Thursday, March 1, 2018

Coinbase customers having problems associated with Visa and banks

The credit card issuer Visa has been the cause of Coinbase's multiple problems with its users' cryptocoin accounts that have included reversed transactions, unauthorized withdrawals and unexplained fees.

Coinbase
Coinbase is a cryptocurrency exchange with headquarters in San Francisco, California. So far, they broker Bitcoin, Bitcoin Cash, Etherium, Litecoin and now perhaps Ripple. Coinbase operates in about 32 countries and offers bitcoin transactions and storage in 190 countries.
Coinbase issues an incorrect explanation of what happened
Last week, Coinbase said that a change in the way that credit card companies classified digital transactions was responsible for the glitches and that it had identified a solution to the problem.
Later on Friday, Coinbase claimed that it was VIsa that actually reversed many weeks' worth of transactions under what it called a new merchant category code or MCC. This code is used to classify businesses by the type of service provided and it helps determine how the Internal Revenue Service (IRS) deals with taxes for the service.
Coinbase claimed that Visa had switched to an MCC “that allows large banks and card issuers to charge consumers additional fees,” with the result that there were charges that looked erroneous.
Coinbase said that it was actively working with major card networks to devise a new MCC for purchase of digital coins that hopefully would not involve additional fees.
Visa denies any MCC changes
Visa issued a statement saying: “Visa policies with respect to the correct coding of transactions have not changed. Cryptocurrency transactions must be properly coded so that issuers can rely on accurate and consistent information when making authorization decisions. We recently sent a communication to clients to explain the existing requirements, but there were no changes or reclassifications. It is inaccurate to say Visa made recent changes to the MCC code.”
Later Visa issued another joint statement with the payments processor Worldpay that handles the transactions with Coinbase saying: “This issue was not caused by Coinbase.” It is not clear what the dispute is between Coinbase and Visa but Visa admits it is the cause not Coinbase. The statement noted that some clients may have had duplicate transactions posted to their accounts when there should have been only one.
The statement goes on to note that Worldpay and Coinbase were working with Visa and the banks to make sure the duplicate transactions were reversed and appropriate credits posted to accounts. It claimed all reversals had been issued and should appear within client's credit and debit card accounts within the next few days. The statement advises those who continue to have problems and issues related to card fees or charges to contact their card issuing bank.
SItuation still unclear
Coinbase customers complained that there funds were still being tied up by both card issuers and banks. Visa claims it is refunding, yet insists that the onus is on parties who had their accounts drained to pursue the appropriate party and determine what to do.
Neither Coinbase, Visa or some banks come out of this without some blame and it seems they are not working well together to handle cryptocurrency trading.
Examples of problems
One user claimed on Reddit to have bought Bitcoin, Ether, and Litecoin on Coinbase worth $300. A few days later the user found that his account was charged with five transactions of $300 worth $1,500 which together with fees emptied his account. The user exclaimed: “My bank account went from very comfortable to negatives balance, not to mention extra $5 charges, and overdraft fees. As a result my rent check bounced, and my bank went further into negative for a NSF charge for $25. My landlord is not a nice person and is on my CASE and I have nothing to offer him. I am FREAKING OUT.”
Pete Kingree a Coinbase client from Virgina said there were unauthorized additions to a Coinbase trade of $931 dollars plus $7.45 bank fees. He said he was writing the Coinbase CEO and the Governor of Virginia. Numerous other complaints are listed in this Verge article.

Previously published in Digital Journal


Cryptocoin mining causes shortage of GPU's used in astronomical research

Aaron Parsons an associate professor of Astronomy at the University of California Berkeley is using an array of radio telescopes to help him discover the first stars that formed in the universe about 13 billion years ago.

Aaron Parsons
Aaron Parsons is both an Associate Professor of Astronomy and Head Graduate Advisor at the Berkeley campus of the University of California. His specialties are radio astronomy instrumentation, cosmic reionization, digital signal processing, experimental cosmology, formation and evolution of large-scale cosmic structure.
Parsons' work with radio telescopes
Parsons' radio telescopes are made up of hundreds of antennas which detect radio emissions that are throughout the cosmos. All the data received needs to processed by a supercomputer to create a map of the sky. This map can aid Parsons in spotting the earliest stars. Ultimately this will help understand how the universe changed from plasma into galaxies and planets.
Parsons' radio telescope is called the Hydrogen Epoch of Reionization Array (HERA) with hundreds of antennas that are located in South Africa. He is currently trying to upgrade the system.
The world's largest radio telescopes are shown on the appended video.
General Processing Units (GPUs)
In a computer you have a central processing unit or CPU and also a general processing unit(GPU) that processes data from video and images. GPUs are also equipped with a large number of Arithmetic Logic Units (ALU), which are responsible for performing mathematical computations. These ALUs, allow the GPU to make many more calculations than the CPU, leading to improved output for the crypto mining process.
The mining process by solving complex mathematical problems allows the miner to add blocks to the blockchain, and rewards him with coins, while verifying the transactions as described in the appended video. As the problems become more complex the miners need more GPU's to solve them.
Mining companies roam the globe looking for locations with cheap power and other advantages. As a recent Digital Journal article reports Iceland is regarded as a paradise for miners with ample cheap power and cool temperatures.
Cryptocoin mining uses huge amounts of power. Bitcoin mining alone is said to use as much power as the whole of the Republic of Ireland. In Iceland mining consumes as much power as all Icelandic households.
Cost rise and shortage of GPUs
Parsons is attempting to upgrade his system to a total of 350 antennas. However, he found the price of the GPUs he uses has gone from $500 dollars to about $1,000 each. This will cost him about $32,000 extra money that he needs to hire graduate students.
Parsons said: “I kind of rolled my eyes a little bit. I usually think of cryptocurrency as some kind of peripheral thing, and I was surprised and a bit annoyed to discover that it’s impacting the bottom line of our telescope.”
The demand for GPUs is so great that chipmakers such as AMD and Nividia have been unable to keep up with demand. Even PC gamers are feeling the effects as are other scientists.
Negative consequences for Parsons
Given financial constraints Parsons might find it necessary to build a smaller telescope but it might not be able to detect faint signals that the large telescope could. This could hinder his research.
Jack Hickish who works with Parsons said that with the shortage it is virtually impossible to buy the GPUs in bulk and save money so that it becomes more difficult to buy them in the quantities that Parsons needs. Hickish said: “It’s really difficult to buy them in the quantity we want. The vendors we’ve spoken to are hesitant to promise us 40, and if I can get that availability, I can get a quote. But [if] you order a week from now, you have to quote again because they might be gone.”
If the GPUs remain expensive and difficult to buy research with radio telescopes will be much less effective and will be held back until more GPUs become available.
Previously published in Digital Journal

US will bank Tik Tok unless it sells off its US operations

  US Treasury Secretary Steven Mnuchin said during a CNBC interview that the Trump administration has decided that the Chinese internet app ...