#90: The cryptocurrency industry is about to collide with Capitol Hill

Going steady

Chain Letter Blockchains, cryptocurrencies, and why they matter 09.25: Going steady 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. AI is a global movement set to deeply change our society. Are you ready for it?   Join us in March in San Francisco for EmTech Digital. Tickets are limited—secure yours today. 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) 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 where tech, business, and culture converge. Attend EmTech Digital March 25-26, 2019 San Francisco 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

HODLing down, Holding up

September 25, 2018

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QUOTE OF THE DAY

“I do think Bitcoin is the first encrypted money that has the potential to do something like change the world.”

- Peter Thiel

MARKET

COIN	PRICE	24H
BTC	$6,450.328703	-2.46%
ETH	$211.120674	-9.93%
XRP	$0.462101	-12.57%
BCH	$438.670029	-6.59%
EOS	$5.203671	-9.15%

*Information as of 9:30 AM EST

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ANALYSIS

HODL May Be Dead, Amount of Bitcoin in Active Wallets Near All Time Highs

More individuals are holding Bitcoin

According to blockchain data analytics firm Chainalysis, 4.8 million Bitcoin are held by wallets of individuals as of the end of August. This represents about 32% of the total supply of Bitcoin (minus lost coins).

This number is up significantly in comparison to the end of last year when Bitcoin hit its all-time high. Last December, 3.8 million Bitcoin or 26% were held by individuals.

Chainalysis found 6.3 billion Bitcoin wallets with a balance that have been inactive for the past year, representing the ones left HODLing.

More liquid supply

More Bitcoins in the hands of individuals means that the currency is becoming more liquid. It is easier than ever to buy into and sell out of Bitcoin.

It could be that more people are using Bitcoin for one of its intended purposes: as a medium of exchange.

Chainalysis economist Philip Gradwell talked about how this is good for adoption:

"They are ready – if things were to change, [if] the opportunity to spend it were to arise – to actually spend it. We've kind of overcome the first hurdle of adoption, getting bitcoin into people's hands."

BTC maturing and becoming less volatile

More individuals using personal wallets to transact Bitcoin has led to less volatility in Bitcoin's price.

With less price movement, there is less fluctuation between investment accounts and active transacting accounts, a sign of a maturing market.

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ADOPTION

How ConsenSys is Supplying Texans with Electricity using Ethereum

What is ConsenSys?

If you are not familiar with ConsenSys, it is a sort of incubator that consists of software companies building infrastructure, applications, and practices for the Ethereum network. ConsenSys is the largest blockchain software company in the world with roughly 900 employees.

The organization is operated by Joseph Lubin, one of the co-founders of Ethereum.

Supplying electricity to its first clients

On Monday, one of ConsenSys's blockchain startups named Grid+ announced that it has supplied electricity to its first customers. Grid+ is using the Ethereum mainnet to distribute renewable energy to four customers in Texas.

The company is processing electricity payments in real time and allows customers to programmatically buy and sell electricity on the blockchain.

Real-time energy distribution can be very helpful to society because it is very difficult for renewable energy to be stored.

Ethereum co-founder Joseph Lubin commented on Grid+'s achievement:

“Groundbreaking milestone. The tireless Grid+ team has begun supplying power to their first four customers.”

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GOVERNMENT

The US Must Take a 'Leadership' Role in Blockchain, IBM Report Says

Blockchain meets the roundtable

In a new report released by IBM, author Thomas Hardjono summarized the results of multiple blockchain-focused meetings held by Congress.

Apparently, Representatives David Schweikert and Jared Polis led the meetings to help other congress members understand the potential of blockchain technology in a handful of use cases.

The roundtable discussions focused mainly on three areas: digital identity, payments and supply chain, and immutability (meaning unchangeable).

Treat blockchain like the internet in the 80's

Following the summaries of Congress' blockchain-focused meetings, Hardjono went on to explain that it is "imperative" that government and industry work side by side to create new laws that encourage blockchain technology to grow.

Though some disagree, Hardjono whipped out his history book and claimed that this leadership between government and industry is the reason the US led the development of the internet in the 1980's to help grow it to what it is today.

So far, Congress' blockchain-focused meetings haven't spurred new regulations, but it is certainly a step in the right direction.

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INSTITUTION

Andreessen Horowitz Invests $15 Million in MakerDAO Stablecoin Firm

Let's talk about MakerDAO

MakerDAO (MKR) is the startup that stands by Dai (DAI), the startup's Ethereum-based stablecoin.

We say Ethereum-based because although Dai pegs itself to a $1.00 value, the stablecoin is collateralized by Ethereum (ETH).

This setup allows anyone to take out a loan by sending their ETH to a smart contract, receiving Dai, and then paying back the Dai debt to access their ETH again.

In a nutshell, MakerDAO is opening economic doors for those who can't qualify for credit.

Where does a16z come in?

Yesterday, it was announced that Andreessen Horowitz (a16z) has acquired 6% of all MKR tokens.

The $15 million in capital will reportedly be used for "operational support" as MakerDAO continues to build out its Dai credit system.

This investment makes (a16z) the first "decentralized autonomous stablecoin organization" which is Silicon Valley's fancy way of saying a16z owns MKR tokens so it can govern part of the MakerDAO and Dai credit system.

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BITS

• Japan`s financial services giant SBI Holdings is trialing a crypto token that can be used to make retail purchases with users’ smartphones.
• A major blockchain payments trial launched by JPMorgan, Australia's ANZ and the Royal Bank of Canada has just gained over 75 new banks as participants.
• Walmart plans to sell leafy greens that are tracked using blockchain technology within the next year.

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COIN OF THE DAY

aelf (ELF)

Ælf is a Blockchain based company developing a decentralized ‘Cloud Operating System’ designed to become a central hub for all Blockchains. Ælf believes the current challenge preventing large scale commercial adoption of Blockchain technology is its inability to meet the requirements of various business and industrial scenarios.

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Bitcoin Bug / The B Foundation / Juventus / Stellar

Subscribe | View in browser $BTC (1:07 p.m. EST): $6,616.20 (-1.12%) // 90-day high: $8,245.16 // 90-day low: $5,889.64/ / More… $BCH (1:07 p.m. EST): $469.62 (-3.25%) // 90-day high: $872.84// 90-day low: $420.58 // More… $ETH (1:08 p.m. EST): $234.62 (-3.25%) // 90-day high: $531.53 // 90-day low: $171.58 // More… $LTC (1:08 p.m. EST): $58.23 (-4.30%) // 90-day high: $107.31 // 90-day low: $49.35 // More… $XRP (1:08 p.m. EST): $0.52 (-7.57%) // 90-day high: $0.57 // 90-day low: $0.22 // More… Here are the 10 most important stories about bitcoin and cryptocurrencies today       1. Bitcoin Core developer John Newbery has taken responsibility for last week's critical bitcoin bug. Newbery took to Twitter on Sunday to say he should have caught the bug that could have seen hackers take many nodes offline and create duplicate transactions. In particular, Newbery, whose job is to check the bitcoin codebase, said a comment that read "so we skip it in CheckBlock" should have alerted him. "That comment and the fCheckDuplicateInputs flag don't just smell, they stink," Newbery wrote. "I should have followed my nose. At the very least I should have looked up Bitcoin Core PR #9049. I didn't." –CRYPTO SLATE       2. Alena Vranova, co-founder of Trezor and Satoshi Labs, announced the creation of The B Foundation. The organization, which Vranova founded alongside evangelist Giacomo Zucco, will be a mixed charitable and commercial organization, focused on coordinating general bitcoin adoption and research developers. Vranova said it is modeled similar to the Ethereum Foundation. "Bitcoin and lightning network development are the main focus," she said. "We might have some side projects like privacy-related projects like tor, freenet, stuff like that, bittorrent, but mostly bitcoin and lightning network." –BITS ONLINE       Trade crypto across exchanges with real-time portfolio analytics - all in one simple place. Sign Up Free Today  Manage your digital assets across exchanges and with a holistic, real-time portfolio dashboard AND advanced trading features built right in. A powerful tool for both active traders and long term investors, Quadency was built with speed, reliability, and your security in mind.         3. Italy's Juventus Football Club, one of the most popular soccer teams in the world, will launch its own crypto token. Distributed through a "Fan Token Offering," Juventus will use the tokens to give fans a voice. Fans can use their tokens to vote on an upcoming mobile app to issues surrounding the team. The announcement comes amid a recent run of European soccer teams turning to blockchain tech to try and engage further with their fan bases. –COINDESK       4. The price of Stellar jumped more than 50 percent last week. Following a more than 20 percent gain on Saturday, Stellar now sits as the sixth-largest cryptocurrency. The increase comes a little more than a month after the company behind Stellar, the Lightyear Corporation, merged with Chain Inc. to form a new company called Interstellar. The new company hopes to create new enterprise products, as well as increase the use of Stellar's global public ledger. –BITCOINIST       [Developers] Chainkit helps you add blockchain to your app in 5 minutes. With Chainkit's new API, you don't need to be a blockchain expert to Register() and Verify() data, events, or processes in your applications. Inside readers get early access before they go live on Product Hunt.  Get Early Access        5. Bloomberg profiles Cathie Wood, the CEO of Ark Investment Management who bought bitcoin in 2015 and currently manages three of the top 15 ETFs in the market. –BLOOMBERG 6. Bitcoin is seen as a "safe haven" compared to altcoins during bear markets. –VENTURE BEAT 7. The United States has the most bitcoin "hodlers" in the world. –USE THE BITCOIN 8. Here's another helpful guide from CoinIQ – this one reviews the 20 post popular cryptocurrency portfolio track apps current on the market. –COINIQ 9. The largest brokerage firm in Brazil will launch an exchange for bitcoin and ethereum. –COIN TELEGRAPH 10. Sheffield Clark, CEO of Coinsecure, said bitcoin is not practical for everyday use. –CRYPTO NEWS REVIEW       Written and curated by David Stegon. He has been a reporter for 15 years, the past 10 focused on technology. Follow him @davidstegon. Editing team: Lon Harris (editor-in-chief at Inside.com, game-master at Screen Junkies), Krystle Vermes (Breaking news editor at Inside, B2B marketing news reporter, host of the "All Day Paranormal" podcast), and Susmita Baral (editor at Inside, recent bylines in NatGeo, Teen Vogue, and Quartz. Runs the biggest mac and cheese account on Instagram).       Dozens of analysts covering news on 2,000 coins in 24/7 realtime. Over 80,000 staff-written headlines. CryptocurrencyNewsfeed.com

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