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Global Risk Report: Cyberattacks Rank As A Growing Global Threat

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The Internet has changed the way we live, for better and for worse. As the world has become smaller thanks to new technology, it has become necessary to assess new risks and identify ways to respond to them.

World Economic ForumTo better understand evolving risks, the World Economic Forum recently sponsored its 11th annual Global Risks Report. The 103-page report is based on the annual Global Risks Perception Survey, completed by nearly 750 members of the World Economic Forum. The members come from academia, business, the public sector and civil society, spanning various geographies and areas of expertise.

The preface by Klaus Schwab, founder and executive chairman of the World Economic Forum, states that advances in rapid digitization and technology are transforming societies, which is sometimes referred to as the Fourth Industrial Revolution. While this presents great opportunities, it also involves risks related to rising cyber dependence, along with changing employment patterns and widening income inequality.

The survey asked respondents to consider 29 global risks over a 10-year period and rate them according to perceived likelihood of occurring and what impact they would have. The most impactful risk cited was the failure of climate change mitigation and adaptation, followed by weapons of mass destruction and water crises.

Cyber Attacks Rise

Cyber attacks were cited among global risks that remain serious, along with fiscal crises in key economies, high unemployment and social instability. There are five risk categories covered: economic, environmental, geopolitical, societal and technological.

Cyber attacks are cited as the greatest risk in North America, followed by extreme weather events and data fraud and theft. North America is the only continent where technological attacks – cyber attacks and data fraud and theft – are predicted.

Major risks in other regions include involuntary migration, water crisis, energy price shocks, internal conflict, failure of national governance and profound social instability.

The technological risks cited in the report include adverse consequences of technological progress, a breakdown of information infrastructure, major cyber attacks and massive data fraud and theft.

Critical information infrastructure breakdown is cited as one of the 10 most challenging global risks. The leading global risks are a failure of climate change mitigation and large-scale, involuntary migration.

Technology’s Downside

While there is hope that emerging technology will improve productivity, the spread of technologies is giving rise to individual innovations and disrupting business models. Internet-related technologies like automation of knowledge work, the Internet of Things, the mobile Internet and cloud technology will be the most disruptive. But the failure to understand and address risks related to technology could impact national economies, especially the cascading effects of cyber risks.

Cyber attacks have emerged as the most likely and potentially most serious risks for the last two to three years in North America. Incidents have increased both in scale and frequency.

To date, most cyber attacks have been isolated, focused on a single nation or entity. But the Internet of Things will lead to more connections between machines and people. This rising interaction will lead to cyber dependency, which survey respondents cited as one of the most important global trends. This dependency will raise the odds of a cyber attack.

In the U.S. and Canada, the two risks cited as the highest concern for doing business are cyber attacks and asset bubbles. Cyber attack is the top U.S. risk, followed by data fraud and theft. The risks related to the Internet and cyber dependency are regarded as the highest concerns for doing business.

Cyber Attackers Target Businesses

Public and private services are becoming more vulnerable to cyber attack. Cyber attack includes cyber crime, espionage and state-sponsored exploits. The attacks are increasingly made against businesses. Cyber crime alone cost the global economy $4.45 billion in 2014. Companies in all industries and sizes have been impacted. Consequences have ranged from reputational to legal and economic.

Cyber attack is viewed as the risk of greatest concern to eight economies: The U.S., Germany, Japan, Estonia, the Netherlands, Malaysia, Singapore and Switzerland. In two countries, public sector organizations have suffered cyber attacks: The U.S. Office of Personnel Management and the Japanese Pension Service.

Office business

Efforts to address and detect attacks are challenged by their evolving nature. Perpetrators constantly find new ways to execute attacks. Companies trying to match this speed in developing prevention and response are often held back by a weak understanding of the risk, inadequate security capabilities and lack of technical ability.

The responsibility of these attacks is unclear to many CEOs. It is uncertain who within an organization actually owns such a risk. There are many “C” level owners, but each has a different interest and often the players do not cooperate. Defining roles for cyber risks is crucial.

Outdated laws undermine governments’ ability to capture cyber criminals and expedite effective legal and regulatory frameworks.

Also read: Cyber warfare: the new arms race

Government-Sponsored Attacks Rise

The threats of government-sponsored espionage surpass the defensive capabilities of many businesses. Companies are accepting the fact that they cannot hope to prevent all cyber attacks. Preventing these attacks is just as hard as identifying and mitigating them. Many attacks are not immediately discovered.

An emphasis is needed on streamlining mechanisms for early detection, response and recovery, and to better manage the consequences.

Cyber crime cannot be fought unilaterally. While companies can follow standard practices or adopt tailored ways to address it, cooperation throughout the value chain with law enforcement is needed. One reason is that attacks can be made through supplier systems.

Public-private partnerships are often difficult due to lack of trust and misaligned incentives. Businesses fear exposing data and practices to competitors and law enforcement.

Governments need to balance their investments in cyber offensive weapons to enhance capabilities for cyber security.

The growing interdependence between machines and people can diminish organizations’ ability to protect their enterprises. Organizations may not fully understand cyber security risks. Particular focus is needed in mobile Internet and machine-to-machine connections. It is important to integrate physical and cyber management.

Regulatory Structures Must Adapt

Another important concern is the growing exchange of data between countries and stakeholders. The current regulatory framework is underdeveloped and lacks the needed legal certainty in transparency, encryption control, privacy, intellectual property, and the impact of proprietary data on competition.

Technology also plays a role in international security. Daesh, also known as Islamic State in Syria, has recruited fighters from more than 100 countries partly by using social media.

While new technology is creating new tools for international security, such as improved capacity to 3D-print weapons from digital templates, technologies are creating new uses not immediately apparent. In addition, innovation typically outpaces regulatory oversight. Advances in robotics, nanotechnology, genome sequencing and artificial intelligence could destabilize world security.

In the Fourth Industrial Revolution, small groups and individuals can inflict large-scale damage.

A New Warfare Frontier

The Internet has opened a new warfare frontier. The “darknet” allows criminals and terrorists to trade. Future conflicts will contain a cyber element.

Darknet

The sea and outer space are likely to become more militarized as both private and public entities have gained the ability to establish satellites or mobilize underwater vehicles that can disrupt fiber-optic cables and satellite traffic. Criminals are already using off-the-shelf drones. Autonomous weapons capable of identifying targets will become more feasible and possibly change the laws of war.

Terrorist and criminal groups will exploit this security deficit and leverage new technologies against security forces. States may choose to double down on security issues and disengage from multilateral collaboration, undermining the effectiveness of global institutions. In some areas, the lines blur between states and violent non-state actors. The area between South America and Mexico, Iraq and the Levant and parts of West Central Africa are areas pressured by civil wars, extremism, crime and humanitarian crises.

To establish order, effective regional powers may emerge. New forms of cooperation could assume roles of trade, finance, security and the Internet. In such a scenario, cyberspace becomes neither global nor open. States will have to exert control over the Internet, building proprietary capabilities in data storage, and infrastructure.

Images from Shutterstock and WEC.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.9 stars on average, based on 8 rated postsLester Coleman is a veteran business journalist based in the United States. He has covered the payments industry for several years and is available for writing assignments.




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1 Comment

  1. Real Anti-Racist Action

    January 17, 2016 at 9:56 am

    Hmm, if governments need to safeguard files, do it the Modern Russian way.
    They went back to Type writers, and paper file storage. Easy and simple.
    This all is just Mi6, Mossad and CIA created security problems. It is the Hegelian dialect of…
    #1 Creating the problem in the first place.
    #2 Then marketing that you are the only solution, to the problem you created in the first place to begin with haha.
    This is insanity to buy into their blatant deception. https://www.eff.org/
    http://ihr.org/

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Bitcoin

BlockState Interview Part One: Institutional Investment Framework Story

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The mainstream media narrative has shown an uncompromisingly negative bias towards institutional crypto investment of late and it only seemed fair that we got in touch with some people who have professional expertise in the field.

BlockState is a platform that aims to deliver a modular blockchain-based legal and technological infrastructure for financial institutions which combats the low interest and return rates offered by traditional asset classes.

We spoke to the three co-founders: Paul Claudius, Michael Weber and Samuel Brack regarding the nature of the project. In addition to how they met and how it all started, their current status, and their plans for the future.

BlockState in Brief

On their website, the BlockChain team states that their intention is to provide “a technological and legal bridge between blockchain technology and financial markets.”.

It is an infrastructural platform upon which organisations within these sectors build or inform their own solutions – and is unashamedly focused towards providing products for the institutional investment crowd.

On the One Hand…

When asked about the ethics, technological approach and modus operandi of BlockState, Managing Director Paul Claudius was eager to provide a comprehensive, dichotomised summary.

“On the one hand we are creating the basis for institutional investors to access the digital assets markets.

“Investment banks can’t simply open a wallet on their phone and start buying crypto-assets. They need a range of services and processes in place to make sure that they abide by regulation and their internal requirements.”

The BlockState consensus is that there are insufficient frameworks in place to mitigate the obstacles faced by companies unfamiliar with the many intricacies of the crypto-space at present.

This is not to mention the prohibitive nature of the past progression of technological and regulatory standards, which are largely non-standardized.

… And On the Other

The ‘other hand’ to which Paul refers to is the lack of blockchain or cryptocurrency integration at product or service levels within the institutional market.

For this reason: BlockState posits the second half of its service as an offering to:

“help institutions leverage blockchain to improve their existing processes… helping them tokenize financial products and using smart contracts to govern their execution… [to] save massive amount of resources while making their systems more transparent and efficient.”

In theory all transactions will be immutably recorded on the blockchain, which will ensure that all parties involved can access this data and that all transactions will be processed quickly.

Performance can distinguish a winning cryptocurrency from a useless dud.

The Three Musketeers

In addition to Paul Claudius, we got the opportunity to speak to fellow founding members Michael Weber and Samuel Brack.

Paul specialises in Strategy and Business Development, whilst Michael’s role is to take the lead on Product Development and Project Management duties. Their specialisms are Strategy and Business Development, and Product Development / Project Management (respectively).

Samuel Brack is the cryptocurrency brains of the operation and performs something of a hands-on position, donning the title of Chief Technology Officer. He sits in a more hands-on position, acting as Chief Technology Officer (CTO) for BlockState.

Before BlockState

Paul recalls that the executive leadership team had “all already knew each other” before the BlockState project even began.

Whilst he and Michael Weber had made acquaintance whilst studying together at the ESPC Europe business school, Michael had met up with Samuel Brack as they were co-founding partners on a prior blockchain based project entitled ‘Goodcoins’.

Whilst they have sold their stake in Goodcoins since, Samuel at least considers his time on the project to have equipped him a knowledge which has been brought forth to BlockState.

Beginners Luck?

On a more personal level: Paul Claudius described his first interaction with the world of cryptocurrency as being the moment in 2012 in which a friend had recommended Bitcoin to him as a potential investment.

He has not disclosed exactly how much Bitcoin he purchased in 2012 but if story is true, considering the token’s contemporary value of $13: Paul would have made a profit of a whopping 51614.53% on his investment. No matter the amount invested.

Products, Pains and Peers

Michael Weber (product lead and project management professional) broke down the trio of primary services / product lines that BlockChain focuses on as being “asset management, dept capital, and derivatives” – with a perceived overlap between the three.

This is as well as the ability for tailoring packages for clients from these tested specialisms.

If these products names appear distinctive yet simple, then you would be correct. Of course, this is one of the main objectives of marketing – however it does not help a company to distinguish itself from its peers.

“While most focus on very specific needs, our infrastructure integrates solutions at every level of the financial product lifecycle, from issuance to reporting always with a view to improving current products on the market.”

This isn’t an easy task however, with obstacles to full-automation rearing their heads alongside undesirably long payment clearance times,

“Some of the major pain points specific to the asset management and derivatives markets and resource consuming operations are settlement and clearing, which can take up to 30 days… with manual processes like getting signatures and manual transactions.”

With a Little Help From My Friends

The three musketeers of BlockState with whom we have already spoken are supposed to possess their own unique-yet-compatible inventories of skills and experience. If the team has any luck it will prove a winning combination.

Three men cannot rule an empire alone however and as the popular idiom goes: successful leaders fill the gaps in their expertise by surrounding themselves with knowledgeable advisors. Following this, BlockState boast a roster of advisors who may just fit the bill for now.

They include (according to Paul):

  • “Patrick Storchenegger, co-founder of the Ethereum Foundation in Zug, is our advisor on legal questions. He brings years of experience from blockchain, capital market law and international tax and business consultancy…
  • “Andrea Voinea, who helped to structure the first Gold Exchange Traded Fund, is a seasoned professional from the asset management market…
  • “Ludwig Schrittenloher, who spent nearly six years at Credit Suisse, offers a breadth of knowledge in DCM and structuring…
  • “[and] Martin Schröder, currently a Director in an investment firm, is an expert in derivatives and also very knowledgeable in capital markets and structuring.”

Estimated Time of ETN

Looking not to the past or present, but forward to what the future may hold for BlockState (or at least, what they plan to happen), we asked Paul Claudius some closing questions in an attempt to reach some conclusions on what may come next…

“At the end of September, we will launch the CTF15 Exchange Traded Note, and it will also be listed on a major European Stock Exchange – to be announced soon…”

An Exchange Traded Note (or ETN) is “a type of unsecured, unsubordinated debt security”

Final Words

Perhaps more exciting even is the fact that the team are currently in the process of preparing the launch of an ‘Equity Token Sale’, issued as part of the company’s equity in a public sale.

According to Paul, it will be “one of the first companies ever to tokenize their equity in a fully regulated and compliant manner, driving the adoption of security tokenization in the financial space.”

Paul, Simon and Michael parted our discussion by asking to remind readers of a forthcoming event at which all three will be attending: the Delta Summit in Malta, which takes place from October 3rd to the 5th.

Stay tuned for the second part of this interview coming soon: in which the team will deliver their commentary on recent news, the present situation; and future predictions on the market and industry.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Altcoins

Stellar Acquires Blockchain Startup Chain to Form Interstellar

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The commercial arm of the Stellar Development Corporation has acquired a promising blockchain startup by the name of Chain, paving the way for possibly higher enterprise adoption of distributed ledger technology. The deal adds to Stellar’s credibility as one of the world’s leading blockchain companies.

Chain Acquired

Chain, a San Francisco-based startup pursuing enterprise grade adoption of blockchain technology in finance, has sold to Lightyear in an undisclosed cash agreement. Lightyear, the subsidiary of the Stellar Development Corporation, will be re-named Interstellar, according to official reports. Jed McCaleb, Stellar’s founder, will be the chief technology officer of the newly formed company, which he said should help companies build on the Stellar network. He adds:

“Chain’s team has led the market for enterprise adoption of blockchain technology, which is a critical component of building a future where money and digital assets move over open protocols.”

Interstellar’s new CEO Adam Ludwin explained how the newly merged company will work together:

“Chain has worked from inside the enterprise while Stellar has focused on the network between organizations. As a single team we will have a complete view and set of capabilities to make value-over-IP a reality.”

Chain is said to be a leader in the world of fin-tech, having built enterprise-grade blockchain solutions for Visa, Citigroup and Nasdaq, among others. With the merger, Interstellar will have access to Sequence, Chain’s powerful cloud solution that enables companies to monitor assets moving between private ledgers and the Stellar network.

Previously, Chain had raised more than $43 million across multiple deals. Financiers included Capital One, Citigroup, Pantera Capital and Blockchain Capital.

XLM Price Update

Although the merger between Chain and Lightyear has not had a demonstrably positive effect on XLM’s price, the cryptocurrency continues to outperform leading assets such as Ethereum and bitcoin cash. The XLM price was down 4.4% on Tuesday but has gained 3.2% over the past seven days. By comparison, bitcoin has declined nearly 1% over that period while Cardano has lost more than 10%. Ethereum is trading in positive territory over seven days as prices recovered from 16-month lows.

XLM, which is currently valued at $0.197, has declined roughly 12% over the past month. At current values, it has a market capitalization of $3.7 billion, placing it sixth among active cryptocurrencies. Bitbox is the most active market for XLM traders, accounting for more than 54% of daily transactions.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 612 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Business

Grayscale’s $6 Million Dollar Bet

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Grayscale Investments, the company behind the Bitcoin Investment Trust, has announced plans to back a little-known privacy coin by the name of Zen. The news came mere months after Grayscale put Zen on its “conviction list” of potentially high-impact cryptocurrencies.

Zen Investment Trust

On Thursday, Grayscale announced the creation of the Zen Investment Trust, which gives accredited investors direct access to the cryptocurrency. It is the eighth such fund mandated to hold just one currency, joining a list of products that include bitcoin, Ethereum, XRP and Ethereum Classic.

Although the announcement came as a surprise to some crypto observers, Grayscale said the decision was based on intensive research and due diligence.

“Grayscale conducts unparalleled research and due diligence on their investment products, striving to offer regulated and professionally managed exposure to the digital currency market for institutional and accredited investors worldwide,” said Rob Viglione, Grayscale’s founder and president.

According to Fortune, Grayscale has already purchased $6.3 million worth of Zen tokens and plans to increase its holdings in the future.

Grayscale appears to be increasing its exposure to privacy-focused coins, having recently added Zcash to its list of single-currency investment funds. These assets align with Viglione’s vision of financial privacy, which he believes will be a dominant theme in the future.

Zen Token: An Introduction

Horizen, the company behind Zen token, launched in May 2017 as ZenCash before rebranding this past summer. The company has designed a platform that provides users with complete control of their digital footprint, including private chat and development features. Once scaled to full capacity, Horizen’s side-chain technology will allow anyone to develop privacy-focused applications and generate income from them. Sidechains ensure that Horizon has the bandwidth to process large volumes of transactions without running into scalability issues plaguing other cryptocurrencies.

For users, Horizen’s platform is intended to provide end-to-end encryption of their online activity. The company employs zk-SNARKs, a protocol that can prove possession of certain information without revealing that information and without any interaction between the prover and verifier. This protocol is also employed by zCash.

Valued at $82 million, Zen is currently ranked no. 72 by market capitalization, according to latest available data. Zen was down only 1% on Thursday compared with double-digit losses for the broader market. At press time, Zen was valued at $17.16, according to CoinMarketCap. Trade volumes amounted to $1.8 million, with Binance accounting for more than half the daily turnover.

There are currently less than 4.7 million ZEN tokens in circulation out of a total supply of 21 million.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 612 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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