Friday, February 15, 2019

ETF clock restarts

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ETF COUNTDOWN: The clock just started on the latest effort to launch a bitcoin exchange-traded fund (ETF).

The U.S. Securities and Exchange Commission (SEC) announced it was beginning its review of a bitcoin ETF rule change proposal filed by NYSE Arca and Bitwise Asset Management on Feb. 11, and the proposal itself was published in the Federal Register on Feb. 15, meaning the regulator has 45 days to make its initial decision on whether to approve, reject or extend the proposal.

The SEC has at most 240 days to make a final decision on whether to approve or reject the ETF. Members of the general public looking to file responses to the rule change proposal have three weeks to submit any comments.

Many proponents of bitcoin ETFs believe the funds will bring new investors and increased liquidity to the market.

NYSE Arca and Bitwise announced their attention to launch a bitcoin ETF earlier this year, filing the rule change proposal the same day. However, due to the government shutdown, the SEC did not publish the filing in the Federal Register, meaning the agency was not examining the proposal.

That changed today, with Friday’s edition of the Register starting the latest countdown. Full Story

LIGHTNING FAST FOOD: Over 150 people bought pizza with bitcoin this week by using the Lightning Network. Crypto payments startup Fold, which launched the web-based Domino's portal on Wednesday, basically makes fiat pizza purchases on behalf of hungry lightning users.

Fold product lead Will Reeves put it this way: “We’re trying to make bitcoin fun again and illustrate that lightning is at a point where it is mainstream-ready.”

The Fold web app plans to integrate lightning for all its shopping options over the next six months, including Starbucks, Whole Foods, Dunkin Donuts, Target and Uber. Since these aren’t official partnerships, the crypto startup places orders on users’ behalf and converts payments to fiat to offer a seamless experience. It remains to be seen how this will factor into the company’s revenue model once the lightning options are out of beta. (A request for comment from Domino’s was not returned as of press time.)

“The average purchase was $25,” Reeves said of the Domino’s experiment. “Since the average lightning payment is usually less than $5 so this was able to stretch the Lightning Network to higher value payments for the first time at volume.” Orders came in from every state across the U.S., he added.

After the Fold lightning integration, Reeves said the startup plans to launch mobile versions of the Fold app for both Android and iOS. This seven-person startup, which is incubated by venture studio Thesis, is currently fundraising and looking to diversify its retail brand offerings. Full Story

TRADING MILLIONS: While crypto-land is abuzz about JPMorgan’s plan to move U.S. dollars around via blockchain, a smaller New York bank has already been doing this for nearly two months. Since launching at the start of the year, Signature Bank’s blockchain-based Signet system has on-boarded more than 100 clients who are using it to send each other millions of dollars a day, 24/7, bank executives said.

“We can say there are trades going on in the millions some days and 10s of millions other days and I would say the number of clients we have is in the triple digits,” Joseph J. DePaolo, president and CEO at Signature Bank, told CoinDesk.

Signature is one of the few banks in the U.S. that will provide deposit accounts to cryptocurrency startups, a group that also includes fellow New Yorkers at Metropolitan Bank and Silvergate Bank in San Diego. But while these clients were the first group to adopt Signet, the bank says non-crypto businesses are signing up as well.

In addition to the previously announced American PowerNet, an independent electrical power trading firm that made Signet the payments platform for its renewable energy customers, DePaolo said Signature is bringing on two other “ecosystems” where rapid movement of money and property is important.

"We will shortly onboard a substantial cargo ecosystem and wholesale diamonds," he said, declining to name either organization. He also said Signature is in talks with a title insurance company.

Explaining why such an entity would be interested in real-time payments, he said: “If you’ve ever been involved in a commercial real estate closing, usually all the lawyers are sitting around eating lunch waiting for the wire transfer.” Full Story

WINDOWS MINERS: A number of apps in Microsoft’s app store have been found to be able to illicitly mine cryptocurrency. The eight apps, discovered by Symantec on Jan. 17, hosted a version of Coinhive, a script for mining the monero cryptocurrency that has proved popular with cyber criminals.

In a blog post on the discovery, Symantec said it had reported the apps to Microsoft, which subsequently took them down. The apps all ran on Windows 10, including Windows 10 S Mode, which restricts app downloads to the Microsoft Store.

Three developers, DigiDream, 1clean and Findoo, reportedly produced all the apps. Symantec wrote in the post: “In total, we discovered eight apps from these developers that shared the same risky behavior. After further investigation, we believe that all these apps were likely developed by the same person or group.”

After being downloaded and opened, the apps work by fetching the monero mining JavaScript library by triggering Google Tag Manager in their domain servers. The mining script is then activated and harnesses the bulk of the victim computer’s CPU cycles to mine the cryptocurrency.

“Although these apps appear to provide privacy policies, there is no mention of coin mining on their descriptions on the app store,” Symantec said. Full Story

CoinDesk Research surfaces the key data, trends and events with its State of Blockchains reports. We will examine individual aspects of cryptocurrencies and fundamental metrics going forward in these reports. We observed the state of Bitcoin (BTC) fees recently.

You can check out the full article here, but here's a snapshot:

Bitcoin now sits below $4,000 and the demand is returning to parity with that of Q4 in 2017. Astonishingly, fees have remained low. This begs the question of how we could have the same increased demand levels but not the commensurate increase in fees. The answer is Segwit Adoption.

Segwit is a software upgrade that allows transaction data to be minimized so a user can fit more transactions in a given block. Only 10 percent of transactions were using Segwit during the fee crisis of Q4 2017, while more than 35 percent are now using it. Jimmy Song, blockchain programmer, simplifies it as “Segwit transactions [result] in a block size of around 2MB”. Thus fees and confirmation times were reduced through the solution of an effective block size increase.

For an in-depth view of crypto data, you can also check out the CoinDesk Crypto-Economic Explorer here.

FLASHBACK FRIDAY

Who remembers Joon Ian at Consensus 2015? Here's a flashback of one of our favorite CoinDesk leaders. Register to see him five years older (and wiser) at Consensus.

Give @Joonian a special shoutout on Twitter if you'll be seeing him at Consensus in 2019!

RAISED TARGET: The momentum of bitcoin's high volume bullish move last Friday has petered out with prices stuck near $3,600 for the seventh day straight. The immediate outlook is neutral, with a move above last Friday's high of $3,711 now required to revive the short-term bullish view. If the bulls can hit that target it would open the doors to $4,000. Full Story

BEST OF THE BEST

COMPUTERWORLD: Company CIOs may be doing blockchain all wrong, according to a piece from Computerworld.

Reporting on a research note from Gartner, the article says that businesses’ IT chiefs are primarily using the tech for proofs-of-concept trials addressing use cases that would be appropriate for a conventional database – and they’re missing out on the tech’s most innovative feature.

After polling consulting firms with clients that have deployed blockchain in some form, Gartner found that shared record keeping and asset tracking are the primary target use cases. Firms are often not using blockchain’s core advantage: to provide “immutable data audit trails for exchanging a single version of transactional truth,” the piece says.

"That no one is using those innovative features calls into question why they're using blockchain. Just go use a database," said Gartner vice president and analyst Avivah Litan. "But, the reason they're using blockchain is for the distributed ledger technology."

THE REST

MEDIAPOST: Blockchain has dominated industry conversations over the last year, so much so that the term has been dubbed the most overrated word of 2018 by ad execs, according to a poll by MediaPost.

The research found that 31 percent of advertisers were significantly more likely to consider “blockchain” overrated than agencies (22%). MediaPost’s Research Intelligencer polled 120 marketers and 181 agency executives last month.

“AI” and “programmatic” came in at equal second most overrated, while “crypto” was close behind in third place.

THE NEW YORK TIMES: The road to blockchain adoption may mirror the growth of the internet in the early 1990s, rolling “from anarchic potential to a more regulated and controlled reality," according to Blockchain And The Law: The Rule of Code, a new book by legal experts Primavera De Filippi and Aaron Wright.

According to a New York Times review of two books analyzing the nascent technology, blockchain still has a ways to go before it can live up to its ideals. “The Blockchan and the New Architecture of Trust” by Kevin Werbach notes that at present, intermediaries who could be replaced by blockchain tools are actually beneficial in many instances and so these tools may actually just supplement the existing paradigm.

Moreover, blockchain’s autonomy may make it inflexible, which leaves it vulnerable to unforeseen consequences, according to De Filippi and Wright. This, in turn, may pose a barrier to adoption, though existing regulations may help by influencing just how certain blockchains are run.

WHO WON #CRYPTOTWITTER

RUNNER UP

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Cardano Community Newsletter - February 15, 2019

Welcome to the Cardano Newsletter!

Published by the Cardano community team every two weeks, this newsletter will provide you with news, updates and events about the project! If you would like to unsubscribe from the Cardano newsletter, you can do so by clicking "unsubscribe from this list" at the bottom of this email.

Announcing the Ambassador Program

The Cardano Ambassador Program was recently launched and the first group of community Ambassadors were announced! The program is designed to recognize community members who go above and beyond, offering regular, consistent and positive contributions to the community and wider project.

Learn more about the Ambassador Program

Cardano Roadmap Update

With the latest roadmap update, there was an announcement on how the Cardano Roadmap would be changing. The timer on the roadmap page has been removed and updates about important software releases will be published intermittently. Further details will be provided at the IOHK Summit by IOHK CEO, Charles Hoskinson.

Read the Announcement

Attend the IOHK Summit

Tickets for the IOHK Summit are now on sale! The event will be held on April 17-18, in Miami, Florida. There will be workshops and talks from all areas of IOHK development, hackathons with IOHK engineers and even a cryptographic puzzle game in Miami!

Get your Tickets

Yoroi Wallet on Android

Yoroi is a light-client wallet for Ada. It was first released as a Google Chrome extension and now has been released as an Android app. In its first week, it reached the #1 spot in Productivity apps in the Google Play Store for Japan!

Learn more here

Upcoming Meetups

We have exciting news to share about upcoming Cardano meetups around the world. In London, there will be a meetup in collaboration with Coinscrum to introduce the recently launched smart contract languages, Plutus and Marlowe. Nearby in Bristol, the IOHK team will be soft launching the Symphony of Blockchains Exhibit, which is a multi-sensory, virtual reality experience that brings to life the origin of blockchain technology! And in Amsterdam, at a community-organized event, Manuel Chakravarty, Language Architect at IOHK, will be presenting on Plutus.

RSVP to these events!
March 4, in London: Coinscrum Plutus & Marlowe Meetup
March 5, in Amsterdam: Cardano Community Meetup
March 14, in Bristol: Symphony of Blockchains Meetup

Nothing in your area?

See if a group already exists on our meetup.com page and connect with the local organiser!

OR

Start your own Cardano meetup group? Learn more here!

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Grayscale tells all 🤔

February 15, 2019

Grayscale's Q4 Report Reveals Capital Inflow Concentrated in Institutions

Released Thursday, Grayscale Investments analyzed its cryptocurrency products and found some surprising trends.

Here's the breakdown of Grayscale's capital inflow for the fourth quarter:

Grayscale found 66% of the capital inflow could be attributed to institutions.
Investors in the United States accounted for 99% of the capital inflow despite having a total distributed geography of 67% United States investors.
Investors in the United States accounted for 99% of the capital inflow despite having a total distributed geography of 67% United States investors.

Allocation stays steady

Though the falling prices certainly aided to the deceleration of Grayscale's growth in 2018, existing portfolio managers show no signs of lowering their portfolio allocation to crypto.

While the allocation is still minuscule compared to other assets, funds indicated they have long-term time horizons for the new asset class.

Still, the bear market hasn't helped the growth of these funds with venture funds actually outpacing new crypto hedge funds in 2018.

ETHEREUM

Ethereum Wants to Avoid ASICs New Poll Shows

According to a new poll, about 76% of respondents are in favor of implementing ProgPoW on Ethereum.

The new upgrade would replace ETHhash, Ethereum's current mining algorithm, and also help fight ASIC miners from taking over the network.

The reason? ASIC miners dramatically increase mining competition which means GPU miners will have to splurge on more expensive equipment to keep up.

Caught in controversy

The decision to add ProgPoW has been an ongoing controversy for months.

Because the new code is ASIC resistant, the network isn't guaranteed to be free from ASIC miners.

Actually, some developers argued that making it harder to create an ASIC miner would actually only help the best mining manufacturing companies to secure significant market share in the industry.

Nonetheless, the code seems like it will move forward anyway with only 24% of respondents in opposition.

RIPPLE

Ripple CEO Brad Garlinghouse Calls Out JP Morgan for "Missing the Point"

In a tweet published Thursday, Ripple CEO Brad Garlinghouse took a stab at JP Morgan for launching their new digital asset called JPM Coin.

Garlinghouse explained:

"As predicted, banks are changing their tune on crypto. But this JPM project misses the point — introducing a closed network today is like launching AOL after Netscape's IPO. 2 years later, and bank coins still aren't the answer."

The future is public

Garlinghouse has been fighting the idea for the last two years as his startup Ripple looks to help banks interact faster and more seamlessly - just like JPM Coin.

In his first argument about the subject, Garlinghouse explained that bank coins like JPM Coin would create "an even more fragmented currency landscape than what we have today."

But the two could soon meet on similar turf. Though Ripple has torn through the industry and vigorously made partnerships to conduct trials, JP Morgan's influence will play to its strength.

BITS

But wait, there's more...

😨 Nvidia says crypto drop-off in the fourth quarter drove sales down.
🤨 Survey finds 41% of institutional investors will invest in ICOs within the next 5 years.
🍕 Crypto startup Fold is making pizza delivery possible with lightning.

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