Greece Government Confident About Lifting Capital Controls Soon

In an incredibly surprising turn of events, it looks as if Greece is getting ready to lift capital controls but the end of the year.After facing an economic disaster not too long ago, the country has tried to recover. For some unknown reason, things seem to be going a lot better than most people expected.

Many people have been following the news about Greece and feared the situation in the country would only become worse over time. Capital controls are annoying to deal with, but there seemed to be no other viable option for the government to do otherwise. As a result, consumers and businesses were very restricted in sending, spending, and receiving funds.  But it appears as if everything has stabilized again.

Lifting Capital Controls

Keeping in mind how over 50 billion euros left banks between November 2014 and July 2015, it seemed unrealistic to expect any improvement in Greece. Moreover, there were valid concerns Greece would drop the Euro and resort to emergency borrowing. However, Louka Katseli, chair of the National Bank of Greece, feels the biggest part of these restrictions will be lifted later this year.

There are particular conditions the country must adhere to before this becomes a reality, though. Greece successfully concluded a review of its bailout reforms for this month. Doing so should help restore investor confidence in Greece, albeit it is hard to predict whether or not this will be the case.

Assuming there is any truth to these rather optimistic claims, the next step will come in the form of the ECB giving Greek banks access to cheap funding. The ECB would do so by accepting Greek banks as collateral. To most people, this will sound like another disaster waiting to happen. Moreover, there is no reason for the ECB to do so, as they would gain nothing from such a move.

But even if all of this happens, two more conditions need to be fulfilled. First of all, effective management of a loan of non-performing loans has to be established. Secondly, all deposits have to be returned to Greek banks. Both of these feats will be rather difficult to achieve, and may throw a monkey wrench into the predicted deadline to lift capital controls

Bitcoin is Still A Safer Option

While all of these promises may sound good on paper, it remains to be seen how the population will react. Saying things and doing things are two entirely different things. For those consumers and enterprises who still feel uncomfortable in Greece, Bitcoin presents a viable alternative. With no banks exerting control over user funds, and no capital controls, Bitcoin remains superior to fiat currency.

Source: Reuters

Header image courtesy of Shutterstock

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The recent debacle surrounding The DAO has shed an interesting spotlight on smart contract technology. Since individual developers wrote the entire concept of this project, it looks like smart contracts are not completely trustless. There is still a lot of work to be done before this technology is ready for mainstream adoption.

Not everyone is capable of – or interested in – writing smart contracts. A steep learning curve is associated with this concept, even though it is accessible to everyone who wants to take the plunge. A smart contract can be a powerful tool, but as The DAO has shown, it can cause a lot of harm as well

Premature Smart Contract Deployment?

This is one of the drawbacks blockchain-based solutions have at this time: hardly anyone fully understands the technology. While there is nothing wrong with getting excited about innovative concepts, not realizing the consequences of implementing technology is dangerous. There is a valuable lesson to be learned from what happened to The DAO but is could be a costly one.

When it comes to writing secure smart contracts, there is still a lot to be done. Cobbling together a smart contract, so that it works is not the same as creating a trustless implementation of technology.  In most cases, these innovations sound exciting on paper, but it is only a matter of time until the reality takes effect.

Cornell Professor Emin Gun Sirer stated on Twitter:

Ethereum enthusiasts may disagree with that statement, albeit there is some truth in it. Solidity and EVM make smart contracts available to every developer out there, regardless of experience. This is a good way to boost innovation in the smart contract space, but may not yield the best results in the initial stages. 

Looking Towards The Future

The DAO debacle puts an interesting spotlight on this technology overall. Many people pointed out the project’s concept was not properly tested and rushed. Unfortunately, it appeared the critics were right. But that does not mean smart contracts have no place in the future of our society either. Enthusiasts and developers need to take the time to review what happened, and learn from the mistakes that were made.

Source: Twitter

Header image courtesy of Shutterstock

The banks were never charmed about Bitcoin for multiple reasons. For starters, when the digital currency was first introduced following the collapse of the US banking system, it was hailed as the killer of the traditional banking sector. As time passed, the digital currency gained enough traction to actually threaten the traditional banking industry with its easy and fast transactions at literally no transaction costs.

The fierce competition offered by the bitcoin to conventional banking institutions did not help the cause either. As the rivalry between the digital currency and banking sector grew, the banking institutions have come to realize the importance of the technology behind digital currency. They are so convinced about the potential advantages of the digital ledger technology that many of them have already invested heavily into its research and development for banking applications,

Some of the leading banking institutions in the world to invest in the blockchain technology includes the likes of Goldman Sachs, BNY Mellon, Mitsubishi UFJ, Deutsche Bank and more. There is also a consortium of international banks created alongside a New York based blockchain solutions company for collective development and deployment of the blockchain solution for the banking sector. The consortium has already made some progress with a custom distributed financial blockchain called Corda for the purpose.

Regarding the banking sectors feelings about the implementation of blockchain technology into their operations, one of the tech publication quotes BNY Mellon’s Chief Information Officer, Suresh Kumar saying –

“This kind of feels like when the Internet started. There is an expectation that, okay, this is something new and different, so there is some value to leveraging it, and the question is: Okay, what are the implications of that for the traditional services, and what kind of services can be enabled that were not practical before?”

The banking sector doesn’t have one particular way of implementing the blockchain technology into its operations, rather different teams are looking into different applications of the technology. It can be for just maintaining AML and KYC requirements or to settle different types of trade, overseas transactions over the blockchain and more. Automation of the entire process is another main attraction for the banking sector. They want to use blockchain technology to switch as many transaction types to Straight Through Processing (STP), thereby completely eliminating human interference.

While the banking sector increasingly looks into the blockchain technology, it also means that those employed in the banking industry may have to start looking for new jobs in the coming years.

The applications of Bitcoin technology are already proven to be endless, it is up to the banks to decide how far they are willing to go with its implementation.

Ref: Fast Company | Image: NewsBTC

The DAO platform was in trouble yesterday, following a hacking incident yesterday the platform is said to have lost about $50 million worth of digital currency. However, there is a good possibility that the stolen ether associated with the DAOs can after all be recovered, preventing huge losses to thousands of investors in the platform.

According to a recent update on the Ethereum blog, Vitalik Buterin, the creator of the platform has mentioned that all the investor funds are safe at the moment. He also goes on to explain the exploit utilized by the attacker and the process used to drain funds. All funds drained from the DAO in the form of ether are currently housed in a child DAO. The attacker is said to have exploited the recursive calling vulnerability by calling a split function and again calling a split function recursively inside the split to collect a lot more ether in one single transaction.

Ether safe for now

While the child fork managed to collect $50 million in ether, it can’t be withdrawn until the creation of child DAO is finished, which incidentally will take another 27 days. The Ethereum development community has decided to counter the issue by introducing a software fork which makes any transaction requiring ether to be transacted from the balance in the account with code hash – 0x7278d050619a624f84f51987149ddb439cdaadfba5966f7cfaea7ad44340a4ba will be deemed invalid, thereby preventing the attacker from withdrawing the ether even after the completion of 27 days leading to a successful child DAO creation.

Is the attacker’s actions justified?

With the DAO community working towards preventing the attacker from gaining access to the ether siphoned off into the child DAO, the attacker has posted an open letter addressed to all the members of DAO and Ethereum Community. In this letter, he defends his action by saying the made use of a feature that was available on the platform and the 3,641,694 ether he collected during the process rightfully belongs to him.

He also goes on to mention that the feature was intentionally put in place by the concerned developers of the platform to promote decentralization by encouraging people to create child DAOs. He believes that he legally took advantage of the incentive and that he is disappointed to be labeled as a thief. He has also warned that he will be taking legal recourse if the Ethereum Foundation or the DAO community attempt to prevent him from accessing the ether he has collected on the child DAO.

The attacker’s letter can be accessed here.

Some of the community members who checked the open letter have claimed that the digital signature used to sign the letter is a fake. However, there are few who believe it to be accurate.

The debate now is to understand whether it is right to penalize a community member for utilizing the features provided on the platform for their benefit. There is still time for another 27 days before the necessity for any action arises and by then we will know how the Ethereum Foundation will decide to proceed with the potential loss of ether from its platform. However, the recent attack has definitely exposed some serious security flaws in the DAO platform which may hurt its reputation.

Ref: Ethereum Blog | Attacker's Letter | Wired |Image: WSJ