Ooh, yet another juicy row in crypto-land: Cryptocurrency enthusiasts love to argue over whether this or that thing is truly decentralized. It's one of their favorite pastimes. That's why the news that Coinbase, the popular US platform for retail cryptocurrency traders, will start listing Ripple's coin, XRP, has so many of them up in arms.
This particular saga has been slowly unfolding for nearly a year, since it was reported that Ripple, a startup aimed at getting banks to use its blockchain network to settle payments between themselves, had tried unsuccessfully to "buy its way" onto major exchanges. It apparently offered Coinbase a loan of $100 million in XRP with the option of paying it back in dollars, which could have allowed the exchange to profit from the deal. Coinbase held off, and even yesterday before the surprise announcement seemed unlikely to list XRP any time soon. The widespread shock and dismay at its sudden acceptance onto the platform is part pragmatic, part ideological, and, ultimately, reflective of a contradiction that lies at the heart of the fledgling industry.
First, the pragmatic part. Due to the level of control that Ripple, a private company, has over XRP, some observers think the US Securities and Exchange Commission might eventually deem it a security, which would subject it to the same strict rules that govern stocks and bonds. No one knows what that would mean for the exchanges that have already listed it. In light of this, Coinbase's decision to list XRP could be viewed as reckless. At the very least, it seems contrary to the image that Coinbase has been crafting for itself as an exchange that proceeds with caution and prioritizes complying with regulators. Maybe it knows something we don't?
The other part of the debate hinges on notions of crypto-idealism. Purists are upset that Coinbase has listed a coin they don't see as a bona fide cryptocurrency. Some of those same purists root for their favorite coins to earn Coinbase listings, since it is seen as a stepping stone to broader adoption. But Coinbase, which now lists 17 tokens, is a traditional technology startup, with venture capitalist backers and a CEO—in other words, decidedly centralized. Why should it be considered an arbiter of what makes real cryptocurrencies? Wasn't the whole point of blockchains to do away with the need for such authorities?
In some ways, it's unfortunate that this chapter of the Coinbase/XRP saga has come to a close, since it was a good illustration of the contradictory passions fueling the development of blockchain technology as well as the the profound regulatory uncertainty clouding its future. Not to worry though: cryptocurrency fans are good at finding new things to fight about.
What's in a name? The Zcash Company, the for-profit entity that developed and maintains Zcash, is changing its name to The Electric Coin Company. Why? "For clarity," says the company. Presumably, it's an attempt to draw a more distinct line between the company and the currency, perhaps in the name of convincing regulators and critics that Zcash is not centrally controlled. Questions about whether the company has an outsized influence over the network have dogged it since the currency launched in October 2016, and they resurfaced recently after we learned the company had secretly discovered and fixed a critical flaw in the system. (see "A cryptocurrency company's covert bug fix has confusing legal implications")
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Mark Zuckerberg said in a recent interview that one blockchain application he's been contemplating pertains to authentication, and would amount to "replacing the notion of what we have with Facebook Connect with something that is truly distributed." However, he admits, he hasn't "figured out a way to make this work out." (CoinDesk)
- A major Brazilian investment bank is launching a so-called tokenized security that will be backed by distressed real estate assets in Brazil. Investors will apparently receive dividends from the recovery of those assets. (Bloomberg)
- Crypto winter hasn't stopped the demand for cryptocurrency services in Argentina from continuing to grow. (CoinDesk)
- Warren Buffet says Bitcoin "is a delusion" that "attracts charlatans." (CNBC)
- HTC's Exodus 1, its "blockchain phone" that has been available since December, has added around 20 new decentralized applications, and will support a browser made by Opera that lets users make micropayments to websites. (The Verge)
- A new startup called CasperLabs, which aims to build a new blockchain based on proof-of-stake, has hired Vlad Zamfir, who has helped spearhead Ethereum's work in the same area. (CoinDesk)
