#86: The Winklevosses’ long crypto game

Any port in a storm

Chain Letter Blockchains, cryptocurrencies, and why they matter 09.11: Any port in a storm Welcome to Chain Letter! Great to have you. Here’s what’s new in the world of blockchains and cryptocurrencies.  Under construction: a bridge to money’s future. Cameron and Tyler Winklevoss are again making crypto headlines, this time for launching their own “regulated stablecoin.” The Gemini dollar is an Ethereum-based crypto-token meant to be pegged to the US dollar. Gemini exchange account holders can convert US dollars to the new tokens, which can be sent to Ethereum addresses or converted back into dollars. The twins promise not only that each circulating Gemini dollar will be backed by a real dollar in a bank deposit, but also that the deposit will be “examined monthly by an independent registered public accounting firm to verify the 1:1 peg.” Perhaps most importantly, it has earned the blessing of the New York Department of Financial Services.   The Winklevosses’ new coin enters an already crowded and noisy field. The appeal of stabelcoins is written right into their name: cryptocurrencies are nothing if not volatile, and pegging tokens to fiat currency means investors can switch from other crypto assets into something they know won’t crater in value. They’re generally thought of as a way for people to consolidate gains after a rise in crypto prices, but they could also make cryptocurrency a more useful store of value and form of payment. The idea has caught on. Gemini wasn’t even the only dollar-pegged token to launch yesterday—the blockchain startup Paxos announced its own Ethereum-based token, which will follow a similar model. Both of those coins, which are fully and transparently collateralized, are a far cry from the most popular stablecoin, Tether, which hasn’t yet been proven to be fully backed. They are also distinct from number of other well-funded projects that are not backed by fiat money and instead use complicated algorithmic schemes to maintain their pegs (See: “Stablecoins are trending,” but they may ignore basic economics”) In a field where so many observers and enthusiasts are hyper-focused on short-term price movements, the Winklevoss twins are looking toward the long-term. They’ve built a popular, regulated exchange, and are creating a self-regulating organization meant to stamp out the kinds of shady industry practices that have kept regulators skeptical and institutional investors on the sidelines. They’re exploring new technical approaches to securely storing cryptographic keys. The Gemini dollar, they say, will give fiat currency “the same desirable technological qualities of cryptocurrencies,” and bring them closer to accomplishing their stated mission: to “build a bridge to the future of money.” Is the blockchain space really nearing its “ceiling”? Ethereum creator Vitalik Buterin apparently thinks so. Much of the growth we’ve seen in the past few years has been spurred by marketing efforts aimed at getting wider adoption, but that strategy is starting to run out of gas, Buterin recently told Bloomberg. “If you talk to the average educated person at this point, they probably have heard of blockchain at least once. There isn’t an opportunity for yet another 1,000-times growth in anything in the space anymore,” he said. Now it’s time to “go from just people being interested to real applications of real economic activity,” he added. But there’s no telling how long that might take, and in the meantime the market seems impatient. Crypto prices have continued to tumble this week, led by Ethereum’s cryptocurrency, ether, whose price has fallen nearly 85 percent since it peaked in January. Featured EmTech MIT Speaker: Clara Vu Combining the latest advances in artificial intelligence with robots could take AI to the next level. Clara Vu, Cofounder and VP of Engineering at Veo Robotics joins us at EmTech MIT to discuss the future of robots and AI. Secure your seat today! Loose Change Fill your pockets with these newsy tidbits. • The US SEC has suspended two trading products, one Bitcoin-related and the other Ethereum-related, that are listed as exchange-traded funds (ETFs) on the Stockholm Stock Exchange. (CNBC) • Ripple’s general counsel has left the company. (Quartz) • WeChat has apparently begun blocking Bitmain’s sales channel, as well as accounts that offer cryptocurrency price predictions. (CoinDesk) • Only one digital currency has seen big gains during the past month: Dogecoin, which was originally launched as a joke. (Bloomberg) • China’s supreme court has ruled that blockchain-based evidence is legally binding. (ETHNews) The Money Quote “When we started a few years ago, our customers were not ready for a public network. Fast forward three years, they’re willingness has gone up, and the maturity of the public networks has changed a lot.” —Adam Ludwin, CEO of Chain, which has been acquired by Lightyear Corporation, a for-profit entity focused on developing the Stellar blockchain. (Reuters) We hope you enjoyed today's tour of what's new in the world of blockchains and cryptocurrencies. Send us some feedback, or follow me @mike_orcutt. Know someone who might enjoy reading Chain Letter? Was this forwarded to you, and you'd like to see more? Discover the emerging tech that will change the world. Attend EmTech 2018 September 11-14, MIT Media Lab Cambridge, MA View this in a browser You received this newsletter because you subscribed with the email address: contacto1745.send-mail@blogger.com edit preferences   |   unsubscribe   |   follow us      MIT Technology Review One Main Street Cambridge, MA 02142

The new stablecoin in town

September 11, 2018

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QUOTE OF THE DAY

“Economists and journalists often get caught up in this question: Why does Bitcoin have value? And the answer is very easy. Because it is useful and scarce.” - Eric Voorhees

MARKET

COIN	PRICE	24H
BTC	$6,314.824752	-0.29%
ETH	$191.809857	-2.28%
XRP	$0.26504	-3.1%
BCH	$465.097375	-2.5%
EOS	$4.952199	-1.85%

*Information as of 9:30 AM EST

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NEWS

Tether, but transparent

Winklevoss Brothers Get Green Light to Launch Fiat-Backed Stablecoin

GEMINI DOLLAR SPECS

• According to Gemini's Medium yesterday, the exchange will be launching its own fiat-backed stablecoin, Gemini Dollar
• Gemini Dollar will operate as an ERC-20 token on the Ethereum network so users can easily send the stablecoin to their Ethereum wallet
• In addition, the Winklevoss brothers hope to use Gemini Dollar to solve time delay issues between time-restricted fiat markets that halt over the weekend and the 24/7 cryptocurrency market

WORLD'S FIRST

• In the past, 1:1 fiat-backed stablecoins have been scrutinized for not being transparent about their actual fiat holdings
• Now, however, the Winklevoss brothers are taking on that problem head-on by having Gemini dollar become the "world's first" regulated stablecoin
• With oversight by the New York State Department of Financial Services (NYDFS) and monthly examinations by an "independent public accounting firm", Gemini Dollar looks to be the most trustful option to date

NYDFS superintendent Maria T. Vullo commented to Forbes:

“These approvals demonstrate that companies can create change and strong standards of compliance within a strong state regulatory framework.”

THE CRITICS

• Though many praised Gemini for creating (hopefully) one of the most transparent stablecoins to date, not everyone saw the news as groundbreaking

Meltem Demirors of crypto investment firm CoinShares tweeted her thoughts on the new release:

"So basically we have more tether? Feel like USD-collateralized stablecoins are only marginally interesting at best. There are dozens of efforts under way, and I don't see natural demand for these assets. Hope this makes them money, because it sounds like it was expensive to print!"

To learn about the different types of stablecoins besides fiat-backed coins, visit here.

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RESEARCH

72% Investors Plan to Buy More Cryptocurrency This Year

BTFD

• A new survey conducted by SharesPost finds that 72% of cryptocurrency investors are planning on buying more crypto some time within the next 12 months
• This survey was conducted in July and pinged 2,490 retail investors and 528 accredited investors
• Investors are intrigued by the strong decline in the market and are still believers in their original investment, so they are willing to double down

SLOWER ADOPTION

• Although a majority of investors admit that they are going to buy more crypto during the dip, they now believe that crypto mainstream adoption will take longer
• In January, when crypto was hitting all-time highs, investors were predicting the space to reach mainstream adoption by 2020
• Now after the bear market that has spanned 2018, respondents think that mainstream adoption will happen slower, predicting 2025 for mainstream adoption

Rohit Kulkarni, managing director and head of research at SharesPost, commented on the findings:

“Based on our survey, crypto investors haven’t lost faith and are planning to buy more. Importantly, this survey indicates that this correction is separating long-term believers from short-term day traders. Investors remain bullish on Bitcoin and Ethereum over the next 18 months because they are the leading digital currencies globally. Both enjoy relatively low correlation to other asset classes and can be an ideal way for investors to diversify a portfolio of stocks and bonds.”

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OPINION

'Crypto-Assets are Here to Stay', EU Watchdog Chief

HERE TO STAY

• Recently EU regulators met at the EU Economic and Financial Affairs Council (ECOFIN) in Vienna, Austria
• After the meeting, the Council concluded that cryptocurrencies are going nowhere
• The Council acknowledged the bear trend of the market but does not think that it takes away from the potential of the technology

European Commission Vice-President Vladis Dombrovskis said in the opening comments of the meeting:

“We see that crypto-assets are here to stay. Despite the recent turbulence, this market continues to grow. In particular initial coin offerings, or ICOs, we see they have the potential to emerge as a viable form of alternative financing. Already last year, ICOs helped raise over 6 billion dollars in funding and this year this figure will be substantially bigger.”

REGULATORY FRAMEWORK

• EU regulators are debating about how to classify cryptocurrencies, either use already existing rules or create totally new rules
• However, there is one thing that regulators can agree on, we need a clear answer for how to handle cryptocurrencies that can apply to the entire EU

Dombrovskis talked about the timeline for future regulations:

“Many Member States today supported the need for such mapping, so we expect to conclude this assessment later this year. This will provide a solid ground to build on and to decide on further steps in this area.”

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ANALYSIS

ICOs Slump in August to Reach Lowest Funding Level in 16 Months

16 MONTHS LATER

• According to Autonomous Research, startups who funded via initial coin offerings (ICOs) only raised $326 million
• This is the lowest month recorded to date since May 2017, just before ICO funding started to boom

Looking at the chart below, it's easy to see that ICO funding followed strongly with the entire crypto market as funding has been declining since January 2018:

ICOs GETTING BATTERED

• ICOs have been strongly scrutinized from a regulator perspective since there is no third-party intermediary involved to reduce the risk of fraud
• In addition, startups that previously raised funding via an ICO are now being blamed for Ether's price dive since they are "cashing out" their ETH to cover expenses
• However, though ICOs are under fire in 2018, Binance CEO CZ claimed earlier this year that they are "necessary" because of strict venture capitalist procedures

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BITS

• Financial services blockchain startup Chain has been acquired by the Stellar-focused firm Lightyear.
  
  
• Former Ripple general counsel Brynly Llyr is taking on the same role for crypto payments startup Celo.
  
  
• Canada’s “first” and “only” regulated Bitcoin (BTC) fund First Block Capital Inc. has obtained mutual fund trust status.

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LEARN THE LINGO

Bitcoin Maximalist

noun

A person who is a firm believer in Bitcoin and is skeptical of altcoins.

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2 new partnerships, Global CEO summit, new Tokyo office, Tech Update and more! - IOST Bi-Weekly update: 10/09/18

Get caught up with IOST's progress for the last 2 weeks

IOST UPDATE SEPTEMBER 10th 2018 Hi ,  it's been a busy time for IOST over the last 2 weeks. We launched our official Tokyo office and added two new full-time members to the IOST Japan Team, entered into partnerships with two companies, gave keynotes at blockchain conferences in Copenhagen and Philadelphia, and much more! Our CDO Kevin Tan also released a long form technical explanation of how IOST is building a better blockchain. Read on for a full update on everything IOST!  JIMMY TO SPEAK AT GLOBAL B7 CEO SUMMIT IOST CEO Jimmy Zhong will represent IOST at Blockchain Seoul 2018 next monday, opening the event with the Global B7 CEO Summit. The B7 Summit brings together the CEO's of 7 of the world's most powerful blockchain projects including IOST, Icon and Tezos. Sponsored by Seoul Metropolitan Government and organized by Money Today Group, Korea Blockchain Association, ZDNet, and the Presidential Committee on the Fourth Industrial Revolution of the Republic of Korea, Blockchain Seoul 2018 will be one of most important blockchain events of 2018! TOKYO OFFICE AND JAPANESE EXPANSION One of our key objectives over the past two weeks was aggressive expansion of IOST's presence in Japan. We are happy to announce the opening of an official IOST Tokyo Office, located in the international Blink Smart Office workplace! Additionally, we are very excited to announce two new additions to the IOST Japan team: Makoto Ota, who will be leading Business Development in the Japanese market and Kanna Sato, who will be the Community Manager for IOST in Japan. Both have extensive experience in Japan's tech startup ecosystem and are invaluable additions as we expand IOST operations in Japan.   COPENHAGEN TECH FESTIVAL IOST hosted a workshop with Reebo at the Copenhagen Tech Festival this past weekend covering the topic of the effects of societal norms on large-scale blockchain adoption. The Copenhagen Tech Festival is a 4-day event sponsored by the Danish government that partners with tech startups to explore the societal impact of new technologies. IOST European Lead Leeho Lim was interviewed at the event - you can read the full article here. US GROWTH LEAD GIVES KEYNOTE AT COINVENTION IOST Growth Lead Simon moderated a panel of top crypto influencers and gave a stellar keynote at Coinvention in Philadelphia last weekend! His speech covered careers in the crypto industry and explained how the increasing interest and investment from major businesses portends great things to come and shows that the current blockchain bubble pop is very different than tulip fever. NEW PARTNERSHIP - CODE CHRYSALIS IOST has entered into a partnership with the offline tech school "Code Chrysalis" which provides an intensive coding bootcamp for engineers. The school was opened last year and has already attracted major attention for its successes. IOST is will be working with Code Chrysalis to launch blockchain coding courses very soon!    NEW PARTNERSHIP - GINCO  We are excited to announce our partnership with Ginco, one of Japan's most popular cryptocurrency wallets. IOST will be added to their digital wallet following the launch of our mainnet and in the meantime we will be co-hosting an event in Tokyo with their team and working with them to spread blockchain awareness in Japan! MORE TECH ARTICLES FROM THE TEAM! IOST Co-Founder and CDO Kevin Tan published a long form technical explanation on Hackernoon of what IOST is aiming to achieve. You can read his article on how IOST is building a better blockchain here. IOST Core Engineer and first employee Pejian He took time out from developing the second iteration of IOST's Testnet to speak about his experience with IOST and the blockchain industry. You can read his interview here. IOST FEATURED IN TOP KOREAN MEDIA Financial News, a major Korean economics newspaper, released a print article about DApps and ecosystem building progress. The article introduced IOST and Bluehill's achievements as exemplary building practices and also comments on Lakao, Upbit and other platform projects. It's great to see IOST getting covered in traditional media! TECH UPDATE Consensus Protocol [Receipt] Receipt bug fixed, added receipt store endpoints and tests [Txpool] Added transaction deletion endpoints and related tests [Voting] Voting design and specs reviewed [Block] Block head reconstructed, signature moved from block head to body [PoB] Modified broadcast logic, made Block Head broadcast first [Genesis] Receipt added in genesis block [Genesis] Dynamic creation of genesis block WIP [Stress Tests] Running stably under large volume parallel transactions (10000ms intervals), various performance metrics optimized after tests [Crypto Module] Crypto module tests added, with comparison of two cryptography algorithms [Locks] Fixed MVCC locks bug [Storage Layer] Refactored storage, RocksDB backend integration finished P2P Network [Network & Log Lib] Optimized network and log libraries [iServer] iServer refactored & optimized for local build & run Virtual Machine [V8VM] Console log library supported in IOST V8VM [V8VM] ObjectBuffer of V8VM implemented, precomputation logic refactored [RPC] JSON support added in RPC module [Block Explorer] Data model layer finished, DB interaction finished [Demo Game] Testnet demo game backend finished [Endpoints] JS endpoints of V8VM largely improved, RequireAuth and CallWithReceipt added The last two weeks were certainly a busy period for IOST with new developments and activity around the world. There are also many exciting events on the horizon for IOST including the launch of our upgraded Testnet, the upcoming release of the CryptoHeroes beta, and the soon to be announced BERM Protocol! You can stay up to date on all things IOST by following us on social media and joining the conversation! Sincerely, IOST Team Copyright © 2018 IOST, All rights reserved. You are receiving this email because you signed up to our mailing list via the IOST.io website Our mailing address is: IOST 601 4th St San Francisco, CA 94107-1635 Add us to your address book Want to change how you receive these emails? You can update your preferences or unsubscribe from this list.