Fintech Friday #4

in #news3 years ago

The new edition of Fintech Friday is out! It's becoming a bit of a habit now, isn't it? Grab a ☕️, put your legs up, and get to reading!

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Mass Adoption

We're continuing to push through into the mainstream.


Last week, China took the lead. This week, it's USA.

USA's Border Officials are planning to trial blockchain for NAFTA and CAFTA certificate tracking of imported goods. How exactly this will go hand in hand with Accenture's pending supply chain patent remains to be seen. At the same time, the delivery service UPS is also entering the blockchain race with its own patent push. Which ever wins, we're still maintaining the opinion that any supply chain which still has a human element in it has nothing to gain by adding blockchain.

Zego, a US-based snack producer, decided to introduce a private blockchain into their pipeline under the name Z-Code. The evil food giant Monsanto recently lost a lawsuit for causing cancer to the plaintiff thorough a compound called glyphosate. This compound is found in various ingredients but most companies don't test for it. Zego tests its suppliers for allergens and glyphosate, and publishes the results on its blockchain for all to see via a simple QR code scan. How useful this actually is remains to be seen - after all, we're talking about a 100% private company with a fully private blockchain behind it, the contents and rules of which they dictate, and in whose best interest it is to keep all the results negative. In any case, this still helps adoption by spreading the blockchain word.

Steve Wozniak, Apple's co-founder, is joining a crypto venture: Equi. Equi will be an equity token for real estate investment. Nothing special or unique in today's landscape, but Steve's popularity could further legitimize the blockchain industry.

Two members of congress have already exposed their crypto holdings, as per a new ruling of the Ethics House. Tulsi Gabbard invested around $15000 in Ethereum and Litecoin each in December of 2017, while Bob Goodlatte owns around $80000 in cryptocurrency. The disclosures come as an effect of the Ethics House ruling that politicians need to declare any asset - real estate, gold, cryptocurrency - in excess of $1000 in value. While this does little for actual mass adoption, it does add legitimacy to the cryptocurrency space.

The internet was shaken by an announcement that the Federal Court in California now accepts cryptocurrency for bail. Martin Marsić, a Serbian citizen, was ordered to pay $750,000 for bail in any cryptocurrency. Marsić hacked Electronic Arts' servers and stole a lot of digital assets, even going as far as selling stolen accounts and using their linked credit cards to buy more assets. Crypto-bail might sound like a big deal, but judges are generally allowed to request bail in any format - even real estate. At the end, it turned out that the FBI, who were supposed to use part of the bail to repair EA's expenses, gave up on the notion of crypto for bail and shifted gears, demanding fiat currency instead.

It looks like Californian politicians might soon be able to accept crypto donations, though. Amounts will currently have a limit of $100 (looks like the board is unfamiliar with the concept of transaction splitting) to prevent money laundering, and next month will see a discussion of higher limits and more thorough crypto integration in political campaigns. Speaking of politics, Ohio Rep. Warren Davidson invited some crypto companies and influentials for a discussion on September 25th. The topic: regulating ICOs. This meeting could enhance the ruling class' understanding of blockchain technology and cryptocurrency in general, dramatically improving legitimacy.

In the "adult entertainment" world, Tube8 - a Pornhub subsidiary - plans to tokenize its entire platform on VIT (Vice Industry Token) and reward viewers for watching porn. VIT is a fork of Steemit which boasts 100,000 transactions per second, but this has not been proven in any kind of practical environment. It is unclear what kind of business model that is where you pay your customers to use your product, nor is it clear how a centralized blockchain platform like VIT can help here, so it all reeks of fraud and price pumping. We mustn't forget that VIT is currently indirectly involved in a lawsuit where Playboy is suing the company BLOC for failing to integrate VIT with its platform. Either way, if any industry is capable of bringing cryptocurrency to the masses quickly, it's porn, so any association there is likely good. In related news, Pornhub partnered with PumaPay to accept all cryptocurrency payments.


All over Asia various crypto friendly cities are popping up, trying to compete with Switzerland's Zug in adoption levels, while China is focusing hard on blockchain improvement through a collaboration between Bank of China and China UnionPay. The research will look into blockchain applications in mobile payments. The Shanghai Stock Exchange (SSE) is also now cooperating with IAMAC (Insurance Asset Management Association of China) to forward the insurance and pension system in China. How they intend to do this remains unclear, but the cooperation is real and SEE's blockchain investments so far are far from trivial. Additionally, Ping An Insurance released a whitepaper on "smart cities" with blockchain being one of the 5 pillars of such cities along with AI, big data, and other buzzwords. Being a very big company, we're sure Ping An can influence the government to move in the right direction.

This all comes hot on the heels of a crypto media purge in China. It turns out that Tencent-owned WeChat which is knee-deep in blockchain already as it's testing blockchain-based business-expense covering, has executed a ban on some crypto media accounts on its platform - accounts of DeepChain, Huobi News and CoinDaily. At the same time, venues in Beijing have suddenly been forbidden from hosting crypto events. It looks like China is trying to monopolize blockchain by filtering out foreign implementations and discoveries and focusing on local progress alone - this theory is further supported by the fact that Chinese regulators are moving in to block 120 external exchanges.


Elsewhere in the world, different countries are competing on how to be the most crypto friendly. Belarus, Portugal, Panama, even Slovenia are on a list of countries that do not tax crypto gains. Croatia - my country - is missing, despite offering 0% tax on crypto investments if you HODL for 3 years (and have proof of purchase, like a receipt).

Lichtenstein is attempting to play catch up with Malta and other crypto havens, so it's launching its own government regulated securities and a stablecoin, not unlike the dKuna. They are also planning a fiat-to-crypto exchange.

In Australia, a partnership between the Cointree exchange and auto-billing platform Gobbill resulted in all Australians now being able to pay their bills with cryptocurrency. At the same time, the Australian Stock Exchange announced that it intends to replace its internal CHESS settlement system with a DLT (blockchain) version by 2020. They'll probably opt for IBM's centralized HyperLedger Fabric again, but as we always say, any adoption is good adoption.

The Canadian IRAP (Industrial Research Assistance Program) now has a blockchain explorer for government grants, hosted on IPFS and run by BitAccess' Catena software. The grants can be searched and are stored on the public Ethereum blockchain, which is exactly the type of mass adoption we need - governmental transparency on a public blockchain.

The music festival Ultra Taiwan 2018 formed a partnership with Pundi X, an Indian payment system for cryptocurrencies. This will let all 30000 attendees pay for drinks, food and goods with a pre-purchased Ultra Coin. Festival tokens are a natural evolution of festival monopoly-money, so it's no surprise it happened this fast. How the system intends to combat the problem of drained cellphone batteries that will be preventing the execution of these payments, however, remains to be seen.

According to DiscoverDash, a site detailing all the places where the cryptocurrency Dash is accepted, it can now be used in over 2300 places of business and growing.


There's mass adoption happening in the world of blockchain development as well. For example Truffle, the team behind many of the most useful and popular tools for Ethereum development, recently launched a highly selective university for producing blockchain developers. They guarantee an offer after the program, or your money back.

Chaincode Labs is a company which does bitcoin-related development. They are now offering a residency for Lightning Network applicants, meaning they're willing to train new Lightning Network developers.


In terms of products, the game Gods Unchained is giving the longest running card game in the world - Magic The Gathering - a run for its money. It hasn't even launched and is already selling cards for $60k a piece. There's no doubt this game, which comes from the same studio which made CryptoBots, will be just as much of a mainstream success as CryptoZombies.

Kinit became the first iOS app to offer crypto-token rewards and spending. Generally, Apple's guidelines forbid this so Kinit being the first to be granted an exemption is a big deal. Kinit is an app for collecting points across many different apps for many different activities - think of it as loyalty points that can be used by many apps, not just Kin/Kik and their Kinit app.

In Slovenia, the first ever container shipped from China was accepted via the blockchain instead of the traditional paper based Bill of Lading. The CargoX Smart Bill of Lading system was used for this and resulted in the first non-trivial application of blockchain to the supply chain and shipping industry. CargoX uses the public Ethereum blockchain which is fantastic for mass adoption.

Crime and Punishment

The Wild West of the cryptocurrency world is no less wild this week either. Lucky for us, the Sheriffs are still quite active.

For example, Jacob Burrel Campos has been arrested in the US, charged with money laundering. He had been accepting fiat payments through cash and Moneygram and turning them into bitcoin via Coinbase and, later when his account was closed, via Bitfinex. He's been charged with laundering 2 million dollars of value for running an unlicensed money transmitting business. Even though entering the cryptocurrency market anonymously through such gateways may sound appealing, think twice - there's no telling when someone's overstepping might cause the police to knock on your door. Use licensed and legitimate platforms like, the sponsor of this newsletter - get a receipt after your purchase and rest assured.

The Robot Revolution

Many believe robots will take our jobs soon. In the world of cryptocurrency fraud, that's probably very true already: Twitter's algorithm is now reported to recommend scambots to new users. Scambots are scripts, automated Twitter accounts which ask people for Ether and in return promise double the amount. This is hot on the heels of a report that a network of 15000 scambots are currently active on Twitter which earn anywhere from 50 to 500 eth per day.

McAfee's corner

This Wild West's Billy the Kid is most definitely John McAfee who seemingly never rests.

His Bitfi hardware wallet now offers ERC20 token (Ethereum token) support but given that both the tokens and the bitcoin are still stored on the Bitfi company server, it's all just as vulnerable as before. Once Bitfi's servers are breached, all of everyone's money is gone.

Other than that, McAfee also found time to announce a new scam - he'll soon be launching Proof of Encounter coins. These coins will be "mined" in real-life encounters, proving you were somewhere you say you were. My personal opinion is that this is McAfee's long game in which he's building an alibi system so that he can mask his future misdeeds much easier by giving someone else the keys to his "encounter wallet".

He's not stopping there - this week, McAfee launched a new "news" platform at McAfee Market News. Their team seems to have been unable to implement even basic HTTPS, the essentials of internet security. We're sure the platform will objectively feature many of his scams.

He found a new Pump & Dump scheme, too. In a newer tweet, he proclaimed his love for a new project - ZClassic's (ZCL) fork called ANON.

He also joined the CPollo project as an "advisor". We're sure he'll provide them with useful advice like "pay 50 BTC for a promotion on Twitter" or "pay 50 more for a featured spot on McAfee Market News" etc.

Pyramids and Clouds

As mentioned in previous editions of Fintech Friday, every single cloud mining company is running a scam - no exceptions. A business model in which the owner of certain hardware is willing to rent this hardware out and share the profit with you would be insane not to cash those profits out 100% for himself instead.

We also claimed several times that any cloud mining company would either go bust or be "hacked" like the Slovenian NiceHash within 6 months. So, Genesis Mining, a popular cloud mining company, recently announced the closure of it's "less profitable" plans, forcing its clients to move to more expensive, more profitable mining plans. It's only a matter of time until the contracts need to be revisited again, or until the company simply disappears like so many before it.

While we're on pyramids and scams - another pearl was produced by Bulgaria (the country of origin for the OneCoin scam): iBull trade. It's a pyramid scheme which demands an investment of at least 1000 euro from its clients, giving them a "licence" and allowing access to the platform which doesn't even trade, despite the name, but "mines altcoins" instead. There is no proof of mining ever taking place - you have to take their word for it. The company is shrouded in red flags, from MLM co-founders to lies on the website, so if you run into ads for this platform around the web, know simply that they should be avoided.

In a similar vein, Edu Swarm follows the same business model. Avoid that one, too.


The founder of the pyramid scheme BitConnect, Divyesh Darji, was arrested in India. It would seem that the whole operation was being run out of Burj Khalifa in Dubai, and started as an escape from Madi's rupee ban. If you remember, India prime minister Madi banned 500 and 1000 rupee notes late in 2016 as a measure to curb terrorism and illegal activity, but by doing that without warning he destroyed the cash savings of many citizens, throwing the country's economy into disarray. Schemes like BitConnect were the ideal escape from this - the growth of cryptocurrencies was just ramping up and returning more and more of an investment every day, so victims were easy to find. In 2018, what many warned about finally happened: the pyramid collapsed. The devaluation caused the BitConnect coin to drop from around $400 to $1 in the span of a day.

We hope the people behind OneCoin (whose identities and proof of fraud we've given to local authorities here in Croatia), DasCoin, Davorcoin, Neter and similar scammy creations will meet the same fate one day.

Extortion and robbery

There's also the more direct side of cryptocurrency crime for all those impatient enough to have no qualms about straight up robbery and blackmail. Active fraud and robbery are very lucrative in this industry - so much so that the UK's Active Fraud department for crime and fraud reporting estimates that 2 million pounds of value was stolen in June and July of 2018 alone.

In Hawaii, fake employees of energy provider companies are calling business owners and demanding pre-payment for non-existent electricity bills via bitcoin. They even provide the victims with detailed instructions on how to execute the payment through a Bitcoin ATM.

A bit further away in the city of Lincoln, Nebraska, someone broke into a coffee place and stole cash from a Bitcoin ATM hosted there.

In South Korea, the owner of a crypto-related business was tricked by Gerard Boudoux, a Serb, into sending over 2 million euro worth of bitcoin in exchange for cash. The problem was that all of the cash was fake - Photoshop-made. The perpetrator was eventually arrested because he was already wanted by the authorities over connections to organized crime.

In China, a multi-month investigation resulted in the arrest of three suspects over cryptocurrency theft in the value of almost 90 million USD over the course of a few years. All three are experienced hackers and have been breaking into people's computers to steal unsecured cryptocurrency. The first theft was reported in March of this year when, with the help of digital forensics Zhou was identified as the first hacker who executed a remote access attack against the first victim. Under pressure, Zhou gave up his colleagues.

ICO Sundown

As time goes by, it becomes more and more obvious which ICOs were fact and which ones were fiction (spoiler: most). As such, many ICO class action lawsuits are popping up, accusing ICO founders of never delivering on their promises.

Unikrn, the ICO famously backed by VC Mark Cuban, is being sued for false promises around its tokens. Unikrn planned to present the tokens and "utility" and they turned out to be a "security". The lawsuit is the consequence of the token's de-valuation from $2 to $0.05, and unfulfilled promises about launching an e-sports betting platform on which these tokens were supposed to be used.

Monkey Capital lost a suit in which it is claimed that they gathered $1 million in a private pre-sale to launch an ICO, which they never did. The money was never returned, and the owner of Monkey Capital, Daniel Harrison, offered no rebuttal or justification. His punishment will likely be severe, as his token - now also deemed a security - breaches federal finance law.


In South Korea, the government inspected 21 exchanges and concluded that barely half of them have adequate security measures in place. The inspection will re-check the exchanges next week when the mistakes are expected to be fixed. Should this not happen, we can expect more closures of Korean exchanges.

This goes hand in hand with reports of increased North Korea hacking activities. Their Ryuk ransomware (the assumption that it's North Korea is based on similarities in source code) has up until now forced businesses to turn over more than $640,000. Kaspersky also published a report about the Lazarus North Korean group (which is suspected of having been the author of Ryuk as well) developing MacOS and Windows malware which led to the infection of an unknown cryptocurrency exchange in South Korea. Despite the operation being quite intricate, in order to infect a computer this malware needs manual installation so it's all - as usual - human error.


An application appeared on Google's Play Store recently selling a simple Ethereum logo for 335 euro. So much for security from Google - it's just more proof that the once-innovative tech giant has lost its way and that it's working against us all by issuing bans but being unable to follow through.

Patent Trolls

As usual, we'll let you decide if patenting blockchain technology is a good or bad thing. Here are this weeks patents and patent applications.

Status Quo and Regulation

The tug-of-ware game between the ruling class and the coming financial elite of cryptocurrency owners continues, to the point of crypto enthusiasts being singled out and searched at airports. Various stories are popping up of draconic targeting by TSA agents of anyone with crypto apparel like stickers and caps. Ignoring the fact that no grown man should ever wear a cap, let alone one with a bitcoin logo, such targeting is by no means acceptable - especially considering the fact that neither the SEC nor the USA in general have a particularly negative stance against cryptocurrency.

In Egypt, internet censorship is reaching new heights. President Abdel Fattah al-Sisi is trying to stop the reach of technology in the country by banning all websites that mention dissenting political opinions or which might have the potential to disrupt the current status quo even a little. This, of course, includes financial revolution like that offered by the blockchain. It looks like Egypt will be the first true testing ground for blockchain's censorship resistance.

In Japan, the sentiment is positive due to FSA's (Financial Services Agency) Toshihide Endo stating that they want cryptocurrency to grow but under appropriate regulation.

In the US, four exchanges came together in a Virtual Commodity Association to self-regulate the cryptocurrency industry. The members are the Gemini exchange, Bitstamp, Bitflyer and Bittrex - true power players of the industry.


Let's take a look at what's new in the software space.


Applications and projects



More Interesting Resources

That's it for this week. If you find any interesting links, make sure you share them with me by pinging me on Twitter!


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