[ANN][NOTE]DNotes - Celebrating DNotes 3rd Birthday - Forum Now Open

[Bergman]

http://finance.yahoo.com/news/bitcoin-alternative-dnotes-launches-dcebrief-175100011.html

There was a ton of work put into this press release and it shows. The way the article was written will lead the reader to do further investigation, exactly what we want. Because the more they research the industry, the more they will learn of the "DNotes Difference" and steps that were taken by the core team to differentiate ourselves from the competition. Everyone who contributed deserves a pat on the back for a job well done.

Great observation, CryptoBrooker. That is very true. We have put a lot of work into it and it also  reflects the enormous time and resources we have spent building our ecosystem. There will remain to be many coins and that is a healthy environment, but there must be a trusted global digital currency for everyone to participated. After reading the above article regarding itBit centralized token (digital currency) for the banks, I am even more certain that DNotes is absolutely on the right track. I hope more of our industry will begin to see that soon. There must be a united front with sufficient united self-interest and leadership to protect and promote the decentralized spirit of digital currency. It will not be easy, but I am confident that we will prevail.

Great job on the press release everyone. Well said cryptobroker they obviously put a lot of effort into it.

I'll take DNotes over bank issued tokens any day.

[DNotes]

http://www.econotimes.com/DNotes-announces-launch-of-DCEBrief-84192

[Chase]

Here comes centralized Digital Currency, I mentioned earlier. This may not be a good thing for the consumers, many bank employees and many of us who are committed to decentralized financial services as an alternative to government/bank controlled currency. Unfortunately, we don't even have an industry association to speak with a united voice. That is just my opinion. What is yours?



itBit Hires Former NYDFS General Counsel Daniel Alter, Pushes Ahead with Bankchain Project

by GIULIO PRISCO on SEPTEMBER 3, 2015 0
https://bitcoinmagazine.com/21845/itbit-hires-former-nydfs-general-counsel-daniel-alter-pushes-ahead-bankchain-project/


In April, Bitcoin Magazine reported that Bitcoin exchange itBit had filed for a banking license in New York. Later in May, itBit was granted a trust charter by the New York Department of Financial Services (NYFDS) under New York State banking law, the first such charter granted to a digital currency company by the NYDFS. ItBit also announced the successful completion of a $25 million Series A funding round.

On September 2, itBit announced the appointments of Daniel “Danny” Alter as the company’s new general counsel and chief compliance officer, and Kim Petry as chief financial officer. Petry was previously CFO of global operations and technology at Broadridge Financial Services and, before that, served as CFO and vice president of global commercial/corporate card payment at American Express.

Alter joined itBit after stepping down in February from his most recent post as general counsel of the New York State Department of Financial Services (NYDFS), where he served as principal counsel and strategic adviser to the New York state superintendent of financial services.

The former New York State Superintendent of Financial Services Benjamin Lawsky left the NYDFS after releasing the controversial Bitlicense regulations for digital currency businesses operating in New York. Lawsky’s move to a consulting business was strongly criticized by the libertarian Cato Institute.

“Because of the contacts he made as a regulator, [Lawsky] can hire himself out to Bitcoin companies wanting to signal to other regulators that they have the approval of the regulatory establishment,” noted Cato Senior Fellow Jim Harper.

It seems likely that Alter’s move to itBit might be criticized in the same grounds.

“The New York State Public Officers law requires that I have a two-year recusal before I can appear before the New York Department of Financial Services on behalf of the company,” said Alter in a pre-emptive statement reported by Reuters. “And it will certainly apply to itBit. I will not step near or have any communications with the New York Department of Financial Services. Those will be handled by outside counsel or qualified compliance people within the company.”

“Between Danny’s deep expertise in financial services and virtual currency regulation and Kim’s demonstrated track record as a successful CFO of global financial organizations, I’m confident that itBit will continue to grow and develop innovative blockchain-based solutions to address the financial industry’s greatest pain points,” said itBit co-founder and CEO Chad Cascarilla. “Danny and Kim possess a deep understanding of how to grow and run a successful business within the regulatory framework of the financial services industry, and their expertise will be invaluable as we work toward the launch of our new permissioned distributed ledger product – Bankchain.”

Bankchain, a new high profile project still held under wraps by itBit, will be a closed, “permissioned blockchain” owned and operated by banks and financial institutions – in other words, a private blockchain without bitcoin and anonymous miners. According to itBit claims, Bankchain will automate, accelerate and simplify post-trade processes across the financial services industry, saving institutions time and money.

Bankchain is “the first consensus-based ledger system exclusively for financial institutions,” states the still very basic Bankchain website. “Bankchain is a new clearing and settlement network that leverages blockchain technology to reimagine how financial institutions execute post-trade. The decentralized network is powered by itBit but fully governed by the member participants that join the platform.”

“[Bankchain] is a proprietary itBit protocol, not blockchain based, but is derived off of blockchain,” itBit head of global operations Steve Wager told Coindesk in August. “We will also not be using bitcoin as the native token; it will be an itBit proprietary token.”

Reddit users strongly criticized the “Sinister Bankchain Project,” but it appears that the trend toward private, permissioned blockchains is here to stay, with strong support expressed, among others, by Accenture and Digital Asset Holdings CEO Blythe Masters.

The itBit / Bank team-up is 100% profit motivated.  None of the savings generated by implementing Bankchain will be passed on to the consumer in the form of reduced fees or lower interest charged.  It really doesn't sound like anything the consumer will be involved in at all, except perhaps a settlement of payments between banks on the customer's exhorbitant interest-loaded credit card balance.

I think we need to separate ourselves, in the public's eye, from what the banks are doing. They are merely using the technology for their own profit.  We, on the other hand, are creating a global currency that everyone worldwide can use, invest in, profit in, conduct business with, and bring stability to the finances of people living with government corruption and runaway inflation.  People from every country, even the ones that appear stable can benefit from a truly decentralized global digital currency.

As far as the banks settling payments from cross border remittances, what are the chances of banks in third world countries trusting these American(?) banks enough to use bankchain tokens?  Or will these poor countries even be invited to the party?

[Dyna]

Here comes centralized Digital Currency, I mentioned earlier. This may not be a good thing for the consumers, many bank employees and many of us who are committed to decentralized financial services as an alternative to government/bank controlled currency. Unfortunately, we don't even have an industry association to speak with a united voice. That is just my opinion. What is yours?



itBit Hires Former NYDFS General Counsel Daniel Alter, Pushes Ahead with Bankchain Project

by GIULIO PRISCO on SEPTEMBER 3, 2015 0
https://bitcoinmagazine.com/21845/itbit-hires-former-nydfs-general-counsel-daniel-alter-pushes-ahead-bankchain-project/


In April, Bitcoin Magazine reported that Bitcoin exchange itBit had filed for a banking license in New York. Later in May, itBit was granted a trust charter by the New York Department of Financial Services (NYFDS) under New York State banking law, the first such charter granted to a digital currency company by the NYDFS. ItBit also announced the successful completion of a $25 million Series A funding round.

On September 2, itBit announced the appointments of Daniel “Danny” Alter as the company’s new general counsel and chief compliance officer, and Kim Petry as chief financial officer. Petry was previously CFO of global operations and technology at Broadridge Financial Services and, before that, served as CFO and vice president of global commercial/corporate card payment at American Express.

Alter joined itBit after stepping down in February from his most recent post as general counsel of the New York State Department of Financial Services (NYDFS), where he served as principal counsel and strategic adviser to the New York state superintendent of financial services.

The former New York State Superintendent of Financial Services Benjamin Lawsky left the NYDFS after releasing the controversial Bitlicense regulations for digital currency businesses operating in New York. Lawsky’s move to a consulting business was strongly criticized by the libertarian Cato Institute.

“Because of the contacts he made as a regulator, [Lawsky] can hire himself out to Bitcoin companies wanting to signal to other regulators that they have the approval of the regulatory establishment,” noted Cato Senior Fellow Jim Harper.

It seems likely that Alter’s move to itBit might be criticized in the same grounds.

“The New York State Public Officers law requires that I have a two-year recusal before I can appear before the New York Department of Financial Services on behalf of the company,” said Alter in a pre-emptive statement reported by Reuters. “And it will certainly apply to itBit. I will not step near or have any communications with the New York Department of Financial Services. Those will be handled by outside counsel or qualified compliance people within the company.”

“Between Danny’s deep expertise in financial services and virtual currency regulation and Kim’s demonstrated track record as a successful CFO of global financial organizations, I’m confident that itBit will continue to grow and develop innovative blockchain-based solutions to address the financial industry’s greatest pain points,” said itBit co-founder and CEO Chad Cascarilla. “Danny and Kim possess a deep understanding of how to grow and run a successful business within the regulatory framework of the financial services industry, and their expertise will be invaluable as we work toward the launch of our new permissioned distributed ledger product – Bankchain.”

Bankchain, a new high profile project still held under wraps by itBit, will be a closed, “permissioned blockchain” owned and operated by banks and financial institutions – in other words, a private blockchain without bitcoin and anonymous miners. According to itBit claims, Bankchain will automate, accelerate and simplify post-trade processes across the financial services industry, saving institutions time and money.

Bankchain is “the first consensus-based ledger system exclusively for financial institutions,” states the still very basic Bankchain website. “Bankchain is a new clearing and settlement network that leverages blockchain technology to reimagine how financial institutions execute post-trade. The decentralized network is powered by itBit but fully governed by the member participants that join the platform.”

“[Bankchain] is a proprietary itBit protocol, not blockchain based, but is derived off of blockchain,” itBit head of global operations Steve Wager told Coindesk in August. “We will also not be using bitcoin as the native token; it will be an itBit proprietary token.”

Reddit users strongly criticized the “Sinister Bankchain Project,” but it appears that the trend toward private, permissioned blockchains is here to stay, with strong support expressed, among others, by Accenture and Digital Asset Holdings CEO Blythe Masters.

The itBit / Bank team-up is 100% profit motivated.  None of the savings generated by implementing Bankchain will be passed on to the consumer in the form of reduced fees or lower interest charged.  It really doesn't sound like anything the consumer will be involved in at all, except perhaps a settlement of payments between banks on the customer's exhorbitant interest-loaded credit card balance.

I think we need to separate ourselves, in the public's eye, from what the banks are doing. They are merely using the technology for their own profit.  We, on the other hand, are creating a global currency that everyone worldwide can use, invest in, profit in, conduct business with, and bring stability to the finances of people living with government corruption and runaway inflation.  People from every country, even the ones that appear stable can benefit from a truly decentralized global digital currency.

As far as the banks settling payments from cross border remittances, what are the chances of banks in third world countries trusting these American(?) banks enough to use bankchain tokens?  Or will these poor countries even be invited to the party?

Those are excellent points. I wish more people in our industry can see it this clearly. Our industry has to step up to clarify what this is all about and not let the bankers diminish the immense value and superiority of decentralized digital currency when mass global acceptance is achieved.

I totally agree that “we need to separate ourselves, in the public's eye, from what the banks are doing. They are merely using the technology for their own profit.  We, on the other hand, are creating a global currency that everyone worldwide can use, invest in, profit in, conduct business with, and bring stability to the finances of people living with government corruption and runaway inflation.” (Chase)

The banking systems and fiat currencies are here to stay. The blockchain/bankchain technology will drastically modernized the movement of money and record keeping leading to the elimination of a very large number of jobs; the massive disruption many in the industry predicted. It will be much harder for our industry to dominate the remittance market. The banks have the advantage of on-ramp and off-ramp infrastructure already in place.

This new development actually strengthens DNotes long–term global mass acceptance business model, inclusive of our own ecosystem which will include our own bank and partner banks. We have always anticipated that the bank will have to adapt and for DNotes to be truly successful we have to be able to interface with the banking world. I will be keeping a very close eye on this. 

[TeeGee]

Here comes centralized Digital Currency, I mentioned earlier. This may not be a good thing for the consumers, many bank employees and many of us who are committed to decentralized financial services as an alternative to government/bank controlled currency. Unfortunately, we don't even have an industry association to speak with a united voice. That is just my opinion. What is yours?



itBit Hires Former NYDFS General Counsel Daniel Alter, Pushes Ahead with Bankchain Project

by GIULIO PRISCO on SEPTEMBER 3, 2015 0
https://bitcoinmagazine.com/21845/itbit-hires-former-nydfs-general-counsel-daniel-alter-pushes-ahead-bankchain-project/


In April, Bitcoin Magazine reported that Bitcoin exchange itBit had filed for a banking license in New York. Later in May, itBit was granted a trust charter by the New York Department of Financial Services (NYFDS) under New York State banking law, the first such charter granted to a digital currency company by the NYDFS. ItBit also announced the successful completion of a $25 million Series A funding round.

On September 2, itBit announced the appointments of Daniel “Danny” Alter as the company’s new general counsel and chief compliance officer, and Kim Petry as chief financial officer. Petry was previously CFO of global operations and technology at Broadridge Financial Services and, before that, served as CFO and vice president of global commercial/corporate card payment at American Express.

Alter joined itBit after stepping down in February from his most recent post as general counsel of the New York State Department of Financial Services (NYDFS), where he served as principal counsel and strategic adviser to the New York state superintendent of financial services.

The former New York State Superintendent of Financial Services Benjamin Lawsky left the NYDFS after releasing the controversial Bitlicense regulations for digital currency businesses operating in New York. Lawsky’s move to a consulting business was strongly criticized by the libertarian Cato Institute.

“Because of the contacts he made as a regulator, [Lawsky] can hire himself out to Bitcoin companies wanting to signal to other regulators that they have the approval of the regulatory establishment,” noted Cato Senior Fellow Jim Harper.

It seems likely that Alter’s move to itBit might be criticized in the same grounds.

“The New York State Public Officers law requires that I have a two-year recusal before I can appear before the New York Department of Financial Services on behalf of the company,” said Alter in a pre-emptive statement reported by Reuters. “And it will certainly apply to itBit. I will not step near or have any communications with the New York Department of Financial Services. Those will be handled by outside counsel or qualified compliance people within the company.”

“Between Danny’s deep expertise in financial services and virtual currency regulation and Kim’s demonstrated track record as a successful CFO of global financial organizations, I’m confident that itBit will continue to grow and develop innovative blockchain-based solutions to address the financial industry’s greatest pain points,” said itBit co-founder and CEO Chad Cascarilla. “Danny and Kim possess a deep understanding of how to grow and run a successful business within the regulatory framework of the financial services industry, and their expertise will be invaluable as we work toward the launch of our new permissioned distributed ledger product – Bankchain.”

Bankchain, a new high profile project still held under wraps by itBit, will be a closed, “permissioned blockchain” owned and operated by banks and financial institutions – in other words, a private blockchain without bitcoin and anonymous miners. According to itBit claims, Bankchain will automate, accelerate and simplify post-trade processes across the financial services industry, saving institutions time and money.

Bankchain is “the first consensus-based ledger system exclusively for financial institutions,” states the still very basic Bankchain website. “Bankchain is a new clearing and settlement network that leverages blockchain technology to reimagine how financial institutions execute post-trade. The decentralized network is powered by itBit but fully governed by the member participants that join the platform.”

“[Bankchain] is a proprietary itBit protocol, not blockchain based, but is derived off of blockchain,” itBit head of global operations Steve Wager told Coindesk in August. “We will also not be using bitcoin as the native token; it will be an itBit proprietary token.”

Reddit users strongly criticized the “Sinister Bankchain Project,” but it appears that the trend toward private, permissioned blockchains is here to stay, with strong support expressed, among others, by Accenture and Digital Asset Holdings CEO Blythe Masters.

The itBit / Bank team-up is 100% profit motivated.  None of the savings generated by implementing Bankchain will be passed on to the consumer in the form of reduced fees or lower interest charged.  It really doesn't sound like anything the consumer will be involved in at all, except perhaps a settlement of payments between banks on the customer's exhorbitant interest-loaded credit card balance.

I think we need to separate ourselves, in the public's eye, from what the banks are doing. They are merely using the technology for their own profit.  We, on the other hand, are creating a global currency that everyone worldwide can use, invest in, profit in, conduct business with, and bring stability to the finances of people living with government corruption and runaway inflation.  People from every country, even the ones that appear stable can benefit from a truly decentralized global digital currency.

As far as the banks settling payments from cross border remittances, what are the chances of banks in third world countries trusting these American(?) banks enough to use bankchain tokens?  Or will these poor countries even be invited to the party?

Apologies if this is difficult to read etc, it's one of my 'long posts' where I think of things and get confused about the order I should discuss them, then 'chop and change' sentences around which can make the message harder to follow. These views and 'on the fly' thoughts are my own, and do not necessarily reflect those of DNotes.

To begin I'm not sure I like the idea when regulators and officials take jobs from companies who had been lobbying them.

To use a politically neutral example, who remembers Darleen Druyun, former weapons buyer for the US Air force? Well in 2005 she was jailed for (only) 9 months after pleading guilty to giving Boeing special treatment in a 23.5 billion dollar government contract - of course, after the deal was inked, Druyun was hired by Boeing as a vice-president with an annual salary of 250k. Druyun allowed Boeing to negotiate for an extra 6 billion dollars more than the contract should have been. This kind of hiring of 'career' government officials into highly paid corporate executive roles has been routine for decades. I don't know if Mr Lawsky made the regulations incredibly expensive and difficult to comply with, to the detriment of itBit's competition before he left the NYDFS, but considering that to the best of my knowledge, itBit is still the only exchange to have a banking licence... it kinda stinks of corruption. This could be a big misunderstanding though, and those two regulators may have just joined itBit fair and square, or these two regulators made itBit a 'sure thing' - we may never know. The next question would be that in the event that there was unfair favouritism affird to itBit, is it sensible (risky) to go into business with them should foul-play be uncovered in the future, or do these appointments provide some level of immunity? It will take more time watching how this all plays out.


In regards to the 'bankchain' thing, I've been waiting for something like this to come along for a while. We all expected banks to try to take the technology for their own to improve their settlement payments from overnight to near-instant. I can see lots of problems with itBit's idea - but I presume many customers may prefer joining banks that are members of the 'bankchain' system for faster payments, which could encourage even more banks to join. I don't have any issue with itBit being profit motivated, but re-my point about the regulators passing ridiculously difficult regulations in NY that have turned away nearly all of itBit's competitors... it doesn't sound like they're playing fair game. Again, this may not be the case at all - pending further research and developments.


Of course, ItBit and the banks are still at a disadvantage - they haven't fixed the money, they still use fiat. I could go on and on with various graphs and points (may I point people in the direction of IMZ's crypto kindergarten blog posts on cryptomoms.com forums), but the reality is that fiat is created as debt, which means new money must come into creation to pay for the interest owing on that debt, which is completely unsustainable. World governments are in massive debt crises, and they have all failed to create the next 'economic' bubble that would give a false sense that the 'real' economy isn't in decline.

But why has recovery been unattainable on this occasion?



https://www.quandl.com/data/FRED/DFF-Effective-Federal-Funds-Rate

Take a look at the effective federal funds rate in the link above. The interest rate tends to be lifted by the fed in times of economic boom, and severely lowered in times when the government want to promulgate economic activity, which leads to 'bubbles' (stock bubble, dotcom bubble, housing bubble etc). The chart clearly shows drops in the interest rate in ~1988, ~2001 and ~2007 in line with the decline of each bubble. These low interest rates make borrowing really cheap, and encourage ridiculous investment activities that no sane person would make if interest rates were dictated by the free-market. Currently, the Fed has an effective 0.14 % interest rate, and it has been near zero since ~2010.

The fact that interest rates are still low, is the obvious tell that there has been no 'real' economic recovery. What is worse, is that there is now nothing in the way of 'government tools' to improve this situation - QE has already convoluted the real decline in the US economy, and dropping interest rates any lower would make them go negative. I hardly think anybody would be interested in running a restaurant where they paid customers to come and eat, and I think it would work the same with your bank deposits if you were earning negative interest - It would mean the destruction of the banking system. I could go into this much further, and bring about many other points, but this should suffice for the moment. Basically, crypto currencies have more long-term stable potential than fiat currencies do. Crypto is going to become a more attractive alternative, and quickly.

But DNotes doesn't only have the advantage of sound money - It is a good point to highlight that DNotes is creating a global digital currency that is useful everywhere and holds an equal value worldwide, so there is no requirment to transfer between currencies (i.e. Euro to USD) like with itBit's system - (presuming foreign banks join, or foreign exchange is possible as a service at each bank through the bankchain).
ItBits 'bankchain' simply can not compete on the near-zero transfer cost possible with DNotes and our ecosystem. Not within the same country, and certainly not internationally. If ItBit does try to compete, the banks will not be pleased to forego all of their processing fee's (income) and leave the bankchain. If they don't try to compete on processing fees, then DNotes holds a competitive advantage and consumers would get more value using DNotes for transfer. ItBit's strategy could like like any number of things, but one could be that they work to get adopted by the banking system, and quickly, then proclaim victory and hope everybody else gives up - including crypto industries. They would come up with some slogan to entice banks like "Bitcoin brought instant payment transfers, banking uses 'real' money. ItBit brings you both". ItBit may simultaneously remain one of the only exchanges where crypto-USD transfers are permitted by the US Gov through banking licences, especially if the NY regulations are adopted in other states (which looks likely). ItBit could continue to accommodate the 'niche' crypto market and make extra profits as a monopoly / oligopoly player to supplement their 'bankchain' income - which would be a great way to hedge their bets in the short term.

Normally I try to avoid speculating this far ahead because there are too many assumptions made along the way. Changing one assumption, would then change the 'next step'. The above is but one potential path we could see.

Chase, I have no idea if banks in developing nations would be invited to the party. I imagine it would be the US banks that wouldn't want to deal with those in developing nations. Assuming any banks even wanted to use ItBit's platform, I doubt the US government would allow the banking system to shift from predominantly being traded in USD, to being traded in "ItBit tokens"... I think DNotes and digital currencies in general are safer from government trying to shut down their ecosystems. It would be much more likely that if this 'bankchain' thing is successful, the US government would buy the rights to it, then force all banks to trade using their own 'issued' tokens by the "BankFederalReserveChain". That way the US government would be able to spy much more easily on every banking transaction, and all but make physical cash illegal...

Of course, at that juncture, who knows how many everyday people would have decided they would prefer to use decentralized crypto's like DNotes?

Anyway, hopefully it sparks an interesting conversation.

[DNotes]

Here comes centralized Digital Currency, I mentioned earlier. This may not be a good thing for the consumers, many bank employees and many of us who are committed to decentralized financial services as an alternative to government/bank controlled currency. Unfortunately, we don't even have an industry association to speak with a united voice. That is just my opinion. What is yours?



itBit Hires Former NYDFS General Counsel Daniel Alter, Pushes Ahead with Bankchain Project

by GIULIO PRISCO on SEPTEMBER 3, 2015 0
https://bitcoinmagazine.com/21845/itbit-hires-former-nydfs-general-counsel-daniel-alter-pushes-ahead-bankchain-project/


In April, Bitcoin Magazine reported that Bitcoin exchange itBit had filed for a banking license in New York. Later in May, itBit was granted a trust charter by the New York Department of Financial Services (NYFDS) under New York State banking law, the first such charter granted to a digital currency company by the NYDFS. ItBit also announced the successful completion of a $25 million Series A funding round.

On September 2, itBit announced the appointments of Daniel “Danny” Alter as the company’s new general counsel and chief compliance officer, and Kim Petry as chief financial officer. Petry was previously CFO of global operations and technology at Broadridge Financial Services and, before that, served as CFO and vice president of global commercial/corporate card payment at American Express.

Alter joined itBit after stepping down in February from his most recent post as general counsel of the New York State Department of Financial Services (NYDFS), where he served as principal counsel and strategic adviser to the New York state superintendent of financial services.

The former New York State Superintendent of Financial Services Benjamin Lawsky left the NYDFS after releasing the controversial Bitlicense regulations for digital currency businesses operating in New York. Lawsky’s move to a consulting business was strongly criticized by the libertarian Cato Institute.

“Because of the contacts he made as a regulator, [Lawsky] can hire himself out to Bitcoin companies wanting to signal to other regulators that they have the approval of the regulatory establishment,” noted Cato Senior Fellow Jim Harper.

It seems likely that Alter’s move to itBit might be criticized in the same grounds.

“The New York State Public Officers law requires that I have a two-year recusal before I can appear before the New York Department of Financial Services on behalf of the company,” said Alter in a pre-emptive statement reported by Reuters. “And it will certainly apply to itBit. I will not step near or have any communications with the New York Department of Financial Services. Those will be handled by outside counsel or qualified compliance people within the company.”

“Between Danny’s deep expertise in financial services and virtual currency regulation and Kim’s demonstrated track record as a successful CFO of global financial organizations, I’m confident that itBit will continue to grow and develop innovative blockchain-based solutions to address the financial industry’s greatest pain points,” said itBit co-founder and CEO Chad Cascarilla. “Danny and Kim possess a deep understanding of how to grow and run a successful business within the regulatory framework of the financial services industry, and their expertise will be invaluable as we work toward the launch of our new permissioned distributed ledger product – Bankchain.”

Bankchain, a new high profile project still held under wraps by itBit, will be a closed, “permissioned blockchain” owned and operated by banks and financial institutions – in other words, a private blockchain without bitcoin and anonymous miners. According to itBit claims, Bankchain will automate, accelerate and simplify post-trade processes across the financial services industry, saving institutions time and money.

Bankchain is “the first consensus-based ledger system exclusively for financial institutions,” states the still very basic Bankchain website. “Bankchain is a new clearing and settlement network that leverages blockchain technology to reimagine how financial institutions execute post-trade. The decentralized network is powered by itBit but fully governed by the member participants that join the platform.”

“[Bankchain] is a proprietary itBit protocol, not blockchain based, but is derived off of blockchain,” itBit head of global operations Steve Wager told Coindesk in August. “We will also not be using bitcoin as the native token; it will be an itBit proprietary token.”

Reddit users strongly criticized the “Sinister Bankchain Project,” but it appears that the trend toward private, permissioned blockchains is here to stay, with strong support expressed, among others, by Accenture and Digital Asset Holdings CEO Blythe Masters.

The itBit / Bank team-up is 100% profit motivated.  None of the savings generated by implementing Bankchain will be passed on to the consumer in the form of reduced fees or lower interest charged.  It really doesn't sound like anything the consumer will be involved in at all, except perhaps a settlement of payments between banks on the customer's exhorbitant interest-loaded credit card balance.

I think we need to separate ourselves, in the public's eye, from what the banks are doing. They are merely using the technology for their own profit.  We, on the other hand, are creating a global currency that everyone worldwide can use, invest in, profit in, conduct business with, and bring stability to the finances of people living with government corruption and runaway inflation.  People from every country, even the ones that appear stable can benefit from a truly decentralized global digital currency.

As far as the banks settling payments from cross border remittances, what are the chances of banks in third world countries trusting these American(?) banks enough to use bankchain tokens?  Or will these poor countries even be invited to the party?

Apologies if this is difficult to read etc, it's one of my 'long posts' where I think of things and get confused about the order I should discuss them, then 'chop and change' sentences around which can make the message harder to follow. These views and 'on the fly' thoughts are my own, and do not necessarily reflect those of DNotes.

To begin I'm not sure I like the idea when regulators and officials take jobs from companies who had been lobbying them.

To use a politically neutral example, who remembers Darleen Druyun, former weapons buyer for the US Air force? Well in 2005 she was jailed for (only) 9 months after pleading guilty to giving Boeing special treatment in a 23.5 billion dollar government contract - of course, after the deal was inked, Druyun was hired by Boeing as a vice-president with an annual salary of 250k. Druyun allowed Boeing to negotiate for an extra 6 billion dollars more than the contract should have been. This kind of hiring of 'career' government officials into highly paid corporate executive roles has been routine for decades. I don't know if Mr Lawsky made the regulations incredibly expensive and difficult to comply with, to the detriment of itBit's competition before he left the NYDFS, but considering that to the best of my knowledge, itBit is still the only exchange to have a banking licence... it kinda stinks of corruption. This could be a big misunderstanding though, and those two regulators may have just joined itBit fair and square, or these two regulators made itBit a 'sure thing' - we may never know. The next question would be that in the event that there was unfair favouritism affird to itBit, is it sensible (risky) to go into business with them should foul-play be uncovered in the future, or do these appointments provide some level of immunity? It will take more time watching how this all plays out.


In regards to the 'bankchain' thing, I've been waiting for something like this to come along for a while. We all expected banks to try to take the technology for their own to improve their settlement payments from overnight to near-instant. I can see lots of problems with itBit's idea - but I presume many customers may prefer joining banks that are members of the 'bankchain' system for faster payments, which could encourage even more banks to join. I don't have any issue with itBit being profit motivated, but re-my point about the regulators passing ridiculously difficult regulations in NY that have turned away nearly all of itBit's competitors... it doesn't sound like they're playing fair game. Again, this may not be the case at all - pending further research and developments.


Of course, ItBit and the banks are still at a disadvantage - they haven't fixed the money, they still use fiat. I could go on and on with various graphs and points (may I point people in the direction of IMZ's crypto kindergarten blog posts on cryptomoms.com forums), but the reality is that fiat is created as debt, which means new money must come into creation to pay for the interest owing on that debt, which is completely unsustainable. World governments are in massive debt crises, and they have all failed to create the next 'economic' bubble that would give a false sense that the 'real' economy isn't in decline.

But why has recovery been unattainable on this occasion?



https://www.quandl.com/data/FRED/DFF-Effective-Federal-Funds-Rate

Take a look at the effective federal funds rate in the link above. The interest rate tends to be lifted by the fed in times of economic boom, and severely lowered in times when the government want to promulgate economic activity, which leads to 'bubbles' (stock bubble, dotcom bubble, housing bubble etc). The chart clearly shows drops in the interest rate in ~1988, ~2001 and ~2007 in line with the decline of each bubble. These low interest rates make borrowing really cheap, and encourage ridiculous investment activities that no sane person would make if interest rates were dictated by the free-market. Currently, the Fed has an effective 0.14 % interest rate, and it has been near zero since ~2010.

The fact that interest rates are still low, is the obvious tell that there has been no 'real' economic recovery. What is worse, is that there is now nothing in the way of 'government tools' to improve this situation - QE has already convoluted the real decline in the US economy, and dropping interest rates any lower would make them go negative. I hardly think anybody would be interested in running a restaurant where they paid customers to come and eat, and I think it would work the same with your bank deposits if you were earning negative interest - It would mean the destruction of the banking system. I could go into this much further, and bring about many other points, but this should suffice for the moment. Basically, crypto currencies have more long-term stable potential than fiat currencies do. Crypto is going to become a more attractive alternative, and quickly.

But DNotes doesn't only have the advantage of sound money - It is a good point to highlight that DNotes is creating a global digital currency that is useful everywhere and holds an equal value worldwide, so there is no requirment no transfer between currencies (i.e. Euro to USD) like with itBit's system - (presuming foreign banks co-operate, or foreign exchange is possible as a service of the banks through the bankchain).
ItBits 'bankchain' simply can not compete on the near-zero transfer cost possible with DNotes and our ecosystem. Not within the same country, and certainly not internationally. If ItBit does try to compete, the banks will not be pleased to forego all of their processing fee's (income) and leave the bankchain. If they don't try to compete on processing fees, then DNotes holds a competitive advantage and consumers would get more value using DNotes for transfer. ItBit's strategy could like like any number of things, but one could be that they work to get adopted by the banking system, and quickly, then proclaim victory and hope everybody else gives up - including crypto industries. They would come up with some slogan to entice banks like "Bitcoin brought instant payment transfers, banking uses 'real' money. ItBit brings you both". ItBit may simultaneously remain one of the only exchanges where crypto-USD transfers are permitted by the US Gov through banking licences, especially if the NY regulations are adopted in other states (which looks likely). ItBit could continue to accommodate the 'niche' crypto market and make extra profits as a monopoly / oligopoly player to supplement their 'bankchain' income - which would be a great way to hedge their bets in the short term.

Normally I try to avoid speculating this far ahead because there are too many assumptions made along the way. Changing one assumption, would then change the 'next step'. The above is but one potential path we could see.

Chase, I have no idea if banks in developing nations would be invited to the party. I imagine it would be the US banks that wouldn't want to deal with those in developing nations. Assuming any banks even wanted to use ItBit's platform, I doubt the US government would allow the banking system to shift from predominantly being traded in USD, to being traded in "ItBit tokens"... I think DNotes and digital currencies in general are safer from government trying to shut down their ecosystems. It would be much more likely that if this 'bankchain' thing is successful, the US government would buy the rights to it, then force all banks to trade using their own 'issued' tokens by the "BankFederalReserveChain". That way the US government would be able to spy much more easily on every banking transaction, and all but make physical cash illegal...

Of course, at that juncture, who knows how many everyday people would have decided they would prefer to use decentralized crypto's like DNotes?

Anyway, hopefully it sparks an interesting conversation.

Thanks TeeGee, I will comment on a small portion of it. I suspect there will be many more niche chains and tokens to come, targeting banks/companies/data/contracts/nations and a plethora of other things. Some will become corrupt, centralized, convoluted, or just fail to gain adoption and some will be successful. However, I believe there will always be a need for a global digital currency for all of these things to pair, and essentially allow them to work in a global/national marketplace. I also believe there is a need for a trusted, positive driving force behind the global digital currency, trying to move things in the right direction without the possibility of direct control. Hence DNotes.

[Dyna]

Here comes centralized Digital Currency, I mentioned earlier. This may not be a good thing for the consumers, many bank employees and many of us who are committed to decentralized financial services as an alternative to government/bank controlled currency. Unfortunately, we don't even have an industry association to speak with a united voice. That is just my opinion. What is yours?



itBit Hires Former NYDFS General Counsel Daniel Alter, Pushes Ahead with Bankchain Project

by GIULIO PRISCO on SEPTEMBER 3, 2015 0
https://bitcoinmagazine.com/21845/itbit-hires-former-nydfs-general-counsel-daniel-alter-pushes-ahead-bankchain-project/


In April, Bitcoin Magazine reported that Bitcoin exchange itBit had filed for a banking license in New York. Later in May, itBit was granted a trust charter by the New York Department of Financial Services (NYFDS) under New York State banking law, the first such charter granted to a digital currency company by the NYDFS. ItBit also announced the successful completion of a $25 million Series A funding round.

On September 2, itBit announced the appointments of Daniel “Danny” Alter as the company’s new general counsel and chief compliance officer, and Kim Petry as chief financial officer. Petry was previously CFO of global operations and technology at Broadridge Financial Services and, before that, served as CFO and vice president of global commercial/corporate card payment at American Express.

Alter joined itBit after stepping down in February from his most recent post as general counsel of the New York State Department of Financial Services (NYDFS), where he served as principal counsel and strategic adviser to the New York state superintendent of financial services.

The former New York State Superintendent of Financial Services Benjamin Lawsky left the NYDFS after releasing the controversial Bitlicense regulations for digital currency businesses operating in New York. Lawsky’s move to a consulting business was strongly criticized by the libertarian Cato Institute.

“Because of the contacts he made as a regulator, [Lawsky] can hire himself out to Bitcoin companies wanting to signal to other regulators that they have the approval of the regulatory establishment,” noted Cato Senior Fellow Jim Harper.

It seems likely that Alter’s move to itBit might be criticized in the same grounds.

“The New York State Public Officers law requires that I have a two-year recusal before I can appear before the New York Department of Financial Services on behalf of the company,” said Alter in a pre-emptive statement reported by Reuters. “And it will certainly apply to itBit. I will not step near or have any communications with the New York Department of Financial Services. Those will be handled by outside counsel or qualified compliance people within the company.”

“Between Danny’s deep expertise in financial services and virtual currency regulation and Kim’s demonstrated track record as a successful CFO of global financial organizations, I’m confident that itBit will continue to grow and develop innovative blockchain-based solutions to address the financial industry’s greatest pain points,” said itBit co-founder and CEO Chad Cascarilla. “Danny and Kim possess a deep understanding of how to grow and run a successful business within the regulatory framework of the financial services industry, and their expertise will be invaluable as we work toward the launch of our new permissioned distributed ledger product – Bankchain.”

Bankchain, a new high profile project still held under wraps by itBit, will be a closed, “permissioned blockchain” owned and operated by banks and financial institutions – in other words, a private blockchain without bitcoin and anonymous miners. According to itBit claims, Bankchain will automate, accelerate and simplify post-trade processes across the financial services industry, saving institutions time and money.

Bankchain is “the first consensus-based ledger system exclusively for financial institutions,” states the still very basic Bankchain website. “Bankchain is a new clearing and settlement network that leverages blockchain technology to reimagine how financial institutions execute post-trade. The decentralized network is powered by itBit but fully governed by the member participants that join the platform.”

“[Bankchain] is a proprietary itBit protocol, not blockchain based, but is derived off of blockchain,” itBit head of global operations Steve Wager told Coindesk in August. “We will also not be using bitcoin as the native token; it will be an itBit proprietary token.”

Reddit users strongly criticized the “Sinister Bankchain Project,” but it appears that the trend toward private, permissioned blockchains is here to stay, with strong support expressed, among others, by Accenture and Digital Asset Holdings CEO Blythe Masters.

The itBit / Bank team-up is 100% profit motivated.  None of the savings generated by implementing Bankchain will be passed on to the consumer in the form of reduced fees or lower interest charged.  It really doesn't sound like anything the consumer will be involved in at all, except perhaps a settlement of payments between banks on the customer's exhorbitant interest-loaded credit card balance.

I think we need to separate ourselves, in the public's eye, from what the banks are doing. They are merely using the technology for their own profit.  We, on the other hand, are creating a global currency that everyone worldwide can use, invest in, profit in, conduct business with, and bring stability to the finances of people living with government corruption and runaway inflation.  People from every country, even the ones that appear stable can benefit from a truly decentralized global digital currency.

As far as the banks settling payments from cross border remittances, what are the chances of banks in third world countries trusting these American(?) banks enough to use bankchain tokens?  Or will these poor countries even be invited to the party?

Those are excellent points. I wish more people in our industry can see it this clearly. Our industry has to step up to clarify what this is all about and not let the bankers diminish the immense value and superiority of decentralized digital currency when mass global acceptance is achieved.

I totally agree that “we need to separate ourselves, in the public's eye, from what the banks are doing. They are merely using the technology for their own profit.  We, on the other hand, are creating a global currency that everyone worldwide can use, invest in, profit in, conduct business with, and bring stability to the finances of people living with government corruption and runaway inflation.” (Chase)

The banking systems and fiat currencies are here to stay. The blockchain/bankchain technology will drastically modernized the movement of money and record keeping leading to the elimination of a very large number of jobs; the massive disruption many in the industry predicted. It will be much harder for our industry to dominate the remittance market. The banks have the advantage of on-ramp and off-ramp infrastructure already in place.

This new development actually strengthens DNotes long–term global mass acceptance business model, inclusive of our own ecosystem which will include our own bank and partner banks. We have always anticipated that the bank will have to adapt and for DNotes to be truly successful we have to be able to interface with the banking world. I will be keeping a very close eye on this.  

Won't it be cool if eventually we can come up with our version of "bankchain" to interface with our system and the banking world? I am certain that we can come up with a cleaner solution and much more trustworthy on a global scale. There is no rush though. Just thinking out loud at this time.

[matatyau-cohen]

Welcome Kris! wish you a great time and a great journey - as a member of DNOTES team and community

A Warm Welcome to Kris:

On behalf of CryptoMoms’ and DNotes’ communities I want to extend a very warm welcome to Kris for join the DNotes Team. Although, Kris has heard a lot about DNotes she is new to our industry and I trust that you all will be most helpful in helping her with any questions she may have.

With Kris’s help this will be the beginning of a new chapter for CryptoMoms and our family of CRISP. Kris is very passionate about women’s empowerment, economic equalities and the financial future of children. We will be reaching out to many organizations and individuals to help take CryptoMoms to the next level.

[Dyna]

Here comes centralized Digital Currency, I mentioned earlier. This may not be a good thing for the consumers, many bank employees and many of us who are committed to decentralized financial services as an alternative to government/bank controlled currency. Unfortunately, we don't even have an industry association to speak with a united voice. That is just my opinion. What is yours?



itBit Hires Former NYDFS General Counsel Daniel Alter, Pushes Ahead with Bankchain Project

by GIULIO PRISCO on SEPTEMBER 3, 2015 0
https://bitcoinmagazine.com/21845/itbit-hires-former-nydfs-general-counsel-daniel-alter-pushes-ahead-bankchain-project/


In April, Bitcoin Magazine reported that Bitcoin exchange itBit had filed for a banking license in New York. Later in May, itBit was granted a trust charter by the New York Department of Financial Services (NYFDS) under New York State banking law, the first such charter granted to a digital currency company by the NYDFS. ItBit also announced the successful completion of a $25 million Series A funding round.

On September 2, itBit announced the appointments of Daniel “Danny” Alter as the company’s new general counsel and chief compliance officer, and Kim Petry as chief financial officer. Petry was previously CFO of global operations and technology at Broadridge Financial Services and, before that, served as CFO and vice president of global commercial/corporate card payment at American Express.

Alter joined itBit after stepping down in February from his most recent post as general counsel of the New York State Department of Financial Services (NYDFS), where he served as principal counsel and strategic adviser to the New York state superintendent of financial services.

The former New York State Superintendent of Financial Services Benjamin Lawsky left the NYDFS after releasing the controversial Bitlicense regulations for digital currency businesses operating in New York. Lawsky’s move to a consulting business was strongly criticized by the libertarian Cato Institute.

“Because of the contacts he made as a regulator, [Lawsky] can hire himself out to Bitcoin companies wanting to signal to other regulators that they have the approval of the regulatory establishment,” noted Cato Senior Fellow Jim Harper.

It seems likely that Alter’s move to itBit might be criticized in the same grounds.

“The New York State Public Officers law requires that I have a two-year recusal before I can appear before the New York Department of Financial Services on behalf of the company,” said Alter in a pre-emptive statement reported by Reuters. “And it will certainly apply to itBit. I will not step near or have any communications with the New York Department of Financial Services. Those will be handled by outside counsel or qualified compliance people within the company.”

“Between Danny’s deep expertise in financial services and virtual currency regulation and Kim’s demonstrated track record as a successful CFO of global financial organizations, I’m confident that itBit will continue to grow and develop innovative blockchain-based solutions to address the financial industry’s greatest pain points,” said itBit co-founder and CEO Chad Cascarilla. “Danny and Kim possess a deep understanding of how to grow and run a successful business within the regulatory framework of the financial services industry, and their expertise will be invaluable as we work toward the launch of our new permissioned distributed ledger product – Bankchain.”

Bankchain, a new high profile project still held under wraps by itBit, will be a closed, “permissioned blockchain” owned and operated by banks and financial institutions – in other words, a private blockchain without bitcoin and anonymous miners. According to itBit claims, Bankchain will automate, accelerate and simplify post-trade processes across the financial services industry, saving institutions time and money.

Bankchain is “the first consensus-based ledger system exclusively for financial institutions,” states the still very basic Bankchain website. “Bankchain is a new clearing and settlement network that leverages blockchain technology to reimagine how financial institutions execute post-trade. The decentralized network is powered by itBit but fully governed by the member participants that join the platform.”

“[Bankchain] is a proprietary itBit protocol, not blockchain based, but is derived off of blockchain,” itBit head of global operations Steve Wager told Coindesk in August. “We will also not be using bitcoin as the native token; it will be an itBit proprietary token.”

Reddit users strongly criticized the “Sinister Bankchain Project,” but it appears that the trend toward private, permissioned blockchains is here to stay, with strong support expressed, among others, by Accenture and Digital Asset Holdings CEO Blythe Masters.

The itBit / Bank team-up is 100% profit motivated.  None of the savings generated by implementing Bankchain will be passed on to the consumer in the form of reduced fees or lower interest charged.  It really doesn't sound like anything the consumer will be involved in at all, except perhaps a settlement of payments between banks on the customer's exhorbitant interest-loaded credit card balance.

I think we need to separate ourselves, in the public's eye, from what the banks are doing. They are merely using the technology for their own profit.  We, on the other hand, are creating a global currency that everyone worldwide can use, invest in, profit in, conduct business with, and bring stability to the finances of people living with government corruption and runaway inflation.  People from every country, even the ones that appear stable can benefit from a truly decentralized global digital currency.

As far as the banks settling payments from cross border remittances, what are the chances of banks in third world countries trusting these American(?) banks enough to use bankchain tokens?  Or will these poor countries even be invited to the party?

Apologies if this is difficult to read etc, it's one of my 'long posts' where I think of things and get confused about the order I should discuss them, then 'chop and change' sentences around which can make the message harder to follow. These views and 'on the fly' thoughts are my own, and do not necessarily reflect those of DNotes.

To begin I'm not sure I like the idea when regulators and officials take jobs from companies who had been lobbying them.

To use a politically neutral example, who remembers Darleen Druyun, former weapons buyer for the US Air force? Well in 2005 she was jailed for (only) 9 months after pleading guilty to giving Boeing special treatment in a 23.5 billion dollar government contract - of course, after the deal was inked, Druyun was hired by Boeing as a vice-president with an annual salary of 250k. Druyun allowed Boeing to negotiate for an extra 6 billion dollars more than the contract should have been. This kind of hiring of 'career' government officials into highly paid corporate executive roles has been routine for decades. I don't know if Mr Lawsky made the regulations incredibly expensive and difficult to comply with, to the detriment of itBit's competition before he left the NYDFS, but considering that to the best of my knowledge, itBit is still the only exchange to have a banking licence... it kinda stinks of corruption. This could be a big misunderstanding though, and those two regulators may have just joined itBit fair and square, or these two regulators made itBit a 'sure thing' - we may never know. The next question would be that in the event that there was unfair favouritism affird to itBit, is it sensible (risky) to go into business with them should foul-play be uncovered in the future, or do these appointments provide some level of immunity? It will take more time watching how this all plays out.


In regards to the 'bankchain' thing, I've been waiting for something like this to come along for a while. We all expected banks to try to take the technology for their own to improve their settlement payments from overnight to near-instant. I can see lots of problems with itBit's idea - but I presume many customers may prefer joining banks that are members of the 'bankchain' system for faster payments, which could encourage even more banks to join. I don't have any issue with itBit being profit motivated, but re-my point about the regulators passing ridiculously difficult regulations in NY that have turned away nearly all of itBit's competitors... it doesn't sound like they're playing fair game. Again, this may not be the case at all - pending further research and developments.


Of course, ItBit and the banks are still at a disadvantage - they haven't fixed the money, they still use fiat. I could go on and on with various graphs and points (may I point people in the direction of IMZ's crypto kindergarten blog posts on cryptomoms.com forums), but the reality is that fiat is created as debt, which means new money must come into creation to pay for the interest owing on that debt, which is completely unsustainable. World governments are in massive debt crises, and they have all failed to create the next 'economic' bubble that would give a false sense that the 'real' economy isn't in decline.

But why has recovery been unattainable on this occasion?



https://www.quandl.com/data/FRED/DFF-Effective-Federal-Funds-Rate

Take a look at the effective federal funds rate in the link above. The interest rate tends to be lifted by the fed in times of economic boom, and severely lowered in times when the government want to promulgate economic activity, which leads to 'bubbles' (stock bubble, dotcom bubble, housing bubble etc). The chart clearly shows drops in the interest rate in ~1988, ~2001 and ~2007 in line with the decline of each bubble. These low interest rates make borrowing really cheap, and encourage ridiculous investment activities that no sane person would make if interest rates were dictated by the free-market. Currently, the Fed has an effective 0.14 % interest rate, and it has been near zero since ~2010.

The fact that interest rates are still low, is the obvious tell that there has been no 'real' economic recovery. What is worse, is that there is now nothing in the way of 'government tools' to improve this situation - QE has already convoluted the real decline in the US economy, and dropping interest rates any lower would make them go negative. I hardly think anybody would be interested in running a restaurant where they paid customers to come and eat, and I think it would work the same with your bank deposits if you were earning negative interest - It would mean the destruction of the banking system. I could go into this much further, and bring about many other points, but this should suffice for the moment. Basically, crypto currencies have more long-term stable potential than fiat currencies do. Crypto is going to become a more attractive alternative, and quickly.

But DNotes doesn't only have the advantage of sound money - It is a good point to highlight that DNotes is creating a global digital currency that is useful everywhere and holds an equal value worldwide, so there is no requirment no transfer between currencies (i.e. Euro to USD) like with itBit's system - (presuming foreign banks co-operate, or foreign exchange is possible as a service of the banks through the bankchain).
ItBits 'bankchain' simply can not compete on the near-zero transfer cost possible with DNotes and our ecosystem. Not within the same country, and certainly not internationally. If ItBit does try to compete, the banks will not be pleased to forego all of their processing fee's (income) and leave the bankchain. If they don't try to compete on processing fees, then DNotes holds a competitive advantage and consumers would get more value using DNotes for transfer. ItBit's strategy could like like any number of things, but one could be that they work to get adopted by the banking system, and quickly, then proclaim victory and hope everybody else gives up - including crypto industries. They would come up with some slogan to entice banks like "Bitcoin brought instant payment transfers, banking uses 'real' money. ItBit brings you both". ItBit may simultaneously remain one of the only exchanges where crypto-USD transfers are permitted by the US Gov through banking licences, especially if the NY regulations are adopted in other states (which looks likely). ItBit could continue to accommodate the 'niche' crypto market and make extra profits as a monopoly / oligopoly player to supplement their 'bankchain' income - which would be a great way to hedge their bets in the short term.

Normally I try to avoid speculating this far ahead because there are too many assumptions made along the way. Changing one assumption, would then change the 'next step'. The above is but one potential path we could see.

Chase, I have no idea if banks in developing nations would be invited to the party. I imagine it would be the US banks that wouldn't want to deal with those in developing nations. Assuming any banks even wanted to use ItBit's platform, I doubt the US government would allow the banking system to shift from predominantly being traded in USD, to being traded in "ItBit tokens"... I think DNotes and digital currencies in general are safer from government trying to shut down their ecosystems. It would be much more likely that if this 'bankchain' thing is successful, the US government would buy the rights to it, then force all banks to trade using their own 'issued' tokens by the "BankFederalReserveChain". That way the US government would be able to spy much more easily on every banking transaction, and all but make physical cash illegal...

Of course, at that juncture, who knows how many everyday people would have decided they would prefer to use decentralized crypto's like DNotes?

Anyway, hopefully it sparks an interesting conversation.

Thanks TeeGee, I will comment on a small portion of it. I suspect there will be many more niche chains and tokens to come, targeting banks/companies/data/contracts/nations and a plethora of other things. Some will become corrupt, centralized, convoluted, or just fail to gain adoption and some will be successful. However, I believe there will always be a need for a global digital currency for all of these things to pair, and essentially allow them to work in a global/national marketplace. I also believe there is a need for a trusted, positive driving force behind the global digital currency, trying to move things in the right direction without the possibility of direct control. Hence DNotes.

Excellent discussion, but where is RJF when we needed him? LOL I know that he is a busy guy but I am sure that he will have some good inputs.

I agree that there will be many different versions of "bankchain" and small banks will be left out for a long time. Massive integration is never easy and I am sure that there will be many challenges and pitfalls along the way. As I mentioned earlier their most immediate advantage is the movement of money especially in cross border currency transfer. The blockchain technology allows for near real time settlement, times-stamped permanent, single data entry, and verifiable record keeping. However, remaining as fiat currency/tokenized digital currency that is still centralized, in my mind, it is not a clean and total solution. It will still involve a lot of paperwork, double entries and manual audits.

This is a very new development. My opinion is speculative and I would appreciate that you all keep an eye on this subject any post new information as it becomes available. Thanks.  

[DNotes]

Found this article pretty interesting comparing digital currency to gold and real estate as reliable / fall back investments. Of course DNotes would be a great option for this type of investment.

Chinese Capital Controls May Create Next Bitcoin Boom

Over the past year, investment money has been flowing out of China’s markets at a record pace, creating great instability in not just China, but globally. The largely state-controlled economy has seen new measures to stem the tide, and massive capital controls may be on the horizon, creating a great opportunity for Bitcoin to peak as it did in 2013, according to ZeroHedge.

Chinese capital controls

Money has been leaving China’s economy for a long time, and the recent currency devaluation is only a symptom of that, not the cause. Investing in real estate is always a staple of any wise investor’s portfolio, and the Chinese have done so. CNN reports that over the last 12 months, more than US$30 billion has left China for U.S. real estate, accounting for almost 25% of all foreign investment in that sector.

The Chinese are starting to "think money in the bank is not safe -- it won't gain any value if the renminbi is still devaluing," said David Ji of Knight Frank, an international real estate agency. "So people will look to real estate as a more solid investment channel.”

The Chinese government has grown their gold reserves, but it is less attractive to the individual investor, as it leaves quite a trail coming and going for those looking to diversify and avoid the local currency’s trouble and monitoring. Moving large sums of money out of the country, without government oversight, via “underground banks” has become very popular, but more and more dangerous, as The State cracks down. ZeroHedge exposes the latest in this situation:

“Chinese officials have intensified a crackdown on what are known in China as underground banks, which Chinese nationals often use to shift money in and out of the country despite tight capital controls. Meng Qingfeng, vice minister of public security, said late in August that those money-transfer agents remained ‘rampant’ despite repeated crackdowns on them, according to the official Xinhua News Agency. Mr. Meng also urged police around the country to better coordinate with the central bank in the campaign, which will run through the end of November.”

Gold, real estate, and bitcoin are an investor’s best friend

[...]

http://cointelegraph.com/news/115222/chinese-capital-controls-may-create-next-bitcoin-boom

[Chase]

Found this article pretty interesting comparing digital currency to gold and real estate as reliable / fall back investments. Of course DNotes would be a great option for this type of investment.

Chinese Capital Controls May Create Next Bitcoin Boom

Over the past year, investment money has been flowing out of China’s markets at a record pace, creating great instability in not just China, but globally. The largely state-controlled economy has seen new measures to stem the tide, and massive capital controls may be on the horizon, creating a great opportunity for Bitcoin to peak as it did in 2013, according to ZeroHedge.

Chinese capital controls

Money has been leaving China’s economy for a long time, and the recent currency devaluation is only a symptom of that, not the cause. Investing in real estate is always a staple of any wise investor’s portfolio, and the Chinese have done so. CNN reports that over the last 12 months, more than US$30 billion has left China for U.S. real estate, accounting for almost 25% of all foreign investment in that sector.

The Chinese are starting to "think money in the bank is not safe -- it won't gain any value if the renminbi is still devaluing," said David Ji of Knight Frank, an international real estate agency. "So people will look to real estate as a more solid investment channel.”

The Chinese government has grown their gold reserves, but it is less attractive to the individual investor, as it leaves quite a trail coming and going for those looking to diversify and avoid the local currency’s trouble and monitoring. Moving large sums of money out of the country, without government oversight, via “underground banks” has become very popular, but more and more dangerous, as The State cracks down. ZeroHedge exposes the latest in this situation:

“Chinese officials have intensified a crackdown on what are known in China as underground banks, which Chinese nationals often use to shift money in and out of the country despite tight capital controls. Meng Qingfeng, vice minister of public security, said late in August that those money-transfer agents remained ‘rampant’ despite repeated crackdowns on them, according to the official Xinhua News Agency. Mr. Meng also urged police around the country to better coordinate with the central bank in the campaign, which will run through the end of November.”

Gold, real estate, and bitcoin are an investor’s best friend

[...]

http://cointelegraph.com/news/115222/chinese-capital-controls-may-create-next-bitcoin-boom

This sounds a lot like what Mark has been talking about at CryptoMoms for quite some time now.  We share the same view on this - besides cryptocurrency, we are both fans of gold.  I also agree with real estate holdings, but can't remember if he mentioned it there.  When I have more time, I am going to re-read that whole section.  It started with Greece and then came China, and next is...

http://cryptomoms.com/forum/cryptomoms-com/5/crypto-kindergarten/537/120

   

[DNotes]

Wow, getting great coverage on the DCEBrief press release.

http://www.marketwatch.com/story/bitcoin-alternative-dnotes-launches-dcebriefcom-digital-currency-executive-brief-news-portal-2015-09-02

http://finance.boston.com/boston/news/read/30558609/bitcoin_alternative_dnotes_launches_dcebrief.com

[MarriedWithChildren]

Wow, getting great coverage on the DCEBrief press release.

http://finance.boston.com/boston/news/read/30558609/bitcoin_alternative_dnotes_launches_dcebrief.com

Congratulations on the launch of DCEBrief.  I haven't learned very much about cryptocurrency, but I'm confident that I am hanging on to a winner.  i get a simple Coles Notes explanation of what's going on here from a friend.  

 How often are new stories written for DCEBrief?

[RJF]

Here comes centralized Digital Currency, I mentioned earlier. This may not be a good thing for the consumers, many bank employees and many of us who are committed to decentralized financial services as an alternative to government/bank controlled currency. Unfortunately, we don't even have an industry association to speak with a united voice. That is just my opinion. What is yours?



itBit Hires Former NYDFS General Counsel Daniel Alter, Pushes Ahead with Bankchain Project

by GIULIO PRISCO on SEPTEMBER 3, 2015 0
https://bitcoinmagazine.com/21845/itbit-hires-former-nydfs-general-counsel-daniel-alter-pushes-ahead-bankchain-project/


In April, Bitcoin Magazine reported that Bitcoin exchange itBit had filed for a banking license in New York. Later in May, itBit was granted a trust charter by the New York Department of Financial Services (NYFDS) under New York State banking law, the first such charter granted to a digital currency company by the NYDFS. ItBit also announced the successful completion of a $25 million Series A funding round.

On September 2, itBit announced the appointments of Daniel “Danny” Alter as the company’s new general counsel and chief compliance officer, and Kim Petry as chief financial officer. Petry was previously CFO of global operations and technology at Broadridge Financial Services and, before that, served as CFO and vice president of global commercial/corporate card payment at American Express.

Alter joined itBit after stepping down in February from his most recent post as general counsel of the New York State Department of Financial Services (NYDFS), where he served as principal counsel and strategic adviser to the New York state superintendent of financial services.

The former New York State Superintendent of Financial Services Benjamin Lawsky left the NYDFS after releasing the controversial Bitlicense regulations for digital currency businesses operating in New York. Lawsky’s move to a consulting business was strongly criticized by the libertarian Cato Institute.

“Because of the contacts he made as a regulator, [Lawsky] can hire himself out to Bitcoin companies wanting to signal to other regulators that they have the approval of the regulatory establishment,” noted Cato Senior Fellow Jim Harper.

It seems likely that Alter’s move to itBit might be criticized in the same grounds.

“The New York State Public Officers law requires that I have a two-year recusal before I can appear before the New York Department of Financial Services on behalf of the company,” said Alter in a pre-emptive statement reported by Reuters. “And it will certainly apply to itBit. I will not step near or have any communications with the New York Department of Financial Services. Those will be handled by outside counsel or qualified compliance people within the company.”

“Between Danny’s deep expertise in financial services and virtual currency regulation and Kim’s demonstrated track record as a successful CFO of global financial organizations, I’m confident that itBit will continue to grow and develop innovative blockchain-based solutions to address the financial industry’s greatest pain points,” said itBit co-founder and CEO Chad Cascarilla. “Danny and Kim possess a deep understanding of how to grow and run a successful business within the regulatory framework of the financial services industry, and their expertise will be invaluable as we work toward the launch of our new permissioned distributed ledger product – Bankchain.”

Bankchain, a new high profile project still held under wraps by itBit, will be a closed, “permissioned blockchain” owned and operated by banks and financial institutions – in other words, a private blockchain without bitcoin and anonymous miners. According to itBit claims, Bankchain will automate, accelerate and simplify post-trade processes across the financial services industry, saving institutions time and money.

Bankchain is “the first consensus-based ledger system exclusively for financial institutions,” states the still very basic Bankchain website. “Bankchain is a new clearing and settlement network that leverages blockchain technology to reimagine how financial institutions execute post-trade. The decentralized network is powered by itBit but fully governed by the member participants that join the platform.”

“[Bankchain] is a proprietary itBit protocol, not blockchain based, but is derived off of blockchain,” itBit head of global operations Steve Wager told Coindesk in August. “We will also not be using bitcoin as the native token; it will be an itBit proprietary token.”

Reddit users strongly criticized the “Sinister Bankchain Project,” but it appears that the trend toward private, permissioned blockchains is here to stay, with strong support expressed, among others, by Accenture and Digital Asset Holdings CEO Blythe Masters.

The itBit / Bank team-up is 100% profit motivated.  None of the savings generated by implementing Bankchain will be passed on to the consumer in the form of reduced fees or lower interest charged.  It really doesn't sound like anything the consumer will be involved in at all, except perhaps a settlement of payments between banks on the customer's exhorbitant interest-loaded credit card balance.

I think we need to separate ourselves, in the public's eye, from what the banks are doing. They are merely using the technology for their own profit.  We, on the other hand, are creating a global currency that everyone worldwide can use, invest in, profit in, conduct business with, and bring stability to the finances of people living with government corruption and runaway inflation.  People from every country, even the ones that appear stable can benefit from a truly decentralized global digital currency.

As far as the banks settling payments from cross border remittances, what are the chances of banks in third world countries trusting these American(?) banks enough to use bankchain tokens?  Or will these poor countries even be invited to the party?

Apologies if this is difficult to read etc, it's one of my 'long posts' where I think of things and get confused about the order I should discuss them, then 'chop and change' sentences around which can make the message harder to follow. These views and 'on the fly' thoughts are my own, and do not necessarily reflect those of DNotes.

To begin I'm not sure I like the idea when regulators and officials take jobs from companies who had been lobbying them.

To use a politically neutral example, who remembers Darleen Druyun, former weapons buyer for the US Air force? Well in 2005 she was jailed for (only) 9 months after pleading guilty to giving Boeing special treatment in a 23.5 billion dollar government contract - of course, after the deal was inked, Druyun was hired by Boeing as a vice-president with an annual salary of 250k. Druyun allowed Boeing to negotiate for an extra 6 billion dollars more than the contract should have been. This kind of hiring of 'career' government officials into highly paid corporate executive roles has been routine for decades. I don't know if Mr Lawsky made the regulations incredibly expensive and difficult to comply with, to the detriment of itBit's competition before he left the NYDFS, but considering that to the best of my knowledge, itBit is still the only exchange to have a banking licence... it kinda stinks of corruption. This could be a big misunderstanding though, and those two regulators may have just joined itBit fair and square, or these two regulators made itBit a 'sure thing' - we may never know. The next question would be that in the event that there was unfair favouritism affird to itBit, is it sensible (risky) to go into business with them should foul-play be uncovered in the future, or do these appointments provide some level of immunity? It will take more time watching how this all plays out.


In regards to the 'bankchain' thing, I've been waiting for something like this to come along for a while. We all expected banks to try to take the technology for their own to improve their settlement payments from overnight to near-instant. I can see lots of problems with itBit's idea - but I presume many customers may prefer joining banks that are members of the 'bankchain' system for faster payments, which could encourage even more banks to join. I don't have any issue with itBit being profit motivated, but re-my point about the regulators passing ridiculously difficult regulations in NY that have turned away nearly all of itBit's competitors... it doesn't sound like they're playing fair game. Again, this may not be the case at all - pending further research and developments.


Of course, ItBit and the banks are still at a disadvantage - they haven't fixed the money, they still use fiat. I could go on and on with various graphs and points (may I point people in the direction of IMZ's crypto kindergarten blog posts on cryptomoms.com forums), but the reality is that fiat is created as debt, which means new money must come into creation to pay for the interest owing on that debt, which is completely unsustainable. World governments are in massive debt crises, and they have all failed to create the next 'economic' bubble that would give a false sense that the 'real' economy isn't in decline.

But why has recovery been unattainable on this occasion?



https://www.quandl.com/data/FRED/DFF-Effective-Federal-Funds-Rate

Take a look at the effective federal funds rate in the link above. The interest rate tends to be lifted by the fed in times of economic boom, and severely lowered in times when the government want to promulgate economic activity, which leads to 'bubbles' (stock bubble, dotcom bubble, housing bubble etc). The chart clearly shows drops in the interest rate in ~1988, ~2001 and ~2007 in line with the decline of each bubble. These low interest rates make borrowing really cheap, and encourage ridiculous investment activities that no sane person would make if interest rates were dictated by the free-market. Currently, the Fed has an effective 0.14 % interest rate, and it has been near zero since ~2010.

The fact that interest rates are still low, is the obvious tell that there has been no 'real' economic recovery. What is worse, is that there is now nothing in the way of 'government tools' to improve this situation - QE has already convoluted the real decline in the US economy, and dropping interest rates any lower would make them go negative. I hardly think anybody would be interested in running a restaurant where they paid customers to come and eat, and I think it would work the same with your bank deposits if you were earning negative interest - It would mean the destruction of the banking system. I could go into this much further, and bring about many other points, but this should suffice for the moment. Basically, crypto currencies have more long-term stable potential than fiat currencies do. Crypto is going to become a more attractive alternative, and quickly.

But DNotes doesn't only have the advantage of sound money - It is a good point to highlight that DNotes is creating a global digital currency that is useful everywhere and holds an equal value worldwide, so there is no requirment no transfer between currencies (i.e. Euro to USD) like with itBit's system - (presuming foreign banks co-operate, or foreign exchange is possible as a service of the banks through the bankchain).
ItBits 'bankchain' simply can not compete on the near-zero transfer cost possible with DNotes and our ecosystem. Not within the same country, and certainly not internationally. If ItBit does try to compete, the banks will not be pleased to forego all of their processing fee's (income) and leave the bankchain. If they don't try to compete on processing fees, then DNotes holds a competitive advantage and consumers would get more value using DNotes for transfer. ItBit's strategy could like like any number of things, but one could be that they work to get adopted by the banking system, and quickly, then proclaim victory and hope everybody else gives up - including crypto industries. They would come up with some slogan to entice banks like "Bitcoin brought instant payment transfers, banking uses 'real' money. ItBit brings you both". ItBit may simultaneously remain one of the only exchanges where crypto-USD transfers are permitted by the US Gov through banking licences, especially if the NY regulations are adopted in other states (which looks likely). ItBit could continue to accommodate the 'niche' crypto market and make extra profits as a monopoly / oligopoly player to supplement their 'bankchain' income - which would be a great way to hedge their bets in the short term.

Normally I try to avoid speculating this far ahead because there are too many assumptions made along the way. Changing one assumption, would then change the 'next step'. The above is but one potential path we could see.

Chase, I have no idea if banks in developing nations would be invited to the party. I imagine it would be the US banks that wouldn't want to deal with those in developing nations. Assuming any banks even wanted to use ItBit's platform, I doubt the US government would allow the banking system to shift from predominantly being traded in USD, to being traded in "ItBit tokens"... I think DNotes and digital currencies in general are safer from government trying to shut down their ecosystems. It would be much more likely that if this 'bankchain' thing is successful, the US government would buy the rights to it, then force all banks to trade using their own 'issued' tokens by the "BankFederalReserveChain". That way the US government would be able to spy much more easily on every banking transaction, and all but make physical cash illegal...

Of course, at that juncture, who knows how many everyday people would have decided they would prefer to use decentralized crypto's like DNotes?

Anyway, hopefully it sparks an interesting conversation.

Thanks TeeGee, I will comment on a small portion of it. I suspect there will be many more niche chains and tokens to come, targeting banks/companies/data/contracts/nations and a plethora of other things. Some will become corrupt, centralized, convoluted, or just fail to gain adoption and some will be successful. However, I believe there will always be a need for a global digital currency for all of these things to pair, and essentially allow them to work in a global/national marketplace. I also believe there is a need for a trusted, positive driving force behind the global digital currency, trying to move things in the right direction without the possibility of direct control. Hence DNotes.

Excellent discussion, but where is RJF when we needed him? LOL I know that he is a busy guy but I am sure that he will have some good inputs.

I agree that there will be many different versions of "bankchain" and small banks will be left out for a long time. Massive integration is never easy and I am sure that there will be many challenges and pitfalls along the way. As I mentioned earlier their most immediate advantage is the movement of money especially in cross border currency transfer. The blockchain technology allows for near real time settlement, times-stamped permanent, single data entry, and verifiable record keeping. However, remaining as fiat currency/tokenized digital currency that is still centralized, in my mind, it is not a clean and total solution. It will still involve a lot of paperwork, double entries and manual audits.

This is a very new development. My opinion is speculative and I would appreciate that you all keep an eye on this subject any post new information as it becomes available. Thanks.  

Sorry guys, and girls! I'm a bit overwhelmed at the moment. Major projects at work and the paramedic unit I run with just won a very prestigious award:

"Public Information Office, August 18

Calvert Advanced Life Support has received notification the department has been selected as the NAEMT’s Volunteer Department of The Year 2015. The award, which is sponsored by Zoll, will be presented at the National Association of Emergency Medical Technicians General Membership Meeting and Awards Presentation on Wednesday, Sept. 16, in Las Vegas, Nevada during EMSworld Expo."

As Chairman of the Board of Directors of that organization, I have been very busy helping prepare for this. We are sending a select group to Vegas to accept the award and attend the conference. My wife (a past Chief of CALS) will be attending and we intend to extend our stay on the west coast to California to visit family and drive the Pacific Coast Highway, something I've always wanted to do.

So, I'll be reading but not posting much till we return later in the month. As for the subject at hand, I think we all realize that commercial interests such as banks, will exploit crypto every way they can now that they realize it's not going away, this is to be expected.

They will also fail in the long run because they have no soul, no real belief in the greater good crypto can do for the worlds less fortunate populations. Its a sad fact of life that for good to exist, there must also be evil. I personally believe good can triumph as long as people believe it can. DNotes stands for good. I think all of us here are fighting for a greater cause than personal wealth and that my friends, is why we will prosper and come out on top.

DNotes best course of action is continuing to do exactly what we are doing now, educating. We must stay the course and continue to bring the message to those who can benefit most and thats not the bankers, it's the ordinary people, the simple folks, the disadvantaged, the isolated and all those who believe the current system is top heavy and imperfect.

So, carry on, keep the torches lit and rally the troupes as needed, we will prevail in the long game. 

[Dyna]

Wow, getting great coverage on the DCEBrief press release.

http://finance.boston.com/boston/news/read/30558609/bitcoin_alternative_dnotes_launches_dcebrief.com

Congratulations on the launch of DCEBrief.  I haven't learned very much about cryptocurrency, but I'm confident that I am hanging on to a winner.  i get a simple Coles Notes explanation of what's going on here from a friend.  

 How often are new stories written for DCEBrief?

Welcome to DNotes forum. Delighted to see you here. I have read quite a few of your posts at CryptoMoms.

DCEBrief launch is a big success. It has already received great coverage and expected to pick up a lot more in the coming days. We are attempting to publish one article of original content per week. Once it is fairly well established we plan to be doing a lot more. DCEBrief will become a valuable site both for DNotes and our industry.

[Dyna]

Here comes centralized Digital Currency, I mentioned earlier. This may not be a good thing for the consumers, many bank employees and many of us who are committed to decentralized financial services as an alternative to government/bank controlled currency. Unfortunately, we don't even have an industry association to speak with a united voice. That is just my opinion. What is yours?



itBit Hires Former NYDFS General Counsel Daniel Alter, Pushes Ahead with Bankchain Project

by GIULIO PRISCO on SEPTEMBER 3, 2015 0
https://bitcoinmagazine.com/21845/itbit-hires-former-nydfs-general-counsel-daniel-alter-pushes-ahead-bankchain-project/


In April, Bitcoin Magazine reported that Bitcoin exchange itBit had filed for a banking license in New York. Later in May, itBit was granted a trust charter by the New York Department of Financial Services (NYFDS) under New York State banking law, the first such charter granted to a digital currency company by the NYDFS. ItBit also announced the successful completion of a $25 million Series A funding round.

On September 2, itBit announced the appointments of Daniel “Danny” Alter as the company’s new general counsel and chief compliance officer, and Kim Petry as chief financial officer. Petry was previously CFO of global operations and technology at Broadridge Financial Services and, before that, served as CFO and vice president of global commercial/corporate card payment at American Express.

Alter joined itBit after stepping down in February from his most recent post as general counsel of the New York State Department of Financial Services (NYDFS), where he served as principal counsel and strategic adviser to the New York state superintendent of financial services.

The former New York State Superintendent of Financial Services Benjamin Lawsky left the NYDFS after releasing the controversial Bitlicense regulations for digital currency businesses operating in New York. Lawsky’s move to a consulting business was strongly criticized by the libertarian Cato Institute.

“Because of the contacts he made as a regulator, [Lawsky] can hire himself out to Bitcoin companies wanting to signal to other regulators that they have the approval of the regulatory establishment,” noted Cato Senior Fellow Jim Harper.

It seems likely that Alter’s move to itBit might be criticized in the same grounds.

“The New York State Public Officers law requires that I have a two-year recusal before I can appear before the New York Department of Financial Services on behalf of the company,” said Alter in a pre-emptive statement reported by Reuters. “And it will certainly apply to itBit. I will not step near or have any communications with the New York Department of Financial Services. Those will be handled by outside counsel or qualified compliance people within the company.”

“Between Danny’s deep expertise in financial services and virtual currency regulation and Kim’s demonstrated track record as a successful CFO of global financial organizations, I’m confident that itBit will continue to grow and develop innovative blockchain-based solutions to address the financial industry’s greatest pain points,” said itBit co-founder and CEO Chad Cascarilla. “Danny and Kim possess a deep understanding of how to grow and run a successful business within the regulatory framework of the financial services industry, and their expertise will be invaluable as we work toward the launch of our new permissioned distributed ledger product – Bankchain.”

Bankchain, a new high profile project still held under wraps by itBit, will be a closed, “permissioned blockchain” owned and operated by banks and financial institutions – in other words, a private blockchain without bitcoin and anonymous miners. According to itBit claims, Bankchain will automate, accelerate and simplify post-trade processes across the financial services industry, saving institutions time and money.

Bankchain is “the first consensus-based ledger system exclusively for financial institutions,” states the still very basic Bankchain website. “Bankchain is a new clearing and settlement network that leverages blockchain technology to reimagine how financial institutions execute post-trade. The decentralized network is powered by itBit but fully governed by the member participants that join the platform.”

“[Bankchain] is a proprietary itBit protocol, not blockchain based, but is derived off of blockchain,” itBit head of global operations Steve Wager told Coindesk in August. “We will also not be using bitcoin as the native token; it will be an itBit proprietary token.”

Reddit users strongly criticized the “Sinister Bankchain Project,” but it appears that the trend toward private, permissioned blockchains is here to stay, with strong support expressed, among others, by Accenture and Digital Asset Holdings CEO Blythe Masters.

The itBit / Bank team-up is 100% profit motivated.  None of the savings generated by implementing Bankchain will be passed on to the consumer in the form of reduced fees or lower interest charged.  It really doesn't sound like anything the consumer will be involved in at all, except perhaps a settlement of payments between banks on the customer's exhorbitant interest-loaded credit card balance.

I think we need to separate ourselves, in the public's eye, from what the banks are doing. They are merely using the technology for their own profit.  We, on the other hand, are creating a global currency that everyone worldwide can use, invest in, profit in, conduct business with, and bring stability to the finances of people living with government corruption and runaway inflation.  People from every country, even the ones that appear stable can benefit from a truly decentralized global digital currency.

As far as the banks settling payments from cross border remittances, what are the chances of banks in third world countries trusting these American(?) banks enough to use bankchain tokens?  Or will these poor countries even be invited to the party?

Apologies if this is difficult to read etc, it's one of my 'long posts' where I think of things and get confused about the order I should discuss them, then 'chop and change' sentences around which can make the message harder to follow. These views and 'on the fly' thoughts are my own, and do not necessarily reflect those of DNotes.

To begin I'm not sure I like the idea when regulators and officials take jobs from companies who had been lobbying them.

To use a politically neutral example, who remembers Darleen Druyun, former weapons buyer for the US Air force? Well in 2005 she was jailed for (only) 9 months after pleading guilty to giving Boeing special treatment in a 23.5 billion dollar government contract - of course, after the deal was inked, Druyun was hired by Boeing as a vice-president with an annual salary of 250k. Druyun allowed Boeing to negotiate for an extra 6 billion dollars more than the contract should have been. This kind of hiring of 'career' government officials into highly paid corporate executive roles has been routine for decades. I don't know if Mr Lawsky made the regulations incredibly expensive and difficult to comply with, to the detriment of itBit's competition before he left the NYDFS, but considering that to the best of my knowledge, itBit is still the only exchange to have a banking licence... it kinda stinks of corruption. This could be a big misunderstanding though, and those two regulators may have just joined itBit fair and square, or these two regulators made itBit a 'sure thing' - we may never know. The next question would be that in the event that there was unfair favouritism affird to itBit, is it sensible (risky) to go into business with them should foul-play be uncovered in the future, or do these appointments provide some level of immunity? It will take more time watching how this all plays out.


In regards to the 'bankchain' thing, I've been waiting for something like this to come along for a while. We all expected banks to try to take the technology for their own to improve their settlement payments from overnight to near-instant. I can see lots of problems with itBit's idea - but I presume many customers may prefer joining banks that are members of the 'bankchain' system for faster payments, which could encourage even more banks to join. I don't have any issue with itBit being profit motivated, but re-my point about the regulators passing ridiculously difficult regulations in NY that have turned away nearly all of itBit's competitors... it doesn't sound like they're playing fair game. Again, this may not be the case at all - pending further research and developments.


Of course, ItBit and the banks are still at a disadvantage - they haven't fixed the money, they still use fiat. I could go on and on with various graphs and points (may I point people in the direction of IMZ's crypto kindergarten blog posts on cryptomoms.com forums), but the reality is that fiat is created as debt, which means new money must come into creation to pay for the interest owing on that debt, which is completely unsustainable. World governments are in massive debt crises, and they have all failed to create the next 'economic' bubble that would give a false sense that the 'real' economy isn't in decline.

But why has recovery been unattainable on this occasion?



https://www.quandl.com/data/FRED/DFF-Effective-Federal-Funds-Rate

Take a look at the effective federal funds rate in the link above. The interest rate tends to be lifted by the fed in times of economic boom, and severely lowered in times when the government want to promulgate economic activity, which leads to 'bubbles' (stock bubble, dotcom bubble, housing bubble etc). The chart clearly shows drops in the interest rate in ~1988, ~2001 and ~2007 in line with the decline of each bubble. These low interest rates make borrowing really cheap, and encourage ridiculous investment activities that no sane person would make if interest rates were dictated by the free-market. Currently, the Fed has an effective 0.14 % interest rate, and it has been near zero since ~2010.

The fact that interest rates are still low, is the obvious tell that there has been no 'real' economic recovery. What is worse, is that there is now nothing in the way of 'government tools' to improve this situation - QE has already convoluted the real decline in the US economy, and dropping interest rates any lower would make them go negative. I hardly think anybody would be interested in running a restaurant where they paid customers to come and eat, and I think it would work the same with your bank deposits if you were earning negative interest - It would mean the destruction of the banking system. I could go into this much further, and bring about many other points, but this should suffice for the moment. Basically, crypto currencies have more long-term stable potential than fiat currencies do. Crypto is going to become a more attractive alternative, and quickly.

But DNotes doesn't only have the advantage of sound money - It is a good point to highlight that DNotes is creating a global digital currency that is useful everywhere and holds an equal value worldwide, so there is no requirment no transfer between currencies (i.e. Euro to USD) like with itBit's system - (presuming foreign banks co-operate, or foreign exchange is possible as a service of the banks through the bankchain).
ItBits 'bankchain' simply can not compete on the near-zero transfer cost possible with DNotes and our ecosystem. Not within the same country, and certainly not internationally. If ItBit does try to compete, the banks will not be pleased to forego all of their processing fee's (income) and leave the bankchain. If they don't try to compete on processing fees, then DNotes holds a competitive advantage and consumers would get more value using DNotes for transfer. ItBit's strategy could like like any number of things, but one could be that they work to get adopted by the banking system, and quickly, then proclaim victory and hope everybody else gives up - including crypto industries. They would come up with some slogan to entice banks like "Bitcoin brought instant payment transfers, banking uses 'real' money. ItBit brings you both". ItBit may simultaneously remain one of the only exchanges where crypto-USD transfers are permitted by the US Gov through banking licences, especially if the NY regulations are adopted in other states (which looks likely). ItBit could continue to accommodate the 'niche' crypto market and make extra profits as a monopoly / oligopoly player to supplement their 'bankchain' income - which would be a great way to hedge their bets in the short term.

Normally I try to avoid speculating this far ahead because there are too many assumptions made along the way. Changing one assumption, would then change the 'next step'. The above is but one potential path we could see.

Chase, I have no idea if banks in developing nations would be invited to the party. I imagine it would be the US banks that wouldn't want to deal with those in developing nations. Assuming any banks even wanted to use ItBit's platform, I doubt the US government would allow the banking system to shift from predominantly being traded in USD, to being traded in "ItBit tokens"... I think DNotes and digital currencies in general are safer from government trying to shut down their ecosystems. It would be much more likely that if this 'bankchain' thing is successful, the US government would buy the rights to it, then force all banks to trade using their own 'issued' tokens by the "BankFederalReserveChain". That way the US government would be able to spy much more easily on every banking transaction, and all but make physical cash illegal...

Of course, at that juncture, who knows how many everyday people would have decided they would prefer to use decentralized crypto's like DNotes?

Anyway, hopefully it sparks an interesting conversation.

Thanks TeeGee, I will comment on a small portion of it. I suspect there will be many more niche chains and tokens to come, targeting banks/companies/data/contracts/nations and a plethora of other things. Some will become corrupt, centralized, convoluted, or just fail to gain adoption and some will be successful. However, I believe there will always be a need for a global digital currency for all of these things to pair, and essentially allow them to work in a global/national marketplace. I also believe there is a need for a trusted, positive driving force behind the global digital currency, trying to move things in the right direction without the possibility of direct control. Hence DNotes.

Excellent discussion, but where is RJF when we needed him? LOL I know that he is a busy guy but I am sure that he will have some good inputs.

I agree that there will be many different versions of "bankchain" and small banks will be left out for a long time. Massive integration is never easy and I am sure that there will be many challenges and pitfalls along the way. As I mentioned earlier their most immediate advantage is the movement of money especially in cross border currency transfer. The blockchain technology allows for near real time settlement, times-stamped permanent, single data entry, and verifiable record keeping. However, remaining as fiat currency/tokenized digital currency that is still centralized, in my mind, it is not a clean and total solution. It will still involve a lot of paperwork, double entries and manual audits.

This is a very new development. My opinion is speculative and I would appreciate that you all keep an eye on this subject any post new information as it becomes available. Thanks.  

Sorry guys, and girls! I'm a bit overwhelmed at the moment. Major projects at work and the paramedic unit I run with just won a very prestigious award:

"Public Information Office, August 18

Calvert Advanced Life Support has received notification the department has been selected as the NAEMT’s Volunteer Department of The Year 2015. The award, which is sponsored by Zoll, will be presented at the National Association of Emergency Medical Technicians General Membership Meeting and Awards Presentation on Wednesday, Sept. 16, in Las Vegas, Nevada during EMSworld Expo."

As Chairman of the Board of Directors of that organization, I have been very busy helping prepare for this. We are sending a select group to Vegas to accept the award and attend the conference. My wife (a past Chief of CALS) will be attending and we intend to extend our stay on the west coast to California to visit family and drive the Pacific Coast Highway, something I've always wanted to do.

So, I'll be reading but not posting much till we return later in the month. As for the subject at hand, I think we all realize that commercial interests such as banks, will exploit crypto every way they can now that they realize it's not going away, this is to be expected.

They will also fail in the long run because they have no soul, no real belief in the greater good crypto can do for the worlds less fortunate populations. Its a sad fact of life that for good to exist, there must also be evil. I personally believe good can triumph as long as people believe it can. DNotes stands for good. I think all of us here are fighting for a greater cause than personal wealth and that my friends, is why we will prosper and come out on top.

DNotes best course of action is continuing to do exactly what we are doing now, educating. We must stay the course and continue to bring the message to those who can benefit most and thats not the bankers, it's the ordinary people, the simple folks, the disadvantaged, the isolated and all those who believe the current system is top heavy and imperfect.

So, carry on, keep the torches lit and rally the troupes as needed, we will prevail in the long game. 

We are very proud of you and your team. Congratulations! I am sure that is well deserved. Enjoy your trip. We will miss you. Highway 1 or Pacific Coast Highway is absolutely a beauty. I have driven on it quite a few times and once with my wife almost the entire route (over 500 + miles) out of 700+ miles. Sunset was amazing at the right spot.

I have been doing quite a bit more thinking about the bank taking advantage of the Blockchain technology to improve their efficiency in the movement or transfer of money. This may actually be a good thing. It will help to legitimize digital currency like DNotes. With mass acceptance decentralized digital currency is far superior to fiat currency, including centralized digital currency like what the bank is trying to do. I am sure one of my future articles for DCEBrief will cover this subject.

[RJF]

Here comes centralized Digital Currency, I mentioned earlier. This may not be a good thing for the consumers, many bank employees and many of us who are committed to decentralized financial services as an alternative to government/bank controlled currency. Unfortunately, we don't even have an industry association to speak with a united voice. That is just my opinion. What is yours?



itBit Hires Former NYDFS General Counsel Daniel Alter, Pushes Ahead with Bankchain Project

by GIULIO PRISCO on SEPTEMBER 3, 2015 0
https://bitcoinmagazine.com/21845/itbit-hires-former-nydfs-general-counsel-daniel-alter-pushes-ahead-bankchain-project/


In April, Bitcoin Magazine reported that Bitcoin exchange itBit had filed for a banking license in New York. Later in May, itBit was granted a trust charter by the New York Department of Financial Services (NYFDS) under New York State banking law, the first such charter granted to a digital currency company by the NYDFS. ItBit also announced the successful completion of a $25 million Series A funding round.

On September 2, itBit announced the appointments of Daniel “Danny” Alter as the company’s new general counsel and chief compliance officer, and Kim Petry as chief financial officer. Petry was previously CFO of global operations and technology at Broadridge Financial Services and, before that, served as CFO and vice president of global commercial/corporate card payment at American Express.

Alter joined itBit after stepping down in February from his most recent post as general counsel of the New York State Department of Financial Services (NYDFS), where he served as principal counsel and strategic adviser to the New York state superintendent of financial services.

The former New York State Superintendent of Financial Services Benjamin Lawsky left the NYDFS after releasing the controversial Bitlicense regulations for digital currency businesses operating in New York. Lawsky’s move to a consulting business was strongly criticized by the libertarian Cato Institute.

“Because of the contacts he made as a regulator, [Lawsky] can hire himself out to Bitcoin companies wanting to signal to other regulators that they have the approval of the regulatory establishment,” noted Cato Senior Fellow Jim Harper.

It seems likely that Alter’s move to itBit might be criticized in the same grounds.

“The New York State Public Officers law requires that I have a two-year recusal before I can appear before the New York Department of Financial Services on behalf of the company,” said Alter in a pre-emptive statement reported by Reuters. “And it will certainly apply to itBit. I will not step near or have any communications with the New York Department of Financial Services. Those will be handled by outside counsel or qualified compliance people within the company.”

“Between Danny’s deep expertise in financial services and virtual currency regulation and Kim’s demonstrated track record as a successful CFO of global financial organizations, I’m confident that itBit will continue to grow and develop innovative blockchain-based solutions to address the financial industry’s greatest pain points,” said itBit co-founder and CEO Chad Cascarilla. “Danny and Kim possess a deep understanding of how to grow and run a successful business within the regulatory framework of the financial services industry, and their expertise will be invaluable as we work toward the launch of our new permissioned distributed ledger product – Bankchain.”

Bankchain, a new high profile project still held under wraps by itBit, will be a closed, “permissioned blockchain” owned and operated by banks and financial institutions – in other words, a private blockchain without bitcoin and anonymous miners. According to itBit claims, Bankchain will automate, accelerate and simplify post-trade processes across the financial services industry, saving institutions time and money.

Bankchain is “the first consensus-based ledger system exclusively for financial institutions,” states the still very basic Bankchain website. “Bankchain is a new clearing and settlement network that leverages blockchain technology to reimagine how financial institutions execute post-trade. The decentralized network is powered by itBit but fully governed by the member participants that join the platform.”

“[Bankchain] is a proprietary itBit protocol, not blockchain based, but is derived off of blockchain,” itBit head of global operations Steve Wager told Coindesk in August. “We will also not be using bitcoin as the native token; it will be an itBit proprietary token.”

Reddit users strongly criticized the “Sinister Bankchain Project,” but it appears that the trend toward private, permissioned blockchains is here to stay, with strong support expressed, among others, by Accenture and Digital Asset Holdings CEO Blythe Masters.

The itBit / Bank team-up is 100% profit motivated.  None of the savings generated by implementing Bankchain will be passed on to the consumer in the form of reduced fees or lower interest charged.  It really doesn't sound like anything the consumer will be involved in at all, except perhaps a settlement of payments between banks on the customer's exhorbitant interest-loaded credit card balance.

I think we need to separate ourselves, in the public's eye, from what the banks are doing. They are merely using the technology for their own profit.  We, on the other hand, are creating a global currency that everyone worldwide can use, invest in, profit in, conduct business with, and bring stability to the finances of people living with government corruption and runaway inflation.  People from every country, even the ones that appear stable can benefit from a truly decentralized global digital currency.

As far as the banks settling payments from cross border remittances, what are the chances of banks in third world countries trusting these American(?) banks enough to use bankchain tokens?  Or will these poor countries even be invited to the party?

Apologies if this is difficult to read etc, it's one of my 'long posts' where I think of things and get confused about the order I should discuss them, then 'chop and change' sentences around which can make the message harder to follow. These views and 'on the fly' thoughts are my own, and do not necessarily reflect those of DNotes.

To begin I'm not sure I like the idea when regulators and officials take jobs from companies who had been lobbying them.

To use a politically neutral example, who remembers Darleen Druyun, former weapons buyer for the US Air force? Well in 2005 she was jailed for (only) 9 months after pleading guilty to giving Boeing special treatment in a 23.5 billion dollar government contract - of course, after the deal was inked, Druyun was hired by Boeing as a vice-president with an annual salary of 250k. Druyun allowed Boeing to negotiate for an extra 6 billion dollars more than the contract should have been. This kind of hiring of 'career' government officials into highly paid corporate executive roles has been routine for decades. I don't know if Mr Lawsky made the regulations incredibly expensive and difficult to comply with, to the detriment of itBit's competition before he left the NYDFS, but considering that to the best of my knowledge, itBit is still the only exchange to have a banking licence... it kinda stinks of corruption. This could be a big misunderstanding though, and those two regulators may have just joined itBit fair and square, or these two regulators made itBit a 'sure thing' - we may never know. The next question would be that in the event that there was unfair favouritism affird to itBit, is it sensible (risky) to go into business with them should foul-play be uncovered in the future, or do these appointments provide some level of immunity? It will take more time watching how this all plays out.


In regards to the 'bankchain' thing, I've been waiting for something like this to come along for a while. We all expected banks to try to take the technology for their own to improve their settlement payments from overnight to near-instant. I can see lots of problems with itBit's idea - but I presume many customers may prefer joining banks that are members of the 'bankchain' system for faster payments, which could encourage even more banks to join. I don't have any issue with itBit being profit motivated, but re-my point about the regulators passing ridiculously difficult regulations in NY that have turned away nearly all of itBit's competitors... it doesn't sound like they're playing fair game. Again, this may not be the case at all - pending further research and developments.


Of course, ItBit and the banks are still at a disadvantage - they haven't fixed the money, they still use fiat. I could go on and on with various graphs and points (may I point people in the direction of IMZ's crypto kindergarten blog posts on cryptomoms.com forums), but the reality is that fiat is created as debt, which means new money must come into creation to pay for the interest owing on that debt, which is completely unsustainable. World governments are in massive debt crises, and they have all failed to create the next 'economic' bubble that would give a false sense that the 'real' economy isn't in decline.

But why has recovery been unattainable on this occasion?



https://www.quandl.com/data/FRED/DFF-Effective-Federal-Funds-Rate

Take a look at the effective federal funds rate in the link above. The interest rate tends to be lifted by the fed in times of economic boom, and severely lowered in times when the government want to promulgate economic activity, which leads to 'bubbles' (stock bubble, dotcom bubble, housing bubble etc). The chart clearly shows drops in the interest rate in ~1988, ~2001 and ~2007 in line with the decline of each bubble. These low interest rates make borrowing really cheap, and encourage ridiculous investment activities that no sane person would make if interest rates were dictated by the free-market. Currently, the Fed has an effective 0.14 % interest rate, and it has been near zero since ~2010.

The fact that interest rates are still low, is the obvious tell that there has been no 'real' economic recovery. What is worse, is that there is now nothing in the way of 'government tools' to improve this situation - QE has already convoluted the real decline in the US economy, and dropping interest rates any lower would make them go negative. I hardly think anybody would be interested in running a restaurant where they paid customers to come and eat, and I think it would work the same with your bank deposits if you were earning negative interest - It would mean the destruction of the banking system. I could go into this much further, and bring about many other points, but this should suffice for the moment. Basically, crypto currencies have more long-term stable potential than fiat currencies do. Crypto is going to become a more attractive alternative, and quickly.

But DNotes doesn't only have the advantage of sound money - It is a good point to highlight that DNotes is creating a global digital currency that is useful everywhere and holds an equal value worldwide, so there is no requirment no transfer between currencies (i.e. Euro to USD) like with itBit's system - (presuming foreign banks co-operate, or foreign exchange is possible as a service of the banks through the bankchain).
ItBits 'bankchain' simply can not compete on the near-zero transfer cost possible with DNotes and our ecosystem. Not within the same country, and certainly not internationally. If ItBit does try to compete, the banks will not be pleased to forego all of their processing fee's (income) and leave the bankchain. If they don't try to compete on processing fees, then DNotes holds a competitive advantage and consumers would get more value using DNotes for transfer. ItBit's strategy could like like any number of things, but one could be that they work to get adopted by the banking system, and quickly, then proclaim victory and hope everybody else gives up - including crypto industries. They would come up with some slogan to entice banks like "Bitcoin brought instant payment transfers, banking uses 'real' money. ItBit brings you both". ItBit may simultaneously remain one of the only exchanges where crypto-USD transfers are permitted by the US Gov through banking licences, especially if the NY regulations are adopted in other states (which looks likely). ItBit could continue to accommodate the 'niche' crypto market and make extra profits as a monopoly / oligopoly player to supplement their 'bankchain' income - which would be a great way to hedge their bets in the short term.

Normally I try to avoid speculating this far ahead because there are too many assumptions made along the way. Changing one assumption, would then change the 'next step'. The above is but one potential path we could see.

Chase, I have no idea if banks in developing nations would be invited to the party. I imagine it would be the US banks that wouldn't want to deal with those in developing nations. Assuming any banks even wanted to use ItBit's platform, I doubt the US government would allow the banking system to shift from predominantly being traded in USD, to being traded in "ItBit tokens"... I think DNotes and digital currencies in general are safer from government trying to shut down their ecosystems. It would be much more likely that if this 'bankchain' thing is successful, the US government would buy the rights to it, then force all banks to trade using their own 'issued' tokens by the "BankFederalReserveChain". That way the US government would be able to spy much more easily on every banking transaction, and all but make physical cash illegal...

Of course, at that juncture, who knows how many everyday people would have decided they would prefer to use decentralized crypto's like DNotes?

Anyway, hopefully it sparks an interesting conversation.

Thanks TeeGee, I will comment on a small portion of it. I suspect there will be many more niche chains and tokens to come, targeting banks/companies/data/contracts/nations and a plethora of other things. Some will become corrupt, centralized, convoluted, or just fail to gain adoption and some will be successful. However, I believe there will always be a need for a global digital currency for all of these things to pair, and essentially allow them to work in a global/national marketplace. I also believe there is a need for a trusted, positive driving force behind the global digital currency, trying to move things in the right direction without the possibility of direct control. Hence DNotes.

Excellent discussion, but where is RJF when we needed him? LOL I know that he is a busy guy but I am sure that he will have some good inputs.

I agree that there will be many different versions of "bankchain" and small banks will be left out for a long time. Massive integration is never easy and I am sure that there will be many challenges and pitfalls along the way. As I mentioned earlier their most immediate advantage is the movement of money especially in cross border currency transfer. The blockchain technology allows for near real time settlement, times-stamped permanent, single data entry, and verifiable record keeping. However, remaining as fiat currency/tokenized digital currency that is still centralized, in my mind, it is not a clean and total solution. It will still involve a lot of paperwork, double entries and manual audits.

This is a very new development. My opinion is speculative and I would appreciate that you all keep an eye on this subject any post new information as it becomes available. Thanks.  

Sorry guys, and girls! I'm a bit overwhelmed at the moment. Major projects at work and the paramedic unit I run with just won a very prestigious award:

"Public Information Office, August 18

Calvert Advanced Life Support has received notification the department has been selected as the NAEMT’s Volunteer Department of The Year 2015. The award, which is sponsored by Zoll, will be presented at the National Association of Emergency Medical Technicians General Membership Meeting and Awards Presentation on Wednesday, Sept. 16, in Las Vegas, Nevada during EMSworld Expo."

As Chairman of the Board of Directors of that organization, I have been very busy helping prepare for this. We are sending a select group to Vegas to accept the award and attend the conference. My wife (a past Chief of CALS) will be attending and we intend to extend our stay on the west coast to California to visit family and drive the Pacific Coast Highway, something I've always wanted to do.

So, I'll be reading but not posting much till we return later in the month. As for the subject at hand, I think we all realize that commercial interests such as banks, will exploit crypto every way they can now that they realize it's not going away, this is to be expected.

They will also fail in the long run because they have no soul, no real belief in the greater good crypto can do for the worlds less fortunate populations. Its a sad fact of life that for good to exist, there must also be evil. I personally believe good can triumph as long as people believe it can. DNotes stands for good. I think all of us here are fighting for a greater cause than personal wealth and that my friends, is why we will prosper and come out on top.

DNotes best course of action is continuing to do exactly what we are doing now, educating. We must stay the course and continue to bring the message to those who can benefit most and thats not the bankers, it's the ordinary people, the simple folks, the disadvantaged, the isolated and all those who believe the current system is top heavy and imperfect.

So, carry on, keep the torches lit and rally the troupes as needed, we will prevail in the long game. 

We are very proud of you and your team. Congratulations! I am sure that is well deserved. Enjoy your trip. We will miss you. Highway 1 or Pacific Coast Highway is absolutely a beauty. I have driven on it quite a few times and once with my wife almost the entire route (over 500 + miles) out of 700+ miles. Sunset was amazing at the right spot.

I have been doing quite a bit more thinking about the bank taking advantage of the Blockchain technology to improve their efficiency in the movement or transfer of money. This may actually be a good thing. It will help to legitimize digital currency like DNotes. With mass acceptance decentralized digital currency is far superior to fiat currency, including centralized digital currency like what the bank is trying to do. I am sure one of my future articles for DCEBrief will cover this subject.

,'

Thanks! While I understand where you're coming from, having worked in a Bank when I was much younger, I don't trust them even a little bit. They will make more money from crypto than they are now from conventional means, and we will all pay. I do agree with mainstreaming crypto any way possible, even using banks but, I still believe it could get ugly and the only ones to loose will be the little guy as usual. I sincerely hope I'm wrong and you're right! In either event, the industry will survive and grow, might even help in some ways by spreading the word as you say. And DNotes will be there after the fallout settles to provide stability and value.


 

[matatyau-cohen]

impressive

Wow, getting great coverage on the DCEBrief press release.

http://www.marketwatch.com/story/bitcoin-alternative-dnotes-launches-dcebriefcom-digital-currency-executive-brief-news-portal-2015-09-02

http://finance.boston.com/boston/news/read/30558609/bitcoin_alternative_dnotes_launches_dcebrief.com

[Dyna]

Here comes centralized Digital Currency, I mentioned earlier. This may not be a good thing for the consumers, many bank employees and many of us who are committed to decentralized financial services as an alternative to government/bank controlled currency. Unfortunately, we don't even have an industry association to speak with a united voice. That is just my opinion. What is yours?



itBit Hires Former NYDFS General Counsel Daniel Alter, Pushes Ahead with Bankchain Project

by GIULIO PRISCO on SEPTEMBER 3, 2015 0
https://bitcoinmagazine.com/21845/itbit-hires-former-nydfs-general-counsel-daniel-alter-pushes-ahead-bankchain-project/


In April, Bitcoin Magazine reported that Bitcoin exchange itBit had filed for a banking license in New York. Later in May, itBit was granted a trust charter by the New York Department of Financial Services (NYFDS) under New York State banking law, the first such charter granted to a digital currency company by the NYDFS. ItBit also announced the successful completion of a $25 million Series A funding round.

On September 2, itBit announced the appointments of Daniel “Danny” Alter as the company’s new general counsel and chief compliance officer, and Kim Petry as chief financial officer. Petry was previously CFO of global operations and technology at Broadridge Financial Services and, before that, served as CFO and vice president of global commercial/corporate card payment at American Express.

Alter joined itBit after stepping down in February from his most recent post as general counsel of the New York State Department of Financial Services (NYDFS), where he served as principal counsel and strategic adviser to the New York state superintendent of financial services.

The former New York State Superintendent of Financial Services Benjamin Lawsky left the NYDFS after releasing the controversial Bitlicense regulations for digital currency businesses operating in New York. Lawsky’s move to a consulting business was strongly criticized by the libertarian Cato Institute.

“Because of the contacts he made as a regulator, [Lawsky] can hire himself out to Bitcoin companies wanting to signal to other regulators that they have the approval of the regulatory establishment,” noted Cato Senior Fellow Jim Harper.

It seems likely that Alter’s move to itBit might be criticized in the same grounds.

“The New York State Public Officers law requires that I have a two-year recusal before I can appear before the New York Department of Financial Services on behalf of the company,” said Alter in a pre-emptive statement reported by Reuters. “And it will certainly apply to itBit. I will not step near or have any communications with the New York Department of Financial Services. Those will be handled by outside counsel or qualified compliance people within the company.”

“Between Danny’s deep expertise in financial services and virtual currency regulation and Kim’s demonstrated track record as a successful CFO of global financial organizations, I’m confident that itBit will continue to grow and develop innovative blockchain-based solutions to address the financial industry’s greatest pain points,” said itBit co-founder and CEO Chad Cascarilla. “Danny and Kim possess a deep understanding of how to grow and run a successful business within the regulatory framework of the financial services industry, and their expertise will be invaluable as we work toward the launch of our new permissioned distributed ledger product – Bankchain.”

Bankchain, a new high profile project still held under wraps by itBit, will be a closed, “permissioned blockchain” owned and operated by banks and financial institutions – in other words, a private blockchain without bitcoin and anonymous miners. According to itBit claims, Bankchain will automate, accelerate and simplify post-trade processes across the financial services industry, saving institutions time and money.

Bankchain is “the first consensus-based ledger system exclusively for financial institutions,” states the still very basic Bankchain website. “Bankchain is a new clearing and settlement network that leverages blockchain technology to reimagine how financial institutions execute post-trade. The decentralized network is powered by itBit but fully governed by the member participants that join the platform.”

“[Bankchain] is a proprietary itBit protocol, not blockchain based, but is derived off of blockchain,” itBit head of global operations Steve Wager told Coindesk in August. “We will also not be using bitcoin as the native token; it will be an itBit proprietary token.”

Reddit users strongly criticized the “Sinister Bankchain Project,” but it appears that the trend toward private, permissioned blockchains is here to stay, with strong support expressed, among others, by Accenture and Digital Asset Holdings CEO Blythe Masters.

The itBit / Bank team-up is 100% profit motivated.  None of the savings generated by implementing Bankchain will be passed on to the consumer in the form of reduced fees or lower interest charged.  It really doesn't sound like anything the consumer will be involved in at all, except perhaps a settlement of payments between banks on the customer's exhorbitant interest-loaded credit card balance.

I think we need to separate ourselves, in the public's eye, from what the banks are doing. They are merely using the technology for their own profit.  We, on the other hand, are creating a global currency that everyone worldwide can use, invest in, profit in, conduct business with, and bring stability to the finances of people living with government corruption and runaway inflation.  People from every country, even the ones that appear stable can benefit from a truly decentralized global digital currency.

As far as the banks settling payments from cross border remittances, what are the chances of banks in third world countries trusting these American(?) banks enough to use bankchain tokens?  Or will these poor countries even be invited to the party?

Apologies if this is difficult to read etc, it's one of my 'long posts' where I think of things and get confused about the order I should discuss them, then 'chop and change' sentences around which can make the message harder to follow. These views and 'on the fly' thoughts are my own, and do not necessarily reflect those of DNotes.

To begin I'm not sure I like the idea when regulators and officials take jobs from companies who had been lobbying them.

To use a politically neutral example, who remembers Darleen Druyun, former weapons buyer for the US Air force? Well in 2005 she was jailed for (only) 9 months after pleading guilty to giving Boeing special treatment in a 23.5 billion dollar government contract - of course, after the deal was inked, Druyun was hired by Boeing as a vice-president with an annual salary of 250k. Druyun allowed Boeing to negotiate for an extra 6 billion dollars more than the contract should have been. This kind of hiring of 'career' government officials into highly paid corporate executive roles has been routine for decades. I don't know if Mr Lawsky made the regulations incredibly expensive and difficult to comply with, to the detriment of itBit's competition before he left the NYDFS, but considering that to the best of my knowledge, itBit is still the only exchange to have a banking licence... it kinda stinks of corruption. This could be a big misunderstanding though, and those two regulators may have just joined itBit fair and square, or these two regulators made itBit a 'sure thing' - we may never know. The next question would be that in the event that there was unfair favouritism affird to itBit, is it sensible (risky) to go into business with them should foul-play be uncovered in the future, or do these appointments provide some level of immunity? It will take more time watching how this all plays out.


In regards to the 'bankchain' thing, I've been waiting for something like this to come along for a while. We all expected banks to try to take the technology for their own to improve their settlement payments from overnight to near-instant. I can see lots of problems with itBit's idea - but I presume many customers may prefer joining banks that are members of the 'bankchain' system for faster payments, which could encourage even more banks to join. I don't have any issue with itBit being profit motivated, but re-my point about the regulators passing ridiculously difficult regulations in NY that have turned away nearly all of itBit's competitors... it doesn't sound like they're playing fair game. Again, this may not be the case at all - pending further research and developments.


Of course, ItBit and the banks are still at a disadvantage - they haven't fixed the money, they still use fiat. I could go on and on with various graphs and points (may I point people in the direction of IMZ's crypto kindergarten blog posts on cryptomoms.com forums), but the reality is that fiat is created as debt, which means new money must come into creation to pay for the interest owing on that debt, which is completely unsustainable. World governments are in massive debt crises, and they have all failed to create the next 'economic' bubble that would give a false sense that the 'real' economy isn't in decline.

But why has recovery been unattainable on this occasion?



https://www.quandl.com/data/FRED/DFF-Effective-Federal-Funds-Rate

Take a look at the effective federal funds rate in the link above. The interest rate tends to be lifted by the fed in times of economic boom, and severely lowered in times when the government want to promulgate economic activity, which leads to 'bubbles' (stock bubble, dotcom bubble, housing bubble etc). The chart clearly shows drops in the interest rate in ~1988, ~2001 and ~2007 in line with the decline of each bubble. These low interest rates make borrowing really cheap, and encourage ridiculous investment activities that no sane person would make if interest rates were dictated by the free-market. Currently, the Fed has an effective 0.14 % interest rate, and it has been near zero since ~2010.

The fact that interest rates are still low, is the obvious tell that there has been no 'real' economic recovery. What is worse, is that there is now nothing in the way of 'government tools' to improve this situation - QE has already convoluted the real decline in the US economy, and dropping interest rates any lower would make them go negative. I hardly think anybody would be interested in running a restaurant where they paid customers to come and eat, and I think it would work the same with your bank deposits if you were earning negative interest - It would mean the destruction of the banking system. I could go into this much further, and bring about many other points, but this should suffice for the moment. Basically, crypto currencies have more long-term stable potential than fiat currencies do. Crypto is going to become a more attractive alternative, and quickly.

But DNotes doesn't only have the advantage of sound money - It is a good point to highlight that DNotes is creating a global digital currency that is useful everywhere and holds an equal value worldwide, so there is no requirment no transfer between currencies (i.e. Euro to USD) like with itBit's system - (presuming foreign banks co-operate, or foreign exchange is possible as a service of the banks through the bankchain).
ItBits 'bankchain' simply can not compete on the near-zero transfer cost possible with DNotes and our ecosystem. Not within the same country, and certainly not internationally. If ItBit does try to compete, the banks will not be pleased to forego all of their processing fee's (income) and leave the bankchain. If they don't try to compete on processing fees, then DNotes holds a competitive advantage and consumers would get more value using DNotes for transfer. ItBit's strategy could like like any number of things, but one could be that they work to get adopted by the banking system, and quickly, then proclaim victory and hope everybody else gives up - including crypto industries. They would come up with some slogan to entice banks like "Bitcoin brought instant payment transfers, banking uses 'real' money. ItBit brings you both". ItBit may simultaneously remain one of the only exchanges where crypto-USD transfers are permitted by the US Gov through banking licences, especially if the NY regulations are adopted in other states (which looks likely). ItBit could continue to accommodate the 'niche' crypto market and make extra profits as a monopoly / oligopoly player to supplement their 'bankchain' income - which would be a great way to hedge their bets in the short term.

Normally I try to avoid speculating this far ahead because there are too many assumptions made along the way. Changing one assumption, would then change the 'next step'. The above is but one potential path we could see.

Chase, I have no idea if banks in developing nations would be invited to the party. I imagine it would be the US banks that wouldn't want to deal with those in developing nations. Assuming any banks even wanted to use ItBit's platform, I doubt the US government would allow the banking system to shift from predominantly being traded in USD, to being traded in "ItBit tokens"... I think DNotes and digital currencies in general are safer from government trying to shut down their ecosystems. It would be much more likely that if this 'bankchain' thing is successful, the US government would buy the rights to it, then force all banks to trade using their own 'issued' tokens by the "BankFederalReserveChain". That way the US government would be able to spy much more easily on every banking transaction, and all but make physical cash illegal...

Of course, at that juncture, who knows how many everyday people would have decided they would prefer to use decentralized crypto's like DNotes?

Anyway, hopefully it sparks an interesting conversation.

Thanks TeeGee, I will comment on a small portion of it. I suspect there will be many more niche chains and tokens to come, targeting banks/companies/data/contracts/nations and a plethora of other things. Some will become corrupt, centralized, convoluted, or just fail to gain adoption and some will be successful. However, I believe there will always be a need for a global digital currency for all of these things to pair, and essentially allow them to work in a global/national marketplace. I also believe there is a need for a trusted, positive driving force behind the global digital currency, trying to move things in the right direction without the possibility of direct control. Hence DNotes.

Excellent discussion, but where is RJF when we needed him? LOL I know that he is a busy guy but I am sure that he will have some good inputs.

I agree that there will be many different versions of "bankchain" and small banks will be left out for a long time. Massive integration is never easy and I am sure that there will be many challenges and pitfalls along the way. As I mentioned earlier their most immediate advantage is the movement of money especially in cross border currency transfer. The blockchain technology allows for near real time settlement, times-stamped permanent, single data entry, and verifiable record keeping. However, remaining as fiat currency/tokenized digital currency that is still centralized, in my mind, it is not a clean and total solution. It will still involve a lot of paperwork, double entries and manual audits.

This is a very new development. My opinion is speculative and I would appreciate that you all keep an eye on this subject any post new information as it becomes available. Thanks.  

Sorry guys, and girls! I'm a bit overwhelmed at the moment. Major projects at work and the paramedic unit I run with just won a very prestigious award:

"Public Information Office, August 18

Calvert Advanced Life Support has received notification the department has been selected as the NAEMT’s Volunteer Department of The Year 2015. The award, which is sponsored by Zoll, will be presented at the National Association of Emergency Medical Technicians General Membership Meeting and Awards Presentation on Wednesday, Sept. 16, in Las Vegas, Nevada during EMSworld Expo."

As Chairman of the Board of Directors of that organization, I have been very busy helping prepare for this. We are sending a select group to Vegas to accept the award and attend the conference. My wife (a past Chief of CALS) will be attending and we intend to extend our stay on the west coast to California to visit family and drive the Pacific Coast Highway, something I've always wanted to do.

So, I'll be reading but not posting much till we return later in the month. As for the subject at hand, I think we all realize that commercial interests such as banks, will exploit crypto every way they can now that they realize it's not going away, this is to be expected.

They will also fail in the long run because they have no soul, no real belief in the greater good crypto can do for the worlds less fortunate populations. Its a sad fact of life that for good to exist, there must also be evil. I personally believe good can triumph as long as people believe it can. DNotes stands for good. I think all of us here are fighting for a greater cause than personal wealth and that my friends, is why we will prosper and come out on top.

DNotes best course of action is continuing to do exactly what we are doing now, educating. We must stay the course and continue to bring the message to those who can benefit most and thats not the bankers, it's the ordinary people, the simple folks, the disadvantaged, the isolated and all those who believe the current system is top heavy and imperfect.

So, carry on, keep the torches lit and rally the troupes as needed, we will prevail in the long game. 

We are very proud of you and your team. Congratulations! I am sure that is well deserved. Enjoy your trip. We will miss you. Highway 1 or Pacific Coast Highway is absolutely a beauty. I have driven on it quite a few times and once with my wife almost the entire route (over 500 + miles) out of 700+ miles. Sunset was amazing at the right spot.

I have been doing quite a bit more thinking about the bank taking advantage of the Blockchain technology to improve their efficiency in the movement or transfer of money. This may actually be a good thing. It will help to legitimize digital currency like DNotes. With mass acceptance decentralized digital currency is far superior to fiat currency, including centralized digital currency like what the bank is trying to do. I am sure one of my future articles for DCEBrief will cover this subject.

,'

Thanks! While I understand where you're coming from, having worked in a Bank when I was much younger, I don't trust them even a little bit. They will make more money from crypto than they are now from conventional means, and we will all pay. I do agree with mainstreaming crypto any way possible, even using banks but, I still believe it could get ugly and the only ones to loose will be the little guy as usual. I sincerely hope I'm wrong and you're right! In either event, the industry will survive and grow, might even help in some ways by spreading the word as you say. And DNotes will be there after the fallout settles to provide stability and value.


 

We are 99% in agreement. I am just giving them the benefit of the doubt and trust them a tiny bit. Banks will continue to perform a vital function, and for DNotes to be truly successful, at some point we have to interface with the banking system. Like it or not, they will continue to be the gateway of wealth.

Having said that, I have many issues with banks.  I am especially troubled by those practices that are designed to exploit those who live from pay check to pay check, as well as many struggling small business owners. I was a small business management consultant for a number of years and well aware of the fact that struggling small business owners are the biggest contributors to the bank’s bottom line. So I do agree that Blockchain technology adoption by banks could get ugly, disproportionately affecting the little guy, small business owners and many employees. However, I fully expect that there will be a lot of competition. We will be doing everything we can to ensure that DNotes will be a alternative to those who prefer to be their own banks and have more control of their financial destiny. 

[DNotes]

Sorry guys, and girls! I'm a bit overwhelmed at the moment. Major projects at work and the paramedic unit I run with just won a very prestigious award:

"Public Information Office, August 18

Calvert Advanced Life Support has received notification the department has been selected as the NAEMT’s Volunteer Department of The Year 2015. The award, which is sponsored by Zoll, will be presented at the National Association of Emergency Medical Technicians General Membership Meeting and Awards Presentation on Wednesday, Sept. 16, in Las Vegas, Nevada during EMSworld Expo."

As Chairman of the Board of Directors of that organization, I have been very busy helping prepare for this. We are sending a select group to Vegas to accept the award and attend the conference. My wife (a past Chief of CALS) will be attending and we intend to extend our stay on the west coast to California to visit family and drive the Pacific Coast Highway, something I've always wanted to do.

So, I'll be reading but not posting much till we return later in the month. As for the subject at hand, I think we all realize that commercial interests such as banks, will exploit crypto every way they can now that they realize it's not going away, this is to be expected.

They will also fail in the long run because they have no soul, no real belief in the greater good crypto can do for the worlds less fortunate populations. Its a sad fact of life that for good to exist, there must also be evil. I personally believe good can triumph as long as people believe it can. DNotes stands for good. I think all of us here are fighting for a greater cause than personal wealth and that my friends, is why we will prosper and come out on top.

DNotes best course of action is continuing to do exactly what we are doing now, educating. We must stay the course and continue to bring the message to those who can benefit most and thats not the bankers, it's the ordinary people, the simple folks, the disadvantaged, the isolated and all those who believe the current system is top heavy and imperfect.

So, carry on, keep the torches lit and rally the troupes as needed, we will prevail in the long game. 

Congrats RJF! Missed having you on the forum, but understand completely.