Welcome to Chain Letter! Great to have you. Here’s what’s new in the world of blockchains and cryptocurrencies. | | A shakeup at ConsenSys reflects crypto’s cold reality. Ethereum cofounder Joe Lubin is pushing through some major strategy changes at ConsenSys, the confusing company he founded to support the development of decentralized applications for Ethereum. In a letter to ConsenSys staff members (which now number more than 1,100), Lubin said the company “must recognize that what got us here will probably not get us there, wherever ‘there’ is.”
It’s hard not to associate the firm’s coming shakeup (in whatever form that takes) with the darkness of the crypto market, where prices keep plunging. Lubin, who has funded much of ConsenSys’s work himself, is believed to hold a stash of Ether that was worth up to $5 billion at the beginning of this year. Depending on how much he’s still holding, it may now now be less than $1 billion. If that’s the case, ConsenSys’s capacity to fund projects is probably dwindling too.
Besides the bear market, though, another thing causing problems at ConsenSys’ is its “weird operating structure,” according to a new in-depth by Forbes. What’s weird about it? That there is no structure at all. Lubin wanted it to be decentralized and sort of anarchic—like Ethereum. Former employees told Forbes that the approach led to “ugly politics.” One said staffers close to Lubin get special treatment, and that “accountability varies widely from team to team.” Another said working there “feels a little like Survivor.”
No more, according to Lubin. He told Breaker: “We’re going to get a lot more rigorous in terms of milestones and timetables.” And he’s not ruling out layoffs.
It’s been quite the rough stretch for the concept of decentralization. But perhaps a little bit of structure, even some dreaded centralization, is necessary for decentralized technologies to advance. | | All eyes on Zcash. The so-called privacy coin took a big step toward widespread adoption yesterday when Coinbase began listing it for its retail customers to buy, sell, send, receive, and store. But the exchange, like law enforcement officials, is still coming to terms with Zcash’s capabilities.
Zcash uses a novel mind-bending cryptographic method called zero-knowledge proofs to give users the option to transact anonymously, using so called shielded addresses. Zcash’s development of a digital coin that is anonymous as real cash stems from idealism. CEO Zooko Wilcox told MIT Technology Review last year that the ultimate goal is to “provide economic opportunity and financial freedom to every human.” Criminals trying to hide their tracks using cryptocurrency probably appreciate the effort too, however.
In a blog post explaining the new service, Coinbase said that at first, customers will not be allowed to use their Coinbase accounts to send Zcash to anonymous addresses. In the future, it said, “we’ll explore support for sending (Zcash) to shielded address in locations where it complies with local laws.” Those local laws likely don’t account for Zcash, since law enforcement officials and policymakers are still trying to figure it out. The latest case in point is a request by the Department of Homeland Security for input on how to conduct “forensic analysis” on Zcash and Monero, another coin that offers enhanced privacy (though not via zero-knowledge proofs).
Zcash CEO Zooko Wilcox says people shouldn’t be making such a big deal about this DHS notice. He’s probably right. But it does show how far from settled Zcash’s standing with law enforcement, and the world at large, still is—Coinbase listing notwithstanding.
(Also see: “Sitting with the cyber-sleuths who track cryptocurrency criminals”) | | Loose Change Fill your pockets with these newsy tidbits. | | | Conflux, a new blockchain project from a group of academics including a Turing Award winner, has raised $35 million from China-based VC funds and internet companies. (CoinDesk) | | | | Attackers have stolen around $100,000 worth of the cryptocurrency Vertcoin via a successful majority attack, in which they gained control of the majority of the network in order to double-spend coins. (Breaker)
+How secure is a blockchain really? (TR) | | | | Crypto-friendly US Congressman Warren Davidson, of Ohio, has introduced a plan for legislation that would clarify the regulatory environment for ICOs. (Cleveland.com) | | | | Sweden’s central bank predicts that the nation will “probably become cashless in 3-5 years.” (Reuters) | | | | Coinbase is launching a year-long research project to figure out how to “help people own more of who they are online.” (CoinDesk) | | | The Money Quote “We are going to be decentralized as f*ck.” —Richard Craib, founder of Numerai, an Ethereum-based marketplace for predictions that its hedge fund can use to make investments. Numerai distributed its currency, which Craib calls “Ethereum’s most used token,” via giveaways called airdrops. Its new plan to open the service so that any hedge fund can use it, and relinquish control over the token supply could be an an effort to steer clear of the SEC’s crackdown on token sales. But the SEC hasn’t yet targeted a company that did an airdrop. (CoinDesk) | | | |
