Justin Tabb:

Our very first video we showed in this series is basically that China. In China, we were able to give you Facebook, YouTube, Twitter, Google, open Google, all in China using SubstratumNode with a minimal number of four nodes. In Russia, we were able to show you that Telegram works. And then in Iran, we were able to show you that basically all the things that are blocked there pretty much the same as China works — so Facebook, Google, YouTube…

Man, I hope this thing doesn’t completely backfire on Substratum in 6-8 months. These video updates from Substratum CEO Justin Tabb are purposely misleading and are presented in a way that suggests it’s currently not possible to access these websites and services in China.

What Tabb doesn’t mention is that China’s firewall isn’t exactly proactive when it comes to traffic monitoring and blocking. The firewall has virtual holes in the form of unblocked IP addresses, and it will react to intrusions eventually. This is precisely why VPN providers are constantly switching IP addresses. Think of yourself breaking into Disney World after the park has closed down for the night. Guards patrol around the property, but they can’t proactively cover every single potential entry point at one time. If you happen to slip in undetected, it’s only a matter of time before you’re found and kicked out.

Substratum’s claim of successfully bypassing China’s firewall is downright misleading. Why? Because their goal is long-term circumvention, and not temporary residence. Anyone in China can browse Facebook and Twitter by setting up a ShadowSocks or OpenVPN install on a server with an IP address that hasn’t been blocked by China’s firewall. In fact, ShadowSocks is how a friend of mine uses Facebook in China, and he’s been doing this for quite a while. Did he ever claim he successfully bypassed China’s firewall? Nope. The meaning of the word “bypass” can change depending on the context. I just think Substratum claiming they have bypassed China’s firewall with four nodes (four IP addresses that can be easily blocked) is a little scammy.

Remember, VPN providers are successful because they have the capital and demand to constantly move around to maintain their service. Substratum’s network will only have long-term success with HUGE adoption VERY quickly because there’s nothing stopping the Chinese government from spending a few “pennies” to run nodes from inside of China. After that, it would just be a matter of recording the other IP addresses of nodes on the network and blocking them on the firewall. Since SubstratumNode will use a gossip-like protocol for node discovery, this wouldn’t be difficult for a motivated individual working from home, let alone the Chinese government.

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MUFG Bank:

MUFG Bank, and its wholly owned subsidiary, Banco MUFG Brasil S.A., today announced the signing of a Memorandum of Understanding (MOU) with Banco Bradesco S.A. to collaborate on a new cross-border payment service. Through this MOU, MUFG Bank has decided to start the collaborative development for cross-border payments between Japan and Brazil, utilizing Ripple’s cutting-edge technology. The new payment system — developed by Ripple, a San Francisco-based software vendor — will assist the banks as they work toward commercializing a high-speed, transparent and traceable cross-border payments solution between Japan and Brazil. In 2017, MUFG Bank said it would join Ripple’s interbank group of leading transaction bankers responsible for building, maintaining, and enhancing rules which ensure operational consistency and legal clarity to support the Ripple global payments network.

Ripple has been dominating the Japanese market. A while ago, the San Francisco-based company set up SBI Ripple Asia, a joint venture with SBI Group. SBI Ripple Asia has since formed the Japan Bank Consortium, a group of over 60 Japanese banks that piloted RC-Cloud, a RippleNet-powered payment system. Now, MUFG has revealed it will use RippleNet to power a new payment service targeted at money transfers between Japan and Brazil.

Okay, so why is MUFG a big deal, and why is Japan-Brazil such an important payment corridor? MUFG is the largest bank in Japan and the fifth largest bank in the world. I’m writing this post in a café in Tokyo right now, and there are literally two MUFG locations within viewing distance.

Brazil is home to the world’s largest Japanese population outside Japan. It all started back in the early 1900s in post-Feudal Japan when many rural Japanese families were looking for emigration opportunities due to poverty. At the time, Brazil was experiencing a significant labor shortage after subsidized Italian immigrants started leaving due to poor working conditions. As a result, Japan and Brazil signed an immigration treaty to allow Japanese citizens to emigrate to Brazil. Nowadays, Brazil is home to over 1.6 million people of Japanese descent, many of whom own coffee plantations and regularly conduct business with Japan-based coffee shops and bean providers. If I’ve learned anything from my time living here in Tokyo, it’s that Japanese people love drinking coffee and hanging out at coffee shops.

Knowing this, it’s pretty obvious why MUFG is targeting the Japan-Brazil corridor. The Japanese Yen (JPY) is one of the world’s premier currencies, and the USD/JPY trading pair on Forex markets offers excellent liquidity and low spreads. The same can’t be said about the Brazilian Real, which doesn’t even make an appearance on minor and exotic Forex pairs. Thus, money transfers between Japan and Brazil can be expensive with a 2% to 20% fee according to remittance data from The World Bank.

So, where does Ripple fit in? Well, in its press release, MUFG stated it is interested in “commercializing a high-speed, transparent and traceable cross-border payments solution between Japan and Brazil.” Ripple’s xCurrent, which is intended to be a replacement for SWIFT’s bank messaging service, offers transparency, traceability, and near-instant settlement times.

xCurrent’s speed and cost-savings aren’t exclusively derived from the XRP token, however. xCurrent is an interoperability protocol that has four layers — bidirectional messaging, Interledger Protocol (ILP) ledger, FX ticker, and a transaction validator. When a payment is initiated and agreed upon between A and B, xCurrent will look for a low-cost payment route through liquidity providers connected to ILP. Typically, these ILP-connected entities are nostro and vostro accounts to facilitate FX transactions.

Thus, xCurrent doesn’t require xRapid and the XRP token to function. With that said, I wouldn’t rule out xRapid integration in the future. As stated before, xCurrent still requires banks to hold nostro and vostro accounts. If A wants to send R$20,000 to B, then that amount has to be sitting in a bank account somewhere. Furthermore, xCurrent doesn’t do anything to alleviate counterparty risk. As XRP continues to build liquidity against an increasing number of both fiat and digital assets, I wouldn’t be surprised if something like JPY-XRP-BRL ended up being the cheapest payment route in the future.

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The Metropolitan Government Building in Shinjuku on a rather foggy evening.

The SEC’s Division of Enforcement released its annual report last week. The comprehensive 45-page document covers a variety of topics including cryptocurrencies and ICOs. On page 15 of the report, the SEC outlines a few “noteworthy enforcement actions,” one of which pertains to a blockchain project called Titanium that was charged with ICO fraud.

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I hate Adsense, but I believe display ads are a necessity for modern web publishers who wish to monetize their work. Projects like Brave and Coil are working on unobtrusive monetization solutions, but they won’t be ready for mainstream adoption anytime soon. For now, I’ve chosen to stick with a small old fashioned HTML/CSS fixed display ad inspired by Daring Fireball, The Loop, and of course Carbon Ads. I didn’t see any tutorials on how to implement this kind of sponsor ad in WordPress without a plugin, so I decided to share my process in this post.

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After a relaxing and mostly Twitter-less week in Hong Kong, I returned home to Tokyo and saw a few tweets from Substratum CMO Christian Pope. In my opinion, Christian Pope is one of the most interesting chief marketing officers in the blockchain industry, so I always make time to read or watch the content he tweets about.

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I took this one a few months ago somewhere in Asakusa.

Yesterday, I spent the afternoon playing around with different ways to display the price of Bitcoin in BrianLi.com’s page header. After I got everything working, I realized forcing the price of Bitcoin on readers is a terrible and stress-inducing idea from a UX perspective. Regardless, here’s the PHP code I used to make it happen.

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Substratum has been releasing a ton of great news lately. Not only has the team figured out how to bypass state of the art cybersecurity infrastructure in China, Russia, and Iran, Substratum CEO Justin Tabb has also been featured on the cover page of a technology publication called “The Technology Headlines” (TTH). Unfortunately, the article was poorly researched, so I just want to highlight and correct a few of its mistakes to ensure it doesn’t become a potential source of FUD.

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Recently, I was accused of editing past blog posts to fit my current perspective and narrative on a certain blockchain project. Considering this is my blog where I have 100% creative control over what gets published, I don’t think editing past content is necessarily an issue — especially when it’s an edit like the one below from a recent post on Substratum.

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