I. Commentary of the week

The White book published by the Ministry of Industry and Information Technology states that the Blockchain industry in China is in its initial phase of full-scale development. On May 21, as revealed in the 2018 White Book Report on the Blockchain Industry (hereafter referred to as the ‘White Book’), there were 456 companies in the Blockchain industry in China as of the end of March 2018, which represents the initial phase in the full-scale development of this industry. In the first quarter of 2018, there were 68 different investments in the blockchain field.

Yu Jianing, the director of the industrial economics research institute of the information center of the MIIT, claims that the blockchain technology is being implemented at an ever-increasing pace, and that the market has become more rational. This leaves open the expectation that investment in the blockchain field will reach a peak this year.

Review on the Blockchain: The blockchain has become the forefront of global technological developments, and has opened a new field for international competition. The blockchain has become a new hot spot for innovation and entrepreneurship, and technological integration will expand its scope of application. In the next three years, the blockchain will be widely implemented in the real-world economy, thus substantially supporting the construction of digital China.

The incentive mechanism of the blockchain will create new platform economics and open a new era of sharing economy. In addition, the blockchain will accelerate the process of “reliable digitalization”, transform the fictitious economy to the real economy, thus serving the real economy. China will further improve the supervision and standard system of the blockchain and continue strengthening the foundation for industrial development.

II. Development progress in other countries

Europe and America

Policy news:

SEC is further discussing the ICO supervision, and high-quality recommendations are being received regularly.

A U.S. Securities and Exchange Commission (SEC) official said on May 24th that the SEC has reviewed the high-quality recommendations for ICO and that the SEC has discussed this digital fundraising tool with more regulators in the last few months.

2.

The United States is considering criminal investigation into Bitcoin for price manipulation.

On May 24, the United States was preparing to carry out a criminal investigation into Bitcoin for price manipulation, according to four informed sources. the U.S. Department of Justice has also launched a criminal investigation into trades involving Bitcoin and other digital currencies for price manipulation. Such informed sources said that the investigation focused on illegal activities that might affect price, including fraud, releasing a large number of non-bona-fide orders, and defrauding other traders buying or selling. They revealed that the federal prosecutors cooperated with the U.S. CFTC, which supervised the Bitcoin-related derivatives.

Industry news:

Thomson Reuters speculates: At least 56 financial companies will jump in the cryptocurrency field within the next six months.

According to Thomson Reuters’s survey on May 21, which comprises more than 400 companies, 20% of such companies plan to directly contact the cryptocurrency assets within the next 12 months, with 70% of them saying they will support cryptocurrency in 2018 and plan to enter the field in the next 3 to 6 months. At least 56 companies will provide cryptocurrency products or services in some form starting October this year. Due to the sturdy growth of cryptocurrency development, some experts believe that the market will continue to keep strong going into 2019.

2.

The world’s largest gold and silver trading company accepts Bitcoin as payment for gold.

On May 20, Euro Pacific announced its cooperation with BitPay, the Bitcoin payment processor, allowing investors to buy gold and silver in Bitcoin through Euro Pacific. Euro Pacific Precious Metals is one of the largest gold and silver trading companies in the world, becoming the first big gold trader accepting Bitcoin. Finger, the marketing manager, hopes that Bitcoin investors realize the practical opportunity.

3.

EDU Tokens can be transferred from any account by exploiting a major vulnerability in the EDU smart contract.

On May 24, according to slowmist.com, there was a major vulnerability in the EDU smart contract through which the EDU Token could be transferred from any account. In the transferFrom functiom

the allowed[_from][msg.sender] >= _value was unchecked

the allowed[_from][msg.sender] -= _value ;

the SafeMath was not enabled, so exceptions could not be thrown for trade rollback. Many instances of hacking have already been detected. The attacker can transfer all the EDU in your account without using the private key. The deduction cannot be prevented, because the contract is not designed for pause. Please calm down and pay close attention to the project owner’s official announcement.

4.

Apple, Google, Hithink RoyalFlush Information Network Co., Ltd. and other traditional internet giants have begun to provide market information of digital currencies.

On May 25, Apple’s built-in stock software added cryptocurrency, including BTC, ETH, BCH, XRP, EOS and other currencies. You can view basic information such as real-time price, opening/ closing price and market value.

The latest industry information released by mainstream foreign media can be seen by sliding to the bottom of the interface. Google, Hithink RoyalFlush Information Network Co., Ltd., Baidu, Sogou and other traditional internet giants have already begun to provide market information of these digital currencies. Apple added the function to its stock market app, indicating that cryptocurrency is a new type of asset which is gradually earning recognition by mainstream society and Apple.

China

Policy news:

The White book published by the Ministry of Industry and Information Technology states that the Blockchain industry in China is in its initial phase of full-scale development.

The White Book revealed on May 21 that there were 456 companies in the Blockchain industry in China at the end of March. This all represents the initial phase in the full-scale development of this industry. In the first quarter of 2018, there were 68 different investments in the blockchain field.

Yu Jianing, the director of the industrial economics research institute of the information center of the MIIT, said that blockchain technology is being implemented at an accelerating rate, and the market became more rational. It is expected that investment in the blockchain field will reach a peak in this year.

To obtain the summary of the White Book, visit: https://www.damenginfo.com/5417.html,

https://pan.baidu.com/s/1pi0e4vt5bvbRryOSNgE6og to download the complete version.

2.

CCTV attests: the national internet financial risk technology platform tracks Bitcoin transactions and takes other monitoring measures.

On May 23, the “Economic News” segment of CCTV’s Financial Channel provided a video revealing that the national internet financial risk technology platform implemented over-the-counter transaction monitoring, pyramid selling currency monitoring, Bitcoin transaction tracking, Bitcoin offline distribution, Bitcoin cross-border monitoring and ICO monitoring. According to the user IDs and payment types shown in over-the-counter transaction monitoring, the over-the-counter transactions through Alipay accounted for nearly one third of the total amount.

Industry news:

Xiong’an New Area launches the smart garbage collector prototype based on blockchain technology.

On May 21, according to Economic Information Daily, the reporter recently found that dozens of smart garbage collector prototypes providing LED screens and QR codes based on blockchain technology are being used in the Xiong’an New Area public service center. It is said that citizens could download the APP, scan the code and dump the sorted garbage, and then the built-in system of the garbage collector will award bonus points to the garbage senders according to the type and weight of garbage. All points could be used to exchange daily necessities through the service system that would set all over the New Area in the future.

Through background data processing, the garbage location and actual load would be sent to the garbage transportation company in real time, thus the garbage from citizens will be efficiently processed and sent to processing institutions.

2.

Tencent, in cooperation with the Shenzhen National Inland Revenue Bureau, will release the country’s first blockchain-based digital invoice solution.

On May 24, Tencent and Shenzhen National Inland Revenue Bureau jointly established the SmartReTax innovation laboratory. The Shenzhen National Inland Revenue Bureau and Tencent will use cloud computing, artificial intelligence, blockchain, big data and other technologies to fully study and empower tax scenarios within the cooperation scope of the SmartReTax innovation laboratory, and continuously promote in-depth cooperation in the “Internet+Tax” field. The cooperation between them will systematically explore a new generation of modern platforms for ecological tax administration, taxpayers and government macro-management.

Russia

Policy news:

1.

Russia has made advances in establishing tax rules for cryptocurrency.

On May 22, as revealed by insiders to Bloomberg News, the Russian government was expected to formulate the tax rules for cryptocurrency after defining the legal status of cryptocurrency, smart tokens and other digital financial assets.

Industry news:

1.

Sberbank bought $12 million dollars of commercial bonds through the blockchain for the first time.

On May 22, the corporate and investment banking department of Sberbank and MTS, the telecom tycoon announced the first commercial bond transaction using blockchain technology in Russia. In a statement, MTS revealed that it placed 750 million Russian rubles ($12 million dollars) in commercial bonds on a proprietary blockchain platform provided by the national clearing house, driven by smart contract technology.

Japan and South Korea

Policy news:

1.

In the third seminar held on cryptocurrency exchange by the Japan Financial Services Agency, it was stated that 58% of mining pools are in China and 16% in the United States.

On May 24, the third seminar held by cryptocurrency exchange of Japan Financial Services Agency summarized and analyzed cryptocurrency and related technologies. It was pointed out that 58% of mining pools were in China and 16% in the United States. The location of pooled mine operators did not need to be consistent with the location of miners providing computing power.

In addition, the cryptocurrency mining equipment is normally located based on three principles: electricity should be affordable to make a profit; high-speed Internet connection should be guaranteed to quickly send and receive data to and from other nodes on the internet; and mining equipment should be set at a proper place to avoid overheating that affects its performance.

Industry news:

1.

Mitsubishi UFJ Financial Group launched a blockchain-based global payment network.

On May 21, Mitsubishi UFJ Financial Group (MUFG) launched a global payment network based on blockchain with Akamai Technologies, the main Cloud Delivery Platform in America. According to the official press release by MUFG, Akamai in Massachusetts can test the blockchain platform “in a realistic business environment” at a processing rate of 1 million transactions per second, and complete a transaction within two seconds.

The payment network would be implemented from the fiscal year 2018, including an communication network interface. The payment network would also support the Internet of Things (IOT) payment modes, including pay-per-view and micro-payment. MUFG’s banking department announced the trial application of MUFG (MUFG’s own cryptocurrency) in 2019 last week.

III. Viewpoint

Tirole, a Nobel Prize winner in 2014, sated: one of the reasons for governmental restrictions on Bitcoin is that it only incentivizes private interests.

On May 20, at the Great Bay Area economic and development forum, Jeae Tirole, a 2014 Nobel Prize winner, distinguished the blockchain from the Bitcoin by indicating that the blockchain was an innovative technology and could be widely used in smart contracts, recording and transferring assets, corporate voting, etc. while Bitcoin was worthless and its bubble price would lead to great risks.

Tirole believed that the social value of Bitcoin did not equal its self-proclaimed value. On the contrary, seigniorage revenue could be gained from issuing of currencies (including yen, euro and yuan) by Central Banks to increase the public property. Therefore, the government can restrict the development and application of Bitcoin to prevent money laundering, tax avoidance and other illegal activities, as well as stop revenue loss.

2.

Father of the digital economy: a one-size-fit-all approach to all digital currencies is impossible.

On May 21, Don Tapscott, the father of the digital economy, said in an interview that a large number of digital currencies will definitely disappear in the future. We should ensure that these digital currencies operate in a certain algorithm or consensus mechanism. We should guide developers to a platform rather than lead investors to invest in a currency. If a digital currency cannot be used in application scenarios nor support useful products or platforms, it will certainly be abandoned.

He also indicated that some digital currencies used for specific purposes or serving for some institutions would be superior to other currencies. For example, Ripple is used for special purposes in the banking system, and is completely different from Ethereum. Other branches within the Canadian government are also conducting pilot trials with Ethereum to improve the transparency of their granting system. The key is not to adopt a one-size-fits-all approach.

3.

Tan Yanfeng, the vice president of Shanda Games: the decentralization essence of the blockchain is opposite of the concept of games.

On May 23, Tan Yanfeng, the vice president of Shanda Games said in an interview with Sina reporters that Shanda Games has studied the blockchain, and their technical developers have published relevant findings. However, the blockchain was not applied to substantive businesses, and was only tracked and studied as a technology.

He believed that the decentralization essence of the blockchain was essentially the opposite of the concept of gaming. The game content produced by core team conflicts with the concept of decentralization. The blockchain is not mature enough to be used in games yet, because there are no suitable application scenarios.

Where to Find Us

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