Dubai – the Blockchain Oasis of the UAE: From Public to Private Sector

In some countries around the world, governments have had a stifling effect on the adoption of blockchain technology. Conversely, the government of the UAE and Dubai have been the driving force behind the promotion of blockchain use in the country.

2018 has seen some significant developments on this front but the foundations had been laid a couple of years ago.

Across the private and public sectors, there has been a push to incorporate this new tech to overhaul current systems. This includes as plans to launch a cryptocurrency that will be used by citizens and governmental departments.

EmCash

The first proposal for an official Dubai cryptocurrency called emCash came about in October 2017. The cryptocurrency is touted to be used for payments for governmental and nongovernmental services – and is pegged to the UAE Dirham.

Consumers could well be using emCash in the next few months after the government signed a deal with a number of parties to setup point of sale payments for the cryptocurrency.

The partnership was announced on October 9, which includes emCredit, a subsidiary of the Dubai Department of Economic Development, blockchain payment provider Pundi X and its partner Ebooc Fintech & Loyalty Labs LLC.

Ebooc will be responsible for providing point of sale terminals in retail outlets, while Pundi X is expected to create 100,000 point of sale units over the next three years.

Regulations – ICOs lead to cautious approach

The Central Bank of the UAE began working on legislation at the beginning of 2017 to address the use of cryptocurrencies in the country.

This culminated in a report by Abu Dhabi’s Financial Services Regulatory Authority in October 2017, which released its findings on initial coin offerings (ICOs) and cryptocurrencies – classing them as securities and commodities respectively.

A swathe of apathy towards ICOs, with bans in countries like China, happened around the same time last year. This had a slight ripple effect, as other institutions and regulatory bodies put out warnings to investors centred on the associated risks of investing in ICOs. This saw UAE Central Bank Governor Mubarak Rashid al-Mansouri caution citizens against the use of cryptocurrencies – amid fears of volatility and criminal uses.

This was primarily due to the corresponding drop in value of various cryptocurrencies following China’s ban, as Al-Mansouri said in a speech at the Islamic Financial Services Board Summit:

“The risks of trading in digital currencies have clearly appeared when the prices of digital currency fell sharply after some countries announced a ban on using initial coin offerings.”

The negative stigma around ICOs seemed to continue into the new year, amid an overall decline in the crypto markets following all time highs in December. In the US, the Securities and Exchange Commission (SEC) led the way with no-nonsense attitude towards ICOs in February 2018.

The UAE Securities and Commodities Authority (SCA) also cautioned local investors about the inherent risks associated with ICOs. Given that they are not regulated in the country, investors had no means of legal protection against fraud.

In an effort to address these concerns, it is understood that the UAE in nearing the completion of a draft of regulations for ICOs in the country. This was reported in September 2018, and is led by the UAE SCA.

Dubai – A Smart blockchain city

In 2016, the foundations were laid for Dubai to uncover startup companies that could help drive the way for the city to become blockchain-powered by 2020.

The UAE government founded the Smart Dubai initiative in 2013, an ambitious project looking to provide cutting edge technological innovations across the country, from technology to governmental processes.

A central part of the initiative is to improve government efficiency by using blockchain technology, in the hopes of making Dubai a global leader in the space. This includes a transition to digital systems which will see visa applications, bill payments, and license renewals move away from traditional paper documentation.

According to Smart Dubai, blockchain technology could redistribute up to 25 million hours of economic productivity by removing the need for paper document processing. The project also promised to benefit the tourism industry in Dubai as international travellers will have fast-tracked entry with pre-approved passport, visas, and security clearances.

Moving around the city will also be improved with approved drivers licenses and car rental, wireless connectivity as well as pre-authenticated temporary digital wallets.

An official Blockchain Strategy was launched in October 2016, in association with Seed Fund 1776, looking for companies building blockchain-based applications across a broad range of industries. In 2017 Dubai won the City Project award for its blockchain strategy, awarded by the Smart City Expo and World Congress in Barcelona.

In conjunction with the Smart Dubai initiative, in April 2018 UAE Vice President and Prime Minister Sheikh Mohammed bin Rashid eventually launched the broader UAE Blockchain Strategy 2021. At the time Sheikh Mohammed said that the project could save the UAE government up to $3 billion annually on document circulation, and drastically improve the quality of life and efficiency:

“The adoption of this technology will reflect on the quality of life in the UAE and will enhance happiness levels for citizens. 50 percent of government transactions on the federal level will be conducted using Blockchain technology by 2021. This technology will save time, effort, and resources and enable individuals to conduct most of their transactions in a timely manner that suits their lifestyle and work.”

Cointelegraph spoke with Muhammed Arafath, executive director at Apla Blockchain, platform helping integrate blockchain technology into government operations in a number of countries including India and the UAE, to get a first hand perspective on the current crypto climate in Dubai:

“Considering the vision which the Dubai government has set on being the ‘blockchain capital’ and the commitment for having most if not all of the government applications on Blockchain by 2020, Dubai is one of the most pro-blockchain governments in the region.”

Over the past two months, the UAE and Dubai have made significant progress in realizing some of the goals outlined in the Smart Dubai initiative.

Partnering with the Dubai Department of Finance, a blockchain-powered payment system was officially launched in September 2018. The Payment Reconciliation and Settlement (PRS) system aims to allow government entities like the Dubai Police, Roads and Transport Authority, and Dubai Health Authority to transact in real-time, providing a transparent system for intergovernmental processes..

According to local media outlet Zawya, the Dubai Electricity and Water Authority and the Knowledge and Human Development Authority have already been using the PRS system.

The tourism sector in Dubai is also expected to benefit from blockchain technology. In March 2018, plans for a virtual business-to-business tourism-specific marketplace using blockchain were unveiled. The Dubai Tourism Blockchain Marketplace will reportedly provide tourists with a platform that features real-time, transparent pricing of Dubai’s hotels availability.

From roads to the judicial system

Blockchain technology is also being leveraged to improve other areas of life in Dubai, from the streets of the city to its courts.

Thus, in February 2018 the Dubai Roads and Transport Authority (RTA) announced plans to launch a blockchain-based system in 2020 that would track the lifecycle of vehicles in the country.

According to media outlet Arabian Business, RTA chairman and executive director Mattar Al Tayer says the initiative should benefit almost every single player in the industry:

“The platform benefits many stakeholders including car manufacturers, dealers, regulators, insurance companies, buyers, sellers and even garages, providing transparency and trust in vehicle transactions, preventing disputes and lowering the cost of services. It tracks ownership, sale, and accident history to create smart, more efficient systems for supply chains.”

In July, Dubai International Financial Center Courts announced a formal partnership with Smart Dubai in order to set up a ‘Court of the Blockchain’ to facilitate improvements in the judicial system. The move would eventually create a blockchain-powered judiciary to help verify court judgements for cross-border enforcement.

Ambitious programs to lead the way

Countries like Malta and the UAE seem to be leading the way in terms of blockchain adoption. Having recognized the many benefits of the technology, strides have been made to actively get out ahead of other countries.

A seemingly important factor is the balance between accepting this new technology while providing the necessary frameworks to ensure investors are protected.

The UAE Blockchain Strategy 2021 is a clear indication of the efforts being made by the country to foster the development of blockchain to improve its own governance and the quality of life for people in the region.

This positive and proactive attitude towards the industry is proving a point, as Arafath told Cointelegraph:

“Dubai is clearly leading the region by example on the adoption of blockchain and crypto.”

As Dubai and the UAE continue to explore and develop technology with the use of blockchain technology, as well as provide a guideline for the use of ICOs and cryptocurrencies, the outlook in the region seems positive.

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A Small Crypto Coin Is Making Big Claims About a Private Proof-of-Stake

If any coin is going to fly under the radar, it makes sense for a privacy coin to do so.

Spectre (not be confused with a separate project called SPECTRE), created two crypto tokens – the aptly named spectre token and the xspec token – in 2016, but hasn’t received much notice from the crypto community so far. Sure enough, its tokens rank in the 500s according to data provider CoinMarketCap, with a total market capitalization of $5.7 million – paltry by many crypto standards.

But that might soon change, as the project is taking a growing interest in a technology called staking.

A number of alternative proof-of-stake systems have launched recently (EOS, Tezos, Neo, Tron), with varying degrees of success, though all of which have commanded large market caps buoyed by big investors.

These systems assign the task of verifying blockchain transactions to a certain number of delegates, representatives of sorts which are voted in by the token holders. While token holders don’t necessarily identify themselves, according to Spectre’s pseudonymous founder, Mandica, there’s a huge privacy problem within these systems.

“All the UTXOs [unspent transaction outputs] spent to generate staking transactions are traceable on the blockchain and all the staking transactions can be linked and your balances are visible to anyone who knows how to analyze the blockchain,” Mandica told CoinDesk.

But the Spectre team, which has been tinkering away on various privacy tools for blockchains for the past couple years, thinks it’s found a way to make staking stealthy as well.

While the technology isn’t ready yet, the team hasn’t been reserved about its ambitions.

“From a user point of view you will be able to keep your entire balance of anonymous coins safe from any observer and you will just need to stake your wallet to receive further anonymous coins that nobody can attribute to you,” Mandica said, continuing:

“This is a unique proposition, and no other cryptocurrency, as far as I know, has a system to stake anonymous coins and generate fresh anonymous coins.”

Entropy in open wallets

While the full picture of how this all works isn’t clear yet (the group hasn’t put out a white paper, though, on social channels, it’s promising one soon), the basic premise is borrowed from another privacy-oriented coin: monero, specifically its ring signature technology.

Ring signatures allow anyone in a particular group to sign a transaction, making it impossible to determine exactly which participants’ keys signed the transaction.

But that still leaves the nodes, which aren’t invisible, able to see the transactions. As such, the Spectre team went to work designing a fix.

“The ‘anonymous’ coins are created using stealth address technology and one-time key pairs, and [they] reside on the blockchain as un-linkable UTXOs that can only be spent by proving ownership through the use of ring signatures and key-images based on the Cryptonote protocol,” Mandica said.

While that’s a bit challenging to parse – and the Spectre team was cautious about explaining in too much detail – there are some clues as to what the system entails.

For instance, users that contribute to the network by leaving their wallets connected to the internet can earn a minimum of a 5 percent annual income on their tokens. Although the fewer people that have their wallets open and online, the higher this yield goes (providing an incentive to others to do it).

Mandica declined to explain in detail what these wallets are doing, but he did say that the “proof-of-stealth” algorithm the team is employing is designed to take advantage of the creation of new tokens with no prior history to increase entropy used to mask the true transactions.

He told CoinDesk:

“Entropy is key in a system using ring signatures to create a large pool of mixins or ‘dummy’ coins that can be used in the ring signature protected anonymous transactions.”

Based on other descriptions of ring signature schemes, protocols need a steady stream of unspent transactions to mask the real transactions. And this may be what those open wallets are doing.

Anonymous to the core

According to the team, in its next major release, the new proof-of-stealth staking mechanism for anonymous coins – the spectre coin is the anonymous one – will complement the proof-of-stake version 3 (PoSv3) algorithm the blockchain already uses.

But this work is just the latest privacy-centric tooling the Spectre team has come up with.

Even those without an unusually high privacy consciousness will be familiar with Tor, an acronym for “The Onion Router,” a scheme for masking internet users’ activity online and even accessing sites intentionally invisible to search engines like Google. Spectre has already built Tor into its systems and even went further, implementing Tor product, “OBSF4,” which allows users to skirt national firewalls, such as those in China and Iran.

The team itself functions anonymously too. In fact, a spokesperson for the Spectra team told CoinDesk that the developers themselves don’t even know each other’s real names.

And even though, with this kind of anonymity it would have been easy to just walk away, the team didn’t give up – even when it’s initial coin offering (ICO) flopped and its project was lacking vitality, while all around them crypto projects, some without serious intent, raised millions by selling tokens.

“We started out in 2016 with a very unsuccessful ICO that raised only 16 BTC at a time when the BTC price was around $600-$700, so we didn’t make it far on those funds,” Mandica said.

Spectre did secure private funding (amount undisclosed) earlier this year, but still the project remains just an after-hours project for the team. Instead of building with the monetary encouragement of the free market, Mandica and his team are building because they believe in the mission.

And that mission is all about one of crypto’s favorite ideas: unbridled privacy.

In a newsletter from June, Mandica explains how best to think about the project:

“The best way to understand Spectre today is to think of bitcoin + Proof-of-Stake.v3 + anonymous transactions (using similar technology to monero) + Tor to hide your IP.”

Venetian mask image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Crypto Wallet to Replace Private Keys With Encrypted QR Codes

Decentralized cryptocurrency wallet SafeWallet is launching a new QR code-based user identification system to replace mnemonic phrases and private keys, the firm announced Friday.

The app, operated by China-based Cheetah Mobile, will use a two-tier security system to grant users access to their holdings, according to a press release. The first stage will have users scan their personalized and encrypted QR codes, while the second asks pre-set security questions.

“The QR code is highly encrypted, so it can’t be decrypted by scanning it with other software … [and] SafeWallet does not store your QR code on its servers,” a company representative told CoinDesk in an email.

The system is claimed by the firm to be more secure than traditional mnemonic phrases, while also being easier to use. In particular, the system hopes to ensure users are not writing their backup phrases down on paper, “which can be easily lost, stolen or damaged.”

SafeWallet believes that the new system can also protect against the risks that arise if users send their passphrases to themselves using email or instant-messaging platforms, which can contain malware or otherwise leak the messages to bad actors.

While acknowledging the possibility that someone could gain access to the QR code if stored on a device or in the cloud (which the firm recommends for convenient backup access), the representative said:

“A hacker can’t access your assets with your QR code alone. They would need to know the answers to your security questions (in addition to your regular SafeWallet password). Our security questions are more specific than your average security questions, so they would be extremely difficult to guess, even if someone is very close to the user. … You are in complete control of your assets at all times. “

Additionally, as a safeguard against theft, private keys “will never” appear as text in the wallet, they said, while SafeWallet will also scan users’ devices for apps containing malicious code and notify users if anything suspicious is found.

SafeWallet product head Kaiser Zhang said in a statement that the new tool means “there is no longer any need to memorize or transcribe long mnemonic phrases or private keys.”

He added:

“This complicated backup process has been one of the primary barriers for users of cryptocurrency wallets, and especially for those who are new to the industry. With this latest update, we are proud to say that we have finally solved this usability issue without sacrificing any of the security capabilities that SafeWallet is known for.”

Further, the company has granted third-party developers access to its security tools, allowing others to add similar security features to their own projects. As such, “SafeWallet’s innovative ID system will serve as a bridge connecting decentralized and centralized systems and resolving ease-of-use and security issues for blockchain products,” the company claimed.

Keys image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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FlipNpik Raises $2 Million to Date in ICO Private Sale, Consolidates Partnerships for Expansion into Asia


This is a paid-for submitted press release. CCN does not endorse, nor is responsible for any material included below and isn’t responsible for any damages or losses connected with any products or services mentioned in the press release. CCN urges readers to conduct their own research with due diligence into the company, product or service mentioned in the press release.

24th July, London, UK and Singapore, Singapore – FlipNpik’s unconventional democratic ICO private sale has already raised USD 2 Million, 4 days after opening it to the public. Notably, funds raised have come from a combination of cryptocurrency and fiat payments – a clear indication that the project is appealing to both the crypto and non-crypto communities.