Your Daily Crypto News on Steemit September 28, 2017

• J-Coin is to become the new Digital Currency of Japan!
• Bitcoin - Money of the Rich or Money for All?
• Commerzbank, KfW and MEAG simulate Transfer of Securities via Blockchain!
• EHLend publishes reputations-based, decentralized Credit Loan!
• Wolf of Wall Street comments on Bitcoin!

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In Japan, several banks are working on a new national currency, the J-Coin. The Coin is to be introduced in 2020.

Several banks in Japan are working on the J-Coin, a crypto equivalent to the Japanese yen. According to the Financial Times, the project is headed by the Central Bank of Japan and a bank group called Mizuho Financial Group. The digital, state currency will be introduced to the Olympic Games in Tokyo 2020.

The main motivation for the digital Coin is to push the cash further, if not even in the long term even completely. Cash is still very common in Japan. About 70% of all shops are traded with cash. In spite of the digital progress, most Japanese people are not skilled in the choice of payment processing. In addition to the high costs associated with cash management, the point of lack of (official) control also plays a role.

In order to ensure sufficient acceptance in the population, payment processing is to be free of charge and very easy to use. Everyone should be able to pay for their purchase with the smartphone. In addition, foreign payment service providers such as Apple Pay or Alipay are to be marginalized.

In addition to lower costs and more control, this also hopes to boost the economy, since the savings can at least be passed on theoretically to the customer. The J-Coin should be exchanged 1: 1 to the yen. The user must, however, be aware that the price for the free payment lies in the supply of the personal data. Banks and companies would also benefit.

How the technology is to be solved technically and to what extent the blockchain technology is used here is not yet known. The Japanese central bank had recently said that the blockchain technology was not yet ripe enough to deal with payment transactions in the country.

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What does an unequal distribution of the bitcoins over all addresses say about a possible centralization?

A ghost goes around in the cryptosphere. More precisely, a Voronoi diagram of Howmuch.net is currently being screened over various social media. T3n has also considered this representation with an article.

I'm talking about the representation in which addresses like many bitcoins lie, more specifically from this graph:

Many commentators with social awareness have, of course, strongly criticized this. The image was displayed outside the crypto scene more than inside it. A little can be understood: almost 50% of the addresses own 0.01% of the available bitcoins! Can you really say that Bitcoin meets the claim "Be Your Own Bank"?

In order to answer this question and to oppose the criticism, two points should be considered: On the one hand, the study of Howmuch.net is critically questioned, on the other hand the question to be asked whether the original vision behind Bitcoin was simply that of the uniform distribution. Finally, criticism is to be placed on a more rational, constructive foundation.

Which addresses were viewed by Howmuch.net?

Here is a major problem with the study, which is so powerful that it should be quoted:

In other words, it has been assumed that an address is assigned to a person. It is commendable that this is not concealed. The wallets of the different Exchanges and all lost Wallets (ie Wallets, to which the access lost) are ignored, but above all the fact that almost every new Wallet generates for the individual user clearly more than one address.

My Ledger Wallet has used a lot of different addresses to this day. Also, my mobile wallet of jaxx has generated a large amount of private keys. Since both Jaxx and Ledger Nano S are designed hierarchically deterministically, a new address is created for each incoming transaction. In both cases, the majority of the addresses are empty. Finally, if you add a variety of test wallets, paper wallets, and brain wallets that were created to get to know the system, the assumption that an address can not be attributed to a person can not be maintained.

Bitcoin - no system of uniform distribution!

A second misunderstanding lies in the false expectation, which seem to overlook the makers of the Howmuch.net study as well as the various distribution channels. The original motivation on the part of Satoshi Nakamoto was the creation of a monetary system independent of central organizations, independent of banks and governments. This is also testified by the Sequence of Genesis Block:

If the goal had been a fair equal distribution, one could have built a kind of tax. It would have been possible to create a kind of negative proof of stake that distributes part of the surplus to poorer wallets. For obvious reasons, a Proof of Identity would have been necessary to prevent Whales from simply creating multiple wallets.

However, this has not been implemented because a much more fundamental independence should be achieved by creating a currency independent of central banks, whose protocol should prevent an increase in money supply. Regardless of the respective wealth, the user was given an accountable account without account usage fees.

In addition, the user could participate proactively by mining or hosting a full node on the network. In the former case, there was even a financial incentive.

Finally, with the different exchanges and the emergence of further crypto currencies, a market was created in which even poorer people could quickly invest in different projects. With the current ICO boom, this development has advanced even further.

Has Bitcoin therefore abolished the ditch between rich and poor? No, but that was not the goal either. What has been achieved with Bitcoin is the development of a monetary system, which gives everyone, poor or rich, independence from institutions that regulate the money. What this can mean is currently seen in the dramatic example of Venezuela.

Bitcoin's true centralization problem

So is everything all right with Bitcoin? Can one say at the present time that the vision of Satoshi Nakamoto has become completely reality and the accusation by Howmuch.net is completely out of thin air? Not at all - but the centralization problem should not simply be reduced to the question of who owns how much money is his own. Even in the case of the social question, this was not the core of the poodle. Not only Marx and Engels have recognized that a centralization of the means of production does not simply ensure the existence of rich people for an unequal and unfair distribution of power.

In the case of Bitcoin, the question arises again: The question is raised as to whether the saying "Be Your Own Bank" still has meaning if the Bitcoins are on a Coinbase wallet when the mining is in the hands of large companies, of which in a country alone more than 50%. Although the trend has been reversed since the beginning of the year with respect to the number of Bitcoin nodes, this growth is in no relation to the increasing Bitcoin adaptation.

Yes, there has been a centralization of the network, especially with regard to mining. This is true, of course, but this development is all the more worrying. Equally worrying is the existence of large investors, which can of course damage the course due to large dumps. The question must also be asked about how sustained such damage would be.

As far as concerns are concerned, the saying "Be Your Own Bank" should be taken seriously and be self-responsible. For traders and long-term investors, a watchful eye and a certain degree of calm is added: Follow the courses and developments on the market! Do not be put off by any news such as China, but you will be asked to assess whether the fundamental value of Bitcoin is questioned.

With a more proactive role, both in the network and as an investor, the saying "Be Your Own Bank" will continue to be well founded, regardless of the distribution of ownership and the own stake.

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Commerzbank, KfW Bankengruppe and MEAG, the Munich Re and ERGO asset managers, have launched a joint test run for a blockchain project. To this end, they traded a money market paper issued by KfW (Euro Commercial Paper, ECP) and presented the transaction in parallel in a blockchain.

The designated securities were thus traded and sold to MEAG without the use of a central paying agent. The transaction was reconstructed and simulated with the help of Distributed Ledger Technology and the platform R3 Corda. The total volume of the transaction is EUR 100,000 and is designed for a period of 5 days. This is clear from a press release issued by Commerzbank AG.

The R3 technology company is the originator of an initiative to explore distributed Ledger technologies for the financial industry. A first prototype of the corda-based platform was previously developed by Commerzbank in cooperation with other banks and R3.

Roman Schmidt, Head of Corporate Finance at Commerzbank said:

Dr. Frank Wellhöfer, MEAG's Managing Director for Asset Management, Back Office and IT, said in a statement:

A statement from Dr. Frank Czichowski, Treasurer of KfW, says:

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ETHLend a blockchain startup that introduced the decentralized loan on the Ethereum Blockchain a few months ago has now also introduced reputations-based (unsecured) loans. So far, the borrower had to secure his credit request with ERC-20 compatible tokens (eg DigixDAO or GOLEM) or ENS domains.

Unsecured lending in a decentralized environment, such as the Ethereum blockchain, presents a challenge. This is because, in a distributed network, such as Ethereum, only pseudo-anonymous addresses are used. Because transactions can not be reversed, there is no promise that a creditworthy loan will repay the loan. As he wanted to remain loyal to his vision of decentralized financing, an "on-chain" solution had to be created.

Therefore, EHLend has introduced a reputation system that allows unsecured loans based on the borrower's payment behavior. The ERC-20-compatible credit token (CRE), which has no monetary value and is not transferable, was introduced for this purpose. The creditor CRE is credited for each successful credit repayment (1 ETH creates 0.1 CRE). Similarly, 0.1 CRE allows the borrower to borrow up to 0.1 ETH unsecured.

If the borrower does not repay the amount, all CREs are permanently deleted and the reputation is thus destroyed. The reputation system thus motivates the borrower to act responsibly to enable unsecured borrowing.

The decentralized application requires the browser plugin MetaMask and can be reached here. ETHLend also has a sandbox version that runs on the Kovan Testnet. There, the platform can be tested in a trial, before a genuine credit request can be abandoned or a loan request financed.

Care is required! CRE increases the threshold for a credit loss, but the risk of a total loss is not guaranteed by unsecured loans. Just as in the centralized credit market, there is also the risk of misuse in the decentralized loan. Therefore it is advisable to examine the Ethereum address of the borrower on so-called blockexplorers (eg Etherscan.io) and pay attention to details such as the age of the address, transaction number and average monthly account balance.

Interesting things are in the near future. Stani Kulechov, founder of ETHLend, reveals that the DApp is currently being further developed and a unique project is being launched at the DApp in August, which has not yet happened in the crypt world. The ETHLend team is also eager to integrate Bitcoin and Altcoins over the coming months. ETHLend's financial and legal advisors continue to work intensively on a KYC implementation (Know Your Customer).

EHLend rejects venture capital financing on principle. Stani Kulechov is convinced that an association with traditional banking and raising capital could create conflicts of interest with the development of a real decentralized credit platform.

Stani Kulechov said:

Is preparing for a token sale (ICO) and is planning an innovative pre-ICO phase with his team, which will be announced in early August: "Our idea may change the way of pre-ICO financing permanently".

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Jordan Belfort, better known as Wolf of Wall Street, has now also expressed his opinion about crypto currencies following the negative comments of Jamie Dimons (CEO, J.P. Morgan).

In an interview with TheStreet, Belfort Dimon initially agreed. "I do not think it's a great model," he told the reporter of the website. He thinks similarly to Dimon that Bitcoin is "fraud".

Ironically, Belfort was condemned to a perpetual imprisonment in 1998 for his involvement in securities fraud and money laundering. After that, he wrote his memoirs (Wolf of Wall Street), which later became a world success through the film adaptation with Leonardo DiCaprio.

Belfort, however, does not think that crypto currencies will disappear. He said:

He also criticized cybersecurity when trading with Bitcoin. Furthermore, he considers the fact that a program, instead of a central authority or institution, can issue new coins of the crypt currency.

"I'm not saying that you should buy Bitcoin or not. But what I say is that I personally would be very, very cautious for myself if I put a lot of money into something that could disappear very quickly, "he explained.

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I wish you all a lovely Thursday!!!
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@danyelk