Welcome to Chain Letter! Great to have you. Here’s what’s new in the world of blockchains and cryptocurrencies. | | Can the cryptocurrency industry regulate itself? Cameron and Tyler Winklevoss think so. The twins, owners of the Gemini cryptocurrency exchange, have convinced three other big US exchanges to meet next month and begin discussing the creation of a self-regulating organization (SRO) for providing better transparency, consumer protection, and risk management. According to a press release, the so-called Virtual Currency Working group, whose initial members also include Bitstamp, bitFlyer USA, and Bittrex, will “work towards” establishing an SRO.
Federal policymakers are still debating how to best govern the cryptocurrency marketplace, in which fraud and security lapses have become common. The goal of the SRO would be to start policing shoddy business practices without government intervention, and perhaps in the process demonstrate that such intervention isn’t necessary. The industry is evolving so quickly that it has proved difficult for regulators to keep up. In May, Brian Quintenz, commissioner of the US Commodity Futures Trading Commission, told the audience at a major cryptocurrency conference that it would behoove companies to begin policing themselves. Quintenz praised yesterday’s announcement in a statement. “Ultimately, an independent and empowered SRO-like entity could have meaningful impact on the integrity and credibility of this young marketplace,” he said. | | The human faces of a bear market. What a difference eight months makes. In January, when cryptocurrency prices were soaring, the New York Times lit up the internet with a story about the people getting ludicrously rich as a result. Its top image featured two grinning guys wearing Bitcoin and Ethereum-themed Christmas sweaters, seemingly drunk on crypto-enthusiasm. Yesterday, the Times published a more sobering piece featuring people who lost money after those prices crashed. Since the peak in January, the value of all outstanding crypto-tokens has fallen by around $600 billion—and taken many investors down with it. This time, the top image is of a forlorn-looking financial analyst from LA who lost 70 percent of the more than $100,000 he invested last fall. In another case, a teacher who lives outside of Seoul, South Korea, drew on her savings and took out loans to put $90,000 into digital currencies—only to lose 90 percent of it. “I thought my family could escape hardship and live more comfortably, but it turned out to be the other way around,” she said. A 28-year-old man in the UK says he “got too caught up in the fear of missing out” only to be left “financially ruined.” Good reminders all that whether cryptocurrency is real money or not, real people’s money is on the line. | | Loose Change Fill your pockets with these newsy tidbits. | | | Venezuela’s government has devalued its national currency and pegged it to the petro cryptocurrency, which many people suspect is a scam. (Finance Magnates) | | | | Kenya’s electoral agency says it intends to use blockchain technology to boost election transparency. (Bloomberg) | | | | A man charged with hacking the servers of EA Games has been ordered to pay $750,000 worth of bitcoin for bail. (Gizmodo) | | | | Bitcoin Cash payments fell to $3.7 million in May after peaking at $10.5 million in March. (Bloomberg) | | | | US Customs and Border Protection plans to test blockchain technology for tracking certain imported products. (CoinDesk) | | | The Money Quote “Rather than focusing on how much energy Bitcoin uses, the discussion should center around who indeed is producing it—and where their power comes from.” —Katrina Kelly-Pitou, a research associate in electrical and computer engineering at the University of Pittsburgh. Kelly-Pitou argues that the conversation around Bitcoin’s energy consumption has been “oversimplified,” and that what really matters are the energy sources miners are using. (The Conversation) | | | |
