UBS has become the latest major bank to see a significant departure from its blockchain innovation team.

Innovation lab lead and 'crypto 2.0' researcher Alex Batlin will depart the firm in October, Financial News reports. The article cites an internal memo from the bank's head of innovation dated August 17.

During his tenure at the bank, Batlin served as a mentor to FinTech startups at Level39, an R&D lab set up by UBS that served as a key vehicle for it to explore distributed ledgers and cryptocurrencies. Batlin also headed the firm's analysis of the impact of these technologies on the bank's business model.

According to the report, the memo asserts that UBS does not intend to shift its blockchain strategy, and that the move isn’t part of any cutbacks on innovation in this area at the bank.

The memo reads:

"There is no change to our focus and approach on blockchain technology. We are reviewing the options for internal and external candidates to lead the next phase of the programme and to extend our Level39 lab activities beyond blockchain as we move forward."

With the news, UBS joins a list of financial firms including BNP Paribas, Deloitte, JPMorgan and State Street that have seen blockchain subject matter experts depart in recent months.

Read our latest feature interview with Batlin here.

Image via UBS

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A new post on the open-source Bitcoin.org website indicates its contributors have reason to believe the online resource may be targeted by malicious actors following an upcoming software release by Bitcoin Core developers.

Bitcoin.org contributor Cobra-Bitcoin published a post today in which he indicated that certain resources the website intends to post following the Bitcoin Core development update could be the target of unspecified "state-sponsored attackers".

At issue, the post asserts, is that Bitcoin.org generally posts binaries, or executable software versions of Bitcoin Core software releases, for developers who do not want to compile the source code issued by the open-source development team.

The offering is aimed at developers who do not want to undertake the recommended Gitian build process by which developers are given source code that allows them to construct the executable code for use.

The post reads:

"As a website, Bitcoin.org does not have the necessary technical resources to guarantee that we can defend ourselves from attackers of this calibre. We ask the Bitcoin community, and in particular the Chinese Bitcoin community to be extra vigilant when downloading binaries from our website."

The post was published to the website without peer review, according to a representative of Bitcoin Core, meaning the message has not been subject to a typical feedback process.

Nonetheless, the update has created confusion about the safety of the release in the media, prompting comment from Bitcoin Core contributors.

"There's absolutely nothing in the Bitcoin Core binaries, as built by the Bitcoin Core team, that has been targeted by state sponsored attackers that we know of at this point," Bitcoin Core contributor Eric Lombrozo said in a statement.

The specific attack discussed would find Bitcoin.org users possibly subjected to a so-called man-in-the-middle attack by which an attacker could make their own version of these files, which could then be used to encourage users to download malicious software.

"This malicious software might also cause your computer to participate in attacks against the bitcoin network. We believe Chinese services such as pools and exchanges are most at risk here due to the origin of the attackers," the post continues.

At press time, Bitcoin.org representative Theymos was active on Reddit, where he was encouraging bitcoin developers to be on "high alert" during the upcoming software release.

Red light image via Shutterstock

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A new prediction market platform is set to go live on the ethereum network this week.

Called Gnosis, the project will allow users to wager on future events by asking and answering questions about the outcome of sports games or elections. However, the platform's creators envision Gnosis one day serving as a platform for a wide range of user-created prediction markets.

An example touted by the team is a sample platform called Hunchgame, which would see Gnosis being used as a basis for a prediction market centered on celebrity gossip.

One of the more experimental use cases for public blockchains, decentralized prediction markets combine new technology with an old concept, one that in the past has seen centralized versions shuttered by governments or unable to hit critical mass due to regulatory restrictions.

The idea is that by using a decentralized network and uncensorable money, the experimental efforts can continue without outside interference. Prediction market advocates also see the platforms as an opportunity to surface information that otherwise might not be made public for use by academics and decision-makers.

With the launch, Gnosis will join Augur as the latest effort to create a decentralized prediction market. As Augur has already launched in beta and held a crowdsale, some observers view the two companies as rivals.

But, there are aspirational and technical differences between the two platforms. For example, questions are resolved by oracles on Gnosis and Augur in different ways.

While Augur uses many oracles to determine the outcome of an event, Gnosis uses a mechanism whereby only one or a few oracles provide the outcome, a feature they say will lead to faster validation.

If any one oracle disagrees with the conclusion, the decision falls to a pool of oracles to decide as a "last resort".

Gnosis founder Martin Köppelmann further says that Gnosis boasts features Augur doesn’t have, such as a long-term plan for incorporating futarchy, an experimental form of government that uses prediction markets.

Gnosis began working on ethereum earlier this year, but would pull back the project to an internal test network to experiment with a new system.

This time, they are launching with a revised version, one where content isn’t so tightly controlled by administrators.

If the "market" is built around the question, “Will Hillary Clinton win the 2016 presidential election?", for example, oracles settle on the final answer and provide validation of the outcome.

Gnosis decentralized autonomous strategist Matt Liston told CoinDesk:

"Anyone can sign up to use the oracle marketplace. That's a very, very big thing. And now anyone can now make markets. Before, these were admin features."

For the launch, Köppelmann said that his team has prepared questions to test on the network, including those centered on topics in recent bitcoin news.

Proposed questions focus on what will happen to Bitfinex, the bitcoin exchange that was hacked earlier this month, and when much-anticipated bitcoin features such as Segregated Witness will be released.

But users can submit any question that they are curious to see answered by a pool of betters.

As for whether Gnosis can grow to become the first widely used example of a decentralized prediction market, this remains to be seen.

While promising, the concept has its detractors. Prediction markets pioneer Robin Hanson, for instance, has said that the reasons that these betting markets haven’t been adopted on a wide scale are perhaps more complicated than industry innovators believe.

While possibly useful, he remains uncertain as to whether they will necessarily address the lack of widespread adoption of prediction markets that has been historically observed.

Image via Michael del Castillo for CoinDesk

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To scale up its blockchain work, 'Big Four' audit firm PwC is thinking small with its strategy.

PwC FinTech director Geraldine Balaj yesterday revealed fresh details about her firm's plans at Blockchain Conference New York. There, Balaj didn't talk about joining the latest, large industry consortia, but about how her company is seeking to form smaller groups designed to find efficiencies in markets on a much more local scale.

Addressing a group of about 200 people at her company’s global headquarters, Balaj said:

"We are really establishing micro-consortia and playing match-maker to a lot of our clients… to basically come up with the standards that we’ve been trying to do for years."

Balaj said that in addition to looking at industry-level cooperation, the "Big Four" accounting firm is meeting with its clients to help identify points of connection between the companies.

Potential areas where such cross-company efficiencies might exist, she said, include in syndicated commercial lending; collateral management and optimization; and "any back-end office process".

The comments are notable as Balaj only recently became a FinTech director at the firm specializing in blockchain and distributed ledgers. At around the same time, she joined, a previous PwC FinTech director, Jeremy Drane, left the company to take a job as chief commercial officer at blockchain startup Libra.

Overall, the event focused on how the distributed ledger industry can learn from the past three years of innovation and build mature products that save time and money.

Image of Geraldine Balaj via Michael del Castillo

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One week after losing more than $60m in a high-profile hack, Bitfinex is once again one of the largest bitcoin exchanges by US dollar volume.

The Hong Kong-based bitcoin exchange led its competitors in USD/BTC trading over the last week, grabbing more than 20% of the market. In total, it transacted 58,700 BTC (roughly $36m) during the seven days ending 20:45 UTC on 17th August, Bitcoinity data reveals.

While this figure puts Bitfinex ahead of all other exchanges in terms of USD/BTC trading volume, analysts were split on whether to view the development as a sign the company had recovered.

Market observers told CoinDesk the activity could either be interpreted as evidence of the exchange's resilience, or as a signal that accountholders were seeking to recoup funds while it was still operational.

Cryptocurrency investment firm founder Jacob Eliosoff, for example, told CoinDesk:

"A lot of the activity is likely related to people withdrawing their holdings out of fear. Withdrawal-driven volume isn't actually reassuring."

However, Eliosoff was not alone in voicing his concerns about this activity. To some, the robust trading activity in the wake of the still unsolved attack is a cause for concern.

Petar Zivkovski, director of operations for leveraged trading platform Whaleclub, asserted that the volume was likely driven by the uncertainties facing accountholders.

"Much of the volume in the days following the hack consisted of traders selling their USD to BTC to be able to withdraw relatively quickly," he said.

Solvency concerns

Bitfinex's perception perhaps took the biggest hit from avid bitcoin traders.

At press time, informal investigations into Bitfinex's solvency were still ongoing on social media, as were calls for the exchange to be more transparent about its financial issues in the wake of the attack. Bitfinex did not respond to requests for comment today.

BTC VIX, an admin at bitcoin trading club Whale Club, provided similar input on volumes, stating that concerns like these caused to Bitfinex experience an inevitable "mass exodus" as accountholders took funds that had been locked up for almost a week.

After withdrawing their funds, Bitfinex’s accountholders went into "wait and see mode", he said.

While some Bitfinex accountholders may be waiting on the sidelines to see whether the exchange’s platform works, other analysts have raised the question of whether the exchange will even remain solvent.

Tim Enneking, chairman of digital currency fund EAM, told CoinDesk:

"I’m not convinced the exchange will survive."

Debt tokens

One major implication of whether the exchange remains open long-term is the value of the Bitfinex token, a blockchain-based asset representing debt in the exchange that was given to customers.

Issued on 7th August at $1 per BFX token, the value of the digital assets has since fluctuated wildly, rising from a low of $0.26 at 09:00 UTC on 12th August to a high of $0.44 at 06:00 UTC on 15th August, figures provided by leveraged trading platform BitMEX reveal.

Arthur Hayes, CEO of BitMEX, emphasized that he believes the value of the token, and the figures on the index his firm has created to track their value, are likely to continue fluctuating due to lingering questions about their worth.

"Bitfinex has published no public data about their financial health, so traders are either wildly bearish or bullish on Bitfinex's future prospects," he said.

Eliosoff also spoke to the uncertain nature of the token. No details as to the total number of tokens issued have yet been provided by the exchange.

"Does it represent a genuine claim on future Bitfinex earnings?" he wondered. "What's their plan to pay back holders? Will courts and regulators let the BFX plan proceed, or will they step in with some other process like bankruptcy?”

He is certainly not the only one to voice concerns about Bitfinex’s decision to issue these tokens. In recent weeks, legal experts have continued to speak openly about the uncertainty over their legal status and concern about the exchange's liability for its actions.

Chart image via Shutterstock

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Blockchain has hit the peak of its hype cycle according to Gartner.

That's the key finding from a new report, issued this week, that asserts the emerging technology is at a stage in its development where users and the public are suffering from "inflated expectations" about its benefits.

Internet of Things (IoT) platforms, connected homes and smart robots were other technologies included in this category.

But if that sounds negative, Gartner’s report also projects blockchain will come to be "transformational" across a variety of industries, and it forecasts that this transition is only between five and 10 years away.

The report reads:

"As a portent for the rise of the programmable economy, the potential of this technology to radically transform economic interactions should raise critical questions for society, governments and enterprises, for which there are no clear answers today."

Gartner goes on to estimate blockchain is now being used by "less than 1%" of its total audience, and predict that the technology will advance most quickly in the manufacturing, government, healthcare and education sectors.

Notably, Gartner discusses bitcoin, calling it "the only proven blockchain".

For the report, "blockchain" is defined as a term relating to a "diverse collection" of distributed ledgers based on other foundational technologies.

Ultimately, the report ends on a cautionary note, recommending firms looking to invest in the technology take the time to understand issues surrounding blockchain governance, an issue it highlighted as a "critical factor" for adoption.

Rollercoaster image via Shutterstock

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