Join a growing list of crypto experts, leading investors and blockchain aficionados who have chosen to receive this newsletter in their inbox everyday – sign up here.
So one of the fortunate or unfortunate side effects of the crypto revolution has been the mushrooming of armchair economists around the world, in cafes, conferences and couches. You can see them online, all atwitter over twitter, vigorously fighting over concepts on Facebook, spewing red-faced rage on reddit, discoursing forth on discord, as well as at various offline (or maybe off chain!) events and forums, furiously quoting Hayek, or debating Austrian v Keynesian v Friedman and expounding on store of value v medium of exchange v unit of account. You are not alone if you had completely forgotten about these after that course in economics in college, only to rediscover them over the past few initial years of a ‘post-crypto’ world.
The dismal science is enjoying a renewed surge in popularity, even though cryptography is likely the far more exacting science, IMHO. Another term that the crypto-faithful will throw at you is something called ‘anti-fragile’, something that gains increased strength and resilience from chaos and disorder. It might come as a surprise to some of this crowd that Nassem Taleb, the venerable but irascible savant that popularized this phrase in his seminal book, actually looks down upon economists, especially the macro variety, almost to the point of calling them charlatans. In spite of himself being one (an economist, of course, not a charlatan, from what we know).
In any case, if you have not read this one, do check out what Taleb has to say about Bitcoin here. It is revealing. Both of Taleb and Bitcoin. Both are clearly anti-fragile.
“Bitmain IPO Roadmap” Crypto mining giant Bitmain made public its redacted financials ahead of the upcoming ICO. The company’s revenue grew tenfold from 2016 to 2017, primarily driven by the hyper-exponential growth in its ASIC business. Despite growing competition, the company owns more than 85% of the market share for Bitcoin mining chips. Widely believed to be a strong proponent of Bitcoin Cash (BCH), Bitmain’s crypto assets account for 28% of the assets on its balance sheet, raising concerns over very high exposure to the high-volatile cryptocurrencies.
A corollary to this has been today’s run up in BCH prices!
“Another Week, Another Stablecoin Project” If 2017 was marked by the cambrian explosion of ICOs, 2018 is turning into a wild year of Stablecoins. Less than a week after Winklevoss-backed Gemini launched its native ERC20 stablecoin, their exchange rivals, Goldman Sachs-backed Circle launched a new stablecoin (USDC) yesterday. USDC is a fiat-backed fully collateralized crypto token that is readily available on Circle Poloniex and Circle Trade.
With the dizzying volatility of cryptocurrencies hampering their utility, stablecoins are expected to drive crypto adoption worldwide. However, stablecoins have their own set of challenges that pose significant risks to their stability. We will soon be publishing a report on stable coins. Please click here if you would might be interested in getting your hands on the report.
This is our fundamental beef with stablecoins. We will paraphrase one of our favorite columnists, Matt Levine here – “There are two points to make here. First, using a stablecoin in a crypto ecosystem allows you to get around some of the institutions, laws, social constructions, etc., of the dollar system. This can be totally innocent and efficient! Maybe your bank just isn’t set up to move money to a smart contract, and there is no fast sensible way to explain it and meet your bank’s know-your-customer rules, and the only way to make smart contracts work efficiently is by having all of the money that goes into them live on the blockchain. Or, alternatively, it can just be a direct dodge around the law: Maybe the smart contract is to buy illicit drugs or Iranian oil, and you’re doing it with stablecoins instead of dollars because otherwise the dollar system would stop you.
But the other point is that the dollar mechanism is very very very popular and standard. If your goal is mainstream adoption of blockchain payments or smart contracts, then you might spend some time trying to get those things to work with dollars in the normal way, so that people can enter into smart contracts with their credit cards or brokerage accounts rather than by first buying stablecoins. If your smart contract can pull baseball scores from ESPN, why can’t it pull dollars from Bank of America? That is a harder approach, probably, because the normal dollar system is encumbered by law and custom and legacy technology. But it’s the system that everyone natively uses, and if you are looking to go mainstream, it might be the place to be”
We will expand the bull case and more in our research report that will be out soon
“Baidu’s Superchain” Chinese internet giant Baidu released a blockchain white paper called ‘Super Chain’ network system. According to the white paper, Baidu’s ‘Super Chain’ is much more efficient than a traditional blockchain. Super Chain nodes operate on multi-core parallel computing to maximize CPU utilization and improve throughput.
“Swiss Startup SEBA Raises 100 million Swiss francs for a Crypto Bank” With the goal of bridging the gap between traditional banking and the digital crypto world, Zug-based SEBA raised 100 million Swiss francs in capital to build a crypto bank which will offer cryptocurrency services to traditional companies and traditional banking services to crypto-focused companies. The company is seeking a banking license from the Swiss financial regulator (FINMA).
Even thought the original libertarian premise behind crypto was to ‘disrupt’ banks, it does seem like it will be a case of replicating traditional financial infrastructure on the blockchain, rather than reinventing a completely new designed-from-the-bottom-up financial infrastructure. Libertarians still may not approve!
Today’s NAV is $1.22, roughly 25% up since the launch and up 4.1% from yesterday.
You can express your interest in 108 Token Series II here. This will be an open-ended, rolling vehicle.
The Many Faces of Bitcoin by Murad Mahmudov
Will ETH Killers Have a Hard Time Attracting Its Developers featuring Linda Xie