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Blockchain tech in national elections: An experience from Romania

The crux of the e-voting blockchain-based system relies on moving to a second stage where voting will be conducted directly online and where no physical presence is needed.

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For the first time in Romania, the recent national parliamentary elections, which were held in November, used blockchain technology with the main purpose to guarantee the integrity of the electoral process and to strengthen its transparency. The government aimed to ensure tamper-proof and real-time data on voters’ presence.

There is still a way to go for the voters to be empowered to record, manage, count and check the votes themselves (without bypassing it to the electoral authorities) by allowing them to hold a copy of the voting record. However, the perspectives of fostering the development of a tech-enabled community consensus and of protecting the democratic values have been stated.

Related: Blockchain voting is the alternative for trusted democratic elections

The novelty of using blockchain technology in Romanian elections

Blockchain technology has been adopted in various industries, where a chain of trust was needed for the flow of information, whereby any change brought to such flow was intended to be visible and marked. Elections proved to be a field where such technology would be of the utmost use in order to signal and prevent fraud, illegal voting (wrong person votes) or multiple voting by the same person or in more than one location.

The main value added resides in the fact that it clearly does not allow any alteration or amendment of the data recorded up to a certain moment, even by their administrators. It works similarly in other industries — it computes unique and unrepeatable data imprints, which are updated every five seconds. Any potential change in the information generates a new imprint, which further makes the respective change visible.

The information recorded was made available to the public through a specifically designated portal. For statistical purposes, this comes as another layer of trust to data and its sources, as well as the security of information.

In terms of red tape in Romania, the blockchain also helped with reporting post elections: The management of the minutes prepared in each voting section, which further resulted in lower costs with other devices and human resources.

Blockchain-powered elections

Ideas of innovative blockchain technology revolutionizing voting were introduced in the European Union in 2016 when the European Parliament started to address their implications on the future of democracy of such a switch from the offline, paper-based process to a modern, simplified and easily tracked process.

Elections of political parties in Estonia, Norway and Switzerland have already applied blockchain technology, but it has been repeatedly recognized that proposals to use blockchain in national elections would have to comply with several other areas of European law, including privacy and data protection for voters, as well as accessibility for all citizens. In Russia, a DLT-based system was used for the 2019 Moscow elections.

Related: Electronic voting with blockchain: An experience from Naples, Italy

Sierra Leone used a blockchain-based voting system for its presidential elections in 2018 and became the first country to do so, whereby blockchain was seen as a savior in election processes by ensuring uncorrupted elections in Africa.

Japan is currently envisaging to partner with a digital identity application in order to build a blockchain-based voting system of its own to be used for elections in the city of Kaga. The partnership plans on creating a stable and transparent election process, with the goal to verify voter identity and ensure only one ballot is issued per person, as well as allowing voters to check their result and that it was performed correctly on the blockchain network.

Related: Election dilemma: Putting data on blockchain doesn’t mean it’s correct

Academics and cybersecurity experts agree that DLT-based voting systems are still in the experimentation phase. Researchers at the Massachusetts Institute of Technology’s Computer Science and Artificial Intelligence Laboratory do not consider blockchain voting technology as reliable, and it has released a paper showing that blockchain systems must mitigate the following risks:

  • Ballot secrecy
  • Software independence and contestability (An error in the software should not affect the outcome of the vote. If an error arises, can the ones managing the software agree that an error arose?)
  • Voter verification and audits.

In principle, such voting requirements could be undermined by human intervention and cybersecurity attacks. The fintech space is riddled with theft examples.

Related: Blockchain-based voting systems have potential despite security concerns

However, using a two-step approach might be the path toward e-voting systems reaching maturity. Romania has already used a voting reporting tool, and the nation had numbers on voter turnout and additional statistics, which prove that applying blockchain technology in elections is possible.

This article was co-authored by Alexandru Stanescu and Ioana Mitu.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Alexandru Stanescu is a founding partner of SLV Legal, a firm focusing on deep tech, fintech, blockchain technology, crypto, Romanian startups, internationalization and alternative dispute resolution. Previously, he worked as the chief legal officer of a blockchain startup in the blockchain legal field at Baker Botts in London and with the World Bank in trade and competitiveness global practice. He is a graduate of Columbia Law School, the University of Deusto and the University of Bucharest. SLV Legal is a member of the Global Legal Blockchain Consortium.

Ioana Mitu is a ounsel at SLV Legal and has experience in the banking industry. Her relevant work highlights over the past years include regulatory procedures of registration, approvals of mergers or acquisitions of qualified participations, as well as compliance with licensing requirements before national authorities. She deals with fintech, blockchain and start-up funding. She is a keen community builder in the intersection of law, policy and technology. She is a member of the Bucharest Bar Association.

The main value added resides in the fact that it clearly does not allow any alteration or amendment of the data recorded up to a certain moment, even by their administrators. It works similarly in other industries — it computes unique and unrepeatable data imprints, which are updated every five seconds. Any potential change in the information generates a new imprint, which further makes the respective change visible.

Source: https://cointelegraph.com/news/blockchain-tech-in-national-elections-an-experience-from-romania

blockchain-tech-in-national-elections:-an-experience-from-romania

Cointelegraph

Here’s how Bitcoin’s intraday volatility complicates leverage trading

Derivatives exchanges offer up to 100x leverage, but traders must consider how Bitcoin’s intraday volatility increases their liquidation risk.

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The crypto sector is in a bull market, and frequent evidence comes from anonymous traders who post their five-, six- and seven-figure investment returns as screenshots on Crypto Twitter.

This condition creates a FOMO-like situation where everyone gets greedy. The temptation to boost potential earnings by twenty times or more is often irresistible for most novice traders.

Today, almost every cryptocurrency exchange offers leveraged trading using derivatives. To enter these markets, a trader has to first deposit collateral (margin), which is usually a stablecoin or Bitcoin (BTC). However, unlike spot (regular) trading, the trader cannot withdraw from a futures market position until it has been closed.

These instruments have benefits and can improve a trader’s outcomes. However, those who often rely on incorrect information when trading futures contracts end up with heavy losses rather than profits.

The basics of derivatives

These leveraged futures contracts are synthetic, and it is even possible to short or place a bet on the downside. Leverage is the most appealing aspect of futures contracts, but it is worth noting that these instruments have long been used in stock markets, commodities, indexes, and foreign exchange (FX).

In traditional finance, traders measure daily price change by calculating the average closing price changes. This measure is widely used in every asset class, and it’s called volatility. However, for various reasons, this metric isn’t helpful for cryptocurrencies and can harm leverage traders.

Bitcoin 60-day USD volatility. Source: BuyBitcoinWorldwide

To be brief, the higher the volatility, the more often an asset price presents wild oscillations. Contrary to the expectation, moving up by 7% to 10% every day represents a low volatility indicator. This happens because the deviation from the mean is small, while random fluctuations between a negative 3% to a positive 3% present a much wider range.

Markets with very low volatility are perfect for leverage

Knowing the general range of how an asset oscillates is extremely important when opening leverage positions. Take the British Pound Sterling (GBP), for example, and one will notice that its volatility is usually below 1% as surprise aggressive daily price changes are unusual.

GBP currency 60-day USD volatility. Source: BuyBitcoinWorldwide

FX markets are relatively stable markets when compared with stocks and commodities. Therefore, some regulated brokers offer even 200x leverage, meaning a 0.5% move against the position would cause a forced liquidation.

For a cryptocurrency trader, the Swiss Franc’s (CHF) daily change versus the U.S. dollar would likely be seen as a stablecoin.

Swiss Franc (CHF) USD prices. Source: Investing.com

However, the 3.4% daily Bitcoin volatility hides a more dangerous price fluctuation. While measuring daily closing prices for traditional markets makes sense, cryptocurrencies trade non-stop. This difference potentially creates much wider movements within the same day, although the daily closing often masquerades it.

Bitcoin price low-high-close USD prices. Source: CoinMarketCap

The average change between the Bitcoin intraday high and low of the past 180 days is 6.5%. As shown above, these ‘intraday moves’ surpassed 10% on 25 occasions. Meaning, in reality, BTC price oscillations are much larger than expected for a 3.2% daily volatility asset.

20x leverage seems crazy considering Bitcoin’s daily moves

To put things into perspective, a 5% move in the wrong direction is enough to liquidate any 20x leveraged Bitcoin position. This data is clear evidence that traders should really consider risk and volatility when leverage-trading cryptocurrencies.

Fast profits are nice, but what is more important is being able to survive the usual daily price swings to hold on to those unrealized gains.

Although there’s not a magical number to set the best leverage for every trader, one must account for the effect of volatility when calculating liquidation risks. Those aiming to keep positions open for more than a couple of days, aiming for 15x or lower leverage, seem to be ‘reasonable.’

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Source: https://cointelegraph.com/news/here-s-how-bitcoin-s-intraday-volatility-complicates-leverage-trading

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Polkadot-centric derivatives exchange raises $6.4M in seed funding

The successful private investment round highlights growing conviction in the Polkadot ecosystem.

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DTrade is planning to build the first derivatives exchange on Polkadot following a highly successful private investment round.

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Polkadot-centric derivatives exchange raises $6.4M in seed funding

Decentralized exchange dTrade is bringing derivatives trading to the Polkadot ecosystem after concluding a $6.4-million seed investment round, setting the stage for wider decentralized finance use cases on the developer network.

The private investment round was led by some of the biggest names in the blockchain venture capital world, including Three Arrows Capital and DeFiance. Polychain Capital, ParaFi Capital, Huobi, Mechanism Capital, Bixin Ventures, IOSG Ventures, Hypersphere Ventures and Fenbushi Capital also participated.

Several companies have also stepped up to support liquidity on dTrade, including Alameda Research, CMS Holdings, MGNR, Kronos and Wintermute.

Alameda Research has invested heavily in Defi this year, allocating $20 million toward Reef Finance and $4 million toward Coin98 Finance.

As a decentralized exchange, dTrade allows for the trading of perpetual swaps and options with on-chain settlement. In theory, the platform can accommodate unlimited derivatives markets without custodial and counterparty risks. The trading platform is not available to United States-based traders.

“Derivatives are on track to become the largest market in decentralized finance, similar to how they are the largest asset class in traditional finance,” said Nikodem Grzesiak, co-founder of dTrade. “Derivatives are an exciting use case of blockchain. Entirely new perpetual swaps for blockchain-based assets within Polkadot’s multi-chain architecture can be added through a simple governance proposal.”

The popularity of crypto derivatives has exploded over the past year as participants seek additional exposure to the rapidly growing market. CoinMarketCap’s 2020 annual report found that crypto derivatives accounted for 55% of the total cryptocurrency market last year.

Polkadot’s developer network has also grown rapidly, with 435 projects having launched on the platform at the time of publication.

Source: https://cointelegraph.com/news/polkadot-centric-derivatives-exchange-raises-6-4m-in-seed-funding

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Dfinity’s ICP token sees violent first day of trade on major exchanges

Following five years of development, Dfinity’s Internet Computer token is trading on major exchanges.

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Dfinity’s “Internet Computer” tokens are finally tradable after five years in the making.

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Dfinity's ICP token sees violent first day of trade on major exchanges

The launch of the Internet Computer utility token has seen a wild first day of trading after its long-awaited debut on exchanges.

The ICP token from Dfinity was listed on Coinbase Pro and several leading exchanges including Binance, Huobi Global, and OKEx on May 11.

Over four hours, prices for the newly launched token have swung from an early intraday high of $700 down to $250, before recovering 70% over 10 hours to trade for $425 at the time of writing. Coingecko estimates $1.8 billion worth of ICP tokens have traded just 14 hours since trade commenced.

ICP/USD chart, 24 hours: Coingecko

The Internet Computer is a decentralized blockchain project by the Dfinity Foundation. Dfinity describes the protocol’s mission as expanding the functionality of the public internet from a network that connects billions of people through standard protocols to a publicly accessible global supercomputer based on its own ICP protocol.

It has the lofty ambition of replacing the trillion-dollar legacy internet and IT industry by allowing developers to install their code directly on the public internet — dispensing with hosting companies, servers, commercial cloud services, and tech monopolies.

Like Ethereum, the platform would allow developers to run computing applications on decentralized infrastructure. However, Dfinity claims superior scalability over Ethereum’s Layer 1 mainnet.

While Dfinity has been focused on building this Internet Computer since 2016, much of the project’s inner workings have been shrouded in mystery due to its policy of closed-source development. The platform’s Mercury genesis launch event took place on May 7, marking the public launch of the platform after its completed mainnet initialization in December 2020.

ICP tokens can be staked into its governance system to earn “voting rewards” or be converted into “cycles” that can be used to power smart contract computation. The Internet Computer platform runs on a Network Nervous System (NNS), which is an open algorithmic governance system that oversees the network and the token economics.

The system is broken down into several subsections which include the ICP tokens in addition to “neurons” and “canisters” which govern the network autonomously and are explained in much more detail on the Dfinity blog.

The project started fundraising before the 2017 ICO boom under the DFN ticker but has since rebranded to ICP.

Source: https://cointelegraph.com/news/dfinity-s-icp-token-sees-violent-first-day-of-trade-on-major-exchanges

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