Former CIA Analyst Says Cryptocurrencies are Not a Threat to National Security

The article was prompted by recent news stories regarding Iran’s plans to make a state-backed cryptocurrency. It is suspected that the Iranian …

Former CIA analyst Yaya Fenusie has published a new article on Forbes arguing that although authoritarian governments are working to build cryptocurrency-based financial systems, cryptocurrencies themselves should not be feared or discouraged from a national security point of view.

Cryptocurrencies are Relevant to National Security

The article was prompted by recent news stories regarding Iran’s plans to make a state-backed cryptocurrency. It is suspected that the Iranian government has been researching blockchain technology since 2007. In July of this year, news broke that Iran’s official department for science formed a joint venture with the country’s central bank to work on developing a national cryptocurrency. The plan was intended to create a financial loophole for imposed US sanctions. Russia, one of Iran’s major allies, is reportedly pushing Iran to continue with the operation. Interestingly, Russia also attempted to help Venezuelan dictator Nicolas Maduro develop a national cryptocurrency following Venezuela’s economic collapse, but the project was quickly abandoned.

While details surrounding Iran’s national cryptocurrency project have yet to be revealed, the token is expected to be used by domestic banks for daily financial transactions. The authoritarian regime has stated that it intends to officially launch its token within three months; however, given the complexity of the project, Fenusie suspects that Iran has been secretly developing its cryptocurrency platform for well over a year.

“There should not be any doubt about the relevance of the crypto space to U.S. foreign policy and national security,” writes Fenusie. “Russia, Venezuela and now Iran are making it clear that they intend to resist U.S. sanctions by adopting blockchain technology-based mechanisms. These authoritarian regimes are looking to build an alternative financial system where there will be no repercussions for funding corruption, oppression and other malfeasance. U.S. sanctions are not perfect, nor exhaustive, instruments of foreign policy, but they are important for enforcing global standards of accountability to check nuclear proliferation, human rights abuses and terrorism.”

Suggested Reading: Learn more about potential applications of blockchain technology in our ‘What is Blockchain?‘ guide.

But Cryptocurrencies are Not a Threat

Despite the actions of authoritarain regimes, Fenusie argues that blockchain and cryptocurrency should not be perceived as direct threats to national security. As with many new technologies, criminals and corrupt governments often attempt to explore the potential for using said technology to commit nefarious acts. Fenusie doesn’t believe that Iran’s cryptocurrency will do much to bolster its national economy, as the new cryptocurrency is reported to be linked to Iran’s weak paper currency, the Iranian Rial. This will likely cool off investor interest, and even Iranian citizens are likely to find workarounds to invest in more worthwhile cryptocurrencies.

Nevertheless, in the event of future authoritarian threats involving cryptocurrencies, Funusie recommends the following policies:

  1. The US treasury department should reinforce the message that any US persons or institutions banking within the US financial system providing anything of financial value to the Iranian regime are in violation of US sanctions, regardless of whether the value is in fiat or cryptocurrencies.
  2. “The U.S. and other governments concerned about nations exploiting blockchain technology to entrench authoritarianism should acknowledge that, similar to the space race of decades ago, there is now a ‘crypto race’ emerging. The Group of Seven (G7) countries should be watching coordination among the rogue actors in this race and strategize ways to foster crypto/blockchain innovation that truly enhances economic and political freedom.”
  3. “The broader crypto space should not treat rogue regime crypto with ambivalence. Instead, blockchain tech influencers should ‘call out’ crypto schemes that fund oppressive regimes. Just as responsible cryptocurrency enthusiasts know that ICO scams hurt crypto’s image, they should understand the risk of authoritarian crypto to tarnish the technology’s reputation.”

Fenusie asserts that although the attempts by Russia, Venezuela or Iran to develop a globally accepted cryptocurrency are likely to fail, the protection against such an attempt comes from encouraging developers in free nations to produce better crypto products that defend key values like liberty.

Totalitarian regimes will always make attempts to exploit new technologies to support their corrupt systems, but this by no means implies that cryptocurrency itself is something that should be looked upon with scorn by the free world. In fact, it is only through encouraging development and productive use cases for technologies like cryptocurrencies that those who love liberty are able to protect themselves from corrupting forces.

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World’s Biggest GPU Maker No Longer Expects to Make Money on Cryptocurrency Mining

On Thursday, the chip-manufacturing giant Nvida saw its stock tumble on the release of its second quarter earning report, which revealed that the …

On Thursday, the chip-manufacturing giant Nvida saw its stock tumble on the release of its second quarter earning report, which revealed that the company had overestimated its GPU sales by $82 million. The reason? No one is building cryptocurrency miners anymore, apparently.

Although Nvidia’s report said the company was expecting a decline in GPU sales and “cryptocurrency-specific products” from a peak of $289 million last quarter to about $100 million this quarter, the actual revenue for its crypto-specific products ended up being a mere $18 million. That’s a 93 percent decrease in just three months.

“Whereas we had previously anticipated cryptocurrency to be meaningful for the year, we are now projecting no contributions going forward,” Nvidia’s report reads.

It’s hard to blame Nvidia for its optimistic outlook on chip sales for cryptocurrency mining. Only a year ago, it was damn near impossible to find graphics cards for sale because cryptocurrency miners were buying them in bulk faster than manufacturers could produce them.

Read More: It Is No Longer Worth It To Build an Ethereum Mining Rig

It’s uncertain why GPU sales for cryptocurrency applications fell off a cliff, but there are likely two main culprits. For starters, cryptocurrencies are now deep into a bear market. The value of top coins has fallen around 70 percent from their all time high in January. This can make it unprofitable for all but the largest cryptocurrency mines to continue to operate because the cost of electricity is more than the value of the coins being mined.

At the same time, application specific integrated circuits (ASICs), a special type of computer chip that is designed only for cryptocurrency mining, have been developed for a number of cryptocurrencies. As Motherboard previously reported, as soon as ASICs are developed for a specific cryptocurrency it makes mining with GPUs impossible due to the huge gains in efficiency.

It’s too early to say whether this drop in GPU sales signals a larger decline in the relevance of cryptocurrencies or simply reflects changing technology standards within the cryptocurrency space. For the foreseeable future, however, it seems Nvidia is going to fully embrace its “gamers come first” promise.

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Phishers stole $2.3 million in crypto during Q2 2018

Names such as Elon Musk, Pavel Durov and Vitalik Buterin has been used. “In this quarter, malefactors actively used GDPR, World Cup, and …

The second quarter of 2018 has seen 58,000 attempts to visit phishing websites pretending to be crypto wallets and markets blocked by cybersecurity firm Kaspersky.

A new report shows that many investors and other interested parties are falling victim to cybercriminals looking to cash in on the cryptocurrency craze. According to the study, more than $2.3 million in crypto has been stolen over the same period.

The report says: “In addition to classic phishing, which aims at gaining access to the victim’s accounts and private key information, cybercriminals try every way to entice a victim to willingly send them cryptocurrency. One of the examples of this are cryptocoin giveaways.

“Cybercriminals continue using the names of new ICO projects to collect money from potential investors that are trying to gain early access to new tokens. Sometimes phishing sites pop up before official project sites.”

Ethereum is the most popular cryptocurrency for phishers, according to Kaspersky, and is used more than other coins because more funding is often raised by ICOs than its crypto rivals.

Crypto giveaways on behalf of celebrities is the most popular cover for scammers, who ask users to transfer a small amount of crypto to a wallet with the promise of getting double or triple the amount back in return. Names such as Elon Musk, Pavel Durov and Vitalik Buterin has been used.

“In this quarter, malefactors actively used GDPR, World Cup, and cryptocurrency themes, and links to malicious websites could be found on social networks and messengers (users were often distributing them themselves), as well as in marketing messages served by large search engines,” the report added.

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Blockchain, Self-Sovereign Identity and the “Off-Grid” People – Opinion

Blockchain lets people control their own identities by storing identifying information in a distributed ledger, enabling them to transact and share …

James Song, CEO, ExsulCoin

It’s an all too common scenario for immigrants and refugees–very often they’ve left almost everything of their previous life behind in order to start over in a new country where they will be safer and have more opportunities for a better life. That doesn’t just mean houses and possessions; it sometimes means abandoning your own knowledge and accomplishments. How many taxi drivers and sanitation workers and customer service reps had advanced degrees, medical licenses, etc. in their home countries that still don’t qualify them to work in the same capacity after they resettle?

While part of this problem is rooted in protective regulations that limit how refugees and immigrants can operate in their new countries, it is also difficult to verify ID and certifications for refugees who may have had to leave their documentation behind. And even if ID can be produced it may not be accepted as valid.

Self-sovereign identity (SSI) is essentially the idea that we create our identities through our daily interactions, both online and offline. For instance, when you provide your driver’s license as verification of your age when you buy alcohol, that store or bar is trusting you to provide accurate identification, and trusting that the DMV knows how old you are, but they don’t have a single central authority to check with before they sell you your beer.

Identity by its nature is decentralized–no single entity tells you who you are, you affirm it yourself with those behaviors and it can be verified by multiple parties–meaning it is already ideally suited for a decentralized solution like blockchain. Blockchain lets people control their own identities by storing identifying information in a distributed ledger, enabling them to transact and share information with end-to-end authentication, without the need for a central authority to verify that they are who they say they are. SSI facilitates trust between distant parties and mitigates the risk of identity theft and other types of fraud.

So how does this translate to verifying employment and educational credentials? The concept is pretty much the same. As a U.S. citizen, when you graduate from college, you are provided with a degree, the document that verifies you have completed the training and coursework necessary to attain that designation.But your potential employer doesn’t want a copy of your degree; they want to know you have the skills and knowledge necessary to execute the tasks of the role, and that is something verified not by a single authority but by previous job experience and your interactions with people in that context.

So when a potential employer is looking at a refugee with a degree from University of Yangon in Myanmar and years of experience working as an architect and an American citizen with a degree from UCLA and years of experience working as an architect, their ability levels may be exactly the same but it is hard to know without a universal standard by which to evaluate them.

And in reality, that standard doesn’t exist. Skills and knowledge aren’t acquired solely through the university system, especially for refugees fleeing unsafe or unlivable conditions who could not even fathom access to an American university education.

ExsulCoin has created open source educational videos for refugees in the Rohingya camp in Bangladesh to learn English, to aid them in the integration process and give them more opportunities to find work after resettlement. The company is now in the process of developing ongoing coursework designed to train refugees for engineering work, also delivered via YouTube. The videos often use animation to enable wider understanding of concepts and teach subjects virtually when hands-on learning isn’t possible.

The ultimate goal of this program is to identify people suited to join software development teams based in the U.S. And while ExsulCoin is constantly creating culturally appropriate, widely accessible general education resources to help as many displaced people as possible, this foundry model helps create clear pathways to employment and stability for resettled refugees by assigning them to specific projects.

Whether it’s basic language, general education, or job specific training, these “students” are not sitting in a classroom, with paperwork in an administrative office verifying their enrollment. They’re accessing videos on YouTube, via Smart phones that they might be sharing with other people, connected to the Internet by mesh networks in refugee camps. So how can one measure and verify comprehension of these lessons at every level, without “proper” identification or certification, no credit card payment on file, no degree or certificate?

Distributed ledger technology allows individuals to store identifiers of themselves and their actions in a chronological chain, authenticated at each stage by a consensus and tokenized as a record and incentive. So biometric data captured by the thumbprint reader on a smartphone creates one verified nonce in the chain, and then every document becomes another link in the chain, authenticated by each online interaction, and then the chain itself becomes a working ID. Governments are already using most of these markers to issue identification, blockchain simply removes the need for that central authority.

The concept of self-sovereign identity and credentialing via blockchain can be applied in many instances, but it is proving itself especially vital to refugees and other marginalized “off-grid” people. Basic education is key to integration, but not all refugees are uneducated; they need pathways to employment and a stable existence following their displacement. Many of the nuances and standards of blockchain-powered SSI are still being established, but even now they have enabled refugees and companies like ExsulCoin to remove the bottleneck of centralized authority and create those pathways.

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Airbnb Co Founder gets his hands on Funding Round for Crypto Dealer

Others who participated in the round include hotshot investors such as Nathan Tribe Capital, Social Capital, Digital Currency Group, YCombinator and …
AirBNB Crypto dealer

Airbnb has been known to help millions of people afford the luxury of travelling abroad thanks to its cheap rentals of rooms, apartments and other places to stay. Airbnb’s co founder Nathan Blecharcyk has now got his hands into cryptocurrency.

The co founder of Airbnb, Blecherczyk has participated in a $22.7 million investment round of cryptocurrency dealer SFOX which is a company that provides trading services to institutional investors.

Others who participated in the round include hotshot investors such as Nathan Tribe Capital, Social Capital, Digital Currency Group, YCombinator and Danhua Venture Capital.

SFOX has placed itself well with a number of cryptocurrency exchanges synched to it. Thus it places the high valued investors into the right channels and helps them in cryptocurrency trading. The buy and sell of these type of traders are pretty big and hence its sometimes difficult to leverage such orders, however SFOX makes it easier.

The funding of SFOX according to its official announcement has led to more than $9 billion in transaction volume already. It is all thanks to the growth of clients.

The new funding will help SFOX expand it’s crypto asset management services along with new markets. SFOX CEO Akbar Thobhani, previously worked as Airbnb’s Head of Growth and Business Development. He commented on cryptocurrencies rising interest and larger institutional problem which is being solved.

Thobhani commented that “institutions are looking for more than just trading. Institutions for example, look for reporting so they can manage their accounting better. To support them, we provide unified reporting to our customers. SFOX provides a complete-suite solution for institutions, from KYC / AML APIs for onboarding, pre-trade analysis using our data analytics, to post-trade management using our reporting solutions. We will be using the capital we raised to build more tools to solve for these additional pain points for institutions and provide a complete crypto asset management platform.”

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Airbnb Co Founder gets his hands on Funding Round for Crypto Dealer
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