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Coinbase Flexing Its Muscle

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Vitalik Buterin thinks Ethereum could follow ZCash and use ZK-Snarks to significantly scale the number of transactions to around 500 transactions per second (TPS), as opposed to the current 15 TPS that significantly limits DAPP adoption and growth, as we saw most recently with the congestion caused in the Ethereum network with Cryptokitties. Note that is still a far cry from the 24,000 TPS that Visa claims to deliver, or the 5000 TPS that Mastercard processes (Interesting to note that Visa is significantly faster than Mastercard as well btw).

Also, after the brief run-up in the blockchain-but-not-quite-blockchain cryptocurrency known as the Ripple (XRP) (which by the way is not needed to actually use the Ripple network), which is a SWIFT competitor, rumors of the founder Jed McCaleb selling some of his significant XRP holdings is contributing to a correction in prices.

Meanwhile in Crypto Wonderland….

“Google follows suit on crypto ad ban reversal after Facebook” Starting from October in the US and Japan, Google will partially relax the previously imposed crypto ad ban, which was imposed in March, to allow ads for regulated crypto exchanges. The updated policies require interested parties to apply for certification to serve ads in each country individually. This is the second instance where we have seen a tech giant partially reverse the ban on crypto ads, after Facebook decided to allow pre-approved cryptocurrency advertisers in June.  In practice though, it remains to be seen how this pans out. Facebook approval for crypto advertisers is a cumbersome manual process and still takes a long time. It remains to be seen if Google will have a slightly more efficient process.

“Coinbase’s policy change to ramp up asset listings” Coinbase is changing its asset-listing framework to expedite the processes for onboarding more cryptocurrencies. According to the company’s blog post, it wants to list assets that comply with local laws and follow a jurisdiction-by-jurisdiction approach for listing digital assets. Token issuers can submit the details of their project in a form and Coinbase will evaluate it against its Digital Asset Framework, before listing the currency on the exchange.

While we believe Coinbase is on the right track, there is inherent complexity in trying to adhere to a jurisdiction by jurisdiction playbook. How will secondary sales of an ERC-20 based token purchased on Coinbase work, for example? Accounting for such a scenario will involve significant centralization, which is what it likely takes to get regulators to play ball and get institutions on-board. However, a lot of this will come at the cost of true decentralization of exchanges. Remember that Coinbase had also acquired Paradex, a 0x-based decentralized relayer recently.

“Bakkt’s first crypto product” Bakkt, which is a regulated ecosystem for institutional investors vying for crypto exposure and headed by ICE, announced the details of its first crypto product, which is going to be physical Bitcoin futures. The futures contract entails the transfer of BTC from the seller to the buyer and the contract is denominated in USD, EUR and GBP.

“After Bitcoin it’s Monero now” Less than week after a vulnerable exploit was identified in Bitcoin’s codebase, Monero developers have identified a critical bug that would have allowed hackers to burn XMR in wallets for a very nominal transaction fees. Luckily, the bug was fixed by the developer team and patched the wallets of exchanges and merchants.

As we have noted before we believe Monero (XMR) is one of those truly anti-fragile secrecy coins, promising true anonymity, as opposed to the pseudonymity that BTC offers or the optional anonymity that even ZCash offers.In the secrecy coin space, we are also closely watching developments with Grin (MimbleWimble).

Crypto Twitter Pick

What We Are Reading / Listening To

A Primer on Austrian Economics by Erik Tokenberg

Technological Trends, Capital and Internet Disruption  featuring Fred Wilson and Chris Dixon

Overnight Performance of Top 10 Cryptocurrencies

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By Ramani Ramachandran and Rohit Alluri

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