Cryptosoft: The hybrid ICO

Hybrid ICOs are what analysts call those who compromise in all three areas – reach, compliance and cost efficiency. One example is RightMesh. RightMesh has established a subsidiary in Switzerland and designed its RMESH token to be classified by Swiss regulators as a pay coin (and not as security). A dedicated law firm ensured that RightMesh met the relevant KYC and AML requirements. The token was also not offered in countries where ICO tokens are generally classified as securities, such as the United States. The RightMesh team researched how the RMESH token would be classified in over 27 jurisdictions. However, this care is associated with corresponding costs. In addition, there is no guarantee that a token will retain its status within a jurisdiction.

„This manual review of investors, regulatory research and selective issuance is a good example of how a company can work with regulators to achieve compliant token distribution, although it also illustrates the huge costs in terms of finance, time and human resources that are currently being incurred, the authors of the study state.

The fourth cryptosoft way: head in the sand

Not every cryptosoft company is willing to find a way to counter this trilemma. Although many (even „the silent majority“ according to the analysts) have already considered an Initial Coin Offering as a cryptosoft financing scam instrument, they do not do so in view of the associated (and above mentioned) uncertainties.

„We have talked to several stakeholders who have seriously considered raising capital for new companies through token issues, but have so far held back and decided that the (known and unknown) costs of achieving a compliant ICO that reaches a sufficient pool of distributed investors are currently too high to proceed.

As a result, many companies are either taking a blanket decision not to implement an ICO, or are adopting a wait-and-see approach in the hope of a more transparent (and at best global) regulatory environment.

A – not entirely altruistic – proposed solution

Since such globally uniform regulation is not yet foreseeable and passivity is not a viable option for every company, the analysts propose a solution in which ICOs regulate themselves. This reveals the biased character of the study.

The iComply system, i.e. one of the authors of the study, is proposed as a possible approach. The platform iComplyICO is supposed to enable the implementation of ICOs with automated Compliance:

„Before the Token Sale of the ICO begins, the rules for who can hold them and may act are coded into the digital tokens. In order to purchase the tokens, individuals must demonstrate that they meet these requirements by verifying their identity in accordance with the appropriate multijurisdictional guidelines and then whitelisting their wallet.“

Those wishing to follow the process in more detail will find more detailed descriptions of what such self-regulating ICOs can look like, both in the study and on the corporate side.

Bitcoin Classic Proposal: A doubling of transactions per block?

A new version of Bitcoin Classic, an offshoot of Bitcoin Core, could double the number of transactions per block.

Bitcoin users currently rely on different versions of Bitcoin Core, the successor to the protocol originally written by Satoshi Nakamoto. The current blocksize debate, however, opened the door to other implementations, as the rise and fall of Bitcoin XT made clear some time ago.

Discussions about this proposal and generally about the yes or no question behind increasing the block size ultimately triggered a schism in the Reddit community around Bitcoin. Further sharp debates took place on Twitter and the slack channels of Bitcoin Core and Bitcoin Classic.

What will happen to the crypto trader?

Now Bitcoin Classic is released. Will the crypto trader be accepted now? A preliminary data collection allows the conclusion that the number of nodes working with Bitcoin Classic will increase in the future like this: . According to the page Coin.Dance there are currently a bit more than 500 nodes with Bitcoin Classic – in comparison there are 4100 Bitcoin core nodes.

The new version of Bitcoin Classic, ultimately a restructuring of the current Bitcoin core that would accept larger blocks, could be a new phase in the debate about scaling the transaction capacity of the blockchain.

For over a year now, members of the Bitcoin community have been arguing extensively and often bitterly about the block size. The latest proposal, which includes Bitcoin Classic, plans to increase the block size from 1MB to 2MB. If the new protocol were activated, it would lead to a split in the blockchain, with both branches containing their own different transaction histories from the time of the split.

Since its release last month, Bitcoin Classic has attracted the attention of both supporters and critics alike. The former see it as the next phase of software development behind Bitcoin, the latter a threat to the blockchain.

The proposal to split the existing history of Bitcoin transactions into two branches as described above (one with 2MB block size, one with 1MB block size) is supported by startups working in the Bitcoin scene and some Bitcoin miners.

However, you have to keep in mind that an activation of the Bitcoin Classic software requires 751 of 1,000 miners supporting 2MB blocks. Only then will a 28-day transition period begin during which node operators and miners will have to replace their software with one compatible with Bitcoin Classic.

At a conference hosted by Coinbase – Coinbase itself is a strong supporter of Bitcoin Classic – Bitcoin Core Maintainer Gavin Andersen said he suspected that miners who did not immediately support Bitcoin Classic would follow suit if there was sufficient support:

„As soon as 75% of the miners are convinced, the rest will follow very quickly. This is exactly what happened with similar protocol updates“.

An adoption of Bitcoin Classic depends on the majority of node operators and miners, they must take the step of splitting off from the existing network. This has never been the case before; so far, new versions of Softfork (protocol versions that are fully downward compatible) have been tested by volunteers.

The Bitcoin Classic team – which includes people like Andersen and Bloq CEO Jeff Garzik – said they expect a new version to be released within the next few weeks. This new version would be based on Bitcoin Core 0.12. The development team will get some new faces (Pedro Pinheiro, Tom Zander and Jon Rumion), while others will only be external (Jonathan Toomim, Marshall Long and Olivier Janssens).

The debates continue

Advocates of increasing the block size limit say that this will be necessary in the near future; it needs this new space to allow more transactions and as a means against too high transaction fees. Friends of Bitcoin Classic stress that it is competition between different implementations of the Bitcoin protocol that drives development and allows Bitcoin users to participate in this process through freedom of choice.

Critics say that these changes should be pushed through too quickly and therefore too risky; the question is asked how a broad adoption of a hard fork should be successfully coordinated at all. It would then be necessary for all nodes to download new software, otherwise they would be separated from the network by incompatibility. Also, the governance system of Bitcoin Classic,

Health sector still needs time for blockchain

Despite the fact that blockchain hypes do exist in the health sector, some say that pitches and ideas are not much more than fantasies.

Such comments come at a time when Blockchain technology and the Bitcoin secret has been increasingly praised

The Blockchain technology is supposed to be a scam solution for everything from the management of electronic medical records to health insurance and reduce the complexity of these Bitcoin secret systems in such a way that the frustration of all users is minimized.

However, new research shows that the entrepreneurs behind these plans mean well, but ultimately offer no better solutions to the industry’s existing problems.

„It’s simply impossible for the healthcare sector to act in real time – even though people like to say the opposite,“ says Dr. Alyssa Hoverson Schott, a physician who works in Sanford Health. She started a discussion on this topic at the Distributed Health Conference earlier this month.

Hoverson Schott has an average of 39 patients per day and has to record their medical data in a database between visits.

„I notice that I often don’t have the time for the entries,“ says Hoverson Schott.

The database entries are sent to insurance companies, which then prepare an offer for the treatment costs on this basis. The negotiation between the hospital and the insurance company can take ninety days.

But what is the real problem with blockchain approaches? The providers of new technical solutions know nothing about the daily business of health insurance companies.

„The founders of these start-ups often talk about things that are not feasible. I doubt that they know our daily routine and understand the system behind it.“

That doesn’t mean that she doesn’t see any place for the blockchain in the health business. She is very interested in the blockchain, also on a personal level: Her husband is a business analyst at Experian and as such is also interested in the blockchain.

She suggests, however, that start-ups should team up with the established industry instead of working „disruptively“ against it.

Even if the minds within the healthcare industry have their concerns, this use case shows that the blockchain is now more than just a technical solution – it has become a social phenomenon.

Concerns from the health sector

There was also interest in the blockchain from other sides in the healthcare industry: Dr Jonathan Holt was a practicing physician, but is now focusing on his two startups. SeqTech Diagnostics performs genetic testing on food and TranSendX is a blockchain application designed to give patients more control over their patient records.

Holt sees another opportunity to expand his expertise in a new project: Like financial companies, health insurance companies often have financial incentives to keep patients‘ or customers‘ information locked up in their files. This could be the starting point, but many of the current ideas are too radical to be accepted.

Holt is not the only one to believe that companies in the healthcare sector are reluctant to accept new data storage systems. A leak of such data can result in such high fines that healthcare providers can go bankrupt.

During the conference mentioned above, start-up entrepreneurs were therefore met with criticism.

There is another reason why healthcare providers are reluctant to face the blockchain industry: They have pumped a lot of time and money into the existing solution.

Similar to financial companies, which will not simply abandon their previous system, this industry also requires updates rather than complete new beginnings.

In addition, many hospitals are currently switching to the electronic health record (EHR), an American counterpart to the e-file. Within the framework of the American Recovery and Reinvestment Act, the US government suggested that health service providers should „make sensible use“ of the EHR from 2014 onwards.