Bitcoin: the wrong implementation of the right idea at the right time

This paper is a study into some of the regulatory implications of cryptocurrencies using the CAMPO research framework (Context, Actors, Methods, Methods, Practice, Outcomes). We explain in CAMPO format why virtual currencies are of interest, how self-regulation has failed, and what useful lessons can be learned. We are hopeful that the full paper will produce useful and semi-permanent findings into the usefulness of virtual currencies in general, block chains as a means of mining currency, and the profundity of current ‘media darling’ currency Bitcoin as compared with the development of block chain generator Ethereum. While virtual currencies can play a role in creating better trading conditions in virtual communities, despite the risks of non-sovereign issuance and therefore only regulation by code (Brown/Marsden 2013), the methodology used poses significant challenges to researching this ‘community’, if BitCoin can even be said to have created a single community, as opposed to enabling an alternate method of exchange for potentially all virtual community transactions. First, BitCoin users have transparency of ownership but anonymity in many transactions, necessary for libertarians or outright criminals in such illicit markets as #SilkRoad. Studying community dynamics is therefore made much more difficult than even such pseudonymous or avatar based communities as Habbo Hotel, World of Warcraft or SecondLife. The ethical implications of studying such communities raise similar problems as those of Tor, Anonymous, Lulzsec and other anonymous hacker communities. Second, the journalistic accounts of BitCoin markets are subject to sensationalism, hype and inaccuracy, even more so than in the earlier hype cycle for SecondLife, exacerbated by the first issue of anonymity. Third, the virtual currency area is subject to slowly emerging regulation by financial authorities and police forces, which appears to be driving much of the early adopter community ‘underground’. Thus, the community in 2016 may not bear much resemblance to that in 2012. Fourth, there has been relatively little academic empirical study of the community, or indeed of virtual currencies in general, until relatively recently. Fifth, the dynamism of the virtual currency environment in the face of the deepening mistrust of the financial system after the 2008 crisis is such that any research conclusions must by their nature be provisional and transient. All these challenges, particularly the final three, also raise the motivation for research – an alternative financial system which is separated from the real-world sovereign and which can use code regulation with limited enforcement from offline policing, both returns the study to the libertarian self-regulated environment of early 1990s MUDs, and offers a tantalising prospect of a tool to evade the perils of ‘private profit, socialized risk’ which existing large financial institutions created in the 2008-12 disaster. The need for further research into virtual currencies based on blockchain mining, and for their usage by virtual communities, is thus pressing and should motivate researchers to solve the many problems in methodology for exploring such an environment

Capital markets and e-fraud: policy note and concept paper for future study

The technological dependency of securities exchanges on internet-based (IP) platforms has dramatically increased the industry's exposure to reputation, market, and operational risks. In addition, the convergence of several innovations in the market are adding stress to these systems. These innovations affect everything from software to system design and architecture. These include the use of XML (extensible markup language) as the industry IP language, STP or straight through processing of data, pervasive or diffuse computing and grid computing, as well as the increased use of Internet and wireless. The fraud is not new, rather, the magnitude and speed by which fraud can be committed has grown exponentially due to the convergence of once private networks on-line. It is imperative that senior management of securities markets and brokerage houses be properly informed of the negative externalities associated with e-brokerage and the possible critical points of failure that exist in today's digitized financial sector as they grow into tomorrow's exchanges. The overwhelming issue regarding e-finance is to determine the true level of understanding that senior management has about on-line platforms, including the inherent risks and the depth of the need to use it wisely. Kellermann and McNevin attempt to highlight the various risks that have been magnified by the increasing digitalization of processes within the brokerage arena and explain the need for concerted research and analysis of these as well as the profound consequences that may entail without proper planning. An effective legal, regulatory, and enforcement framework is essential for creating the right incentive structure for market participants. The legal and regulatory framework should focus on the improvement of internal monitoring of risks and vulnerabilities, greater information sharing about these risks and vulnerabilities, education and training on the care and use of these technologies, and better reporting of risks and responses. Public/private partnerships and collaborations also are needed to create an electronic commerce (e-commerce) environment that is safe and sound.Environmental Economics&Policies,Insurance&Risk Mitigation,Financial Intermediation,ICT Policy and Strategies,Banks&Banking Reform

Private vs. Public Technological Incubator Program - The lesson from Israel

The Public Technological Incubator Program (PTIP) was initiated by the Office of the Chief Scientist (OCS) in the Ministry of Industry and Trade in Israel in the wake of a large influx of immigrants from the former USSR, many of whom were scientists and engineers. This massive immigration of highly skilled labor bolstered the Israeli high-tech industry which in the early 1990’s blossomed in an unprecedented manner. Between 1990 and 1993, 28 incubators were established. Today there are 24 incubators that are still in operation and they can be found near metropolitan areas and in peripheral areas, as well. Since the year 2000, private technological incubators began operating in Israel. This development owes its activity to the rapidly growing private (venture) capital (VC) that traditionally did not funded such projects. This study examines the differences and similarities between these two types of technological incubators – public vs. private. It addresses the question weather there is still a need for PTIP. The study points to the unique role played by VC funds and private investment companies in sponsoring projects in the private and the public technological incubators. VC funds tend to invest more in projects within private incubators than in projects in public incubators. However, they are only of secondary in importance compare to the financial support rendered by the (CSO) to public incubators and to the owner/sponsor in the private incubators. Thus, these sources of funds serve as complementary rather than as a substitute of funding for projects. Based on our empirical analysis and our findings, the main conclusion is that private incubators cannot substitute public incubators program; even after the entrance of the private sector into the area of technological incubator activity, there is still justification for the continuation of the TPIP. Private incubators tend to concentrate in selected fields while public incubators sponsor a large variety of fields. The PTIP is found to be the only answer to advance national objectives such as the geographical distribution of economic activities and providing special incentives to some selected population groups (such as new immigrants) for whom such activities would otherwise be out of reach.