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Thai music festival to use its own token for a cashless event

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Despite the ongoing COVID-19 pandemic, some global events have chosen to move forward as planned. Instead of canceling, they are working to limit close contact between attendees through the introduction of new technologies. One such solution involves a cashless payment system powered by blockchain.

Mystic Valley, one the largest music festivals in Thailand, will be issuing its own token for cashless payments during its upcoming three-day event.

According to a Nov. 19 announcement, Mystic Valley organizers partnered with local cryptocurrency exchange Bitazza and blockchain startup Fuse.io to mint its own crypto token, MYST.

The new token is designed to provide all financial transactions at the festival including payments made to food and drinks vendors and merchandisers. The event is scheduled to run from Nov. 27 to Nov. 29 at the Mountain Creek Golf Resort in Khao Yai, Nakhon Ratchasima.

According to the announcement, MYST token is intended to eliminate the need for paper money, resulting in a smoother and safer experience for attendees and vendors.

The new cashless payment system is also expected to reduce costly fees charged by major point of sale systems. “Network’s $0.01 transaction makes the implementation of cashless payments accessible to any kind of event organizer at [a] fraction of the cost,” the announcement notes.

A spokesperson for the event told Cointelegraph that users will be able to exchange the unused amount of MYST tokens for fiat. “Then they will get a cash or wire transfer refund,” the person added.

Alongside providing a cashless payment system, Mystic Valley also allows attendees to buy their tickets with major cryptocurrencies like Bitcoin (BTC), Ether (ETH), and stablecoin Tether (USDT), the announcement notes.

The music industry has been closely tied with crypto in recent years. Audius, a Binance-backed decentralized music sharing service, distributed $8 million in governance tokens to musicians and listeners on its platform in late October 2020. In late September, French DJ David Guetta secured a deal with crypto-focused virtual reality platform Sensorium Galaxy.



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Stellar Lumens doubles in price following upgrade

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The price of Stellar Lumens (XLM) shot up 60% in the past 24 hours and crossed the 20 cent mark for the first time since Sept. 2018. The ‘stellar’ price action followed an announcement by the project’s developers that a new version of the Stellar public network protocol had been implemented by validators.

The Protocol 15 upgrade was voted into effect at 4:00 PM UTC on Nov. 23 and introduces two new features that aim to reduce the level of complexity presented to users of Stellar network-based apps and services.

Price action for Stellar Lumens has been relatively subdued over the past year until Nov. 21, when trading volume started to build. XLM has doubled in price over the last 48 hours and leads the top 100 coins by market cap in weekly gains, topping out at +125%. It is among a handful of coins currently leading the altcoin pack in what could potentially be a long-awaited “alt season.”

Initially forked from Ripple Labs protocol by Jed McCaleb and launched in July 2014, Stellar seeks to lessen the cost of cross-border payments using blockchain. The project is particularly focused on serving unbanked or underbanked regions of the world where access to traditional financial services is either nonexistent or prohibitively costly.

Stellar’s Protocol 15 upgrade includes two new components designed to enhance user experience while retaining a defense against “farm attacks” and other methods in which bad actors may try to subvert the purpose of the network. A farm attack is where multiple accounts are created by an entity with the aim of harvesting the small amounts of funds sent to those accounts by service providers which are required to activate the account.

According to Stellar’s official blog, the Protocol 15 features have been in development for over a year and address some of the “biggest pain points” for developers when building apps and services for customers on Stellar.

After the upgrade, developers can create simpler, better user experiences that abstract away the complexity of blockchain, and do it without losing any of the advantages of a fast, cheap, and permissionless public ledger.

Stellar has also just announced a partnership with East African business-to-business payment platform provider ClickPesa, which serves six countries in the region. According to Stellar’s blog post, ClickPesa was motivated to use Stellar upon recognizing an “opportunity to reduce the friction inherent to intra-African cross-border payments and P2P payment activity.”

In October, Stellar announced that stablecoin USDC would be hosted on its blockchain at some point in 2021, furthering its mission of simplifying cross-border money transfers. Stellar Lumens’ extremely low transaction fees and 4-5 second settlement times are among its top selling points as a cryptocurrency.





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Blockchain-based voting systems have potential despite security concerns

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The 2020 United States presidential election was met with an increase in mail-in ballots due to COVID-19 concerns. Yet while many Americans stayed away from polling stations this year, postal delays, rejected ballots, and other challenges emerged.

Unsurprisingly, better ways for casting votes during major elections quickly became a hot topic of discussion. This has also led some in the crypto community advocating with renewed vigor for a blockchain-based voting system to be used in the future presidential elections.

While the promises of blockchain include trust, transparency and immutability, a group of researchers at the Massachusetts Institute of Technology’s Computer Science and Artificial Intelligence Laboratory pointed out security flaws associated with blockchain voting systems. The researchers published a report on Nov. 6 explaining that online voting is fatally flawed since such systems are vulnerable to large-scale cyber attacks. The report specifically discusses blockchain-based voting systems like Voatz, which has been used in U.S. municipal elections, yet reportedly suffers from data security issues.

Security aside, blockchain voting systems may be viable

Despite security concerns, some still believe that blockchain-based voting systems will be leveraged in major elections moving forward. Maxim Rukinov, head of the Distributed Ledger Technologies Center of St. Petersburg State University, told Cointelegraph that blockchain allows for a system of fair elections to take place within a trusted environment between participants who generally do not trust each other: “With blockchain you can make voting available and increase the transparency of any election. In a perfect scenario, the results of such a vote cannot be faked.”

Rukinov shared that he has been working with a team of researchers to develop an online voting system specifically designed for enterprise use. Known as “CryptoVeche,” Rukinov explained that this particular system stores voting results in a blockchain, which is a type of distributed ledger. As such, the system is highly secure against external and internal hacks.

Alex Tapscott, co-founder of the Blockchain Research Institute and a book author, explained this in detail for a New York Times article published in 2018, even before the COVID-19 pandemic brought new challenges to light. Tapscott pointed out that in elections, trust is concentrated within government agencies, which are extremely vulnerable to hacks, fraud, and human errors. To put this into perspective, a study released last year shows that local and federal government entities have fallen victim to 443 data breaches since 2014, but those mostly included lost hardware, mailing errors, and paper breaches.

Tapscott noted that a blockchain system relies on distributed network computers to verify transactions. Once verified, results are recorded in blocks that are linked cryptographically to the preceding block. A secure ledger is then formed, which is transparent to all network participants, yet remains immutable and tamper proof. This feature is also important for ensuring that individuals only cast a single vote, as blockchain-based systems are meant to prevent double-spending. 

Don Tapscott, well-known author and co-founder of the Blockchain Research Institute further told Cointelegraph that votes cannot be sent online today because internet-based systems do not work well for such applications:

“If we transmit information like a vote on the Internet we’re actually sending a copy of that file; the original remains in our possession. This is acceptable for sharing information but unacceptable for transactions with assets, like money, securities, songs or recording votes in elections.”

As such, Tapscott noted that within a blockchain-based system, public trust in the voting process is achieved through cryptography, code, and collaboration among citizens, government agencies, and other stakeholders.

Technical challenges must be overcome

Of course, there is no denying that technical challenges related to blockchain-based voting systems remain. In addition to the security concerns mentioned by MIT researchers in their recent report, Rukinov acknowledged that developing an online voting system is challenging.

Rukinov further explained that with blockchain systems the accuracy of transactions, in this case, voter registration is verified by a consensus mechanism between different members of the network. However, when it comes to voting systems independent observers must also be one of the parties involved with the consensus, meaning they would have to hold several validation nodes.

According to Rukinov, in most cases the number of nodes owned by the network organizer are greater than the number of independent nodes. So in the case of a blockchain-based voting system, an attack may occur when those who control more than half of the resources have the ability to change data at random. Rukinov pointed out that this problem is not the case for all types of consensus mechanisms.

Lior Lamash, Founder and CEO of GK8, a cybersecurity company, also told Cointelegraph that while the immutable nature of blockchain makes it an effective platform to ensure the integrity of the voting process, several vulnerabilities remain. Specifically speaking, Lamash noted that voter identification is problematic when using blockchain-based voting systems:

“The security aspect of blockchain-based voting is tricky. On one hand, the blockchain itself is completely secured from even state-level hackers, as it employs hundreds of thousands of nodes on multiple servers across the globe. The challenge would be in securing the ‘endpoints’ of this network – individual ballots and voting stations.”

Moreover, Lamash noted that while each ballot stores a user’s private keys, a hacker could obtain that information and manipulate the entire election process: “This issue is quite similar to the challenge that banks and other financial institutions face when offering blockchain-based services.”

Undeniable potential

Although challenges remain with blockchain-based voting systems, it’s clear that blockchain has huge potential for use in future elections. Dylan Dewdney, chief executive officer of Kylin, a cross-chain platform designed for Polkadot-based data economy, told Cointelegraph that the trusted outcome of an election must also be taken into consideration. He further determined that blockchain being applied for data validation is highly useful in this case.

According to Dewdney, a decentralized infrastructure could help improve the trusted outcome of an electoral process. Dewdney explained that Kylin has created a data validation process using an oracle node, which serves as an information feed. An arbitration node is then used to judge if that data is valid or not. Dewdney said:

“Anyone operating an arbitration node would have an excellent incentive to challenge inaccurate information as they would be rewarded in a native token to do so. Similarly, providing accurate, validated (challengeable) information as a premium data feeder to consumers like news organizations, is incredibly valuable as a premium data feed in a data marketplace.”

Although Kylin is a solution that can easily be applied in the decentralized finance space, the same concept can be used for voting systems. “Decentralized validation of local electoral results could provide a very powerful tool against some of the problems we are currently seeing.” He further added: “This could easily operate as the linked consensus of the validated API feeds of literally thousands of local election results reported to websites within a Dapp developers premium data sourcing.”

Rukinov believes that the ideal blockchain-based voting system must cater to voter eligibility, verifiability, and immutability. He mentioned that these features can be achieved in the future through cryptographic protocols including digital signatures, zero-knowledge proofs, and homomorphic encryption: “In order to achieve additional benefits, it’s necessary to add the possibility of cancelling the registration; observers being able to detect the facts of falsification; and the permanence of the register change history.”



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BIS report suggests ‘embedded‘ monitoring tool for stablecoins

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Facebook’s proposal for its digital currency, Libra, was a wake-up call for international regulatory agencies, finance ministries and central bankers. All these actors recognized that the company’s reach across its three platforms had the potential to accelerate adoption of a global stablecoin to an unprecedented extent.

In a new paper from the Bank of International Settlements, three analysts have proposed that the novelty of Libra and other proposed global stablecoins demand that regulators reimagine the possibilities for monitoring and supervising their issuance and circulation.

Libra’s potential for rapid, mass adoption across multiple jurisdictions would require authorities to develop dynamic and adaptable tools for supervision and enforcement, the analysts write. While challenging, they argue that the nature of the digital stablecoin can itself offer new enforcement mechanisms:

“Stablecoin proposals are one area where embedded supervision may work in practice. Information is a central function of regulation, both from the standpoint of enhancing market functioning and efficiency, and as from the standpoint of supervision, whether for purposes of market integrity, customer and investor protection, or prudential supervision.” 

This “embedded supervision” would make a direct and automated data reporting provision a registration requirement for all prospective stablecoin issuers.

As the analysts point out, this is already the case for some existing non-stablecoin digital payment platforms such as AliPay and WeChat Pay in China. 

Stablecoins that use distributed ledger technology can generate secure information and support automated monitoring of the ledger, reducing the need for issuers to actively collect, verify and report data to public authorities.

There are, broadly speaking, three aims of introducing embedded supervision for stablecoins: reducing the costs of compliance, thereby leveling the playing field for large and smaller private actors; developing an open-source suite of monitoring tools that can clarify how regulatory frameworks can be applied; and ensuring the legal finality of payments, which remains distinct from economic and contractual finality.

After a careful analysis of the various challenges presented by this model, the authors argue that a better solution could, ultimately, be to embed fiat currencies within a similar paradigm. 

Central bank digital currencies, or CBDCs, would not present the same “conflicts of interest” that privately-issued stablecoins represent. The authors therefore conclude with the suggestion that stablecoins may be an experimental proposal that points the way to innovation within the existing system, not beyond it: 

“In the same way that stablecoins from previous centuries […] were an evolutionary step on the road to central banking, today’s stablecoins could too eventually give way to other reforms. This may include robust sovereign-backed alternatives and new means to connect central bank money across borders.”