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What Actually is Programmable Money?

Everyone seems to be interested in programmable money (and assets), but what exactly does this mean? This post explores the concept of programmable money – what is possible today, and what is possible with the help of smart contracts on blockchains. Is it automated payments? If I click on “make a payment” in my bank’s … Continue reading What Actually is Programmable Money?

The post What Actually is Programmable Money? appeared first on Bits on Blocks.

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Everyone seems to be interested in programmable money (and assets), but what exactly does this mean? This post explores the concept of programmable money – what is possible today, and what is possible with the help of smart contracts on blockchains.

Is it automated payments?

  • If I click on “make a payment” in my bank’s online banking website, and the bank’s computers move the money, is this programmable money?
  • If I run an app on my computer which does some stuff then logs in to my bank’s online banking website and clicks on “make a payment”, is this programmable money?
  • What if my program does the same thing using the bank’s API?

It feels like simply instructing a bank to make a payment doesn’t count as programmable money, whether that instruction comes from a human or a computer program. Here’s a primer on how payments are made today.

This means that programmable money can’t just be the ability to write arbitrary code that can move money. Even if it includes complex business logic and external data as part of the decision making. Because businesses already do this today: payment instructions sent to banks typically come from computer programs running on corporate servers.

So is it more to do with automation of payments at the bank’s side (as opposed to on the customer’s side)?

  • If I instruct my bank to make an automated monthly payment of $4,000 to my landlord, is that programmable money?
  • If I authorise a utilities provider (eg electricity, gas, phone etc) to take different amounts of money from my bank account every month, is that programmable money?
  • What about if I upload a file to my bank to pay 350 staff their monthly salary, is that programmability? (This is how payroll works; you don’t usually have someone manually typing in each and every payment)

Well, we have all of this already. Banks already perform client-instructed automated tasks, with rudimentary if/then logic:

IF it's the first day of the month THEN pay rent UNLESS I don't have enough money THEN don't make the payment AND send a notification AND charge a fee.

If banks saw demand, I suppose they could let you upload code, and they would run the code, and they would treat the result of the code as a payment instruction from you. But the result is no different to if you ran your own code then instructed the bank, as discussed earlier. And this would create liability headaches for the banks if and when the code goes wrong…

If not automated payments then what?

Well, in each of the above cases, of course the bank could actually hold back the payment, even after they have received the payment instruction. (And in many cases they are required by regulators to not tell customers why they have withheld the payment!)

So you are not guaranteed that the payment will work end to end.

Does programmable money mean that no matter what, the code’s instructions will be carried out, and no bank or intermediary can stop it?

If that’s the aim, then this can only happen if customers can hold and control money (or something representing money) outside of the banking system.

Stablecoins, on a public or permissioned ledger, get us closer. You can upload programs called smart contracts that are guaranteed to run. But even these smart contracts result in an instruction to the smart contract that defines the money. And the smart contract that defines the money can decide not to make the payment, for example if the payment instruction is to a blacklisted account.

It’s designer money

I think then the answer is designer money. Money that is created by someone – an issuer – that behaves a certain way, and has certain constraints no matter who “owns” it at any point in time.

Banks can’t do this, because money in banks is all different. My USD at Citibank is different to your USD at JP Morgan. It’s different in two ways:

  1. My Citibank-dollars are controlled by Citibank, and your JP Morgan-dollars are controlled by JP Morgan. This means if the money should behave a certain way, both banks have to implement exactly the same logic and constraints.
  2. My Citibank-dollars are legally, and practically, a different instrument to your JP Morgan-dollars. My Citibank-dollars are a legal agreement that Citibank owes me dollars; your JP Morgan-dollars are a legal agreement that JP Morgan owes you dollars.

The result is that money, controlled by all of these different entities, is all different and behaves in different ways. Think how hard it is to implement anti-money-laundering rules across the board. Every participant has to attempt to apply the same logic. Every. Single. Participant. No wonder it’s ridiculously expensive, and has many gaps.

Why is this the case? It’s because there is no ledger for money that can be referenced to while transactions are made.

Problems today

  • Money that was intended for some specific thing ends up somewhere else (corruption).
  • Loans can be spent on items other than what the borrower told their lender they would use it for (fraud).
  • Grants can be used to pay for things the grant was not intended for (misuse, corruption, or fraud).

Benefits of designer money

Now you can create money where the money itself has control logic built into it. This is done at the smart contract level. A smart contract is typically a bunch of code that is run by all participants in a blockchain network. It that defines:

  1. The characteristics of the money (how many units there are, who initially owns it, etc)
  2. How users can interact with the money (ask for a balance, make a payment, etc).

The constraints are coded into the second part of the smart contract, so that all payment requests are subject to those constraints – no matter who is in control of the money at the time.

In this way, money can only go to intended destinations. Once this special purpose money has arrived at the destination, it can be “redeemed” for general purpose money, if needed. (As analogy, think about how food stamps work)

You can create certain types of money that can’t be sent without additional data, eg proof that the payment is to support an export or import.

You can even put constraints on wallet balances or money flows. For example a recipient’s balance can’t exceed $2,500, or any payment can only be made up to $50, or any account can only send or receive a total of $1,500 per day, or whatever.

With designer money, the possibilities are practically endless. Yes, special purpose money reduces the ‘fungability’ of money, but that’s the point. There are so many cases today where money has special uses and should not be fungible with general purpose money, but the current system messes this up.

During Covid-19, governments are experimenting with grants that should only be spent in certain ways. Blockchains provide a platform for building designer money in a repeatable and scalable way.

What do you think? What’s your definition of programmable money?

Note: Special thanks to Henning Diedrich, author of “Ethereum: Blockchains, Digital Assets, Smart Contracts, Decentralized Autonomous Organizations” for feedback and inputs on this piece.

Source: https://bitsonblocks.net/2020/04/26/what-actually-is-programmable-money/

Blockchain

Binance to cease these crypto-derivative offerings in Australia

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Once upon a time, regulators around the world weren’t confident about handling the crypto-ecosystem. This attitude, however, has changed of late thanks to the industry’s growth and the interest it has seen from traditional institutions and major investors.

The aforementioned change isn’t universal, alas, with some crypto-entities still coming under a lot of regulatory fire. Binance is a case in point. The platform has come under increased scrutiny from a growing number of regulators worldwide, including regulatory authorities from the U.K, the U.S, the Netherlands, and Canada.

Australia too has now been added to this ignominious list.

According to an official announcement made by the exchange, Binance will no longer offer Futures and Options trading in Australia. It read,

“As Binance constantly evaluates its product and service offerings to comply with local regulations, we will cease offering the following products to existing Australian users: Futures, Options, Leveraged Tokens”

Moreover, it revealed that ‘existing Australian users will have 90 days to reduce and close their positions for these products.’ Post 23 December, users will no longer be able to manually reduce their positions, and all remaining open positions will cease.

What does this mean for Binance and its executives?

Well, the aforementioned step is in alignment with its executives’ aim – To create a sustainable ecosystem around blockchain technology and digital assets. In fact, according to one of its executives,

“Binance welcomes developments to our industry’s regulatory framework as they pose opportunities for the market players to have greater collaboration with the regulators. We are committed to working constructively in policy-making that seeks to benefit every user.”

This move followed last month’s restrictions on Options, margin products, and leveraged tokens (New accounts were barred from engaging in).

And the “nightmare” continues… 

Binance took a similar hit in a different part of the world less than two weeks ago. It discontinued support for trading pairs in the Singapore dollar (SGD), again due to regulatory crackdown(s).
Binance found itself in troubled waters earlier this year, with regulators around the world zeroing in on the top exchange. The regulatory pressure forced the leading crypto-company to adopt a proactive approach to compliance. That being said, the jury is still out on whether these steps have been making any difference?
Moreover, US authorities are probing possible insider trading and market manipulation allegations involving Binance. The exchange, for its part, has denied these speculations. Binance has a “zero-tolerance policy for insider trading,” a statement said.
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Source: https://ambcrypto.com/binance-to-cease-crypto-derivative-offerings-in-australia

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Blockchain

Robinhood Testing New Cryptocurrency Wallet as Demand Rises

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The millennial-focused trading portal is edging closer to launching a long-awaited app that will enable its growing user-base to send and receive cryptocurrencies.

A beta version of Robinhood’s iPhone app showed the company’s latest upgrades on the new digital asset features, according to Bloomberg.

There is a hidden image showing a waiting list for users eager to get their hands on the app and code referring to crypto transfers, it added.

Delving Deeper into Crypto

Robinhood users can already buy and sell cryptocurrencies on the platform but they need to convert them to and from USD. With a native app, users will be able to send crypto assets to each other directly and set up two-factor authentication for additional security.

Robinhood Chief Executive Officer Vlad Tenev stated that adding crypto wallets is a priority for the company’s developers and they are actively working on such.


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“The ability to deposit and withdraw cryptocurrencies is tricky to do with scale, and we want to make sure it’s done correctly and properly.”

He did not specify a launch date, but the beta app leak suggests it is not too far away. Users of the new functions will need to activate crypto sending and receiving and the registration page will require an identity check, the report added.

On Sept. 11, CryptoPotato reported that Robinhood had launched incentives to promote longer-term cryptocurrency investing. The zero-fee recurring purchase feature enables users to schedule digital asset purchases for regular intervals with buys as low as a dollar.

This will encourage customers to build their cryptocurrency portfolios over time and “become a whole coiner,” stated Robinhood.

Robinhood Users Hungry For Crypto

Cryptocurrency trading has been one of the biggest drivers of revenue for Robinhood this year. Dogecoin has been the crown jewel, according to the company. It reported that 62% of its $233 million in second-quarter crypto income came from DOGE trading.

It added that more than half of all transaction-based revenue on the platform came from digital asset trading. The firm did warn that Q3 would not be as prosperous due to “seasonal headwinds and lower trading activity across the industry.”

Robinhood share prices have already fallen 43% since their all-time high of a little over $70 in early August. They are currently trading down 1.68% since Monday’s open at $40.70 according to Yahoo! Finance.

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Source: https://cryptopotato.com/robinhood-testing-new-cryptocurrency-wallet-as-demand-rises/

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Blockchain

Snoop Dogg Reveals His Connection With Twitter Account on NFTs

Snoop Dogg Twitter

Rate this post American rapper Snoop Dogg tweeted on Monday that he’s the owner of a Twitter account that talks about nonfungible tokens (NFTs). The account, named @CozomoMedici, shares “insights and tales from the wild world of NFTs” and has 27.7K followers at the moment. Snoop Dog Claims to Be Popular NFT Advocate on Twitter Snoop Dogg left the crypto community stunned this week after he revealed himself as the owner of a Twitter account dedicated to NFTs.  The account Cozomo de’ Medici, named after an Italian banker, is only a month old. However, it has already garnered attention from industry watchers and even a mention from crypto-focused news outlet The Block.   According to The Verge, the person behind the Medici account had been creating hype around their real identity for “at least a few days” and even conducted a poll for their followers to take a guess. The poll featured Democratic congresswoman Alexandria Ocasio-Cortez and Matt Bellamy, the lead singer of the rock band Muse. Snoop, however, was not mentioned in the poll. On September 20, @CozomoMedici tweeted that they were about to reveal their identity from their account. Shortly after, Snoop Dogg tweeted “I am @CozomoMedici.”   Interestingly, after making this revelation, the Medici account bought two weed-themed collectibles from an artist named NyanDogg, The Verge reported. Additionally, Snoop’s alleged OpenSea account has been sent  “a cloud of blunt and Snoop-themed NFTs” following the reveal. Is Medici Account an Elaborate Prank? The Medici account could likely turn out to be an elaborate prank, one that Snoop might have engineered himself or just participated in. Many reactions to Medici’s reveal have also expressed skepticism about Snoop’s involvement. “I have a hard time accepting that this account is Snoop Dogg. Like seriously Snoop Dogg muted his live stream for a week (?) by accident. And he is that deep into NFTs out here owning crypto punks… Owning Eth using OpenSea. Would love that to be true but I can’t believe it,” Twitter user @Brandolf485 wrote in the comments. Nonetheless, the crypto community will have to continue looking for concrete proof till Snoop’s involvement with the account is confirmed. 

The post Snoop Dogg Reveals His Connection With Twitter Account on NFTs appeared first on Cryptoknowmics-Crypto News and Media Platform.

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American rapper Snoop Dogg tweeted on Monday that he’s the owner of a Twitter account that talks about nonfungible tokens (NFTs). The account, named @CozomoMedici, shares “insights and tales from the wild world of NFTs” and has 27.7K followers at the moment.

Snoop Dog Claims to Be Popular NFT Advocate on Twitter

Snoop Dogg left the crypto community stunned this week after he revealed himself as the owner of a Twitter account dedicated to NFTs. 

The account Cozomo de’ Medici, named after an Italian banker, is only a month old. However, it has already garnered attention from industry watchers and even a mention from crypto-focused news outlet The Block.  

According to The Verge, the person behind the Medici account had been creating hype around their real identity for “at least a few days” and even conducted a poll for their followers to take a guess. The poll featured Democratic congresswoman Alexandria Ocasio-Cortez and Matt Bellamy, the lead singer of the rock band Muse. Snoop, however, was not mentioned in the poll.

On September 20, @CozomoMedici tweeted that they were about to reveal their identity from their account. Shortly after, Snoop Dogg tweeted “I am @CozomoMedici.”

Interestingly, after making this revelation, the Medici account bought two weed-themed collectibles from an artist named NyanDogg, The Verge reported. Additionally, Snoop’s alleged OpenSea account has been sent  “a cloud of blunt and Snoop-themed NFTs” following the reveal.

Is Medici Account an Elaborate Prank?

The Medici account could likely turn out to be an elaborate prank, one that Snoop might have engineered himself or just participated in. Many reactions to Medici’s reveal have also expressed skepticism about Snoop’s involvement.

“I have a hard time accepting that this account is Snoop Dogg. Like seriously Snoop Dogg muted his live stream for a week (?) by accident. And he is that deep into NFTs out here owning crypto punks… Owning Eth using OpenSea. Would love that to be true but I can’t believe it,” Twitter user @Brandolf485 wrote in the comments.

Nonetheless, the crypto community will have to continue looking for concrete proof till Snoop’s involvement with the account is confirmed. 

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Source: https://www.cryptoknowmics.com/news/snoop-dogg-reveals-his-connection-with-twitter-account-on-nfts/

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