Welcome to Chain Letter! Great to have you. Here’s what’s new in the world of blockchains and cryptocurrencies. | | Why Line’s new crypto-token is not a surprise: The news that Japan’s popular messaging service will launch its own crypto-token could be a big deal for cryptocurrency adoption. It’s also not surprising. Line revealed its intention to offer digital currency services back in January, and since then has opened its own cryptocurrency exchange and launched a $10 million venture fund for blockchain startups.
Besides that, Line is just the latest big Japanese company to make a serious foray into cryptocurrency. On the same day of Line’s latest announcement, Rakuten, an e-commerce giant that operates more than 70 financial technology services, revealed plans to acquire a local cryptocurrency exchange. Another big Japanese e-commerce company, DMM, and financial services giant SBI Holdings have also opened exchanges. These moves seem like attempts to capitalize on the well-documented popularity of cryptocurrency trading among Japanese retail investors, and take advantage of the nation’s relatively friendly regulatory environment. A law that went into effect last year created a licensing regime for cryptocurrency exchanges—a move that has legitimized the industry to a degree not seen in other major economies.
In a twist, however, Line’s new “Link” token won’t be available to its 75 million Japanese users (most of the rest of its 200 million users are in Taiwan, Thailand, and Indonesia). That’s in part due to the January heist of more than $500 million worth of digital coins from Coincheck, a popular cryptocurrency exchange (which was operating without a license, under an exemption). Japan’s Financial Services Agency has been slow to issue new approvals since that theft—which means Line is still waiting in line. | | Blockchains, but for tyrants. Can blockchain technology serve as a “counterbalance” to authoritarian governments that will try to use artificial intelligence, machine learning, and other information technologies to further centralize their power? It’s too early to tell, argues historian and philosopher Yuval Noah Harari in a new essay for The Atlantic entitled “Why Technology Favors Tyranny.” He writes: “Remember that the Internet, too, was hyped in its early days as a libertarian panacea that would free people from all centralized systems—but now is poised to make centralized authority more powerful than ever.” (See also: “Who needs democracy when you have data?”) | | Venezuela’s new cryptocurrency doesn’t seem to exist. Venezuelan president Nicolás Maduro claims that sales of the petro, the supposedly oil-reserve-backed national cryptocurrency he launched in February, have already raised $3.3 billion, and that the coin is being used to pay for imports. But an investigation by Reuters has found no evidence to back those claims—or that the petro is even a functional cryptocurrency.
Reuters spent four months speaking with experts on cryptocurrencies and oil-field valuation, visiting oil reserve sites in Venezuela, and analyzing blockchain transactions. It found that the petro is not being sold on any exchange, and no shops accept it. Records on the NEM blockchain, which was supposed to host the token, indicate that it has not been issued. Hugbel Roa, a cabinet minister involved in the project, confirmed to Reuters that “nobody has been able to make use of the petro … nor have any resources been received.” He said that Venezuela is still developing its own blockchain technology, and that instead of acquiring tokens, buyers of the petro have reserved future ones. That may be true, but it doesn’t square with Maduro’s claim that it’s already being used to pay for things. And it makes his recent announcement that salaries, pensions, and the exchange rate for Venezuela’s bolivar are now pegged to the petro all the more confusing. | | Loose Change Fill your pockets with these newsy tidbits. | | | The South Korean province of Geyongsangbuk-do plans to launch its own cryptocurrency. (Finance Magnates) | | | | IBM has launched its cross-border payment network, which uses the Stellar blockchain to settle transactions. (CoinDesk) | | | | Google has added the Ethereum dataset to its big data analytics platform, called BigQuery. (Google) | | | | The Yahoo Finance iOS app now lets users trade Bitcoin, Ethereum, Litecoin, and Dogecoin. (Yahoo) | | | | California’s state legislature has passed a new bill that defines blockchain and cryptocurrency-related terms. (Bitcoin News) | | | The Money Quote “There are parallels to the Theranos story (big promises about tech for socially critical purposes) relevant to the blockchain space. We seem willing to forgive the 'thought leaders' and promoters of the tech as just enthusiasts rather than fraudsters, but there is a fine line.” —Angela Walch, an associate professor at St. Mary’s University School of Law. In a recent Twitter thread, Walch expressed concern that a coming “second wave” of blockchain-focused academic work might be based on faulty premises about the technology’s capabilities. | | | |
