Representing a significant shift in Equibit Group's audience and community growth, our seventh newsletter has been widely distributed amongst an audience of interested miners, investors, issuers, financial institutions, and more. To all, welcome! We look forward to sharing our monthly updates with you.
We encourage you to show your support for what we're working on by sharing this newsletter, or any piece of it, with your networks.
As we move into November, our strategy proves successful. The past few months have seen our priorities focused on building a dynamic community of early-stage investors and issuing companies who will leverage our token and platform to raise capital, and on developing world class software and suite of products that will change how securities (equity and debt) trading is performed.
Our community has shown significant growth, representative of our commitment to building a strong Equibit Group network.
At launch, access to Equibit Portfolio, our wallet, and securities market dashboard will be granted to the community at no cost, thus encouraging rapid adoption of our platform.
Continued progress of Equibit Portfolio and integration of communications functionality into the wallet has development on schedule.
We're pleased to share that Equibit Trading Passport functions have been improved and completed, as has construction of the SHA-3 mining algorithm, which is now in the process of being integrated.
Equibit Core is also near ready, with the outstanding piece being implementation of a hard fork of SegWit, which would provide a cleaner and more complete integration.
Mining Equibit Group’s Token, EQB
With a major focus on outreach, October saw a huge push in interest from the global mining community. Equibit Group is providing incentives for miners to become involved early by allowing them to mine EQB before granting access to the general public. Through this soft launch we will distribute Equibit's hashrate across many independent machines thus protecting the network from any >50% attacks during the period following hard launch, as well as form a test group where we can iron out any kinks in the protocol should they emerge. Interested miners are encouraged to contact Chief Blockchain Officer Nathan Wosnack at firstname.lastname@example.org.
Equibit Group believes that the token supply of a network should mirror network adoption rates. A recent blog post, Managing the Token Supply - the Logistic Curve, details why we chose to engineer the production of EQB following a Logistic, or 'S', curve. This provides the network with an apt supply of tokens as it develops in use, translating into better price stability, miner profits, and decentralization.
This week we wrote about why we chose to employ the Secure Algorithm-3 (SHA-3) as our hash standard, citing research into the various alternatives and our findings as to what made SHA-3 superior.
In addition to SHA-3 being the current Federal Information Processing Standard (FIPS), SHA-3 also meets the FIPS 140-2 security requirements, a standard set in 2001 that specifies requirements satisfied by a cryptographic module. Having been collectively developed and rigorously tested by the community, SHA-3 enjoys strong community support. Further, SHA-3 has performed very well in tests, resisting a pre-image attack using Grover's quantum search algorithm.
The State of Bitcoin
On October 24th Bitcoin endured another hard fork, creating a new Bitcoin, Bitcoin Gold (BTG). According to the team behind BTG, it's purpose is to "make Bitcoin decentralized again" by creating "blocks with a new proof-of-work algorithm." A bifurcation of the Bitcoin blockchain took place, but did not alter the original Bitcoin.
BTG substitutes a new hash from the original SHA-2, Equihash, which is considered to be deliberately ineffecient so that there's no incentive to develop an Application Specific Integrated Circuit (ASIC) for it. As part our research that led us to conclude that SHA-3 is the superior cryptographic hash function, we studied Equihash along with several other alternatives. Read more about this in our recent blog post.
Equibit Group's take on BTG:
Because we don't believe that it's the mining hash that helps maintain decentralization of a cryptocurrency - we think it has more to do with the token distribution itself - we don't think that moving to Equihash will necessarily help with miner decentralization. When it comes to developing a strong cryptocurrency, we believe it is more important to focus on miner support, security, and community testing, and that the hash doesn't play as large a role as some may believe. As such, our opinion is that Bitcoin Gold will likely be less successful than Bitcoin Cash (BCH) and Bitcoin (BTC).
November Hard Fork
In the middle of this month, on or around November 16th, Bitcoin is set to hard fork yet again, potentially creating two blockchains and another version of Bitcoin. The hard fork centres around block size, with the community divided over "a seemingly technical question over how to increase the amount of transactions the blockchain can process per second," as discussed by Laura Shin and guests on her Unchained podcast. The Segregated Witness (SegWit) 2X faction driving the hard fork believes Bitcoin will be better off with a doubled block size, allowing for on-chain scaling of Bitcoin's transaction capacity.
While this fork does not affect our development schedule - these new currencies are all versions of Bitcoin - we are interested in seeing which Bitcoin the community more fully supports as that will be the version of Bitcoin we ultimately support in Portfolio.
The Regulatory Environment
On October 17th Canada’s Ontario Securities Commission (OSC) granted TokenFunder, a graduate of the OSC’s regulatory sandbox initiative, the first regulatory-approved initial coin offering (ICO) in Canada. Having met the imposed requirements, the ICO is slated to begin November 1st as part of a “test environment” and is granted exemption under existing securities laws for a relief period of twelve months. As reported by BitcoinMagazine, “TokenFunder is a Toronto-based startup that helps other startups launch and manage ICOs.” The OSC also noted that the “decision should not necessarily be viewed as a precedent for other applicants in the jurisdictions of Canada.”
South Korea also took steps to put additional cryptocurrency regulation into effect this month, creating a bill that will focus on "criminal activities including crimes perpetuated through multi-level and door-to-door sales," Bitcoin.com reported.
The South Korean government has set up a digital currency task force that includes the Ministry of Justice, the Financial Services Commission (FSC), the Ministry of Strategy and Finance, and the Fair Trade Commission. The task force will be looked upon "to clarify the grounds for punishment" for illicit digital currency transactions or related crimes and make recommendations for future amendments to regulations.
On September 29th, South Korean publication Yonhap News reported that the FSC had banned all forms of initial coin offerings stating, "with risks of scams growing over [ICOs], the FSC said it will ban 'all forms of initial coin offerings regardless of using a certain technology or a certain name.'"
Equibit Group In The Media
Discussing the ICO regulations in Canada, the Globe and Mail interviewed CEO Chris Horlacher for an article seeking his opinion on clarity from a Canadian Securities Administrators (CSA) staff notice.
Chris was quoted, "Some blockchain-industry insiders argue that the CSA staff notice is not clear enough and burdens startups with the task of deciphering whether securities laws apply to their token offering.
'Whereas the Australian notice is very specific about what kinds of tokens would be considered securities, the CSA notice provides none of that clarity, and instead imposes the requirement to do all kinds of analysis and expend resources in consideration of whether their token meets an investment contract test,' Equibit Group chief executive Chris Horlacher says."
Paid Globe and Mail subscribers can read the full interview here.
Interested in how Equibit Group is changing future of securities, The Bankless Times featured Chris in an interview.
We thank you for your continued support and interest and look forward to delivering our suite of products.
- The Equibit Group Team