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Calls for “Legal Bitcoin” in Ukraine, as Natsbank Mulls E-Fiat



Ukraine, now serious about crypto regulation, is setting up a special working group to oversee the completion of the necessary framework. Dedicated legislation has been making its way through parliament since October. The National Bank is considering plans to emit “e-hryvnias”, while the justice minister says bitcoin is a fact and calls for its legalization.

Crypto Matters in Ukraine’s Security

Cryptocurrencies have been addressed as a major topic of discussion during a meeting of the National Cybersecurity Coordination Center on Thursday. Participants took a closer look at what they referred as “uncontrolled circulation of cryptocurrencies on the territory of Ukraine”, Froklog reported. According to representatives of Ukraine’s National Bank, Security Service and National Police – the absence of control and the anonymity of transactions create conditions for laundering money acquired through criminal activities. Unsurprisingly, Ukrainian officials also noted the possible use of cryptos to purchase illicit goods, like drugs and weapons. The “black list” would’ve been incomplete if financing terrorism was not mentioned, and so it was.

The development of the cryptocurrency market cannot be left unattended

This is what Oleksandr Turchynov, Secretary of the National Security Council, said during the meeting of the cybersecurity body. In his words, when the government is distancing itself from the matter, in a legal vacuum, threats arise for the economy and security of the state. He emphasized the absence of regulatory framework and subordinate statutory instruments. With the fast development of cryptocurrencies around the world, Ukraine cannot leave this question without the due attention, Turchynov stressed.

Calls for “Legal Bitcoin” in Ukraine, as Natsbank Mulls E-Fiat
Oleksandr Turchynov

Following his comments, the NCCC decided to set up a working group and charge it with finalizing all legal preparations to adopt crypto regulation. The National Bank, the Ministry of Finance and the Security Service will be represented in the party, along with other supervisory and law enforcement institutions. They must determine how the cryptocurrency market will be functioning and how the mechanism to monitor transactions and identities will be implemented. The working group will also be dealing with crypto-taxation.

The government experts will develop a mechanism to access data collected by the cryptocurrency exchanges. They will be obliged to keep transaction records under the requirements currently applicable to other financial institutions. Crypto companies will have to reveal information about their customers when a “motivated request” is submitted by the authorities.

Bitcoin to Stay, Hence – Must Be Legalized

The cybersecurity meeting was held a few days after a statement by the Minister of Justice who said that “Bitcoin must be brought into the legal field”. In an interview for Segodnya on Sunday, Pavel Petrenko noted that cryptocurrency transactions would be taking place, one way or the other. That’s why, he thinks, it would be better if bitcoin gets regulated right away.

“Bitcoin already forms a sizable portion of market transactions, including those of goods and services. That’s a fact!”, the government official stated, referring to the matter as Fait accompli. He added that every state and international organization must respond to this “transnational public phenomenon. Otherwise, these relations will be left outside the law. Regardless, they will continue to exist anyway”, Petrenko added.

Calls for “Legal Bitcoin” in Ukraine, as Natsbank Mulls E-FiatUkraine’s justice minister also thinks that his country should work with the EU and the US to provide a unified legal definition of bitcoin. The high-ranking Kiev official reiterated his ministry’s readiness to join other Ukrainian institutions that had been “actively dealing” with the legal issues. Financial regulators in the country have already supported parliamentary initiatives to officially regulate the status of cryptocurrencies.

Two bills and one amendment have been advancing through parliamentary commissions since their introduction to the Rada last October. No progress has been reported this year. One of the drafts aims to encompass the circulation of digital coins in Ukraine. Another focuses on “stimulating the market of cryptocurrencies and their derivatives”. Tweaks in the Tax Code should address cryptocurrency income, with unconfirmed reports of possible exemptions and incentives for miners. A parliamentary report explores the implications of new legislation on the state budget.

Hryvnia – “Tak”, Crypto – “Ni”

Another announcement from the cybersecurity meeting in Kiev read that the National Bank is “considering the expediency of issuing cryptocurrency”. Shortly after Ukraine’s “Natsbank” corrected that slip of the tongue.

In a press-release, posted on social media, the central financial authority said clearly that no plans were in place to issue a new crypto. However, the bank is still mulling over the possibility to emit a so called “e-hryvnia”, or the nation’s fiat currency in electronic/digital form. This could be done within the framework of the “Cashless Economy” project aimed at speeding up bank operations and minimizing losses in money transfers.

The National Bank is studying modern innovation technologies and looking into a broad spectrum of possible applications in perspective…

Central banks… What can you do about it?

Do you think Ukraine will soon legalize bitcoin and expand its cryptocurrency sector or go for a digital national currency? Tell us in the comments section below.

Images courtesy of Shutterstock.


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United Bitcoin May Be the Most Controversial Fork to Date 2018



Back on December 12 the well-known developer Jeff Garzik launched a Bitcoin Core (BTC) based fork called United Bitcoin (UBTC) after Segwit2x failed. At block height 498,777 the snapshot took place, and the UBTC network began just like the rest of the forks in existence, but claiming the tokens is far more complicated than one would think

The Promises of United Bitcoin

A few months ago we reported on the UBTC project created by Jeff Garzik, his partner at the blockchain company, Bloq, chairman Matthew Roszak, and Bitbank Group’s Songxiu Hua. The team says it plans to create a credit currency system pegged against various fiat currencies alongside a native smart contract feature. The entire network is modeled after the bitcoin core blockchain prior to December 12, and all active wallet holders are able to receive UBTC at a 1:1 rate. The catch is inactive wallets will go towards the UB Foundation to support innovative blockchain development.

Over the past few weeks, the UBTC team have made some videos detailing their project’s goals to be serious cryptocurrency contender. One particular documentary shows Garzik describing why he thinks UBTC can be a digital asset that engages and unites with the entire cryptocurrency ecosystem. “If I could start with a clean slate what technologies would I include?” Garzik asks an audience during the video. Matthew Roszak says that United Bitcoin will encompass three really important pieces technology, community, and tokenomics by relying on cross-industry innovation.

United Bitcoin: Jeff Garzik's Fork Represents a 'Clean Slate'

One Out of Only Two Miners Controls 70% of the Network’s Hashrate

United Bitcoin: Jeff Garzik's Fork Represents a 'Clean Slate'So far the network has minimal infrastructure and community support. At the time of publication, there are only two miners who are processing UBTC blocks; an unknown entity and the mining pool The mining pool has more than 70 percent of the network’s hashrate. The network’s total hashrate is only 50,811.47 TH/s and block intervals can range from an hour and a half, to occasional sporadic 20-40 minute blocks. The network has an extremely low amount of users as there are only 20 pending transactions right now. Blocks are averaging roughly 20-100 transactions, and most block sizes are well below 1MB even though UBTC has the capacity for 8MB blocks.

UBTC has its own full node wallet client for Linux, Windows, and Macintosh operating systems and the source code is available for review. According to the distribution repository, there will also be a lightweight client release soon. There are three other wallets that support the UBTC protocol. As far as exchanges most of them are based in Asia, and a great majority of them are unknown and exchange very little trade volume besides the exchange Okex. At the moment, according to Coinmarketcap statistics, one UBTC is worth $82 USD.

Required Identity Verification and Claiming Inactive Addresses: United Bitcoin Is the Most Controversial Fork to Date

The most controversial part of the project is the opt-in airdrop feature which basically means a bitcoin holder must give up some form of identification to obtain UBTC. In order to even get started with UBTC, a user must supply a valid email address and a mobile phone number. After this process, the registrant has to have a valid bitcoin address as well to receive the 1:1 distribution. Another contentious issue with UBTC is the Foundation’s claiming of “unused addresses” which means after a period of time inactive addresses will be used for future development. At the moment the team has added a “grace period” which has extended the timeframe so bitcoin holders can claim their UBTC.

Because of the ‘KYC-like’ requirements and the fact that the development team will claim Satoshi Nakamoto’s and the inactive addresses of many whales, makes UBTC one of the most vexed bitcoin forks to date. These two tendentious issues plus the fact that the network has very little infrastructure may have a hard time gaining the crypto-community it hopes to progress.

What do you think about the UBTC project? Would you claim these airdrop tokens knowing you have to tie your identity to the platform? What do you think about the development team claiming inactive addresses? Let us know what you think about this project in the comments below.

Images via Pixabay, United Bitcoin archives, and website.

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Report Claims 34,000 Ethereum Smart Contracts Are Vulnerable to Bugs



Over 34,000 ethereum smart contracts containing $4.4 million in ETH may be vulnerable to exploitation. That’s the conclusion reached by a quintet of researchers hailing from Singapore and the UK. Their technical report, which is currently undergoing peer review, suggests that millions of dollars in ether may be at risk from poorly coded smart contracts that contain a variety of bugs.

Smart Contracts Are Only as Smart as Their Creator

“Finding The Greedy, Prodigal, and Suicidal Contracts at Scale” is the provocative title of a research paper submitted by British and Singaporean students last week. Its authors have dived deep into ethereum smart contracts, “finding contracts that either lock funds indefinitely, leak them carelessly to arbitrary users, or can be killed by anyone”. This latter flaw is precisely what happened to Parity last November.

The dangers of relying on smart contracts that have not been independently audited are well-documented. In the past year, $500 million has been lost due to bad code, and around half of that figure involved ethereum. The most notorious case was the Parity bug which led to $168 million of ether being rendered permanently inaccessible, though there have been plenty of smaller incidents where inexperienced or inattentive developers have been caught out.

A Small Drop in a Big Ocean

The authors of the report claim to have used a tool to analyze almost one million smart contracts, of which 34,200 were found to be vulnerable, with 2,365 of these stemming from distinct projects. That means that around 3.4% of all smart contracts are potentially vulnerable to being hacked, broken, or otherwise exploited. Of the contracts that the research team flagged as being exploitable, “the maximal amount of Ether that could have been withdrawn…is nearly 4,905 Ether” worth $4.4 million.

The report continues: “In addition, 6,239 Ether (7.5 million US dollars) is locked inside posthumous contracts currently on the blockchain, of which 313 Ether (379,940 US dollars) have been sent to dead contracts after they have been killed.” One thing the report deliberately omits is the identity of the smart contracts flagged as being at risk. But with almost 1 in 20 contracts vulnerable, and a jackpot of over $4.5 million in ether up for grabs, determined attackers have every incentive to put this research to the test.

What do you think can be done to make smart contracts safer? Let us know in the comments section below.

Images courtesy of Shutterstock.

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