Recognized economist Nouriel Roubini, a professor at Stern School and NYU, recently launched a series of attacks against the crypto sector. All of the False Claims Roubini Made He claimed Bitcoin is a Ponzi scheme, Ethereum co-creator Vitalik Buterin amassed a wealth of a billion dollars by creating a pre-mined blockchain network, and said public … Continued
Ever since Nouriel Roubini appeared before the United States Senate Committee On Banking, Housing, and Urban Affairs, to discuss cryptocurrencies – he has certainly been causing quite the commotion with regards to the cryptocurrency community. Roubini vs Buterin This is not surprising, considering the famed economist shared several controversial statements about bitcoin and cryptocurrency … Continued
Today’s installment of The Daily is about building more than bickering, though we’ll squeeze in a little of the latter before we sign off. First though, let’s start by considering the latest projects being proposed within the crypto space: a tokenized security platform and a social media network that doesn’t leak data.
It’s being reported that Nasdaq, the giant U.S. exchange operator, is plotting a new platform dedicated to tokenized securities. The move would enable projects to offer STOs in a regulated environment so as to accord to U.S. law. As popularity for ICOs has waned, exacerbated by fears that so-called utility tokens may in fact be unregistered securities, U.S. projects eyeing tokenization have been left with no choice but to go down the STO route. It’s believed that Nasdaq is in talks with blockchain firm Symbiont to create its own platform that would enable tokenized securities to be listed and traded.
Social Media Backlash Intensifies
There’s been a storm brewing all year on social media, with wave after wave of censorship and data leaks hastening the exodus from Facebook and its ilk. Users intent on jumping ship have been left with a quandary though: where to go? We’ve reported on some of the Bitcoin Cash-based initiatives, as well as Twitter alternatives such as Gab and Mastodon. Blockstack has now launched a $1 million challenge to build decentralized social networks, writing: “Your data and privacy are being exploited and monetized by today’s social networks. It’s time for a change. We deserve the right to control our data.” They add:
It’s time for a new breed of social networks – where power is taken back from a single authority and control is returned to you, to me, to all of us. It’s time to decentralize social networks.
10 teams will be encouraged to devise social networks that don’t leak data. A similar venture was also launched recently by web inventor Sir Tim Berners-Lee. While these initiatives aren’t going to topple the social media giants any time soon, greater choice for pro-privacy consumers can only be a good thing.
Vitalik Buterin Sets the Record Straight
Ethereum’s Vitalik Buterin generally avoids wading into Twitter spats, but felt obliged to correct several of the inaccurate claims Nouriel Roubini made in the week of his similarly inaccurate U.S. Senate testimony. “Vitalik Buterin was the ringleader – together with Joe Lubin – of the criminal pre-mining sale/scam that created ether. They stole 75% of the ether supply and became instant ‘billionaires’ of fake wealth,” tweeted Roubini, whose timeline has become increasingly manic as the week’s progressed.
“I never personally held more than ~0.9% of all ETH, and my net worth never came close to $1b,” responded Buterin. “Also, I’m pretty sure there are no criminal laws against pre-mining.” Then, on Friday, as Roubini doubled down on his bug-eyed crypto rambling, Buterin again stepped in to dispel the notion that bitcoin and ethereum maximalists are at war, while giving a shout out to bitcoin cash proponents.
Have you learned about BCH yet?
The space is actually great fun once you get to know it.
Ethereum co-founder, Vitalik Buterin has thrown shade on prominent economist and cryptocurrency skeptic Nouriel Roubini, in response to Roubini’s earlier statements calling him a “dictator” and describing decentralization in Crypto as a “myth”. In a tweet, Buterin subtly hinted that Roubini has no idea what he is talking about and as such he should not … Continued
Nouriel Roubini, a proclaimed critic of the crypto sector, characterized decentralization as a myth, claiming that no system, currency, or protocol can exist in a peer-to-peer ecosystem. “Decentralization in crypto is a myth. It is a system more centralized than North Korea: miners are centralized, exchanges are centralized, developers are centralized dictators (Buterin is ‘dictator
In today’s edition of The Daily, we’re focusing on human interest stories. Tales involving people rather than products, as a reminder of the many ways in which cryptocurrency affects people’s lives, transforming them for the better. From Australia to China, Thursday’s roundup is as borderless as bitcoin itself.
Never mind living on bitcoin for 21 days – one man has gone 344 days better than the Chinese women recently profiled and survived for a whole year. Armed with 1 BTC he purchased for $4,724 last August, the Redditor managed to take in 18 countries in 12 months. Trip highlights included meeting Vitalik Buterin in China, John McAfee in Singapore, and hitting up Amsterdam, where he confessed to having “Used a bit of my almost-running-out-BTC to taste true wormwood absinthe.”
The crypto fanatic captured some of his most memorable moments in a short video for posterity. The chief takeaway from his round the globe extravaganza? “Crypto will set us free.”
Bitcoin Beats Gold When Fleeing Your Homeland
Anecdotal stories have surfaced of Venezuelans having their gold confiscated at the airport. Government officials have reportedly been taking liberties and confiscating families’ life savings in some instances. While most of us will fortunately never face such a fate, the story illustrates one of the ways in which bitcoin beats physical assets such as gold or cash.
Nowallet is a new project that aims to help anyone who needs to leave home in a hurry and conceal their crypto. It promises to help users create a “plausibly deniable” bitcoin brainwallet, and was inspired by reports of incidents of bitcoin being seized physically at border crossings. Its developer explains:
You will only need to remember an email address and passphrase combination, rather than an entire 24 word mnemonic seed. People are typically more accustomed to remembering a normal set of login info, which will protect users from forgetting or misremembering part of their seed and losing coins forever.
Bitcoin Not Brickstring
Finally, crypto heads have been chuckling over a question posed on Australia’s version of “Who Wants to Be a Millionaire?” One of the multiple choice answers to the question “The technology that enables cryptocurrencies such as bitcoin to function is called what?” was “Brickstring”. “Bullish on brickstring” quipped crypto Twitter.
What are your thoughts on today’s news tidbits as featured in The Daily? Let us know in the comments section below.
Images courtesy of Shutterstock, and Twitter.
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Binance, the one-year-old startup that appeared from nowhere to become the world’s top crypto exchange, is making major moves as it enters the next phase of its business. That includes a plan to offer fiat-to-crypto trading in international markets and the release of a decentralized exchange to complement its current trading site.
The company routinely trades more than $1 billion in crypto volumes daily — even in this current bear market — but to date it has only allowed crypto-to-crypto trading. That’s primarily down to the need for regulation in order to offer fiat currency conversation, but that’s set to change.
Speaking at a Coindesk event in Singapore last week, CEO Changpeng “CZ” Zhao revealed plans to launch a slew of local exchanges offering fiat conversation in markets across the world and he provided further details in an interview with TechCrunch.
“Right now, we are centralized crypto-to-crypto,” Zhao told us. “We don’t offer fiat gateways and so we rely on others to do that. But through discussions with different regulators across the world, we now have those channels. We want to make it easier for fiat currency to get into the crypto world.”
There’s certainly a need for institutional money. Crypto prices are down as much as 55 percent on January’ highs, according to analysis from Bloomberg, so it figures that major players like Binance need the backing of big names and large amounts to reverse the trend. While many in the space say they are happy to see a low price since it drives out less sincere operators, dwindling interest in crypto isn’t ideal for those who get paid by facilitating trades.
Zhao said the plan is to open three fiat exchanges this year with a view to growing the number to 10 in 2019, with “ideally two per continent.” Part of the goal is to help larger, institutional investors bring money into the crypto ecosystem, a move that would help Binance and the rest of the industry, too.
“We want to” reach both retail and institutional investors he added. “Our target has always been more retail focused, but now institutions are coming into crypto and we are seeing that.”
Binance CEO Changpeng “CZ” Zhao speaks at TechCrunch’s blockchain event in Zug in July 2018 [Image: Daniel Vaiman/Explore To Create]
Already, Binance has opened a joint venture in Lichtenstein, it has announced plans to offer fiat in Malta, and it is working on a launch Singapore. Currently in a limited beta, Zhao said the Singapore-based exchange should go live within the next month after stress testing on areas like KYC, trading flow and scalability is done.
While he didn’t specifically call out other markets that Binance is looking at, he did rule out launching in China, Japan and the U.S, which are three major markets for crypto despite respective legal roadblocks. China banned ICOs and exchanges some time ago, the U.S. has begun cracking down on crypto and Japan has tight licensing around exchanges which, for one thing, imposes regulations on what tokens can be listed on exchanges.
“Japan is progressive on crypto but their exchange regulation is too strict,” Zhao said. “It makes it very hard for exchanges.”
Indeed, it stands to reason that Binance — which once had an office in Tokyo before deciding against operating a local entity — would need to modify its token selection in line with Japanese laws were it to gain a license to operate in Japan. Either way, Zhao doesn’t seem key to reevaluate the country just yet.
Binance — which has flocked to crypto-friendly nations like Malta and Bermuda — said it would open an office in Singapore should the proposed exchange rollout go successfully.
Beyond fiat, the company is also getting closer to launching a decentralized exchange (dex) which would allow buyers and sellers to trade tokens directly without the exchange acting as an intermediatory.
The Binance dex would significantly alter the trading flow as it stands today, but Binance itself — which Zhao told Coindesk made a profit of $350 million over the past six months — would still draw revenue. That’s because the dex would operate on Binance’s own blockchain with the company operating a number of nodes itself. Zhao said that when its nodes are used in transactions, it would gain some of the network fee.
While, equally, the firm stands to profit from increased dex use because that could make Binance’s BNB token more valuable, Zhao argued.
The company recently released a very early demo of the dex — spoiler alert: it is underwhelming — but Zhao said a fully-working service should be available by the end of this year or early 2019 at the latest. The Binance CEO, who once build software for futures trading for Bloomberg, is leading the development of the project.
“Development is going well,” he added. “Our dex is very simple but it’s fast.”
Ellie Zhang, who runs the Binance Labs division that manages both projects, candidly told TechCrunch last month that real use cases for blockchain and crypto are crucial if Binance is to “thrive” as a business.
Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.
Ethereum co-creator Vitalik Buterin has a plan to scale the Ethereum network to accommodate a ~3,200 percent increase in transactions without the use of second-layer technologies such as Plasma. Buterin: ZK-SNARKS Could Help ETH Scale to 500 tx/s Writing on an ETH research forum in a post originally published on Saturday, Buterin said that Ethereum … Continued
Charles Hoskinson, the co-founder of Ethereum and Cardano, entered the cryptocurrency sector when Bitcoin was valued at just over $1. Since then, the infrastructure supporting the market and blockchain systems has changed drastically, at an exponential rate. In an interview with Mpho Dagada, Hoskinson, the CEO of IOHK, a technology company that leads the development … Continued
Ethereum researcher and developer Vlad Zamfir has created the first successful proof-of-concept of second-layer scaling solution Sharding with developers Tim Beiko and John Marling. At ETH Berlin, one of the world’s largest Ethereum hackathons, Zamfir said in an interview with Rachel Rose O’Leary at Coindesk that Ethereum developers will be able to run the proof-of-concept … Continued
The last few months haven’t been easy for crypto investors. Following the dizzying highs of crypto trading late last year, which saw Bitcoin reach a peak of $19,276 and a market cap of $323 billion and Ether reach $1,152 with a market cap of more than $112 billion, prices have crashed. Today, Bitcoin trades at around $6,500, and Ether at $204. Their combined market caps have shed about $300 billion in value.
That’s basically five Bernie Madoffs worth of losses.
The situation has put crypto investors in quite the bind. As one indicative example, the Wall Street Journal profiled wunderkind crypto investor Olaf Carlson-Wee, who founded Polychain Capital. The fund, which has seen dizzying growth over the past few years turning a few thousand dollars into tens of millions in returns, has lost about 40% of its $800 million in capital through investment losses and investor withdrawals.
It’s clear the second blockchain bubble is now complete (the first was the run-up in Bitcoin prices in 2013). The question is: what’s next for blockchain?
Blockchain’s two narratives problem
I have previously argued that blockchain’s rise is a dual parallel to that of the internet. On one side that I dubbed the 1960s narrative, the technology is extraordinarily nascent, with limited use cases and almost no ability to scale. The other side is the 1990s narrative — that this is a groundbreaking new technology that should be invested in immediately for maximum returns.
Blockchain’s story so far is the freakish combination of these two narratives. The enthusiasm of the “1990s” crypto investors on valuation never matched the enthusiasm of the “1960s” crowd of crypto researchers and core blockchain designers, who focused on the potential of these technologies over the vagaries of price. As conversations with leaders like Vitalik Buterin can attest, many of the core engineers are hyper-aware of just how much work remains to be done to see blockchain become a foundational technology.
The simple answer is that the 1960s crowd is right, and the 1990s crowd is just too early. Much more development is needed to get blockchain where it needs to be, and much more analysis is going to have to be done to figure out where the investment returns are going to be. Search and social ended up being the killer apps for the internet, but the winners in those categories hardly emerged instantly.
Real innovation is slower than we always expect
The pace of innovation may have accelerated over the past two centuries, but there is still a ceiling on how fast things can change. The cell phone took almost two decades from its original launch in the 1980s to the launch of the iPhone in 2007. The internet took roughly three decades from its conception at ARPA to what we now understand as the world wide web.
Blockchain is almost certainly on a similar timeline. While the tech has antecedents going back to the digital gold of the 1990s, we can start the clock with the launch of Bitcoin in 2009. That means we aren’t even finished with the first decade of understanding this technology, building up a theory of how it works, or thinking through its use cases in a scalable way. In short, there is so much more work to be done to harness this tech for our own purposes.
The good news is that the massive infusion of investment from crypto traders over the past few years should help to rapidly accelerate blockchain’s development. Some of these projects, which wouldn’t have gotten funding even from a university laboratory, are sitting on a ridiculous level of seed funding. They could create a lot of progress in this space, assuming that these projects use their funds effectively.
The downside to the onrush of capital is that morale has certainly been shaken for many participants, and morale is critical to seeing through complex new projects to completion. There are going to be ups and downs with the design of any new technology on the frontier of engineering — but morale and stubbornness can do a lot to keep the momentum up.
Where should we be focused on?
To me, several veins of research and development around blockchain remain deeply exciting, if we have the patience to see them through. They are:
Identity: I’ve written about projects like Element and Learning Machines before. There are incredible challenges around how to offer portable and secure identities to every human on earth, to say nothing of every animal and physical object. Blockchain seems like technology that might be able to help here, if we are able to figure how to connect the digital world to the analog one. Facebook was once considered to be the identity layer of the internet – a claim that it has failed to live up to. Blockchain may ultimately arrive to complete that mission.
Decentralized web: I was fortunate to catch up with Jutta Steiner of Parity Technologies last week at TechCrunch Disrupt and also host her at our event in Zug this past July. She and others like Gavin Wood have done a lot of work to start thinking through how chains can interact, as well as how to rebuild our modern web infrastructure in a decentralized way. Their ideas — like everything in this new world — are very early and inchoate, but they are inspiring in their potential. While centralized servers have huge performance advantages over decentralized technologies today, there’s no reason why that gap has to be permanent. Web3 and other projects could lead the way to pushing this model forward.
Security Tokens: can blockchain technologies help us build a safer, more efficient financial system? I am reminded of the piece by Matt Levine of Bloomberg on the shareholder votes to take Dell private and the massive level of indirection and complication it illuminated when it comes to ownership in our modern economy. Security tokens could provide a means to manage that complexity in a much more fluid way, particularly in a world where sharing is increasingly the norm around fixed assets (autos and Uber, homes and Airbnb, etc.)
I use “may” and “could” for each of these examples because we have no idea what we are going to discover on the frontier of blockchain. The good news is that these are rich directions to investigate, and even if we don’t discover something specifically in these areas, we are likely to discover something that moves the technologies forward along the way.
All this is to say that we need to stop reading the latest token prices every ten minutes, and get back to the real work of building up this new technology and turning it into the revolution it one day could be.
Vitalik Buterin’s comments that the days of seeing 1000x growth in the crypto space were met with a significant amount of community backlash, no doubt much of it from those who invested heavily at the wrong time and are eager to see the market take off once again. Throughout article comment sections and Twitter threads, the … Continued