Latest news about Bitcoin and all cryptocurrencies. Your daily crypto news habit.
đ PSA: supporting Token Economy on StakeTree! đ˛
TL;DR as an experiment, we are now using a decentralized Patreon to accept ETH to grow and improve Token Economy.
đ staketree.com/tokeneconomy
As a newsletter covering decentralized technologies and their massively disruptive potential, we feel obliged and mostly excited to eat our own dog food. So when we came across Nielâs Staketree we just went for it. Itâs a simple smart contract that allows a creator to raise funds from supporters via ETH staking and then drip-feeds funds to a beneficiary address to the tune of 10% of the balance each week. Importantly it also gives the funders the choice of initiating a refund of whatever is left of their initial stake, at any time. Itâs still a pilot project in its early days of development, but its functional and does the job for us (thanks Niel for setting us up on a Saturday!).
Some asked us why we donât charge for the newsletter, some asked us to accept sponsorships, many are begging us to feature their scammy ICOs. Staketree feels like the most natural, fair and non-intrusive way of monetizing: anyone is totally free to chose what it is worth to them, no intermediary taking a fee in the middle. We do have some running costs of course, nothing gargantuan that we could not afford. But we do also have many opportunities to make the product better which weâd like to explore instead of parking them.
Mostly, we love to experiment!
(We would also appreciate it if you could take 15 seconds for a quick survey đ)
đ Token Economy
Extortion, Police Raids and Secrecy: Inside The Venezuelan Bitcoin Mining World by Pirate Beachbum
What a fascinating story to read. It gives you all of the feelings.
The #1 takeaway is that hyperbitcoinization is happening in Venezuela.
As the state currency breaks down, the only way to maintain spending power and earn an income is through Bitcoin. The more fortunate are able to afford S9 miners and can live in more than decent conditions.
With hidden mining activities happening all over the country, it is clear that Bitcoinâs censorship-resistant technology has found its first major real-life use case.
We donât think itâs the last. This is exactly what fascinated me about Bitcoin early on, and seeing it happen in real-life just 5 years or so after having first touched the coin is insane.
Must-read (with a grain of salt because the story-writer didnât really do much fact checking).
Telegramâs ICO is attracting the industryâs newer crypto investors while firms like Andreessen Horowitz sit this one out by Teddy Schleifer
Whatâs happening with the monster Telegram ICO is extremely fascinating.
The article states that the big VCs who have dabbled in crypto the most are sitting this one out (USV, A16Z, Bessemer), while some that still havenât placed their bets are going all in (Sequoia (we hear theyâre leading..), Kleiner, Benchmark, etc.).
Weâre seeing this behavior even at a much smaller scale. Weâve seen SPVs being formed and investors putting in insane amounts of money usually as one of their first ICO investments.
For some reason, this ICO just makes people more comfortable. Seeing a product live with so much hype and traction makes everyone not care that much about the fact that they are investing in something completely new that has absolutely nothing to do with the product currently live (and which doesnât exist yet).
In any case, it will be interesting to see who wins this hodlers-vs-n00bs little bet.
Infrastructure Matters by Jill Carlson
A great post by Jill Carlson highlighting how the innovation pendulum in blockchain continues to swing from new decentralized assets (first Ether, Litecoin, Zcash and the altcoins, more recently Filecoin, Tezos, EOS etc) to decentralized infrastructure (permissioned blockchains first, now Ledger, 0x, Lightning Network).
The emergence of new assets drives innovation in the way these assets get secured, traded and transacted. Jill thinks 2018 is the year infrastructure projects deliver.
a16z Podcast: Mental Models for Understanding Crypto Tokens
A great conversation between Chris Dixon and Nick Tomaino.
There are discussions about all possible token types, as well as the process and things to look at while investing in promising crypto projects.
Coincheck: Worldâs biggest ever digital currency âtheftâ
$534 million worth of NEM have just been stolen from one of Japanâs largest exchange. Despite the fact that this is largest than the MtGox theft and the largest ever theft of digital assets, it just seems to go mostly unnoticed. Markets are up, the discourse has already move on.
Perhaps it is no longer news that exchanges are the least safe place one can keep coins. Coincheck (ironically named) was holding NEM in a hot wallet!
The funds stolen are marked and itâs highly unlikely the thief will be able to cash out unnoticed. In the meantime Coincheck have announced that they will make good their affected customers out of their own balance sheet (yes, exchanges are not safe but they are insanely profitable).
StripeâââEnding Bitcoin support by Tom Karlo
Stripe had a small feature that enabled Bitcoin support. It wasnât very widely available and wasnât that pushed by the company.
Now the experiment is veering to an early end, citing fees, confirmation times and price volatility as the main culprits.
They apparently are not done with crypto just yet, saying that âWeâre interested in whatâs happening with Lightning and other proposals to enable faster payments. OmiseGO is an ambitious and clever proposal; more broadly, Ethereum continues to spawn many high-potential projects. We may add support for Stellar (to which we provided seed funding) if substantive use continues to grow. Itâs possible that Bitcoin Cash, Litecoin, or another Bitcoin variant, will find a way to achieve significant popularity while keeping settlement times and transaction fees very low. Bitcoin itself may become viable for payments again in the future. And, of course, thereâll be more ideas and technologies in the years ahead.â
For me, thinking of anything other than Bitcoin for payments is fairly utopian (especially things like Stellar), so I expect that Lightning would be the only possible choice here.
Bitcoin by Nassim Nicholas Taleb
A very long awaited piece, Taleb finally writes something about Bitcoin.
The most shared and highlighted piece has certainly been the following:
âBut its mere existence is an insurance policy that will remind governments that the last object establishment could control, namely, the currency, is no longer their monopoly. This gives us, the crowd, an insurance policy against an Orwellian future.â
Nassim gets it.
BitGo Enters Into Agreement To Acquire Kingdom Trust
BitGo is going to go hard against Coinbase in the custodianship market.
To do that theyâve just acquired a $12B AUM custodian called Kingdom Trust.
âThe custodial services offered by the trust company, alongside BitGoâs market-leading digital currency security protection software, will make the combined companies the only full-stack, at scale provider of onsite and online protection for digital currency investments held by institutional investorsâ
South Koreaâs Crypto Craze Explained by Seoulâs Largest Investor
Interesting view about why South Korea is so influential in the crypto trading world.
The TLâDR is:âTo sum it all up, a tech savvy nation that highly valued digital goods and also had a penchant for gambling without a viable outlet was naturally drawn to cryptocurrencies. The densely packed and hyper-connected composition of Seoul allowed for word of the massive gains being made from cryptocurrency investments to spread rapidly throughout the population, creating a mania. The rise of cryptocurrencyâs popularity coincided with political turmoil that distracted the government from a situation that under normal circumstances, it would have tried to control.â
Introducing aragonOS 3.0 alpha, the new operating system for protocols and DApps by Jorge Izquierdo
Massive, massive release from Aragon of their aragonOS 3.0 framework. This is now a super-modular smart contract framework that can be used for the governance of any decentralized project.
Their own Aragon Core will be using aragonOS.
The post is technical, but if you are going to be developing decentralized companies or projects, it feels like this is one piece you wonât be able to miss.
Robinhood CryptoâââBuy Bitcoin & Other Cryptocurrencies
Robinhood has finally launched their crypto investing offering.
They will start with BTC and ETH, and contrary to popular belief they will let users withdraw their coins (even if it will require additional info and take a week).
This is one additional step to bring the masses into BTC and ETH, even if Coinbase is already available to anyone that breathes.
There are currently almost 900,000 people in line to get early access to Robinhood Crypto.
If you are interested in how Robinhood makes money, this Twitter thread should shed some lights.
Coinbase booked $1 billion in revenue last year by Teddy Schleifer
Coinbase did a whooping $1B in *revenues* last year, and every VC now wants to get in. Aside from the fact that getting in *after* a company hits $1B in rev is not really what VCs are paid for, there isnât anyone selling to being with.
Announcing the Trading Technologies Partnership by Adam White
This one flew under the radar, but I think is pretty massive.
Coinbase struck a partnership with Trading Technologies, a 350+ people firm whose trading software is used all over the world.
The partnership makes it so that TT customers will be able to use the TT platform to trade directly on GDAX.
Two takeaways:1) Coinbase / GDAX will be absolutely massive given the influx of institutional money.
2) We havenât seen shit yet about institutional capital flowing into the space.
Blockchain company buys more than 60,000 acres in Northern Nevada
This is a weird one. The owners of ETHNews.com have gotten so rich off the price of Ether that they have purchased 67,000 acres (270 km2) of land in Nevada close to Teslaâs Gigafactory (they also bought blockchains.com).
The speculation on the use that they will make for it is rampant in the community, and on their website they just say they will build a campus.
Using cheap electric spillover power from Tesla to mine crypto could be one of the potential activities, but we really have no idea what is going on here.
Tether Confirms Its Relationship With Auditor Has âDissolvedâ by Marc Hochstein
Man, it doesnât smell good (never has really). The audit that was taking months to happen, is never gonna see the light of day.
You can let your speculation run rampant on this one.
On the other side, this week we had a huge Chinese miner assure everyone that Bitfinex and Tether are loaded with $B of USD in cash.
đ Cool new projects
EthDNS: an Ethereum backend for the Domain Name System by Jim McDonald
Awesome!
EthDNS is a nameserver for ENS-stored data, meaning that it can resolve queries for normal tlds whose information is stored on the Ethereum blockchain instead of a normal server.
This makes things more efficient (one nameserver for ALL of the info stored on the blockchain) and trustless (there canât be any delisting).
Anyone can run their own nameserver that reads from the blockchain now.
TrueUSD: A USD-Backed Stablecoin You Can Trust by Stephen Kade
TrustToken, a real-world asset tokenization protocol, have launched a collateralized ERC20 stable coin, endorsed by no less than Ari Paul of BlockTower (investor in TrustToken).
With all the noise and FUD about Tether, we badly need some fully transparent, compliant and regularly audited alternative so this is timely. As for the approach, it seems to mitigate known flaws of the existing examples of stable coins, both the algorithmic ones (actual stability) and the collateralized ones (counterparty risk and transparency).
TrueUSD is backed by fiat held by a network of licensed trust companies and banks (their way of reducing counterparty risk), and as a KYCâed holder of TrueUSD one is the beneficial owner of the custodial account funds were sent into. That means that the token represents a legally recognizable claim on the underlying fiat and therefore fully redeemable (price stabilization is therefore left to arbitrageurs). They promise regular audits and transparency on bank account holdings, though they have yet to disclose who the auditors are.
Announcing The ERC dEX Public Beta! by Luke Autry
Another 0x relayer goes live, joining RadarRelay, Paradex and the others.
2018 is the year of decentralized exchanges.
A handy tool that charts the Github commit history of 590 cryptocurrencies based on the most popular repo.
Cardano still has the most activity, though there has been a significant slump since September. And Litecoin??
Handy tool built by a couple of Bitcoin developers that shows how optimized a bitcoin transaction is.
It shows how much could be saved in fees if the transactions were batched, used segwit or avoided multisig.
Introducing Strike, a stripe-like API for Lightning by ACINQ
Ok so this is beautiful.
ACINQ is a small French startup developing deep Bitcoin tech.
They are the makers of Eclair (French for Lightning), which is a Scala-based implementation of Lightning.
This week, they released Strike, a Stripe-like API for Lightning.
Strike is basically exactly like Stripe. They will receive payments on your behalf (they are running the node, opening and managing the channels and so on) and you then get a payout in BTC onchain once you reach a threshold amount (that you choose, so you can minimize the amount of trust you place in them or decide to pay less tx fees).
This is very different from what Blockstream released last week, which was a tool for anyone to easily implement Lightning (but where you essentially are running the full thing in a completely trustless manner).
Kudos.
DFINITY White Paper: Our Consensus Algorithm by dfinity-network
The DFINITY White Paper on their Consensus System is out.
It is very interesting (even for a permissioned committee-based model). For me it goes to show that some tech-heavy projects are really bringing massive innovations to all aspects of decentralized computing (in this case, the Proof of Stake mechanism).
Amadeus is yet-another 0x Relayer. It seems like every week there is a new one.
The interesting thing about them is that they are focusing entirely on an API strategy, to enable dApps to have token exchanges built in.
𤥠ICO madness
âEl Petro es Independenciaâ
Weâve already understood that Venezuela is pushing hard, and this week they released a document stating that âPetro is independenceâ. Itâs a national decree that creates the âSuperintendencia de los Criptoactivosâ, the agency that will handle the creation and management of the Petro.
Regardless of how much we think the coin is useless, I feel weâre living in incredible times and this will be a fascinating story to watch develop.
Katy Perryâs Cryptonails Instagram post
If this is not peak mainstream, I donât know what is.
Weâre talking about an image with lesser known cryptocurrencies like Monero, broadcasted to 68M people all over the world.
đŽ This week in regulation
Opening Remarks at the Securities Regulation Institute Chairman Jay Clayton
Two very strong statements by the SEC Chairman this week, one as part of his opening remarks at the Securities Regulation Institute and a joint-one with the CFCT Chairman on the WSJ two days later (see below).
The first one seems like an unprecedented blow at industry gatekeepers, particularly lawyers, hinting that many may not be acting âresponsiblyâ by being excessively lenient in counselling ICO promoters. Is the SAFT being questioned subtly?
âI have instructed the SEC staff to be on high alert for approaches to ICOs that may be contrary to the spirit of our securities laws and the professional obligations of the U.S. securities bar.â
Clayton also brings up the recent surge in listed companies of all sorts âmovingâ into the blockchain space.
âThe SEC is looking closely at the disclosures of public companies that shift their business models to capitalize on the perceived promise of distributed ledger technology and whether the disclosures comply with the securities laws, particularly in the case of an offering.â
Regulators Are Looking at Cryptocurrency
(behind WSJ paywall, click here for readable version)
In a joint statement with the Chair of the CFCT, SECâs Jay Clayton continues with the same tone of his opening remarks.
While regulatory efforts should operate in the spirit of embracing innovation, they are very concerned by the current state of affairs in crypto land which shows âlittle or no regard to our proven regulatory approachâ.
They hint at revisiting regulatory frameworks for exchanges to bring them under the scrutiny of the SEC or CFCT (currently operating under states regulations).
They hint at vigorous enforcement against âthose who seek to evade the registration, disclosure and antifraud requirements of our securities laws.â
With respect to ICOs, and directly addressing lawyers, advisors and exchanges, the are âdisturbedâ by âmany examples of form being elevated over substance, with form-based arguments depriving investors of mandatory protectionsâ. Again this feels like an attack at the instrument of the SAFT.
On a positive note, they do appreciate the underlying technology has potential for âproductivity-enhancing economic developmentâ and they hint at taking a forward-looking approach to this new market.
Overall, we should continue to expect more enforcement coming from the SEC, which is likely to result in less public ICOs and more private rounds, certainly on US ground. We are definitely seeing more and more projects deliberately avoiding a public token sale all-together. Utility tokens are clearly hard to deal with in context of the existing regulatory framework, the SAFT was a start to self-regulation but clearly not the final answer. To that end, itâs great to see new initiatives like Consensys Brooklyn project taking off (their Telegram group is buzzing with activity!).
Banking group Nordea bans bitcoin trading
This is beyond silly. Nordea bank bans bitcoin trading for 31k employees.
First, we re not entirely sure how they will ever be able to actually enforce this ban.
Secondly, weâve all seen the âdonât look into this holeâ prank on youtube. If anything, this ban is very likely to have the opposite effect of the desired outcome.
Third, surely they must ban gambling, or wingsuit flying, or alcohol too, if protecting their employees from âhigh risksâ is what they are truly concerned about?
First they ignore you, then they laugh at you, then they fight you, then you win. If Gandhi was right, we are one step away from winning.
đ° New funds
With rumours that by now EOS has raised about $1 billion from its continuous ICO, it was a matter of time before they announced an ecosystem fund. Two in fact, as we missed the first one last week, a $50 million fund in partnership with TomorrowBC, a sub-fund of Eric Schmidtâs Tomorrow Ventures, seeded by Block.one (developer of the EOS software).
This one with Novogratzâs Galaxy is bigger at $325Â million.
We talked about ecosystem funds and their rationale last summer, when Blockstack and Tezos announced theirs. Many projects that raised capital in 2016/7 are now sitting on more liquid assets that they can sensibly deploy, so we expect to see more of these type of funds pop up this year.
Wall Street Vets Raise $50 Million for Crypto Fund of Fund by Michael del Castillo
Ex Credit-Suisse and Morgan Stanley bankers are raising $125 million crypto fund of fund, of which $50 million has been secured.
They will be investing in a portfolio of crypto funds as well has hedging their bets with short positions in Bitcoin and Ether futures, charging 1 & 15 for the service.
Big ups for targeting managers with humility, a rare quality in a bull market:
âAnyone who really claims to know exactly what is going to happen in the crypto space is probably misguided at best, so I think itâs important to come at this space with a strong amount of humility, because I think it will inform your investment strategy and ultimately your trading.â
BlackRock duo quit to launch cryptocurrency hedge fund
Mainstream finance is haemorrhaging people into crypto at an increasingly rapid pace (see just above).
Grayscale Plans Five New Crypto Funds
In Q2 Grayscale will launch four new single-currency crypto funds plus and index fund a la Hold 10 based on a basket of digital currencies. Would not be surprised if Grayscale got to $10 billion AUM by the end of 2018.
One side effect of the emergence of index funds is the increasing correlation between crypto assets returns, as inflows and outflows of capital from such funds will move assets together.
This is quite an interesting development and a sign we are likely to see an increasing number of security tokens emerge.
A fund is raising $35 million via a pre-sale and subsequent ICO for a security token that will give token holders exposure to a portfolio 30 companies in the 22nd 500 Startups batch. The fund will hold between 2.5% and 10% of each company and will distribute proceeds to token holders as and when distributions occur, with the added benefit of being liquid (though hard to find exchanges willing to list security tokens, perhaps the DEXs?).
Youâll remember we covered Spice.vc a while back, a tokenized venture fund raising capital via ICO. As part of setting it up, the Spice team have also productized and spun-out the regulatory and compliance process into securitize.io, a platform to issue security tokens along the lines of what Templum and Polymath are working on.
Bitcoin Dev Jimmy Song Is Now at Blockchain Capital
Something we will see A LOT more of very soon: venture capital (and hedge fund) firms snatching up core developer talent either as partners or venture partners.
This time itâs Blockchain Capital, which has announced that Jimmy Song, a bitcoin core developer, has joined the firm as a venture partner.
Comes at an interesting time given we just reported on Vitalik leaving his VC role last week, but there will not be a slowdown here for us. Weâll be seeing specifically a lot more Joey / Pantera type deals.
âšď¸ About us
Token Economy is written and curated by Stefano Bernardi and Yannick Roux
If youâre building a new fundamental piece of technology for the future, please reach out đ¤
đś đ˛Token Economy #33: Dogfooding was originally published in Token Economy on Medium, where people are continuing the conversation by highlighting and responding to this story.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.