CEO of UBS: Blockchain Will Transform Cost Base of Financial Services Industry

The CEO of Swiss financial services provider UBS Group Sergio Ermotti said that blockchain will be essential for the financial services industry in an interview with CNBC June 18.

Ermotti said that the underlying technology of cryptocurrencies will allow “[the] freeing up of resources to become more efficient,” adding that “[it] is a great way to allow us to… reduce costs.” He stated that blockchain will prove to be transformative to the industry’s cost base in five to ten years’ time, adding that prioritizing the application of blockchain technology will ensure that UBS remains competitive:

“Our industry will continue to be under pressure, in terms of gross margins. It’s no doubt. The only way you can stay relevant is not only by being strong in terms of capital, in terms of products, the quality of the people you have, advice you give to clients. You need also to be able to price it correctly.”

UBS joined a blockchain partnership called Batavia with IBM, Bank of Montreal, CaixaBank, Commerzbank, and Erste Group last fall. The project performed its first pilot transactions in April, which involved sending cars from Germany to Spain and furniture production textiles from Austria to Spain.

While UBS has been exploring blockchain use cases for its business, the financial services giant remains skeptical about cryptocurrencies. UBS chairman Axel Weber said earlier this month that the bank will not offer its customers trading services in Bitcoin or any other cryptocurrencies. Weber even called for stricter controls on crypto, saying that, “[cryptocurrencies] are often not transparent and, therefore, open to being abused.”

India: Former Legislator in Bitcoin Extortion Case Declared Proclaimed Offender

An Indian court declared former Member of the Legislative Assembly (MLA) Nalin Kotadiya a proclaimed offender in connection with a Bitcoin (BTC) extortion case amounting to $1.3 million, Business Standard reported June 18.

Judge PG Tamakuwala declared Kotadiya a proclaimed offender or “absconder” under Section 82 of the Code of Criminal Procedure with reference to an application filed by the Criminal Investigation Department (CID). Kotadiya “remained untraceable,” even after a warrant was issued for his arrest. The CID initatiated proceedings again, seeking that the court should declare him a proclaimed offender.

In India, a proclaimed offender proceeding is a procedure of the court, by which the court announces the individual as a wrongdoer and compels police to apprehend the individual named in the procedure. The passport of the wrongdoer is also confiscated so that they may not flee the country. The ruling ordered Kotadiya to appear before the court within 30 days.

Earlier, the complainant in the case, an Indian businessman Sailesh Bhatt, alleged that in February policemen kidnapped him and his business partner Kirit Paladia, kept him confined at a farmhouse and extorted BTC worth approximately $1.3 million owned by Paladia. Bhatt also said that Nalin Kotadiya was involved in that he pressured him to pay the ransom. The policemen were subsequently arrested in connection with the case.

Kotadiya is a former MLA of the ruling BJP from Dhari in the Amreli district. He is also a leader of the Patidar caste.

Earlier this month, cybersecurity company Carbon Black published a report stating that roughly $1.1 billion worth of cryptocurrency has been stolen in the first half of 2018. Estimates show that there are 12,000 marketplaces and 34,000 offerings associated with cryptotheft that hackers can take advantage of.

Speaking at the Money20/20 Europe conference on June 4, former U.S. Federal Prosecutor Mary Beth Buchanan said that “a lot more” crimes have been committed with fiat currencies than crypto. Buchanan also stressed that there are now many “commercially available” tools that law enforcement can leverage to trace how currency has moved on a blockchain.

Binance Supports Malta Stock Exchange’s Stratup Accelerator Program

The Malta Stock Exchange (MSE) has announced that digital currency exchange Binance is backing its newly launched program to support fintech and crypto startups, Finance Magnates reported June 18.

According to a tweet by the MSE’s official Twitter account, it will accept up to twelve fintech companies to utilize the facilities proposed within the newly established program:

MSX FinTech Accelerator Programme aims to support and mentor fintech startups and entrepreneurs to become more competitive. Within the program, entities will be offered services such as in-house accounting and payroll, facilities including offices and conference rooms, a training center, and communication services. Thomson Reuters has also reportedly joined the program as a mentor.

Commenting on the accelerator program, the MSE chairman Joseph Portelli said that the exchange will enable both local and foreign organizations to bring their products to the market faster by offering “easy access to a readymade solution.” A Binance spokesperson said:

“We moved our operations to Malta precisely because it has demonstrated its progressive approach to supporting and developing the crypto and blockchain industry. Malta is creating a safe and legislated environment for the industry to become reputable, attracting companies like ours and many others. The Malta Stock Exchange reflects these values, providing the infrastructure for entrepreneurs and start-ups to flourish in what is otherwise a highly competitive industry.”

Binance is one of the largest digital currency exchanges in the world, with a 24 hour trading volume of nearly $1.2 billion at press time. Currently its token Binance Coin is trading at $16.68 with a total market capitalization of $1.9 billion, according to CoinMarketCap. Binance is also working on the launch of a new Malta-based cryptocurrency trading platform which will allow crypto-fiat trading by the end of the year.

Earlier this month, Binance made an undisclosed investment in Malta-based blockchain-powered esports voting platform chiliZ. Binance and chiliZ will reportedly “join forces” to provide the sports industry with a “fan-driven token ecosystem for traditional sports teams.”

In April, Binance partnered with Ugandan blockchain organization Crypto Savannah in order to support economic development of the East African country. The partnership will promote “economic transformation” by generating employment as well as attracting investment to Uganda.

US: Federal Employees to Disclose Crypto Holdings Following New Guidance

The US Office of Government Ethics (OGE) has ordered federal employees to report their holdings of virtual currency, according to new guidance issued June 18. The guidance will affect around 2 million federal executive branch employees, including the Departments of Homeland Security, the Army, Justice, Veterans Affairs, and others.

According to the notice, the OGE “does not consider virtual currency a ‘real’ currency or legal tender.” The reporting and conflict principles set out in the guidance will apply equally to digital assets like “coins” and “tokens,” which were received within initial coin offerings (ICOs) or issued or distributed employing blockchain technology. It states:

“Filers report their holdings in a virtual currency if the value of the virtual currency holding exceeded $1,000 at the end of the reporting period or if the income produced by the virtual currency holding exceeded $200 during the reporting period. Filers are required to identify the name of the virtual currency and, if held through an exchange or platform, the exchange or platform on which it is held.”

The development of guidance was deemed essential because, “virtual currencies are experiencing a surge in use and access, and as a result, employees who hold virtual currencies are increasingly seeking guidance from their ethics officials concerning their financial disclosure reporting obligations.”

Public filers are required to report transactions of certain investment assets, i.e. different forms of securities, although the notice says that the requirements will depend on whether a particular digital asset is recognized a security. If there is any uncertainty, the agency recommends “ethics officials advise the employee to report transactions of that asset on periodic transaction reports if the value of the transaction exceeds the reporting threshold.”

Furthermore, the guidance states that digital currency is an “investment asset” and “it may create a conflict of interest for employees who own it,” and it is not subject to any conflict of interest exemptions. According to the document, the OGE may need to issue further guidance as “the nature of virtual currency becomes better defined.”

In March, the South Korean government banned its own officials from holding and trading cryptocurrency, which is considered to be “the first time the government has formulated a virtual currency ban for all public officials.” According to the Ministry of Personnel Management, officials who are found to be involved in cryptocurrency trading are “in violation of the prohibition of forbearance obligations under the civil servants’ law” and are subject to disciplinary actions.

Bitcoin, Ethereum, Ripple, Bitcoin Cash, EOS, Litecoin, Cardano, Stellar, IOTA: Price Analysis, June 18

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

The market data is provided by the HitBTC exchange.

Every bear market tests the patience of the investors. The ones who stick around reap the maximum benefits when the new bull market starts. Most retail investors are easily influenced by the wild forecasts and end up buying near the peaks and selling close to the bottoms.

Some people that tend to predict the end of the world during a bear phase. Similarly, we can find many forecasting the end of cryptocurrencies. But, the astute investor knows that Bitcoin and the altcoins are a resilient bunch with many possible uses, so it is better to buy and stick with them when the prices are low rather than chase when the prices are skyrocketing.

The crypto hedge funds returns have tumbled in 2018. However, they are willing to accept the short-term pain in favor of long-term gains that will accrue from the entry of the institutional investors.

A bear market is a good time to shift money from non-performing and dubious digital currencies to the more stable ones. Investors who held on to their Apple or Amazon during the dotcom bubble reaped huge benefits while the others holding shady companies ended up broke.  

Yoni Assia, the CEO of eToro shared with Business Insider that if one has a long-term approach then “selling crypto now is like selling Apple in 2001.”

While the fundamentals suggest ‘hodling,’ let’s see what the charts forecast.    

BTC/USD

For the past three days, Bitcoin had been trading inside the intraday range of June 14. Today, the price is attempting to break out of the tight range.

BTC/USD

If the BTC/USD pair sustains above $6,715, it can pull back to the 20-day EMA. Though both the moving averages are sloping down and the RSI is in the negative territory, our view is of the formation of a range in the leading digital currency. Hence, a breakout and close (UTC) above the downtrend line is a good place to enter long positions with the stops below the $6,000 levels.

On the upside, the first resistance is at the $7,700 levels, above which the rally can extend to the resistance line of the symmetrical triangle, close to $8,500 levels.

This is a high-risk trade, hence, please keep the position size less than 40 percent of usual size. Our assumption of a range bound trade will be invalidated if the price breaks below the $6,000 levels.

ETH/USD

Unlike other digital currencies, Ethereum is trading well above its June 13 lows of $450.1. This shows short-term outperformance.

The first sign of strength will be when it breaks out of the descending channel. However, this will not turn it positive because it had broken out of the channel on June 6 but could not break out of the 20-day EMA.

ETH/USD

Hence, we suggest waiting until the ETH/USD pair breaks out of the downtrend line. This will confirm a likely change in trend.

The first target objective will be a rally to $628.99, which is the intraday high of June 3. The 50-day SMA is also close to this level. Once these two resistances are crossed, a rally to $700 can be expected.

As the overall sentiment is negative, any long position should be attempted with less than 40 percent of the usual position size.

XRP/USD

Ripple is trying to find support close to the $0.5 levels. Below this, the final support is at $0.45351. We believe that the bulls will aggressively defend the support zone between $0.5-$0.45351 because if this zone breaks, the next support is way lower at $0.24.

XRP/USD

Any pullback will face selling at the $0.56270 levels and above that at the 20-day EMA. The XRP/USD pair will be out of danger once it breaks out of the downtrend line one.

We shall wait for the price to sustain above the downtrend line one before recommending any trade. On the upside, the rally will face resistance at $0.7 and again at the downtrend line of the descending triangle.

BCH/USD

Bitcoin Cash has found support close to the intraday lows of June 13. Any pullback will face resistance at the downtrend line.

BCH/USD

Periodically, the BCH/USD pair enters small trading ranges before breaking out or breaking down from it.

A break out of the 20-day EMA will be the first indication of a change in trend. Traders can initiate long positions if the price sustains the $1,000 mark with a target objective of $1,200 and $1,500. The stops can be placed below the $800 levels.

A breakdown of the $817.8709 levels can extend the down move to the next support zone of $777.5304-$736.0137.

This is a risky trade, hence, please keep the allocation size 40 percent of usual size.

EOS/USD

EOS is trying to stay above the $10.3384 levels. A breakdown of this level will result in a retest of the June 13 lows of $9.0887, below which a fall to $8 levels is likely.  

EOS/USD

Unlike the other digital currencies, the EOS/USD pair is still way above its April levels, which shows its relative outperformance in the medium term.

If the bulls scale above the 20-day EMA and the 50-day SMA, it will indicate strength. We shall wait for the prices to sustain above the 50-day SMA before recommending a trade on it.

LTC/USD

Litecoin continues to trade below the breakdown levels of $107.102. This shows a lack of urgency among the buyers. After a breakdown from a bearish pattern, the path of least resistance is on the downside. So, a decline to $84.708 and $75.131 levels is probable.  

LTC/USD

However, if the LTC/USD pair doesn’t move lower, it will indicate that the sellers don’t want to part with their holdings at these levels.

The bulls will face stiff resistance at the 20-day EMA, which is close to the $107.102 mark. If the cryptocurrency breaks out and sustains above the $107.102 levels, it will invalidate the bearish development and will offer the traders an opportunity to go long. Until then, it is best to remain on the sidelines.

ADA/USD

Cardano is trading near the critical support of $0.13 for the past few days. The last time prices had declined to the $0.13 levels in mid-March to early-April of this year, they had stayed there for approximately three weeks. The gradually sloping moving averages point to the similar consolidation this time.

ADA/USD

In April, the ADA/USD pair started an up move after it broke out of the 20-day EMA with force. The rally carried the digital currency from the bottom of the range to the top of the range.

This time too, we shall wait for prices to break out and sustain above the 20-day EMA before suggesting any long positions.

Any breakdown of the $0.13 levels on a closing (UTC) basis will be a negative development and will invalidate our assumption of a range formation in the digital currency.

XLM/USD

Stellar has held the $0.184 levels since mid-December of last year. Hence, we believe that the bulls will again aggressively defend the critical level.

XLM/USD

A strong bounce will offer us an opportunity to recommend long positions because the next up move should carry the XLM/USD pair to $0.31, $0.385 and finally to the top of the range at $0.47766719.

As both moving averages are sloping down and the RSI is in negative territory, we shall wait for the price to break out and close (UTC) above the downtrend line before proposing any trade.

IOTA/USD

After trading in a small range for the past two days, IOTA resumed its fall towards the critical support at $0.9150. However, buying at the lows has resulted in a turnaround and has increased the possibility of a pullback to the $1.33 levels.

IOTA/USD

The IOTA/USD pair will gain strength after it breaks out of the 20-day EMA and the downtrend line. The resistances on the upside are at $1.755 and $2.03.

We shall wait for a new buy setup to form before suggesting any long positions in it.

The market data is provided by the HitBTC exchange. The charts for the analysis are provided by TradingView.

Spanish Bank Group to Develop Blockchain Platform to Identify Clients

Major Spanish banking consortium Niuron announced they are developing a blockchain platform for client digital identification verification, EuropaPress reports Monday, June 18.

The group of banks reportedly plans to create the platform by the end of 2018, with the goal of developing a blockchain technology-based system to identify and record clients when they open an account for the first time.

Niuron believes that the new blockchain platform will improve the speed of operations, reduce fraud, and prevent money laundering. The platform will reportedly benefit clients in that it will decrease the time required for the registration process and provide clients with more control over their personal data.

Once the platform is completed, clients’ data will be shared between different banks and financial institutions. While ostensibly simplifying digital identification, it will also comply with recent EU General Data Protection Regulation (GDPR) rules and modern security standards.

The Niuron consortium includes Abanca, Bankia, Caixabank, Caixa Ontinyent, Ibercaja, Kutxabank, Liberbank, Unicaja Banco, and Cecabank. According to an Economipedia report based on assets and capitalization, Caixabank was Spain’s third largest bank in 2017. Ibercaja, Kutxabank and Abanca were also included in country’s top 10.

The GDPR legal framework was adopted by the EU on May 25 of this year, and is forecasted to create 75,000 privacy jobs. Fortune’s Global 500 companies are estimated to spend $8 billion in order to ensure compliance with the new regulations. The new framework for data privacy and protection aims to create a uniform data regulation within Europe, and to increase individuals’ control over the use and storage their personal data.

Square Receives NY BitLicense, Cash App Now Offers BTC Trading for New York Users

Financial services provider Square has received a BitLicense from the New York Department of Financial Services (NYDFS), according to a press release published today, June 18. As a result, Bitcoin (BTC) trading is now available to New York users of Square’s Cash App, according to Cash App’s Twitter.

Cash App released a Bitcoin option at the end of January to almost all of its users, originally excluding those in New York, Georgia, and Hawaii. With Square’s Point of Sale (PoS) network, adding a Bitcoin option means that merchants using Square could potentially accept Bitcoin as a form of payment.

The Cash App support team noted on Twitter that while users can currently send Bitcoin to an external wallet, they can’t currently send it to other Cash App users on the platform.

Jack Dorsey, CEO of both Square and Twitter, tweeted about the addition of Bitcoin trading for New York users earlier today:

In mid-May Dorsey said that he remains bullish about cryptocurrency’s future, stating that while he is not sure whether it will be Bitcoin, he thinks that crypto will become the Internet’s native currency.

Barry Silbert, founder and CEO of the Digital Currency Group and Genesis Global Trading, today revealed a partnership between Genesis and Square in a congratulatory tweet to Dorsey regarding Square’s BitLicense:

Historically, the state of New York has strictly regulated crypto; the implementation of the BitLicense in 2015 drove many large crypto exchanges out of the state. However, the recent approval of crypto exchange Gemini’s BitLicense, as well as Square’s New York crypto expansion, shows New York heading in a more crypto-friendly direction.

Blockchain Gaming Company Launches Free Fantasy World Cup Tournament with $135K Prize Pool

A blockchain-based gaming company which offers its own cryptocurrency for in-game purchases has announced it is collaborating with a fantasy sports giant and offering free tournaments to mark the World Cup.

GameCredits is teaming up with FanDuel, a large daily fantasy sports company, and says the competitions will run throughout the major sporting event. As well as $35,000 in cash, the prize pool also offers $100,000 worth of GAME – the platform’s cryptocurrency.

It is hoped that the fantasy football tournaments, which commence on June 14 and run until July 15 – the date of the World Cup final – will help introduce a whole new audience to the GAME currency.

The company says it has long wanted to break into the world of fantasy sports – especially since Matt Fortnow joined its team. GameCredits says he created the very first site in this now bustling marketplace all the way back in 1999 and ended up selling the company to CBS, the US entertainment giant.

After news of the collaboration emerged, Mr Fortnow said: “Working with FanDuel presents an exciting opportunity to establish a presence among fantasy sports users and to continue to grow awareness for GameCredits globally.”

According to GameCredits, FanDuel has built a community of more than 6 million players since launch, generating more than $4.5 billion in payouts to its community.

“By gamers, for gamers”

GameCredits offers a suite of products designed to cater to developers, as well as the gamers they wish to reach with their titles.

Among them is GPlay, a gaming store where developers receive 90 percent of the revenues generated from sales as well as in-game content. The company says this figure is substantially more than the market average, as the likes of Google Play and Apple’s App Store take as much as 30 percent commission when purchases are made.

Players also have the chance to earn GAME currency through an app known as GShare. Here, gamers lease the unused GPU and CPU cycles in their PC, earning crypto in the process. From here, the funds can be used to purchase “the best, newest and most popular PC games” – often at a discount.

This is coupled with GWallet, a universal wallet which is designed specifically for buying games and purchasing extras in play.

Now a 100-strong team with team members in Russia, Serbia, India, the US – GameCredits says the company’s founders are “first and foremost gamers” who are determined to change the industry for the better. They argue that gaming has been unfairly dismissed as a waste of time, when in fact it can relieve stress and be used as an educational tool.

Benefits for developers and gamers

GameCredits says its ecosystem benefits developers by ensuring they receive payments faster. Whereas some platforms impose a 60-day waiting time before remuneration is delivered, the company says its creatives can expect compensation to arrive within 60 hours instead.

The young company, established in 2016, also hopes to boost the revenue potential of developers by introducing “limitless deposits,” helping earnings to rise substantially. At the same time, it believes its blockchain technology will help cut the levels of fraud seen when virtual transactions are being made.

The platform also aims to enhance the purchasing power of players by ensuring that the credits earned in one title can be easily transferred to another through the universal wallet.

 

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

Japan’s Self-Regulatory Crypto Exchange Body to Release Voluntary Rules, Report Says

Japan’s Virtual Currency Exchange Association (JVCEA) will reportedly be releasing new voluntary rules next week, Cointelegraph Japan reports today, June 18.

The official announcement of the regulatory guidelines, set for June 27th, will reportedly include a ban on insider trading, penalizing cryptocurrency exchange employees if they engage in “inappropriate” trading due to their firsthand knowledge.

In order to conform to anti-money laundering (AML) regulations, the voluntary regulation proposal will also prohibit the trading of anonymity-oriented cryptocurrencies, such as Monero and Zcash, on exchanges.

Formed at the end of April following the $530 mln NEM hack of Japanese crypto exchange Coincheck, the JVCEA is a self-regulatory body that combined the two crypto entities already in existence — the Japan Blockchain Association (JBA) and the Japan Cryptocurrency Business Association (JCBA).

The organization, which is made up of Japan’s 16 licensed crypto exchanges, describes its operations as inspecting the security of crypto exchanges in Japan, as well as more specific tasks like assessing tokens issued in Initial Coin Offerings (ICO).

In April, Korea’s self-regulatory cryptocurrency association released its own set of guidelines, which included managing clients’ coins separately from their own supply, holding a minimum equity of 2 bln won ($1.8 mln), and releasing regular audit and finance reports.

Email Scams, Patched Loopholes, and Backroom Politicking: EOS Mainnet’s Road to Launch

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Decentralized governance is hard, as we have already learned from the notorious Bitcoin community standoffs. But as the saga around the EOS mainnet’s onerous drag toward going live illustrates, it might be challenging to make things work collegially, even in a quasi-decentralized system where the number of stakeholders is limited.

Although the long-anticipated EOS blockchain technically took off on June 10, it was not operational, and its tokens were ‘frozen’ for almost five days. It was a stalled community-governance procedure that was holding the process back.

In order to kick off, the EOS community had to elect 21 entities responsible for the blockchain’s operations by a similarly designed vote, and it didn’t go smoothly. The delay in reaching the 15 percent threshold of voting tokens necessary to seal the election made investors nervous, who put in their money to make Block.one’s $4 billion ICO the biggest token sale in history.

Delegated proof of stake: a not-so-decentralized mechanics of EOS

EOS is heralded by its creators as a platform for the deployment of Decentralized Autonomous Organizations (DAOs) and Corporations (DACs) on an industrial scale. Its main selling point is meant to be the capacity to handle many more transactions per unit of time than the Ethereum blockchain, which EOS seeks to supersede. The technical solution behind this ambitious vision of increased speed and scalability is the consensus algorithm embedded into EOS’s design, called a delegated proof of stake (DPoS).

It relies on a restricted pool of Block Producers who work to validate transactions, which dramatically increases the network’s throughput — at the cost of decentralization, as many believe. One of the most outspoken critics of DPoS has been Ethereum’s Vitalik Buterin, who contended that it creates dynamics conducive for stakeholder collusion and cartelization of the token-holder community. Renowned blockchain researcher Emin Gün Sirer was also quite critical, suggesting that ‘EOS isn’t even trying’ to be a decentralized system.

The EOS mainnet relies on 21 groups called Block Producers, or supernodes, who are elected by the votes of token holders, cast in proportion to their token holdings. This immediately sounds like a whales’ game, doesn’t it? Factor in another consideration: according to a widely circulated Reddit user’s report, almost half of the EOS token supply is confined to just 10 wallets, while the top-100 sits on 75 percent of the overall wealth. The caveat is, however, that 10 percent are reserved for the founding entity Block.one, which pledged not to put them toward voting, while several other giants are likely major exchanges’ repositories. Yet, it would be a safe guess that many of the remaining money bags entered the competition to become block producers, as their holdings put them in a tremendous position to vote themselves in. Why, then, was it such an ordeal to surpass the 15 percent voting bar?

The whales in the backrooms: a struggle of the voting process

There are two mutually non-exclusive answers to this question. One is big-player politics. According to this view, the whales did not rush to cast their overweight ballots as soon as the election kicked off, waiting for others to vote and for the overall landscape to become clearer. While the main-street turnout was dragging percent by percent, the real talks were likely happening in backrooms, as coalitions were formed and agreements reached between those who had a real shot at the Block Producers’ spots. One convincing cue pointing to this dynamic is the fact that while the first 9 percent of the vote was painfully sluggish to come in, the stretch between 9 percent and 15 percent took less than a day — a likely sign that big chunks of votes rolled in as a consensus was finally reached. The covert struggle wasn’t all fair play, too: impostors surfaced here and there, and accusations of other candidates being fake werewidespread.

Another probable reason for the lackluster vote during the first days was the how the procedure was complicated, and even risky for less-sophisticated investors. In order to cast a ballot, token holders had to use their private keys with a third-party’s software. While the only provably legitimate voting tool (CLEOS by Block.one) was command line-based, it was not always easy to tell where the tools with more user-friendly interfaces came from. Combined with the realization that one’s John Q. Public vote does not carry any real weight, it could have a chilling effect on potential lay voters. Ultimately, the pool of 21 elected Block Producers now looks like this, topped by EOS Cannon, Liquid EOS and EOS Beijing (as of press time).

The arduous election was far from the only speed bump on the way to the EOS mainnet launch. Several weeks prior to the event were riddled with controversies. On May 31, someone hacked Block.one’s Zendesk account and sent out fraudulent announcements of an ‘unsold tokens’ giveaway. Looking fairly authentic, these emails helped the impostors swindle investors out of several million dollars.

Just a few days prior to that, a Chinese cybersecurity firm found a series of massive flaws in the EOS system, pointing to loopholes that could allow attackers to take full control over any network node. In what looked more like a PR move, Block.one promptly responded by instituting a bug bounty program, which led to even more software-security professionals to start enthusiastically digging around in order to unearth further flaws and vulnerabilities. Cybersecurity researcher Guido Vranken  gained fame when he discovered 12 vulnerabilities worth $10,000 each in a matter of a week, prompting a widespread murmur that the $4 billion enterprise could do somewhat better.

A messy path to launch

On top of all this, the draft of the EOS constitution that was unveiled in early June received a cold welcome from some influential voices in the crypto community as being poorly conceived. Blockchain titan Nick Szabo was especially harsh, calling the document ‘naively drafted’ and suggested that it would render EOS ‘labor-intensive, permissioned, jurisdictionally biased’ and having ‘poor social scalability.’ And then the transcript of the June 8 conference call of 200 EOS developers and Block Producer candidates went public. It had left the community perplexed for the overall organizational havoc that it showcased, as well as for some spicy particularities like the discussion on whether to ‘print’ more tokens (resolved with a yes):

I am a little perturbed by these guys having the authority to print themselves more token,…What is this —> [sic] A reserve banking system?”

However messy the path to the EOS launch has been, it finally happened on June 14, seeing the token price recover from recent blows. So, is it finally time for the developers to leave all the vitriol behind and get down to some real work? Not quite yet. Just two days after the launch, the EOS mainnet underwent a ‘freeze’ and effectively stopped processing transactions. It wasn’t until the next day that it was operational again. Ultimately, the number of really bad-looking debacles that accompanied the platform’s takeoff, weighted against its war chest, understandably left many influencers more and more critical of the whole enterprise.

The blockchain world, however, was never stingy with second chances. Some projects grow too hyped and too expensive to fail, retaining a massive vote of confidence despite a modest yield. Those who have stakes in EOS or are longing for a faster alternative to Ethereum will keep cheering Block.one and their confederates on, while the Ethereum loyals will anticipate new blunders with a degree of schadenfreude. All eyes are now on the performance of EOS-based applications and the ability of the network to withstand attacks. Whether EOS can survive and live up to its potential will shape the investors’ mood, as well as the fate of the DPoS consensus algorithm.