts, tax experts, accounting experts, people specialized in global marketing and global communications PR, secure ICO launch platforms, independent audit firms, smart contract audits, KYC, AML utilities and a community of investors looking to support the product.”

Switzerland has a lot of historic features which lends itself to the decentralised view of the world. Its own political system is based on a citizen-controlled ethos and boasts century’s old culture of individual rights. Coupled with Swiss neutrality, business-friendly environment and privacy-friendly financial and legal infrastructures, it is very successfully marketing itself as a hub for crypto friendly companies.

Last month, the CVA announced its first strategic partner in KPMG Switzerland. KPMG will be an active member and chair two working groups; one on Tax, Accounting and Structuring and the other on Cyber Security. But it is not just corporations that want in; a local hotel and restaurant, the Swiss Chalet Merlischachen, is now accepting bitcoin and ethereum as payment for its food and hospitality. It claims to be the first hospitality company in Zug to accept alt currency.

Zug and the Crypto Valley would seem a powerful advocate for all things blockchain. Their example is catching. Just a week ago, Ireland stepped up to the plate and announced its own crypto centre. Called Crypto Coast and headed up by blockchain veteran Reuben Godfrey, the Irish hub is seeking to do the same as Crypto Valley. However, where Switzerland and Zug may offer traditional financial expertise, Ireland’s Crypto Coast has based its foundation on a wealth of blockchain professionals and positive government support.

In conclusion, it’s not really a question of the Crypto Valley being in competition with the Crypto Coast and more a question of how soon the rest of the world will follow suit

Indorse – Spelling The End Of The Dishonest CV…

Just how do you know if what people claim in their CV is true? For a time, google seemed to deliver an endless source of data on other people. You could search for people online and see where they had worked. Then social media made it even easier to track people – or so it seemed.

In the last few years prospective employees have been warned that when they attend interviews, the company looking to hire will include a trawl of their social media to see if what they say is true or to ascertain the calibre of the person.

Of course there have already been cases where legal claims have been made against individuals abusing social media, but even harmless activities may be seen as detrimental to prospective employment. Applying to a company where the CEO is teetotal? Then perhaps don’t post those post party pictures on FB. Looking to work in a company that works in pet supplies? Perhaps posting pictures of you supporting the local hunt might not be so clever. The list is endless.

However, while verifying your character online is one thing, verifying your career details is another. Most CVs have referees which a thorough employer will use, but what if the person has set out to deliberately inflate their CV. Is it possible to check that online?

The majority of employers would head over to Linkedin – and indeed most management on ICOs link directly to their Linkedin page. Linkedin in an established platform but there is a flaw. Only the individual can insert their CV details. No one else can comment on them. The nearest there exists for validation of the CV details is in the recommendation section – but these could be from friends or even fake accounts should a person wish to deceive.

So how can an employer quickly check out the veracity of a CV, or indeed how can a candidate stand out with their skill sets?

Indorse, a decentralised professional social media network, think they have the answer. And so do 1800 token account holders that helped raise $9 million over their ICO in September. This sum will keep them going for the next two years says co-founder David Moskowitz. ‘We learnt a lot from our ICO – basically to keep any future ones shorter and have more focus on the secondary market.’

His co-founder and CTO, Guarang Torvekar adds that they would have liked to have more celebrity endorsement. Ánd better known advisers.’

Which brings us to one of the principles of Indorse – peer to peer validation. Peer to peer validation on Indorse is random and anonymous.

‘There have been a few ICO scandals recently over CVs from the fraudulent state where advisers were not part of the team to the lesser crime of inflating their CVs quite dramatically. Even today what we read on Linkedin we tend to believe – despite the fact that it is published by the individual,’ says Mosowitz.

‘You cannot game the system on Indorse,’ adds Torvekar. ‘You can’t ask your spouse or colleague to endorse you. All the validation is random and is only allocated once a consensus is reached to the order of 70%.’

The individual adds their skill sets with attached proof. So, if someone claimed to have Java programing skills, they could attach their certification. Then anonymous, random peers can validate – or not – that section.

Timelines are important too according to Torvekar. ‘Someone working for 20 years should have a much greater wealth of experience than someone working for less than 5 years, and that is reflected too in how the Indorse CV is created.’

People deemed to have authentic and experienced CV will receive an Indorse Score. This is delivered in the form of a non-transferable, non-tradable token. This is to reflect their reputation. Other members of the Indorse community can earn tokens as rewards for participating on the site. These are tradable and transferable and mimic the popular Steemit model.  In time the co-founders hope the IND tokens will be used to purchase or sell additional services on the site.

The use of blockchain is core to the project according to Torvekar. He was instrumental in setting up the Singapore Ethereum meetup two years ago (where he met Moskowitz) which now regularly attracts a couple of hundred to each gathering. They launched Indorse at one such meetup.

‘Blockchain underpins our decentralised model in four ways,’ explains Torvekar. ‘’The first is the management of the data – there is no single point that is vulnerable. Secondly, Indorse is completely autonomous – no one is in control.

‘We use Byzantine Fault Tolerance to produce consensus and finally it is transparent – no more inflated at best or totally dishonest CVs on our platform.’

Already 1800 people have signed up for the beta MVP version and both co-founders hope to hit 3000 before the end of the year.

With two years’ worth of salaries in their pocket what next for the founders? ‘Company pages.’ says Moskowitz. ‘We want to extend the same transparency to corporates.’ Now, that will be interesting.