|From: Glenn Petersen||1/5/2018 9:42:50 AM|
|How the Winklevoss Twins Found Vindication in a Bitcoin Fortune |
By NATHANIEL POPPER
New York Times
DEC. 19, 2017
The Winklevoss twins, Cameron (left) and Tyler, at their office in New York City. A bet on Bitcoin several years ago has grown into a fortune for the brothers. Credit Vincent Tullo for The New York Times
The Winklevoss twins have carved an unorthodox path toward fame in the American business world.
They went to Harvard University and then on to the Olympics as rowers. Along the way, they fought a legal battle with Mark Zuckerberg over the ownership of Facebook. In the Oscar-nominated movie “The Social Network,” they were portrayed as uptight gentry, outwitted by Mr. Zuckerberg, the brilliant, budding tech mogul.
Cameron, the left-handed Winklevoss brother, and Tyler, the right-handed one, followed that with a risky bet: They used money from a $65 million settlement with Mr. Zuckerberg to load up on Bitcoin. That turned them into the first prominent virtual currency millionaires in 2013, back when Bitcoin was primarily known as a currency for online drug dealers.
More than a few people in Silicon Valley and on Wall Street saw the towering twins as the naïve — if chiseled — faces of the latest tulip bulb mania. Many still do.
But the soaring value of Bitcoin in recent months is giving the brothers a moment of vindication, and quite a bit more than that: Their Bitcoin stockpile was worth around $1.3 billion on Tuesday .
“We’ve turned that laughter and ridicule into oxygen and wind at our back,” Tyler Winklevoss said in an interview last week.
It is unclear how fleeting their vindication, or their fortune, will be. Many Bitcoin aficionados are expecting a major correction to the recent spike in its value, which has gone from $1,000 for one coin at the beginning of the year to around $18,500 on Tuesday.
Currently, the average price of one Bitcoin is about $16,459, according to Blockchain.info, a news and data site.
If nothing else, the growing fortune of the 36-year-old Winklevoss twins is a reminder that for all the small investors getting into Bitcoin this year, the biggest winners have been a relatively small number of early holders who had plenty of money to start with and have been riding a price roller coaster for years. (The mysterious creator of Bitcoin, Satoshi Nakamoto, is believed by researchers to be holding on to Bitcoin worth around $19 billion.)
The New York offices of Gemini, a virtual currency exchange founded by the Winklevoss brothers. Credit Vincent Tullo for The New York Times
Some of these new Bitcoin millionaires are cashing out and buying Lamborghinis, professional hockey teams or even low-risk bond funds. The Winklevoss twins, though, said they had no intention to diversify.
“We still think it is probably one of the best investments in the world and will be for the decades to come,” Tyler Winklevoss said. “And if it’s not, we’d rather live with disappointment than regret.”
They have collected an additional $350 million or so of other virtual currencies, most of it in the Bitcoin alternative called Ethereum. The brothers are also majority owners of the virtual currency exchange they founded, Gemini, which most likely takes their joint holdings to a value well over $2 billion, or enough to make each of them a billionaire.
They have sold almost none of their original holdings. While they both have apartments in downtown Manhattan, they say they live relatively spartan lives with few luxuries. Cameron drives an old S.U.V.; Tyler doesn’t have a car at all.
The Winklevoss twins’ financial rise began during their settlement with Mr. Zuckerberg in 2008. Their lawyers urged them to take the $45 million (after lawyers’ fees) in cash. But they wanted to be paid in shares of Facebook.
“The lawyers thought we were crazy,” Cameron Winklevoss said last week. “We thought they were crazy for taking cash.”
By the time Facebook went public in 2012, their stock was worth around $300 million, their rowing careers were over, and they were looking for something new.
When they began buying Bitcoin in late 2012, the price of an individual coin was below $10. Few people in Silicon Valley or on Wall Street had publicly expressed interest in the virtual currency.
The Winklevoss twins sit in on a daily meeting at Gemini in New York City. Credit Vincent Tullo for The New York Times
Over a few months, the brothers bought 1 percent of all the outstanding Bitcoin at the time — some 120,000 tokens. As they did, the price soared, making their Bitcoin portfolio worth around $11 million by the time they went public with it in April 2013.
Their buying spree was mocked at the time, and a few of their early decisions fueled that derision. They also invested in Bitinstant, one of the first companies to trade Bitcoins online. Bitinstant’s executives, in fact, had tutored the brothers in the basics of Bitcoin.
The chief executive of Bitinstant, Charlie Shrem, was arrested in 2014, accused of helping to supply Bitcoins to users of online drug markets. Mr. Shrem pleaded guilty to lesser charges and was sentenced to a year in jail. The Winklevosses were never implicated in the wrongdoing, which happened before they became investors.
While that drama was unfolding, the twins applied to create the first Bitcoin exchange traded fund, or E.T.F., an investment product that would hold Bitcoins but be traded on stock exchanges. That brought more criticism from people who wondered why someone would buy a fund rather than Bitcoin itself. In March, regulators rejected the application.
On top of all that, until last year the price of Bitcoin was sliding and the virtual currency concept was looking wobbly. But the Winklevosses, who once bet that years of punishing rowing practices would take them to the Olympics, held their ground.
“We are very comfortable in very high-risk environments with absolutely no guarantee of success,” Tyler Winklevoss said. “I don’t mean existing in that environment for days, weeks or months. I mean year after year.”
They sold some of their tokens to pay for Gemini, a name that means twins in Latin. Like the Bitcoin E.T.F., their investment in Gemini was driven by their experience with the difficulty of buying and securely storing Bitcoin.
Every Bitcoin sits in an address that can be accessed only with the corresponding password, or private key. The problem with this system is that anyone who gets hold of a private key can easily take the Bitcoin. And unlike money taken from a bank account, stolen Bitcoin are essentially impossible to retrieve. A number of virtual currency exchanges and wallets have collectively lost billions of dollars’ worth of Bitcoin to thieves.
The Winklevoss brothers recorded parts of the security code for their Bitcoin on papers stored in safe deposit boxes around the country. Credit Vincent Tullo for The New York Times
The Winklevosses came up with an elaborate system to store and secure their own private keys. They cut up printouts of their private keys into pieces and then distributed them in envelopes to safe deposit boxes around the country, so if one envelope were stolen the thief would not have the entire key.
With Gemini, they have created a high-tech version of this process to hold customer money. Getting into the company’s wallets requires multiple signatures from cryptographically sealed devices that were never linked to the internet.
Gemini got a license from New York State regulators that allows them to hold Bitcoins for regulated banks and asset managers — something essentially no other virtual currency companies can do. That has turned Gemini into one of the most trusted destinations for sophisticated investors.
“Gemini is an underappreciated exchange, one of the few exchanges I trust as a custodian,” said Ari Paul, a managing partner at the virtual currency hedge fund BlockTower Capital.
Gemini is now expanding from its old 5,000-square-foot offices to new, 35,000-square-foot facilities in Midtown Manhattan.
This doesn’t mean Gemini or the Winklevosses have ironed out all the kinks. Like many other exchanges, Gemini has struggled to stay online in the deluge of new customers in recent weeks.
These growing pains are part of the reason the brothers say they are holding on to their Bitcoin. They believe virtual currencies are still a long way from real mainstream adoption.
They said they might look at selling when the value of all the Bitcoin in circulation approaches the value of all gold in the world — some $7 trillion or $8 trillion compared with the $310 billion value of all Bitcoin on Tuesday — given that they think Bitcoin is set to replace gold as a rare commodity. But then Tyler Winklevoss questioned even that, pointing out the ways that he believes Bitcoin is better than gold.
“In a funny way, I’m not sure we’d even sell there,” he said. “Bitcoin is more than gold — it’s a programmable store of money. It may continue to innovate.”
Follow Nathaniel Popper on Twitter: @nathanielpopper
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|To: Sr K who wrote (100)||1/8/2018 9:57:16 PM|
|From: Glenn Petersen|
|OSTK up another 3% today as it continues to pivot:|
Overstock Invests $2 Million in Blockchain Voting Startup
Jan 8, 2018 at 13:01 UTC
Medici Ventures, a subsidiary of online retail giant Overstock.com, has led the seed funding round of mobile voting platform Voatz.
Voatz raised over $2.2 million in the round, which also saw investments from the Urban Innovation Fund and Oakhouse Partners, as well as angel investors including Walt Winshall, Tom Williams, Joe Caruso and members of the Walnut Ventures angels group.
According to a press release, Voatz is planning to utilize the funding to grow its business development team, widen its services across the U.S. and work towards the development of new products.
Medici Ventures' president, Jonathan Johnson, said that blockchain's immutable record keeping will lead to greater confidence in the accuracy of results, while its usability will enable citizens to participate in elections without barriers.
Voatz is a mobile voting platform that uses blockchain technology to ensure secure record-keeping and identity verification. The platform has already been deployed by universities, state political groups, and non-profit organizations for their internal voting functions, the release states.
According to Andrew Maguire, investor at Oakhouse Partners, Voatz combines biometrics and blockchain technology, benefits that would increase voters' confidence and participation.
"We are delighted and grateful for the support we have received from our investors to help grow our team and accelerate the deployment of our cutting edge voting and citizen engagement platform," Nimit Sawhney, CEO of Voatz, said.
The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at email@example.com.
Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.
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|From: Dragonfly1967||1/10/2018 11:07:14 AM|
|TNEN:OTC acquired Kryptonite|
Sine announcing the deal on Monday the stock has doubled. It's up again 21% today.
I am new here, has anybody been following TNEN and an opinion on it ?
The Newsrelease reads well, especially the achievements of Mr Chung sound very promising.
TNEN - True North Energy
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|To: Dragonfly1967 who wrote (102)||1/10/2018 10:00:50 PM|
|From: Glenn Petersen|
|True North Energy is a black box. There are no details in the press release about the capital structure of the company or whether or not the acquired company has any revenues, let alone profits. The company terminated its SEC registration in 2009. Without any other information, it is impossible to give you any sort of informed opinion.|
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|From: Glenn Petersen||1/12/2018 9:30:09 AM|
China's blockchain fever gets hotter even as regulator queries price surge
JANUARY 12, 2018 / 8:15 AM
SHANGHAI (Reuters) - China’s blockchain-related companies extended their bullish run on Friday, as punters brushed aside concerns raised by regulators about the rationality of stock price surges this week.
Blockchain mania continued to propel the shares of a dozen companies which recently disclosed their involvement in cryptocurrency technology, even though some admitted their investments in the technology were still at an early stage.
A growing number of Chinese firms - ranging from packaging firms to gaming companies - have publicly linked their businesses with blockchain to capitalize on rapidly growing investor interest globally for the technology, the backbone of bitcoin and other digital currencies.
Chinese regulators are taking unprecedented steps to contain financial risks - Beijing has banned initial coin offerings, shut down local cryptocurrency trading exchanges and limited bitcoin mining - but speculators are not deterred.
Shares of Cashway Technology Co Ltd (603106.SS) soared for the second day on Friday, even after it clarified that it had merely hired two young graduates majoring in encryption algorithm.
Client Service International Inc 300663.SZ jumped the maximum 10 percent for the third straight day, although the software maker flagged risks to investors, saying it was still “exploring” blockchain technology.
Stock punters also pushed up other blockchain concept stocks such as Xiamen Anne (002235.SZ), Brilliance Technology (300542.SZ) and Shenzhen Zqgame 300052.SZ.
Most of these companies had seen their shares steadily falling since mid-2015 to multi-year lows before this week’s blockchain-triggered spurt.
“It takes only five minutes to think of an idea that has something to do with blockchain. But it’s a totally different story to build a business model around it that makes money,” said retail investor Wu Beicheng, adding he identified only one China-listed company, Hundsun Technologies (600570.SS), as a reasonable bet.
Highlighting how some companies are tapping into the speculative interest, the Shanghai Stock Exchange questioned Shanghai U9 Game Co (600652.SS) on Thursday, asking whether it used the blockchain concept to help push up its flagging share price. The company has a large proportion of shares pledged for loans.
Robin Zhang, compliance manager at asset manager Soochow Securities CSSD (Singapore), put China’s blockchain mania in the backdrop of a global setting, where companies including Eastman Kodak (KODK.N) have attracted investor fever due to their applications of the technology.
“It’s a bit like the dot.com bubble. But after the bubble burst, some companies with real customers, revenues and performance, will stand out, like Google or Alibaba.”
Reporting by Samuel Shen and John Ruwitch; Editing by Jacqueline Wong
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|From: Glenn Petersen||1/15/2018 10:24:15 AM|
|Open banking: The money revolution nobody knows about|
It’s going to transform the ways you manage your money but you've probably never heard of it
Thursday 11 January 2018 18:20 GMT
Concerns have been raised that fraudsters could capitalise on the new development Getty
This weekend a major change in the way banks manage your data takes place, one that could completely revolutionise how we bank, who owns our financial data and which companies can offer us targeted financial services.
It’s called Open Banking and it’s driven by a new EU directive and new UK competition rules. Changes taking effect this weekend mean that banks will have to share financial data such as transaction history and spending patterns with other (regulated) third-party providers if the account holder requests it.
That might sound like baffling small print, but it could genuinely shake up the way in which you manage your money.
Instead of your personal data being something jealously guarded by your bank, you’ll be able to request that approved companies can also access it. That will mean they can help you analyse and improve your spending habits or simply just point you at financial services that better meet your needs.
But it’s not without its critics, and those critics argue that Open Banking will actually strip power from the consumer by creating complex chains of data access, making it harder to prove who was at fault if information is stolen.
Concerns have also been raised that fraudsters may capitalise on this development by tricking customers into sharing their login information under the banner of ‘Open Banking’.
Perhaps most alarmingly, though, very few people seem to have actually heard about it. As far as revolutions go, this one is remaining firmly within the palace walls so far.
Who needs it?
There has been some real fintech innovation in recent years and months. There are now apps that analyse your spending habits and save affordable monthly amounts on your behalf, and apps that drip-feed your money into your account so you don’t overspend (check out our favourite apps here).
With Open Banking, such apps can get your permission to use your data instead of relying on co-operation from the banks. It could allow innovative firms to develop app dashboards that list all your financial products in one handy place.
It could also make it easier for third parties to assess which bank account is best for you by actually analysing your use. For example, many of us have no idea how much our overdrafts cost us but a company that could access your account could provide far more clarity about cheaper alternatives.
Rachel Springall, finance spokesperson at moneyfacts.co.uk, says that this change could do far more than just make switching accounts easier.
She says it could be used to help get people approved for finance or to allow debt management tools to better recommend current accounts.
“One example of how the data could be used is for those consumers looking to save money for a specific goal who feel that they don’t have enough disposable income. Sharing their data with a budgeting app could uncover some unnecessary purchases and work out where they can save money, whereas before they may not have been as motivated to look deeper into their transaction history themselves.
“Using an app to easily see every account in one place will be helpful for consumers with multiple accounts from different firms.”
Those consumers who have actually heard about the Open Data revolution may well be worried about whether shared data will remain secure.
After all, ‘open’ and ‘banking’ are not two words that naturally go together in a world where people have to guard their financial data against fraudsters.
That reluctance could be key in whether new Open Banking rules herald a revolution or a slower, more hesitant pace of change. And that could allow banks a head-start in making use of the rule change.
“Open banking has the potential to transform consumers’ relationship with financial products, but it hinges on consumers’ willingness to embrace it,” said Jeremy Light, a managing director at Accenture who leads the company’s Payment Services Practice in Europe.
“Until new entrants to the financial services sector can earn consumers’ trust, banks can draw on their extensive heritage to secure an important early advantage.”
Some commentators have sought to reassure consumers by highlighting that Open Banking does not mean a free-for-all.
Springall says: “It’s likely that some consumers remain concerned about sharing their personal information or having it hacked. However, Open Banking was set up to create software and security systems that comply with the data security standards and protect any information. Data is to remain encrypted and any usage of information is tracked.
“Consumers would need to give companies their permission to access any data and then expressly authorise the bank or building society to supply it.”
Astonishingly, despite being one of the biggest developments in consumer banking in decades and one that could totally transform how we manage our finances, most people don’t know that anything is changing.
Back in September, the consumer champion Which? carried out a survey that showed 92% of the public had not heard of Open Banking.
What’s more, over half (51%) said they were fairly or very unlikely to consider sharing their financial data, even if doing so would mean they were offered more relevant products and services.
That reluctance was also apparent in a survey carried out by Accenture. It questioned more than 2,000 UK consumers and found that 69% said they would not share bank account information with third-party providers. In fact, 53% said they would never change their current banking habits and make use of Open Banking rules.
But Dave Tonge, chief technology officer at Moneyhub Enterprise, says that the data security will be at least as robust as existing security protocols such as direct debits, as well as having to be renewed every three months.
He says: “Technology is transforming financial services and will bring huge benefit to consumers, particularly in how they organise and take control of their finances, but one of the biggest barriers remains fear around sharing data. This reflects legacy issues within the sector and also how difficult banks have made it for consumers and new entrants including third-party money management tools.
“There is still…education needed to bring consumers up to speed with just how much Open Banking can improve their financial interaction, through monitoring spending and making better saving and investing decisions.”
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|From: Glenn Petersen||1/22/2018 11:10:17 AM|
|h/t The Ox|
More than 10 percent of $3.7 billion raised in ICOs has been stolen: Ernst & Young
January 22, 2018
NEW YORK (Reuters) - More than 10 percent of funds raised through “initial coin offerings” are lost or stolen in hacker attacks, according to new research by Ernst & Young that delves into the risks of investing in cryptocurrency projects online.
The professional services firm analyzed more than 372 ICOs, in which new digital currencies are distributed to buyers, and found that roughly $400 million of the total $3.7 billion funds raised to date had been stolen, according to research published on Monday.
Phishing was the most widely used hacking technique for ICOs, with hackers stealing up to $1.5 million in ICO proceeds per month, according to the report.
The research also noted that the volume of ICOs has been slowing since late 2017. Less than 25 percent of ICOs reached their target in November, compared with 90 percent in June.
The study comes amid a cryptocurrency investing craze, with young companies raising hundreds of millions of dollars online to fund their projects, with often little more than a handful of employees and a business plan outlined in a so-called “white paper”.
The challenges faced by more recent ICOs in reaching their targets are partly attributable to the lower quality of projects, as well as issues that have emerged around earlier projects, said Paul Brody, global innovation leader for blockchain technology at Ernst & Young (EY).
“The volume just exploded, people raised their fundraising goals and the quality just dropped,” Brody said in an interview.
“We were shocked by the quality of some of the white papers, we see clear coding errors and we see conflicts of interest between the companies issuing tokens and the community of token holders.”
In ICOs companies typically raise money to build new technology platforms or to fund businesses that use cryptocurrencies, also called tokens, and blockchain, the software that underpins them. Yet for many of these projects the need for blockchain and cryptocurrencies is often unjustified, according to EY.
It also noted valuations of ICO tokens are often driven by “fear of missing out”, or “FOMO”, and have no connection to market fundamentals such as project development. EY said “FOMO” has led investors to pour money into ICOs at record speeds, with the 10 shortest lasting ICOs attracting $300,000 per second on average.
The study also found several instances in which the underlying software code of a project contained hidden investment terms that had not been disclosed, or contradicted previous disclosures. For example, a whitepaper might state that there will be no further issuance of a cryptocurrency, while the code might leave that option open.
Reporting by Anna Irrera
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|From: Glenn Petersen||1/29/2018 10:08:48 PM|
|A crypto startup that vanished and changed its website to the word ‘penis’ allegedly stole the identities of its team|
January 29, 2018
- Three blockchain experts linked to an illegitimate startup called Prodeum told Business Insider they have nothing to do with the organization and are victims of identity theft.
- The startup, Prodeum, raised $11 in an online fundraiser before disappearing on Sunday.
- Prodeum's website went blank late Sunday aside for the text "penis" in the upper-left corner.
The Prodeum website went blank, aside from this message, soon after the company raised $11. Reddit
Three blockchain experts linked to a bizarre cryptocurrency startup that sought to raise $6.5 million before vanishing have told Business Insider that they are victims of identity theft and have nothing to do with the company.
The startup, called Prodeum, had billed itself as developing a system to use blockchain technology for agricultural commodities, like fruits and vegetables.
But Prodeum caused waves online Sunday evening after trying to sell tokens to investors through a risky fundraising technique and subsequently disappearing from the web, leaving only the word "penis" on its homepage.
In the end, the company appears to have raised only an almost comical grand total of $11 from investors in its initial coin offering, or ICO. But the bizarre incident highlights the chaos and risks lurking in the unregulated world of cryptocurrencies, as well as some of the unexpected dangers that are likely to become more common as interest in cryptocurrencies continues to surge.
Darius Rugevicius, Vytautas Kaseta, and Mario Pazos were all listed as team members or advisors on TokenDesk fundraising page for Prodeum.
While fake founders are a common trait among questionable cryptocurrency startups, Rugevicius, Kaseta, and Pazos all actually work with blockchain startups. All three expressed concern to Business Insider that the Prodeum scam could have an negative impact on their reputations.
Their photos and names were posted on the original website, along with links to active LinkedIn profiles. A fourth team member, Petar Jandric, does not appear to be linked to a real person.
All traces of Prodeum, a startup on the Ethereum blockchain, have been wiped from the internet, and its homepage now redirects to an anonymous Twitter account.
'It could be some Russian based scammers. But we can't confirm this yet.' Rugevicius, a general partner at Connect Capital in New York, was at the airport Monday morning on his way to South Korea for a conference hosted by the blockchain company ICON.
"I have personally worked with number of most prominent projects in blockchain field and certainly have no ties with this project," Rugevicius told Business Insider.
Profiles for the team, listed on TokenDesk, included at least three members who claim their identities were stolen. TokenDesk
Pazos, a Miami-based blockchain startup advisor and angel investor, said he didn't know about Prodeum until he was contacted for this story. He advises the blockchain startups WaBi Project and Kairos, and is closely involved with both of their ICOs.
An ICO is an unregulated fundraising technique used by blockchain companies where cyptocurrencies like bitcoin and ethereum are used to purchase "tokens" from a startup. In theory, the tokens will be valuable if the company takes off, though many people buy random digital tokens in the hopes that they can trade them like stocks.
Though he said he hasn't thought much about scams until this happened to him, Pazos said that he takes the legitimacy of the companies that he works with very seriously, and has turned away clients that he didn't feel confident would succeed in the space.
"We run a very thorough due diligence process and interview with the CEO and their team. In fact, we have face to face interactions. I make sure that they're legitimate companies," Pezos said, adding that he also looks at companies' financials to make sure they are not struggling to make ends meet.
Kaseta, a Lithuania-based blockchain engineer and advisor, said he and Rugevicius are looking into taking legal action against the alleged scammers. He also said he is working with the crypto community to find the people behind the Prodeum.
"From the first information, looks like it could be some Russian based scammers. But we can't confirm this yet," Kaseta said.
Though Prodeum ultimately raised just $11, the company originally set out to raise 5,400 ether, or $6.5 million. The project goal was to "bring fruits and vegetables to the blockchain." It may sound silly, but tracking produce from farm to store is one of the more practical uses of blockchain technology, with companies like IBM and Walmart partnering on similar projects.
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