Welcome to Chain Letter! Great to have you. Here’s what’s new in the world of blockchains and cryptocurrencies. | | The awkward courtship between policymakers and crypto advocates continues. Members of Congress and representatives from leading venture capital firms, Wall Street, and cryptocurrency startups are convening in DC today for a high-profile roundtable discussion. The meeting—called “Legislating Certainty for Cryptocurrencies”—will be hosted by Representative Warren Davidson of Ohio. He has told invitees that their input will be “critical to helping us preempt a heavy-handed regulatory approach that could stall innovation and kill the US ICO market.”
What’s he worried about? So far, the regulatory approach at the federal level has been more uncertain than heavy-handed. Speaking of ICOs, for instance, the Securities and Exchange Commission has said that most crypto-token sales in the US qualify as securities offerings, and should be subject to relatively strict investor protection rules. Indeed, the SEC has already busted several ICOs for allegedly selling unregistered securities. Sounds like they’re getting pretty tough, right? But what about the platforms that let people buy, sell, and trade these tokens? No federal agency has the authority to directly oversee cryptocurrency exchanges, and that was undoubtedly a factor in the decision by the New York Attorney General’s office to recently conduct its own revealing probe of cryptocurrency exchanges.
Davidson, who plans to introduce a new bill this fall, seems to think Congress will need to pass new laws in order to clarify things. He’s not alone. Representative Tom Emmer, from Minnesota, announced on Friday that he will introduce three new pieces of crypto-focused legislation: a resolution expressing support for blockchain technology, and two bills that would create regulatory “safe harbors,” designed to protect blockchain entrepreneurs and cryptocurrency holders from certain legal liabilities they face under today’s rules. Those all sound fairly pro-industry, though. The more thorny challenge will be creating crypto-specific investor protections without appearing to stifle the new industry’s growth. That explains why one of the biggest agenda items for today’s roundtable comes in the form of a question: “What is the best way to protect consumers from fraud?” Many crypto enthusiasts might balk at the answer, since it likely entails becoming more like the banks and other institutions that they’d like to replace. | | Blockchain for supply chains is about to finally get real. Tired of hearing about how blockchain technology could help companies better manage their supply chains? Well, Walmart is ready to start for real. The retail giant is wrapping up a two-year pilot project, in which it used a distributed ledger to track food products from farm to shelf. It appears to have been such a success that it’s ordering vegetable suppliers, farmers, logistics firms, and everyone involved in getting leafy greens from farm to plate that they will need to join the new blockchain network by next September.
Skeptics will still wonder how exactly using a permissioned blockchain (in this case a system designed by IBM) is an improvement over conventional online databases. Besides, a blockchain can’t tell if someone enters fraudulent or mistaken data about a given food product. But Walmart seems convinced that if nothing else the new technology will help it pinpoint the sources of food-borne illnesses much faster than it can today, which could save lives in addition to money. A recent E. coli outbreak affecting romaine lettuce killed five people, according to the Centers for Disease Control, and forced Walmart to throw out every bag until it located the source. The retailer says the recent demonstration showed that whereas it took employees seven days to locate the farm that grew a batch of sliced mangoes, a blockchain reduced that time to seconds. | | Loose Change Fill your pockets with these newsy tidbits. | | | Crypto prices tend to respond strongly to news related to “the legal status of cryptocurrencies,” but not always in a bad way, according to new research from the Bank of International Settlements. The report concludes that responses signal a “clear preference for a defined legal status.” (BIS) | | | | Ethereum creator Vitalik Buterin says the same “zero-knowledge proof” technology that lets Zcash users transact anonymously could be used to help Ethereum scale. (CoinDesk)
+A mind-bending cryptographic trick promises to take blockchains mainstream. (TR) | | | | AntPool, a bitcoin mining company owned by China-based mining chip maker Bitmain, will sponsor the Houston Rockets pro basketball team next season. (South China Morning Post) | | | | Cryptocurrency investing platform Circle is to add four new tokens: Qtum, 0x, Stellar, and EOS. It says it chose them due to their “potential to contribute powerful infrastructure to the broader crypto ecosystem”—whatever that means. (Finance Magnates) | | | | The US Navy is studying whether blockchain technology can help it trace aircraft parts throughout their life cycle. (CoinDesk) | | | | The trustee in charge of liquidating cryptocurrencies on behalf of bankrupt exchange Mt.Gox has just sold another $230 million of Bitcoin. ( Bloomberg) | | | The Money Quote “Cryptography is the only thing that can give power to the individual in the information age.” —Renowned cryptographer David Chaum, who founded DigiCash, a now-defunct digital currency startup, back in the early 1990s. Chaum now says he has “reinvented” cryptocurrency with a new coin meant to fix fundamental technical problems facing the technology, including challenges to scalability, privacy, and vulnerability to quantum computers. (CoinDesk) | | | |
