Readings

Is Bitcoin halal or haram?

Working paper by Mr. Muhammad Abu Bakar – Mufti certified by the Jamia Darul-Uloom in Karachi, Pakistan under the supervision of Respected Sheikh Mufti Taqi Usmani – proposes s critic cut on Shariah status of bitcoin.

Interesting paper including exposure on history of money. development of Bitcoin, blockchain, Islamic property definitions and practices, and Bictoin in light of previous Fatwas.

Skipping to conclusions of the working paper:

  • Blockchain is evolving, so should Shariah opinions as scholars do their own research
  • Blockchain may act as a ledger recording value and cash transfers.
  • Depending of jurisdiction and legal status, Bitcoin could be seen as permissible.
  • Store of value, welath and data integrity arguably permissible.  Buying  cryptocurrency for investment purposes is not advisable.
  • Beware of ponzi schemes.

‘An Equilibrium Valuation of Bitcoin and Decentralized Network Assets’ by Emiliano S. Pagnotta and Andrea Buraschi

An Equilibrium Valuation of Bitcoin and Decentralized Network Assets

March 21, 2018
Emiliano S. Pagnotta∗and Andrea Buraschi

Great analysis of Bitcoin especially attempted modeling price impacts of censorship resistance, mining costs, network sizes, reward and incentive structure.  Their approach of price equilibrium and the decentralized network economy should be considered in future price models.

“We address the valuation of bitcoins and other blockchain tokens in a new type of production economy: a decentralized financial network (DN). An identifying property of these assets is that contributors to the DN trust (miners) receive units of the same asset used by consumers of DN services. Therefore, the overall production (hashrate) and the bitcoin price are jointly determined. We characterize the demand for bitcoins and the supply of hashrate and show that the equilibrium price is obtained by solving a fixed-point  problem and study its determinants.  Price-hashrate “spirals” amplify demand and supply shocks…”

Read full paper

Neon Exchange (NEX) – off chain 0x

Nex is a new design to crypto exchange: a decentralized exchange with an off chain matching engine.  The idea is to combine the fact that holder should have control of their tokens (as in Dex) but not sacrifice matching engine performance and sophistication (as in centralized exchanges).

The secret sauce of this hybrid creation is on a provable deterministic relation between off-chain matched trades and on chain transaction record.

By running a public specified deterministic protocol, that relation can make sure also fair price matching and on chain settlement.

Initially running on NEO, they plan to include Ethereum and other chains in future development.

NEX, Neon Exchange token, is entitled of a share of fees by their NEX on stake, similar to GAS on NEO.

 

IMF’s Lagarde advocacy for a level playing field

IMF’s Managing Director Christine Lagarde post “An Even-handed Approach to Crypto-Assets” brings an optimistic view of the potential good side of crypto.  This balances against previous darker post “Addressing the Dark Side of the Crypto World“.

Comparing posts we can see the concerns of crypto usage for money laundering, terrorism funding and criminal activities and how it relates to some key features of cryptocurrencies: decentralization, data integrity, transaction security, digital democratic access.

In broad, Lagarde highlights the role a broad collaboration environment (eg IMF according to her) can help development:

“Just as a few technologies that emerged from the dot-com era have transformed our lives, the crypto-assets that survive could have a significant impact on how we save, invest and pay our bills. That is why policymakers should keep an open mind and work toward ­­an even-handed regulatory framework that minimizes risks while allowing the creative process to bear fruit….Continue reading→

Basis : Price-Stable Cryptocurrency

Basis team designed a system that target price stability.  Their premise is that volatile cryptocurrencies are not suitable for many day-to-day applications.

In their white paper co-founders Nader Al-Naji, Josh Chen and Lawrence Diao outline a smart three-token system that besides the core Basis coin,  uses bond and share tokens to expand and contract coin availability.  This systems intends to execute monetary policy towards price stability.Continue reading→

Data Commons

It is clear by now that you don’t own your data (arguably neither your money).  Shouldn’t it be the case then that our data takes part of a Data Commons.

The case is building, at least since 2016 but it is gathering supporters among the scientific community.  Examples here, here, and here.

This is cause for appraisal and kudos alright.  And as science gets more and more data hungry, it’s no wonder scientists seek free access to data.

What about the science that will be built using our data?  Open source, creative commons as well?  Right?

 

 

Bitcoin Standard?

Frances Coppola provided an extensive, harsh, critical review of the hyped “The Bitcoin Standard: The Decentralized Alternative to Central Banking” by Saifedean Ammous.

Not that maximalists would change their mind after appointed issues of the book.  All historical perspective is always selective, of course.  And asserting causation to millenia old economic developments might be an useful intellectual tool.

Moreover, Ammous’s book gives us an interesting account of current Bitcoin economic environment, and such is granted by Coppola.

But Coppola’s critique show how one must be careful before any attempt to decree a necessary outcome from historical fact-picking tale.

Civil rights to autonomous artificial systems

In an open letter to the European Commission a group of ‘Political Leaders, AI/robotics researchers and industry leaders, Physical and Mental Health specialists, Law and Ethics experts gathered to’ voice their concern about negative consequences of legal status to robots.

This echoes the concept that granted corporations personhood legal status, and the long debate over its convenience, how this notion spread and became usual in modern law.

The paragraph 59 f  from report cited in the letter is by its turn based on the recommendations to the Commission on Civil Law Rules on Robotics that can give a thorough view on the grounds of what moved the Committee on Legal Affairs to propose it.