Blockchain Companies Dominate the Forbes Fintech 50 List 2018 5 1001

The headlines have been dominated by the crypto world of late. Mostly, the record highs and plummeting lows of Bitcoin’s value and hackers syphoning off money from major ICOs. All this negative press is enough to make investors nervous, but it isn’t all bad news. In fact, as Forbes releases its Fintech 50 list for 2018, nine of the companies are blockchain.

The Impact of Blockchain on the Financial Industry

Beyond the concerns about digital currency, whether Bitcoin’s real value has been inflated, and major banks banning purchase of it with their credit cards; blockchain has further implications for the financial industry. In fact, blockchain technology could be the answer to many an outdated and inefficient solution in the banking world, revolutionizing how financial transactions are recorded and carried out worldwide.

The fact that blockchain technology can trace specific transactions and provide transparency make them music to the ears of agencies like the IRS and FBI. Blockchain doesn’t just drive efficiency, it changes the whole manner in which trust is federated between buyer and seller, government agencies and countries.

By using smart contracts, blockchain digitalizes and automates the information, removing various counterparties that were previously involved in that process, effectively cutting out the middleman and creating greater transparency. Let’s take a look at some of the companies causing a stir in the blockchain community:

The Bitfury Group, Amsterdam

The Bitfury Group make hardware and software that allows for Bitcoin mining and security. They also provide software that supports blockchain in supply chains for government and insurance, specifically working with the government of Georgia to transfer land titles to the blockchain.

According to Valery Vavilov, CEO & Co-Founder and one of the richest men in cryptocurrency, “The internet allows us to digitize information and transfer it globally, but it lacked a solution to digitize and securely transfer assets. The Bitfury Group utilizes the technology of the Blockchain to allow companies to successfully digitize their assets and safely transact them over the internet – making the world safer, simpler and more efficient.”

Chainalysis, New York

It’s bad news for would-be crypto criminals with companies like Chainalysis gaining protagonism. With customers including the IRS, FBI and Drug Enforcement Administration, this newcomer to the Forbes Fintech 50 is allowing major institutions and law enforcement agencies to trace specific transactions. This could mean an end to money laundering and illicit transactions.

Claiming to “protect the junction between finance and the decentralized internet,” Chainalysis is the leading provider of anti-money laundering software for Bitcoin, with customers racking up over $15 billion worth of transactions on their platform.

Coinbase, San Francisco

Widely recognized as the easiest and most user-friendly platform to start your journey into the cryptocurrency world, most people have been introduced to Coinbase by now. Trading in Bitcoin, Ethereum and Litecoin, this trusted tool offers customers digital currency wallets, and has already racked up over 10 million users, registering more than $1 billion in revenue and over $50 billion in transactions. Its Co-Founder, Brian Armstrong, also made the Forbes list of the Richest People In Cryptocurrency.

Shapeshift, Zug, Switzerland

They say it’s all about location, location, location, and Shapshift’s headquarters in a country famous for its financial institutions is no accident. Claiming to be the “safest, fastest asset exchange on earth,” users can trade in up to 70 different cryptocurrencies, without even setting up an account or having a wallet. How very Swiss of them.

With a focus on privacy, Shapeshift does not accept fiat currencies and does not link to any bank accounts. The benefits of this were accidentally showcased not so long ago when the company was hacked into by a disgruntled employee. No crypto was lost at all, due to the fact that the company does not hold onto customer funds.

As the fintech industry begins to reach something close to maturity, it’s clear that blockchain is leading the charge in 2018. With an emphasis on transparency, security, and privacy for those who want to keep their financial transactions under wraps, there’s a blockchain company out there to tackle most financial woes.

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Christina is a technology and business communicator who has worked with high profile ICOs and blockchain influencers to break industry news.

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Freelance Terrorist Carried Out Hundreds of Bomb Threats in Exchange For Bitcoin 45 7071

An American-Israeli teen is sentenced to a decade in prison after a Tel Aviv court convicted him for a series of fake bomb threats he carried out in exchange for Bitcoin.

The 19 year old began making threats professionally at the age of 16. He is convicted only for crimes committed while over the age of 18. These include making false threats and reports, extortion, money laundering, and conspiracy to commit a crime.

While the Israeli courts withheld the defendant’s identity because some of his alleged crimes occurred while he was a minor, the Guardian identified him as Michael Kadar at the time of his arrest. He was originally indicted for over 2,000 bomb threats, carried out between 2015 and 2017.

Kadar Targeted Children and Jewish Community Centers

The targets of Kadar’s threats included Jewish community centers, the Israeli Embassy in Washington DC, elementary schools, shopping centers, hospitals, law enforcement agencies, airports and airlines.

A threat to an El-Al flight resulted in the deployment of fighter jets for an escorted emergency landing; another threat to a Canadian airport left six people injured during emergency disembarkment; a Virgin flight dumped eight tons of fuel before landing because of a threat; and another threat went to a plane carrying the Boston Celtics.

Kadar also targeted Republican Delaware state senator Ernesto Lopez, who he threatened with blackmail and the murder of his daughter. After Lopez ignored the demands, Kadar ordered drugs to have sent to Lopez’s residence.

Dealing Terror From Mom and Dad’s Apartment

His reign of terror operated from his parent’s fifth floor apartment near the beach in a posh neighborhood in Ashkelon, about 30 miles south of Tel Aviv. But his threats landed in over a dozen countries, including Ireland, New Zealand, Germany, Denmark, Great Britain, Belgium, Australia, Norway, Argentina, Israel, the United States, and Canada.

“One can easily imagine the terror, the fear and the horror that gripped the airplane passengers who were forced to make an emergency landing, some of whom were injured while evacuating the plane,” read the verdict by judge Zvi Gurfinkel, “and the terrified panic caused when there was a need to evacuate pupils from schools because of fake bomb threats.”

The Judge also divulged Kadar’s fees for his services: $40 for a threatening phone call to a private residence, $80 for a bomb threat to a school, and $500 for an airplane scare. Kadar operated on the dark net and disguised his IP address, using a powerful self-installed antenna to tap into remote networks, and software to mask his voice. According to an indictment filed against him in Florida, he spent some of his calls going into graphic detail threatening the deaths of children in American Jewish centers.

A Small Fortune in Bitcoins

At the time of his arrest, Kadar had amassed around 184 Bitcoins for such services—about half a million dollars at the time, and closer to $680,000 today. He also dealt in bomb making manuals, drugs, and child pornography.

Kadar is the son of an American mother, and his father is an Israeli engineer, and has dual citizenship. The US Department of Justice has also indicted Kadar for 32 crimes, including hate crimes, cyberstalking, giving false information to the police, and making threatening phone calls to around 200 institutions. A separate indictment also accuses Kadar of threatening the children of a former CIA and Pentagon official with kidnapping and murder, and links him to over 245 threatening calls.

When Kadar was arrested, he tried to escape by grabbing a pistol from a police officer, but was wrestled to the ground. Thursday’s conviction follows a cooperative investigation by the FBI and Israeli authorities, who have not been able to recover Kadar’s Bitcoins.

Teen’s Mother Calls Conviction ‘Cruel’

Kadar’s mother spoke outside the courtroom after her son’s sentencing, saying “This is the most cruel, cruel thing in the world. I’m very sorry, but I am ashamed that the country acts this way.” She insisted that her son needed treatment, not prison.

In an earlier interview she told Israeli TV her sun was suffering from a brain tumor, which made school difficult for him. Because of this and his autism, Kadar was homeschooled.

Defense lawyer Shira Nir said these conditions made Kadar unfit to stand trial, as he could not distinguish right from wrong. A medical panel confirmed the defendant’s autistic condition, but concluded he was capable of understanding the consequences of his actions. Judge Gurfinkel said Kadar’s conditions were taken into account, lessening the sentence from 17 years in prison to 10.

Bitcoin Uses As Much Energy As Austria, Could Add 2°C to Earth’s Atmosphere 2,187 14286

Bitcoin mining, it turns out, damages the earth more than more traditional environmental assaults like actual mineral mining.

According to a paper published Monday in Nature Sustainability, the power-hungry Bitcoin mining process consumes more than triple the amount of energy needed to mine the equivalent amount of gold, more than quadruple what’s needed for copper, and more than double what it takes to mine platinum.

Other coins didn’t fare much better. By their measurements, Ethereum and Litecoin consume 7 megajoules of electricity to produce the equivalent of $1, the same energy expenditure as copper mining but more than that of platinum or gold. Monero eats up 14 megajoules to produce $1.

Naturally, these measurements refer to the notoriously variable dollar valuations of such tokens. “While the market prices of the coins are quite volatile,” write researchers Max J. Krause and Thabet Tolaymat, “the network hashrates for three of the four cryptocurrencies have trended consistently upward, suggesting that energy requirements will continue to increase.”

Bitcoin’s Growing Electricity Bill is Bigger Than Some Countries

We’ve long known that Bitcoin is unsustainable. In a 2015 article for Motherboard, Christopher Malmo pointed out that a single Bitcoin transaction used 5,033 times as much energy as a Visa swipe, and could power 1.5 American homes for a day.

The electricity used to crunch Bitcoin code—and its environmental cost—has been growing with its increasing popularity. Digiconomist’s Bitcoin Energy Consumption Index shows Bitcoin currently consuming 73.12 terawatt hours (or 263.232 billion megajoules) of electricity annually. To put that in context, it’s comparable to the amount of energy it takes to power Austria for a year.

That means there are 175ish countries on earth using less energy than Bitcoin (to say nothing of crypto on the whole), while 66 countries consume less energy per capita than one Bitcoin transaction (it takes 94 thousand kilowatt hours of electricity to mine a single Bitcoin).

Iceland, a major hub of Bitcoin mining farms, spends nearly as much energy on Bitcoin as it does powering its residential homes. In this case, the damage is mitigated because most of Iceland’s power comes from renewable energy.

Canada’s Bitcoin emissions are also on the lower end due to renewable energy sources. They’re using this to court mining companies from China, where mining emissions are about four times that of Canada’s. Montreal International attracts foreign investment by calling Quebec the land of “green bitcoin”. This has caught the eye of some Chinese mining companies looking to go overseas as the Chinese government has discouraged expansion and shut down some mining operations altogether.

Depending on Bitcoin’s growth, some have projected that it could use as much energy as the entire world by 2020.

Digital Currency Has a Real Carbon Footprint

Krause’s and Tolaymat’s research reminds us of the sobering reality that all this invisible wealth has real world costs.

For the 30 months they measured between January 2016 and June 2018, they estimate their four featured tokens collectively belched out at least 3 million tons of CO2 emissions, possibly as much as 15 million tons.

These findings follow another study, published last month, which determined Bitcoin alone could add two degrees Celcius to global warming within the next three decades. That’s enough to raise ocean acidity by 29 percent.

Solving Bitcoin’s Energy Consumption Crisis

So what is the solution? If the world were to switch to 100 percent renewable energy overnight, the problem would be moot. But we can’t hold our breath for that. There could be ways of incentivizing clean energy so greener mines reap more coins, or of implementing clean energy in other ways.

It’s also possible to adopt less computationally intensive mining algorithms so the mining computers don’t guzzle as much juice. This would disappoint a lot of old school Bitcoiners who have invested in hardware, but their feelings don’t really outweigh that 2 degrees celcius that everyone will have to live with (or die by).

Whatever the best solution turns out to be, something needs to change soon. Bitcoin is growing up, and it’s time for it to mature into something more sustainable.

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