Danette Wallace - Blockchain Will Force Us To Put Our Big Boy Big Girl Pants On

Blockchain Will Force Us To Put Our Big Boy / Big Girl Pants On

Author: Danette Wallace

When we transition to digital currencies and blockchain applications we will need to collectively grow up.

In western culture, we are accustomed to depending on external organizations to take care of our assets. Banks take care of our money, trusts take care of our properties, stock brokers take care of our investments. If we have an issue with any of these areas, there is a backup system in place. These external organizations are responsible for backing up our information because essentially we don’t own the data, they do.

The irony is that there is a sense of freedom that comes when your information is captured (much like there is a sense of freedom for children who don’t have to worry about paying for rent or food because their parents take care of it). As a society, we’re like children. We’re free of the worry of being 100% responsible for our information because centralized organizations take care of it, problem is, they also own it. With blockchain, all of that will change.

A SHIFT OF RESPONSIBILITY

With the move to digital currencies and blockchain applications, the safety of our assets and our sensitive information will become our individual responsibility. Currently, this is not the case. If we lose a valuable document, we can recover it from the organization that is responsible for keeping a record of it. There is often a record of what we own somewhere in the bureaucratic universe.

Because of this backup system, our minds tend to think of digital assets as “copies” of something that exists in the cloud somewhere. With decentralized blockchains, however, the original data exists on individual nodes only. In other words, the original data will often exist only in our phones. That’s what makes blockchain so different from other technologies. It allows for the digital asset to be the “original,” just like cash. But also like cash, if you lose it, you lose it.

TIME TO GROW UP

This may be a difficult transition for some. We all have that friend who seems to misplace their keys every other week or the family member who can’t find their eyeglasses even when the glasses are sitting on top of their head. These are the individuals who may have the hardest time with this new responsibility.

A number of people have lost millions of dollars worth of Bitcoin from being careless with their personal passwords to their Bitcoin accounts. Since the password doesn’t exist on a central database, if the person loses their password, there’s no way to recover it and the Bitcoin sits on the blockchain with no way to access it. As of July, 2018, a total of $44 billion worth of Bitcoin (6M Bitcoin) are left inaccessible and permanently lost on the Bitcoin blockchain. If you don’t want to lose access to your cryptocurrency, do whatever you can to keep your passwords safe.

Andreas Antonopoulos, one of the foremost Bitcoin experts, prints out his passwords and key phrases and puts the paper copies in bank safety deposit boxes. This is ironic given that Antonopoulos thinks banks will go by the wayside when cryptocurrency enters mainstream. I tend to agree with him. I have always said that banks should consider transitioning from monetary banks to information banks. That way they will continue to remain relevant.

DO YOUR HOMEWORK, KNOW WHO/WHAT TO TRUST

With the transition to blockchain, we will need to shift our trust from the banking system and government organizations to trusting the blockchain protocol. Blockchain is a unique technology because it’s able to hold records of people’s assets in a decentralized framework. Blockchain is often referred to as a trust-less system which means, with blockchain, we don’t need to trust people or institutions. The trust resides in the technology itself.

For some, trusting blockchain protocols may be difficult at first. This is often due to their misunderstanding of where to appropriately place their trust. The trust-less aspect of blockchain comes into play when the technology is used as it was intended…as a decentralized consensus platform. Trust should not be placed in centralized databases, even if they say they are using a blockchain. If they are using a centralized blockchain, then they are not using blockchain as it was intended. The user should be mature in their pursuit of knowledge and in their decision making and they should know who to trust.

For example, those that have done their homework know that the Bitcoin protocol has proven its trustworthiness. In the nine years that Bitcoin has been around, there has not been a successful theft from the protocol yet. This does not mean that people don’t try. Hackers are constantly trying to hack into Bitcoin. The reason they’re unsuccessful is because of the decentralized nature of the protocol. To successfully compromise the system, a hacker would need to gain consensus from the community to implement their changes but hackers are never able to gain that consensus. This is why a decentralized blockchain is safer than a centralized one. Regulations and laws do not prevent hackers from hacking into Bitcoin, the decentralized community does.

When data is kept in a centralized exchange, it’s more susceptible to theft and corruption. This is why it’s important to 1) know the difference between a centralized blockchain and a decentralized blockchain and 2) put our trust in the appropriate decentralized blockchains.

For proof of the safety of decentralized frameworks, all you have to do is look at the evidence.

  • Amount of Bitcoin stolen from the decentralized Bitcoin protocol — $0
  • Amount of Bitcoin stolen from centralized exchanges — $15 Billion

When there is a shift in trust from centralized organizations to decentralized blockchains and we gain an aptitude to know the difference, we will take on a new responsibility for the safety of our assets. That’s when we will collectively grow from blockchain infants to blockchain adolescents and have our big boy / big girl pants on.

“Blockchain Will Force Us To Put Our Big Boy / Big Girl Pants On” 

Author: Danette Wallace

Meetup 15th October 2019

I’m going to start by telling you all a story which has huge significance for digital currencies.

I was in a pub down south with a friend. A little while later, another gentleman came in who my friend knew. After introductions the new arrival asked me “ What do you do then?” I replied that I was involved with cryptocurrency.

“What’s that then?” he asked.

“ It’s like Bitcoin.”

“Never heard of it” he replied

I thought for a moment.

“Do you use Facebook?”

“Oh course” he said.

“ Have you heard of Libra?”

“Oh yes, I know all about Libra,” and he really did. He had read all about it.

So my point is back in say March this year there might have been 40-50 million people who knew something about crypto or digital currencies.

But NOW, a potential 2.7 BILLION do.

And that is a game changer. There’s lots of issues about Libra, not least their problems with SEC and the Senate and people dropping out, but it remains the case that it has opened up the debate that was needed

We will be having the second Advisory Board meeting next week. We have high hopes that this will prove a useful and helpful fixture as we move forward.

We are due to have a meeting with our preferred blockchain suppliers in the next couple of days, but we already have some important information in this respect.

The decision has been taken to have Scotcoin become an ERC compliant token. Our coin will have smart contract capability. We in fact have a coin running on the Ropsten testnet and expect to be able to deploy it in Alpha mode fairly shortly. There are other considerations to be taken into account, but at the very least we now have an actual beta test coin that covers what we require in terms of security, longevity and tradeability. As you probably know, Ethereum is the largest blockchain in terms of tokens sitting on it. There are other very good reasons for going down this route, quite apart from speed of transaction, the scalability and the minimal power use.

Firstly, the SEC has ruled that Ethereum (and its tokens) are NOT securities. The reasoning behind this is that the very nature of the blockchain per se – as a decentralised platform – means that no one is actually managing the token for profit. ICO considerations are somewhat different, but the baseline is that Ethereum (and Bitcoin eg) are exchange tokens with the same characteristics. Sales and purchases are NOT security transactions and therefore the SEC has no oversight. Scotcoin is and will be exactly the same.

Secondly, the basis of any blockchain covers 5 main points.

Number 1 is that it is ( or should be) decentralised. That means that no one person or small group of people can influence the profitability of the token. In essence a token has no inherent profitability – the pound in your pocket is worth a pound with no DNA to make it profitable and in excess of that £1. Number two is that the decentralised consensus means that everyone on the network has an identical copy at the same time. No one can “steal a march” on anyone else. Number 3 is that it is “add only”. You can’t alter or add to a block once it is complete. That means that number 4 new information CANNOT conflict with existing information. And finally number 5, everyone can access all the information on the blockchain simultaneously and instantly.

As a reminder, each “block” consists of three parts . The first is the hash that seeds the block, in other words the incoming hash or information. The second part is the data that gets entered into the block in other words the transactions that have taken place and are being entered to be recorded. And finally, the third part is a second hash, which is the outgoing hash covering not only what has happened in that particular block but all that has happened since block one. Just so you know we are very close to block 600,000 on the Bitcoin blockchain.

Another reason for going down the ERC route is that one of our 5 pillars for Scotcoin’s new blockchain is that it must have longevity and stability as well as security. The Ethereum chain ticks these boxes. There are already something like 250,000 tokens on it and it is the second largest crypto currency both by total market capitalisation and by daily volume.

It is frequently said that crypto currencies are a store of and do a very good job of transferring value. Why do we say that? What are the characteristics that cryptocurrencies share:

1. The supply of all the coins or tokens are clearly defined and publicly available.

2. They are permissionless: You can just download the software for free and start sending money across the internet.

3. They are self-sovereign: You don’t have to rely on a bank, payment service or other centralised organization to process the transactions. It’s all performed on the blockchain network.

4. They are highly divisible: You can divide every cryptocurrency into extremely small amounts, enabling easy day-to-day (micro) payments iup to 18 zeros after the decimal point.

5. They are extremely portable: Everyone can fly across the world carrying billions worth of cryptocurrency. Try doing that with real gold.

Other primary characteristics of cryptocurrencies are that they are interchangeable and censorship resistant — no governing authority can prevent any cryptocurrency user from spending their crypto.

Some of you may have heard of Luca Pacioli. He wrote the base treatise on what one would term modern accountancy in 1493 – yes over 520 years ago.

Quite apart from setting down the basis of double entry bookkeeping, which arguably brought about the modern financial world, what it did do was bring Trust to an area where skulduggery had been the norm. In essence, the blockchain and crypto currencies do the same thing in respect of modern finance – you can be sure that a transaction can be trusted if it is recorded on the blockchain. There does not need to be a third party noting the transaction for it to be trustable.

We at Scotcoin are particularly keen on the circular economy and heading towards Zero Waste. I am proud to announce a joint initiative to reward people using Zero Waste in Scotland. There are quite a few shops you can visit and we are putting in place a scheme to reward people who use Toogoodtogo, who recycle food. Quite recently an entire wedding for over 200 people was catered using their food. This is food that would otherwise go to landfill, but an enormous waste and cost to the shops that need to get rid of it . We will be putting up a list of those shops where you can earn SCOT for buying from them and where you can trade in your SCOT for products. Now that we very nearly have our new coin, we will also be offering other online products and services via the website tokenmarkets.com. Scotcoin will have it’s own dedicated sales site. In essence, by paying in Scotcoin you will receive up to a 30% discount on items.

One of the most important things that people need to realise is that Blockchain and its technology will put responsibility fair and square on the individual again. Lost your bank card? No problem, the bank will send you a new one. Forgotten your password? You can reset it. With crypto, NEITHER of those options are available. Where we have been used to other people and third parties backstopping us, none of that will exist. As a result we will have to be much less cavalier about what we do in relation to our wallets and Identity – because yes, Blockchain impinges on Identity as well.

Just in the last few weeks I’ve been reminded of this. We will shortly be putting up an article entitled “Time to pull on you big boy or girl pants” and it deals precisely with this problem.

So if you have a crypto wallet, make sure you have taken a photograph of the pass phrase AND written it down in not one but TWO different places. Lose that and you lose the wallet, the coins, everything. So make sure it’s safe. We will be offering a way, with the new coin, of securing your passphrase.

One of the questions I am frequently asked is why should I buy Crypto and/or Scotcoin? There are many good reasons, but there is one which does not get enough airing. That is that Crypto are a digital asset and as such have created a whole new asset class to have in the mix of your investments. This may not be of significance to lots of people, but it is a consideration which should not be ignored. The traditional classes (shares, bonds, properties, cash etc) now have another leg – digital.

Finally, in celebration of the fast approaching anniversary of the creation of Scotcoin on the Counterparty Protocol, we are running a promotion on our exchange which will give purchasers 50% off the cost. So whatever the number of SCOT you wish to buy, the cost will be cut in half during the period of this promotion. We have had some criticism of the fact that our exchange price has been higher than the DEX price. The coupon code, which we will be advising all our wallet holders of, is 50offat5. This will effectively bring the DEX price and our exchange price into line.

The other thing we are testing at the moment is the website I mentioned above which will take SCOT for product. If you have items you would like to sell, please get in touch with me . Similarly if you would like to test for us, please let me know.

Scotcoin

Scotcoin Promotional code

Scotcoin has been around since 2013, but has been on the Counterparty Protocol since November 2014.

That means that in just a few days we will be celebrating the 5 year anniversary of what we call V2 Scotcoin.

We want to share our delight at being the longest surviving Country Coin and the fact that the existing protocol is coming up for its fifth anniversary.

To celebrate this, we have a special code you can use on our exchange

Here is the link:

https://exchange.scotcoinproject.com/shop/

The code you need is

50offat5

Which you put into the appropriate box when you get to checkout in your cart.

It takes 50% off the price you will pay.

That means that a purchase you thought was going to be £20 is only going to cost you £10.

We have been criticised in the past for charging a lot more than the Counterparty DEX price when we sell Scotcoin. This promotional discount puts us squarely in the DEX price bracket. Please note also that we will be making an announcement about our new coin imminently, and holders of V2 will, subject to conditions, receive a bonus.

For larger quantities or for any queries please email me at [email protected], and I will be delighted to help.

VIDEO: THE SCOTCOIN PROJECT CIC – interview with Temple Melville

Watch this interview with Temple Melville, where he shares an overview of SCOTCOIN and SCOTCOIN CIC with information on how you can get started with cryptocurrency >

Copyright © Bad Pony Media Productions.

Scotcoin MeetUp – Tuesday 15 October 2019

Join us for the next of our legendary meet ups – this time in EDINBURGH. 

Chat about cryptocurrency, pick up a copy of our book, find out more about the latest news from Scotcoin.

Meetup Date: Tuesday 15th October 2019 @ 6:30pm
Venue: Library Gallery, 1 Summerhall, Edinburgh EH9 1PL

BOOK HERE > Scotcoin Meetup

How Cryptocurrencies Already Help Sovereign Nations

How Cryptocurrencies Already Help Sovereign Nations

Article by Scotcoin’s own Temple Melville published in City AM on 28/8/19

Cryptocurrencies are almost as old as money itself. Indeed, crypto simply means concealed or secret. So the first man (or woman) who tried to exchange some rocks for a sheep could be said to have been using a crypto currency. Up to that point a sheep had been worth 15 chickens. It’s simple, really. You attribute a symbolic sense to something you do not see.

Finance Houses and liquidity

Move on to the 1600s when after the Thirty Years War belief in what then passed for “money” was at a low. Something else had to be found, and it was, in the shape of strong finance houses with robust links to other similar houses. They issued their own currencies when the State currencies could no longer be trusted. Move on again to the American experience of the mid 1800s. There were over 8000 “currencies” – usually paper – being traded around the country with a big business in accepting and exchanging them. There had to be some form of currency to enable trade to take place as America expanded. These of course were seriously open to abuse and eventually the individuals and banks that had issued them had to bow to the Federal Government creating its own, reliable currency.

Liquidity created – WIR

In the 1930s there was to all intents and purposes no liquidity in any markets. Things were so bad that some of the good citizens of Zurich created their own currency to enable them to trade. This was called WIR and was, indeed, like those currencies before it, a crypto currency. Over the years it has prospered (perhaps one would expect a Swiss monetary instrument to do this) until today it is used by more than half a million people, over 70,000 businesses and transacts some CHF2.5billion annually – that’s around half a percent of Swiss GDP. By doing so, it illustrates exactly what “Money” is – a trusted medium of exchange that others will accept, and a stable store of value.

Crypto today

The present crop of crypto currencies rely on digital technology to give them credibility. You can’t have a run on the “Bank” for example – there isn’t one. Despite being relatively small in terms of value (only some 0.1% of total world assets) they already show what digital and crypto currencies can do to enhance people’s lives. As an example, if you want to send £1million to anywhere in the world, that will cost you between £20-30,000. Using a digital currency, it can be done for 50p. In fact, the Philippines is looking to create a Bitcoin transfer system for its overseas citizens. Using this system would save their economy over USD1.5 Billion a year – a significant sum in a poor country.

The three cryptos no one talks about

There are three interbank tools that are in effect digital currencies and have been for years. These are:

1. Target2 – the ECB system, the old Bundesbank system which is currently so politically in focus in respect of Italy

2. IMF SDRs – Special Drawing rights

3. The highly secret interbank settlement system at the BIS in Basle.

These three were absolutely crucial in getting the world through the 2007 crisis.

Hyun Song Shin of the BIS argued last year that cryptos (and he was specifically talking about Bitcoin) had issues with scalability and finality. At that time he was right as you would expect, but he was talking about first generation blockchain. We have since had second generation in Hyperledger, and now third generation called Permissioned Decentralised Blockchain. Facebook’s Libra will largely use this system and there can be no doubt this will revolutionise the use of digital and crypto currencies world-wide. We’ve gone from around 35 million wallets to a potential 2.7 BILLION. But Shin’s central thesis holds good – you need people to USE these new currencies to make them both trusted and useful, and having exchanged goods for the currency, the person TAKING the currency needs to find someone else to take it as well.

Cash declining

The use of cash has been declining for years in most western countries, and the Central Banks have realised that it will have to be replaced with something. To this end both Sweden and Uruguay have run full scale crypto trials which have largely been successful, though not set for full implementation anytime soon.

The use of crypto currencies can and should mean social inclusion. Whilst Central Banks’ attitude remains “Bitcoin is not a good idea,” the idea behind it continues to fire imaginations all around the world.

The Brixton Pound

This remains a very positive initiative which is making a real difference within Brixton. Arguably it’s as old as Bitcoin. People are prepared to use it and pass it on – and the money stays in Brixton. That is different from the likes of Bitcoin which is world-wide, but it doesn’t detract from the social inclusiveness of it. We look to history for lessons on the nature of money and the role of central banks in building trust in the use of money in society. The issue of trust has again come to the fore in debates on the durability of cryptocurrencies such as Bitcoin, and how far private money can supplant central bank money as a medium of exchange.

Future payment needs

In the future, physical cash or even bank transfers as we currently know them are unlikely to be the main answer. Central banks are already working on systems and digital currencies that will be trusted and used. Existing crypto-assets have exhibited a high degree of volatility and are considered an immature asset class given the lack of standardisation and constant evolution. They present a number of risks for banks, including liquidity risk; credit risk; market risk; operational risk (including fraud and cyber risks); money laundering and terrorist financing risk; and legal and reputation risks. But new know your customer and anti-money laundering rules will mitigate much of this.

In many ways, the African sub-Saharan region has become a leader in mobile money resulting in a radical change in the delivery of financial services and significant gains in financial inclusion. Where there is a lack of payment infrastructure, the use of crypto currencies immediately enhances trade and social inclusion. You only have to think of Eastern Europe which hardly had a fixed line telephone system before 1989, and suddenly every man and his dog had a mobile phone, leapfrogging to a new world.

Christine Lagarde in an excellent speech to the November 2018 Singapore Fintech Conference, has posed the question – should central banks issue a new digital form of money?

Arguably they already have. As such, it can only be seen as a force for good.

Scotcoin awarded the ‘Most Community-Focused Digital Currency Platform 2019

A pleasure to announce that Scotcoin has been awarded the ‘Most Community-Focused Digital Currency Platform 2019 – Scotland’, by the CV Magazine’s Corporate Excellence Awards 2019.

Scotcoin - Corporate Excellence Awards 2019 Certificate

Types of token

On July 31, the FCA issued its settled policy statement on cryptocurrencies in a document titled “PS19/22: Guidance on Cryptoassets.” The document represents an updated version of a consultation paper on crypto assets that was first released for public comment in January 2019, and intends to bring more regulatory clarity to existing types of digital assets.

In essence it describes 3 types of crypto assets.

  1. Exchange token: Referencing Bitcoin and Ethereum, the FCA described these tokens as “usually decentralized and primarily used as a means of exchange.” The regulator emphasized that such digital currencies do not fall under the regulatory scope of the FCA and is outside its remit.
  2. Security tokens: The FCA said it will be regulating security tokens as they are considered as digital assets with specific features that provide rights and obligations akin to specified investments such as shares or debt instruments
  3. Utility tokens: These fail the Howey test, and simply provide users with a product and/or service.

The FCA also stated that some stablecoins may fall under its remit, as they have characteristics of e-money or security tokens. Stablecoins are cryptocurrencies designed to minimize the volatility of the price of the stablecoin, relative to some “stable” asset or basket of assets. A stablecoin can be pegged to a cryptocurrency, fiat money, or to exchange-traded commodities (such as precious metals or industrial metals).

For the avoidance of doubt, Scotcoin is an Exchange token.

When Harold Wilson said “The Pound in your pocket won’t be affected” he didn’t know about crypto currencies

Money

Life has moved on a great deal since those days, and not least because, slowly but surely, people are carrying less and less cash on them. Only a couple of years ago, the Royal Mint didn’t produce ANY 20p pieces or £2 coins. Why? Because the fall in their use had meant they didn’t need any more circulating.

Rockvilla Pizza in the Rockvilla district of Glasgow have decided to go completely cashless. It may sound like a gimmick, but there are good commercial reasons as well. The Rockvilla  area itself has a lot of interesting history see HERE: https://www.heraldscotland.com/arts_ents/13839562.rockvilla-rises-the-vanished-part-of-industrial-glasgow-set-to-be-resurrected-as-a-theatrical-hub/

Rockvilla Pizza is opening on 23rd July and if you register you can get free pizza!

pizza
Free pizza – with Scotcoin!

Typically, what happens in a venue that takes cash?

First thing in the morning you have to check the float. Do you need more change? Nip to the bank where they will charge you 80p per £100. You give and take change all day and (horrors) when you cash up at night it’s short! Then you have to take the money into the bank where they charge you another 80p per £100. And none of that includes the cost of time and the poor person who has to count it all.

So commercially not taking cash saves quite decent sums of money, as well as a lot of time, and in Rockvilla Pizza’s case they intend to reduce the cost of their pizzas.

So not only will they make full use of contactless (which by the way means there is never a cash shortfall and there is a proper record of every transaction) but their intention is to take Crypto Currencies as well.

Oh and there’s one other benefit: Your insurance premium goes down too. No cash, much lower premium. No cash overnight, much lower premium again. And you don’t have to be insured to take cash to the bank either. It’s a beautiful virtuous circle which means your pizza will be the best value ever!

And don’t forget, if you register  before their official opening on 23rd July, you can get free pizza!!

Register HERE : https://mailchi.mp/9d5da1d556d1/rockvillacomingsoon

Hype Cycle Blockchain

Blockchain has moved on…

Blockchain has moved on since we started this journey. If Bitcoin was first generation Blockchain, Hyperledger was second generation. We are now into THIRD generation, which is described as permissioned decentralized blockchain.

Libra, Facebook’s offering in the digital currency space is exactly that, and Microsoft is clearly committed to blockchain technology. That being the case, you can bet Amazon and Google are not far behind.

In  many ways Scotcoin is lucky that solutions which less than a year ago appeared final and long term, have in fact proven to be less than robust. But we at Scotcoin have remained committed to research and partnerships with credible players in the industry.

We have refined our approach to define 5 pillars on which any solution must stand.

  • 1. An efficient and cost effective migration process. We have some 3500 holders of Scotcoin we need to migrate safely and securely
  • 2. A robust blockchain solution
  • 3. Un-issued surplus coin creation (for reward and future distribution)
  • 4. Access to an efficient secondary market or markets and
  • 5. Crucially, a reliable and durable delivery partner with likely longevity. Present management both of Scotcoin and providers of blockchains will unfortunately not live forever. That means the company we choose to go with must be extremely well capitalised and look to have longevity.

In terms of progress, for 1/2/3 and 5 we have solid ticks. 4 is the crucial one and is the most difficult for all altcoins.

It is however one we have to make sure works for all our holders. In essence it is the provision of liquidity to all Scotcoin users and this has to be guaranteed.

As ever, America is 6 to 9 months ahead of the UK and Europe in this regard, but that does mean we are able to look at solutions being offered and choose the best features. As usual, everything reverts to the mean and what a few months ago was thin on the ground is becoming almost commonplace today.

We have been through the classic hype cycle of euphoria followed by crash and burn, then slow revival and quiet confidence.

hype cycle for Blockchain business 2018

It looks very much as if we are now in this latter stage, with positive developments and progress on the provision of blockchain technology and you can be assured the Scotcoin team is across this.

We at Scotcoin as I say are very much in the penultimate  stages of choosing the long term provider we need, and look forward to announcing our collaboration with them in  the near future, which we aim to secure the future of your Scotcoin predicated on our five pillars.