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Alibaba files for a Blockchain patent that allows ‘Administrative Intervention’

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Chinese e-commerce giant Alibaba has filed for a patent for a blockchain system that allows a third-party administrator to intervene in a transaction process when it experiences any illegal activity.

Alibaba Group filed a patent application with the U.S. Patent and Trademark Office (USPTO) in which the patent authors stated that while blockchain technology has many attractive features such as openness, unchangeability, and decentralization, but sometimes it fails to account for certain practical considerations associated with implementing it in a regulated, real-world environment.

The Alibaba researchers focussed on the point that standard smart contracts do not allow legal authorities to freeze user accounts associated with illegal transactions or otherwise facilitate administrative intervention in a blockchain network.

The patent application states that,

“In real life, however, there is a type of administrative intervention activities in the category of special transactions. For example, when a user performs illegal activities, a court order may be executed to freeze the user’s account. However, this operation activity conflicts with smart contracts in existing blockchains and cannot be carried out,” the patent authors wrote. “Therefore, there is a need for a blockchain-based transaction processing method that enables special transactions like administrative intervention in a blockchain.”

Under Alibaba’s proposed blockchain system, authorized administrator accounts would be allowed to send “special transactions” to nodes, which then call a smart contract to perform operating instructions on a particular account.

The authors wrote:

“Here, the issuing account recorded in the various embodiments may be an account owned by a government agency or a trustful institution. Since corresponding smart contracts are created for different designated accounts, it indicates that operation instructions issued by the designated accounts are recognized. As a result, effective administrative supervision can be performed on all accounts in a blockchain network, and this type of supervision is limited, which will not restrict normal transactions in the blockchain network.”

However, the authors admit that this system introduces an element of risk into the blockchain network since administrator accounts could be prone to hackers. Consequently, they suggest decentralizing supervisory power among a plurality of designated accounts.

“In this way, the supervision power of the accounts in the blockchain can be decentralization, such that the supervision power against the blockchain is not centralized in one designated account and the effectiveness and credibility of supervision can be ensured,” they wrote. “At the same time, it prevents the loss of all supervision power over the blockchain when one designated account is compromised.

To simply put, Alibaba’s proposed system would not only reduce the complexity associated with giving administrators extraordinary privileges but would also give them the ability to perform these actions over the entire network, not just on a particular token or smart contract.

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Barclays, a British financial service stops working on Crypto project

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According to some sources, Barclays, a British multinational service company has stopped doing work on a cryptocurrency trading project, in the latest twist for banks hoping to tap into the rapidly growing sector. There was speculation in April 2018 that Barclays Bank Plc. was considering introducing a cryptocurrency trading desk to join Goldman Sachs Group in the initiative. It may appear that it will not be happening, at least for now.

Not too long ago, the financial institution was interested in doing positive development in the crypto world. Earlier this year, the investment bank in this regard put together a senior team to look at how it could incorporate the trading of digital assets into its markets business. The initiative, however, has been put “on ice”, in other words, it has been delayed, one of the people said.

Read Also: IMF says the rapid growth of Crypto market will impact global financial system

 Tyrer worked alongside Marvin Barth, head of FX and emerging markets macro strategy at Barclays, on the project. Lee Braine, a senior technologist at an investment bank, and consultant Matthieu Jobbe Duval also worked on the venture.

The sources informed, the four were exploring whether cryptocurrencies could be a viable long-term asset class, whether Barclays’ clients are interested in the project and what IT infrastructure would be required.

Barclays’ chief executive Jes Staley told the bank’s annual general meeting in May that Barclays remained careful of the regulatory and compliance issues surrounding the asset class. “There is the possibility of cryptocurrencies being used for activities that the bank wants to have no part of,” he said.

The decision to shelve the project will be of interest to the UK’s lender’s rivals, many of which have been exploring ways to profit from the explosion of interest in cryptocurrencies.

JPMorgan transferred Oliver Harris into the newly-created position of head of crypto-strategy in May, while Goldman Sachs said it is looking into opening a desk for trading cryptocurrencies.

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Zambia’s Central Bank says Bitcoin is not legal in the country

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Zambia’s central bank has said that cryptocurrencies like bitcoin are not legal tender in the country.

As you know that many nations are introducing friendlier policies for blockchain technology and there’s a positive development overall in the Blockchain industry but Zambia has a different point of view when it comes to cryptocurrency. The Bank of Zambia (BoZ), responsible for creating and implementing monetary policies for the world’s 105th largest economy, explained their stance against the use of cryptocurrencies in contrast to the growing public interests in the field.

According to a local news report. The central bank admitted that it was receiving a lot of inquiries related to Bitcoin’s legal status in Zambia, and they had to “safeguard the interests of members of the public and to maintain the integrity of the financial system” with its official stance on the digital currency.

BoZ believes there are certain clauses in their financial constitutions, naming Section 30 which do not allow giving Bitcoin a legal status in Zambia. BoZ stated that clauses and said they are the barrier in the way of Bitcoin and similar digital assets from having a legal tender status. Also, the bank agreed that they had no constitutional power to disfigure or ban the local crypto market under the existing legal framework.

“Firstly, Section 30 of the Bank of Zambia Act vests the right to issue notes and coins exclusively in the BoZ. To date, BoZ has not issued any form of cryptocurrency. Cryptocurrencies are not legal tender in the Republic of Zambia; Secondly, BoZ does not oversee, supervise nor regulate the cryptocurrency landscape. Consequently, any and all activities related to the buying, trading or usage of cryptocurrencies are performed at owner’s risk.”

BoZ also issued a warning regarding the investment in cryptocurrency. The bank said that the investors should be aware of the risks associated with the use of cryptocurrencies. It added money laundering, consumer protection (related to hacking and fraud), and terrorism financing to its statement, reminding that they will not be able to offer any legal recourse to crypto users if they get subjected to any of such online crimes.

As of now, the Zambian crypto community does not constitute any significant trading activity to the global crypto volume. The country does not have an active local exchange, and the local crypto traders mostly rely on either foreign crypto exchanges or peer-to-peer desks to conduct their transactions. It might be due to the lack of crypto education in a country where only 11.6 percent of people have an internet connection, according to a World Bank report.

What do you think Will Zambia ever give a legal status to cryptocurrency or not? Let us know in the comment section or email at aqsa9990@gmail.com

 

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IMF says rapid growth of Crypto market will impact global financial system

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The International Monetary Fund (IMF) has stated in a recently released report that the rapid growth of Bitcoin and crypto could impact the international finance system.

The report entitled “World Economic Outlook: Challenges to Steady Growth” published by the IMF read:

“Cybersecurity breaches and cyberattacks on critical financial infrastructure represent an additional source of risk because they could undermine cross-border payment systems and disrupt the flow of goods and services. Continued rapid growth of crypto assets could create new vulnerabilities in the international financial system.”

Despite the 80 percent decline in the valuation of the crypto market, the industry has seen some of the most positive developments regarding the institutionalization, regulation, and development of cryptocurrencies as an emerging asset class in the past nine months.

Led by existing companies like Coinbase and Gemini, major financial institutions in the likes of NYSE, Cboe, and Goldman Sachs have started to strengthen the infrastructure of the cryptocurrency market, allowing both high profile retail traders and institutional investors to allocate large amounts of money in the asset class.

As the cryptocurrency sector continues to grow at an exponential rate, the IMF emphasized that it could create vulnerabilities in the financial system. Because cryptocurrencies are considered alternative currencies with value, a growing number of hackers have started to target digital asset trading platforms with sophisticated tools and hacking methods.

Jeon Ha-jin, the chairman of South Korea Blockchain Association said,

“Stealing cryptocurrencies is similar to stealing cash, and exchanges will continue to be targeted by hacking attacks in the long-term. It is as important to establish systems to deal with the aftermath of hacking attacks as integrating various methods to prevent hacking attacks.”

In South Korea, the third largest cryptocurrency exchange market behind the US and Japan, exchanges have begun to insure their funds through trusted insurance providers like Samsung to add an additional layer of security and investor protection.

Gemini, a leading cryptocurrency exchange in the US alongside Coinbase, also recently obtained insurance services from Aon to ensure that in an unlikely event of a security breach, the exchange is able to cover user funds and holdings fully.

Emin Gun Sirer, a professor at the prestigious Cornell University and a highly regarded expert in the space of cryptocurrency and blockchain, stated that the acknowledgment of cryptocurrencies as an asset class by the IMF is optimistic for the industry.

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