Occasional musings on crypto from an early investor, entrepreneur, and two-bit idiot.
TBI's Daily Bit

Blockstack & Gnosis

April 24, 2018
Daily Bit

No Bit today as I got tied up in meetings, and must leave the office now or I'll have a soon-to-be-ex-wife waiting for me at home.

But I have a great one for you tomorrow, which is basically part two of my post from yesterday. The encore discusses the necessity of filters in crypto. (Teaser: I generally don't recommend writing about self-love critiques, but it was part of a larger point.)

In the meantime, I hope you enjoy today's below-the-fold content, as well as our full library of research reports - now up to 10! - which is growing by the day. (In case you didn't get the joke, yesterday's report was actually Blockstack, not Pied Piper.)

I'll have four more Daily Bits for you to enjoy as part of the April Fool idiocy experiment I promised. Then we'll gather feedback, regroup on the product, and relaunch the full newsletter after NYC Blockchain Week wraps up in mid-May.

Send ideas and feedback!


I Like Pictures

While taking a look at how far we are from returning to all time highs I was surprised to see this. The five tokens that have retained their value most are all less than one year old.

Oh, to be young.

We'll also have more on EOS tomorrow, as Multicoin Capital just dropped a juicy looking report on the asset earlier today.

Light bedtime reading.


Red Pillz

The volunteer army at Messari is building a free, open-source library that anyone can use as a resource, so you can go down the crypto rabbit hole a bit more efficiently.

Today's project believes in the wisdom of the crowd. Gnosis is building a platform for decentralized prediction markets, where users can buy shares in an expected outcome of any arbitrary event and profit from accurate bets. Can "skin-in-the-game" help to parse signal from noise, attract informed analysts, and lead to more accurate forecasts than traditional methods such as polling? 

In the future, Gnosis markets data could be used to inform decisions made by businesses, governments, and non-profits, so if you want to feel better about your gambling habit check out a preview of the platform.


TBI's Compression Algorithm

Debates over Ether as a Security. Gary Gensler, the former Chairman of the CFTC, has reignited the debate over whether Ether should be considered a security. In an interview with the New York Times, Gensler says Ether and Ripple could be non-compliant securities, given the way they were created and sold. In response, Coin Center argued that ethereum’s decentralized network and current utility ensured that it failed the Howey Test today. While skeptics like Preston Bryne are cautioning that decentralization may not actually be a defense for Ethereum's Howey case. Given the manner of Ethereum’s ICO/pre-sale, its centralized data repository on Github, and the Ethereum Foundation as a common enterprise, Ethereum could be at risk, however unlikely.

The latest lawsuit against Coinbase is going to a jury trial. Last July, a class action lawsuit was filed against Coinbase on behalf of customers of the now-defunct cryptocurrency exchange Cryptsy and its CEO Paul Vernon. The lawsuit alleged Cryptsy and Vernon used Coinbase to launder and steal millions of dollars worth of user funds over a several-year period and specifically points to Coinbase's alleged failings when it came to taking active steps to prevent money laundering through its services. Coinbase wanted to settle in arbitration, but two judges ruled against the request. This lawsuit will now move to a public jury trial and will proceed to discovery. Potential implication: even stricter AML laws for crypto exchanges ahead. (Coindesk)

Fedcoins: The Federal Reserve Considers its own Digital Money. In its latest study, the Federal Reserve Bank of St Louis considers the use of central bank digital currencies called “Fed Coins”. The gist: a central bank could easily introduce a cryptocurrency, given existing standards, such as Ethereum's ERC20 or ERC223. Alternatively, the central bank could attach value components to fractions of existing cryptoassets, such as Bitcoin. To use fedcoins, people would need to show proof of identity and set up a wallet with the Federal Reserve or an affiliate bank, at which point they could buy the new currency with US dollars at a one-to-one ratio. This would ultimately result in the slow disappearance of physical cash. The study argues that the creation of a “central bank electronic money” would increase the stability of the financial system, simplify and clarify monetary policy, and require little administrative effort. (The Federal Reserve Bank of St. Louis)

Quick Bits (Don’t read that, I read it for you)

Choke Points 
+ In a move to preempt a u-turn in crypto trading markets, Circle moved up its minimum ticket size to $500,000, with an average of $1 million, offering an option that traditional exchanges with less liquidity cannot match.
+ After a week-long vote, 55% of voters in the ethereum community said no to restoring the 500,000 ETH that was frozen due to the Parity multi-sig bug from last year. 

Startup Signals
+ Andreessen Horowitz is reportedly preparing to launch a separate fund to buy and sell crypto assets.
+ Following a $4 million fundraise from last fall, Orchid Labs is planning to raise an additional $125 million in funding through a private sale. 

BigCo Noise
+ Reuters surveyed 400 of its financial services clients and found that 20% of those institutions are considering trading cryptocurrencies within the next 12 months, with 70 percent of those saying they are planning to start trading cryptocurrencies in the next three to six months.
+ SK Telecom, South Korea’s telecom giant, is reportedly launching a blockchain-based platform for authenticating customers' identities. 

The Powers That Be
+ The 16 cryptocurrency exchanges that are currently registered with Japan's Financial Services Agency (FSA) have formally launched a new self-regulatory organization called the Japanese Cryptocurrency Exchange Association. The group will comprehensive rules regarding customer protection and internal controls, seek compliance from member companies, and impose penalties on bad actors.

+ Goldman Sachs hires Justin Schmidt, formerly of quantitative trading firms Seven Eight Capital LLC and WorldQuant LLC, as head of their digital asset markets to help clients gain exposure to cryptocurrencies.

Did I miss something big?

Send me the link, your twitter handle and your best imitation compression algorithm write up. If I really whiffed, I’ll include your bit tomorrow (with attribution).


Shameless Plugs

Hit me up when I'm in your city!

Upcoming Travel:
+ Boston (4/25-4/27 - Pillar VC's Unchained) 
+ SF (5/1-5/3 - private event)
+ NYC (5/10-5/17 - Fluidity, Ethereal, Consensus, Token Summit)
+ Asia (Japan, Korea, Hong Kong early through mid-June)

My company, Messari, is hiring:
+ Front-end developer, Full-stack engineer, Data engineers, Blockchain engineers (TCR!) 
+ Volunteer analysts and summer interns
+ Content curation lead (compression algo tinkerer)

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