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Moody’s Misses the Point on Blockchain Tech, Fears ‘Systemic’ Risk

Moody’s Misses the Point on Blockchain Tech, Fears ‘Systemic’ Risk

Moody’s Misses the Point on Blockchain Tech, Fears ‘Systemic’ RiskMoody’s claims the blockchain poses a ‘concentrated risk.’ Have they met the Federal Reserve? | Source: ShutterstockBy CCN: Moody’s is one of the world’s best-known rating agencies, and it appears they are ready to admit they see some upside in blockchain technology. They also claim there are systemic risks to conventional finance from the adoption of the tech.Moody’s Is Concerned About “Concentrated Risk” When Using BlockchainYes, you heard that correctly. Moody’s angle is not that blockchain technology is displacing and disrupting archaic financial systems. Instead, they argue that its application is risky:“New key transaction parties will be introduced to the process, namely the entities that serve as developer, provider, and operator of a blockchain. They may be either closely linked or identical with the originator, or independent third-party service providers, which could lead to a certain degree of counterparty concentration risk. [This] may also assume a systemic component.”No System Is More Concentrated Than The World’s Reliance on the U.S. DollarThis argument has always been out there and it’s frustrating, to put it mildly. To dissuade someone from doing something, fear is an excellent deterrent. Another good tactic is to take the biggest problem with your system and claim that it’s the biggest issue with the usurper. Conventional finance is so overwhelmingly reliant on the US Dollar and the Federal Reserve that any criticism of something else for being “concentrated” is the ultimate hypocritical situation. The blockchain is the target in this scenario.Bitcoin and many of its peers utilize a vast and complex network. Many of the most exceptional engineers in the world build and maintain them. The way Moody’s writes about it, you would think it was four men and a dog in a shed. If one calls in sick, then the whole system collapses!Banks Are Resistant to ChangeAs ever, the issue here is that banks have resisted change for a long time and it’s expensive and time-consuming to shift to a more efficient platform. Moody’s is not exactly known for getting it right all the time. The salvaging of their reputation after the sub-prime mortgage crisis bears a resemblance to Lazarus emerging from his tomb. All a rating agency has to be is honest and thorough. Most of the big ones failed the test in 2008.Bitcoin’s Rules Are Inherent in the SystemSo should the Moody’s report be taken seriously? Absolutely. It should be a reminder that engineers and strategists for blockchain projects have to hold themselves to a higher standard. The old guard is always desperate to see an upstart fail.Take this final quote from Moody’s “Someone has to define the rules and also has to monitor the application of the rules.”This could apply to anything. Blockchain isn’t magic, but the implantation of the consensus algorithm might as well be when judged against the tired old systems that finance runs on today.The average lifespan of a fiat currency is 27 years before it implodes. Individual leaders and not people vote for central bankers who set the tone for the entire financial system. If that’s not a systemic risk, I’m not sure what is. About The AuthorFrancois AureFinancial speculator living in the hills in Los Angeles. J.D. but very much not a lawyer. Favorite trading books are anything written by Jack Schwager.
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Hackers made $32K in 7 weeks by fixing bugs in cryptocurrency projects

Hackers made $32K in 7 weeks by fixing bugs in cryptocurrency projects

In the past seven weeks, white hat hackers earned at least $32,150 by fixing security flaws in popular cryptocurrency and blockchain platforms like TRON, Brave, EOS and Coinbase.
According to data reviewed by Hard Fork, 15 blockchain-related firms have paid rewards to security researchers between March 28 and May 16, split across 30 publicly-released bug reports.

Omise, the software firm behind cryptocurrency OmiseGo, fielded the most fixes (six). Blockchain-powered prediction market Augur disclosed three reports, as did Brave Software, makers of the Brave browser, which features its own native token.

Projects adjust their HackerOne rewards to the severity the discovered security flaws. Whilst the majority of Omise’s reports were only worth around $100 each, other payments in the past seven weeks were much higher.
Block.one, the firm behind the EOS “blockchain,” rewarded one hacker with $10,000 for a single fix, as did budding network Aeternity.
TRON also paid $3,100 to the researcher who realized the network was susceptible to being flooded with malicious smart contracts, which would have brought its blockchain to a screeching halt.
The amount of hackers who prefer to fix security issues seems to be remaining steady — but sometimes they can make off with much bigger amounts exploiting vulnerabilities themselves.
Indeed, cryptocurrency exchange Binance revealed attackers had successfully stolen 7,000 BTC (then $40 million, now $55 million) from its own wallets last week.
Coincidentally, Binance runs its own bug bounty program with a maximum reward of $100,000 for the most critical of vulnerabilities. The Binance hacker remains at large.

Published May 20, 2019 — 15:21 UTC

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ABN AMRO signs on Accenture and ING Bank for its blockchain inventory platform

ABN AMRO signs on Accenture and ING Bank for its blockchain inventory platform

Despite abandoning plans to build its own Bitcoin wallet, ABN AMRO is not quite done with blockchain tech.
The Dutch banking giant has announced plans to launch a decentralized trade inventory platform in collaboration with Accenture and ING Bank, according to a press release (spotted by CoinDesk).

Codenamed Forcefield, the project will employ Internet-of-Things (IoT) devices to provide “real-time insight into trade inventories.” ABN AMRO claims the platform’s monitoring features “will lead to more secure physical handling processes and a reduction of costs.”
Upon launch, the project will focus on “refined metals,” but “functionality will be expanded across other dry bulk commodities” in the future.
In addition to ING and Accenture, a number of other companies – including Anglo American, CMST International, Hartree Partners, Macquarie, Mercuria, and OCBC Bank – have also signed a memorandum of understanding to join Forcefield.
Back in January, ABN AMRO teased plans to develop its own cryptocurrency wallet, called Wallie. But as Hard Fork reported, the bank has now ditched Wallie as cryptocurrencies are still “too risky.”
“We have approached all the people who have shown interest,” ABN AMRO press officer Jarco de Swart told Hard Fork. “We have concluded that cryptocurrencies because of their unregulated nature are at the moment too risky assets [sic] for our clients to invest in.”
ABN AMRO and ING are hardly the only banks looking to get in on the blockchain hype. Indeed, leading banks – including Barclays and HSBC – reportedly poured $50 million into a blockchain-based digital cash system, expected to launch in 2020.

Published May 20, 2019 — 15:00 UTC

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