Token Economy Kwestie #12
It’s bot a rather eventful week te Russian crypto.
1. The Very first Deputy Prime Minister demonstrated support for the creation of a “crypto-ruble”, a state-backed cryptocurrency.
Two. A spokesman for the Regulators called for bitcoin to be regulated and only tradable by qualified investors on the MSE.
Trio. The same day Onderdaan King Russia launches the WhopperCoin, a loyalty scheme te the form of a crypto currency. Yes, that’s right.
Four. A day zometeen, the Ethereum Foundation, represented by Vitalik himself, struck a partnership with state-owned bankgebouw Vnesheconombank (VEB) aimed at supporting “its fresh blockchain research center, providing specialist training for distributed ledger technology and the ethereum platform”.
Five. The next day, that wasgoed called a “misunderstanding” and the partnership wasgoed no longer inbetween VEB and the EF but inbetween VEB and a freshly formed entity called Ethereum Russia (founded by Vitalik and the CEO of Yota Devices, a Russian company).
And this is after a company co-owned by Putin’s internet advisor announced earlier ter August a project for a $100 million ICO to launch a bitcoin mining operation. Putin himself met with Vitalik te June, when only a year ago there were talks at the Kremlin of introducing criminal penalties for bitcoin adopters and miners. Views switched rapidly!
While wij are urged by a friend who knows the region well to take everything coming out of Russia with a “huge grain of salt”, spil omkoopbaar power games tend to be portrayed spil benevolent partnerships or endeavours, one can’t disregard what’s going on overheen there.
The Russian government is clearly beginning to get the grips with the threat and the chance created by crypto currencies, and wants to ensure it stays right ter the middle of the developments. And Russia isn’t alone te worrying, wij covered North Korea’s crypto endeavours a few issues ago. Crypto seems to be worrying oppressive governments!
It’s indeed commencing to feel like crypto might develop into modern time’s space wedloop: nation states accumulate mining power today spil a way to lock te international monetary hegemony of tomorrow.
Despite Vitalik’s best intentions of widespread blockchain adoption, this feels like a dangerous spel to play.
👮 The regulators are coming
This week has most undoubtedly bot a scary one for people te the space.
You can just feel the wind rising.
Be sure to head down to our “Growing Pains” sections where wij discuss more about the SEC and China’s regulators beginning their very first timid deeds.
🚀 But honey badger don’t care
No one seems to care much about the regulatory activity going on, spil both ETH and BTC touched their all time highs this week, with a massive rally.
We’re back down spil wij speak, but the influx of capital does not seem to be slowing down at all — with a lotsbestemming of activity from China and South Korea.
The party’s still on 🎉
Now on to the sweet stuff:
📌 Token Economy
Primoz Kordez from ICONOMI writes a long and detailed postbode about the value of token ecosystems.
There’s the classic means of payment / store of value discussion, but there’s also a lotsbestemming of other good stuff talking about inflation, yielding tokens and more.
Primoz is pretty bullish on utility value tokens:
“The networks generated on the voet of blockchain protocols shall substitute classic “pipeline” companies ter many industries and the concept of ownership and central entities shall be substituted by the concept of stakeholders and a well thought out decentralized system te which individuals co-create the value of the network.”
Michael Karnjanaprakorn lays down his own monster to evaluate tokens.
He’s bot investing ter the space for a while and he’s truly superb, so I pay attention.
Does it align with one of the themes I’m investing ter right now?
Two. Token Network Effects
Does the token align incentives to at the same time accelerate growth and token value?
Trio. Team &, Leadership
Is there a strong team that can scale an open source network?
Four. Technology &, Developer Ecosystem
Does open-source code exist with supporting developer adoption?
How semitransparent is the team with the community?
Has the team proved the capability to execute?
What are the terms of the ICO?
“When I very first embarked to work te tech, it wasn’t crazy to raise an gifangel or seed round with just an idea. But, overheen time, the caf got set higher and higher. The same thing will toebijten with cryptocurrencies. While it might be the Wild Wild Westelijk today, don’t get burned by investing into low quality projects.”
A super-solid tweetstorm by Peter Van Valkenburgh about the shapeshift economy.
Another pretty bullish case here:
“Money” will diegene and be substituted by digital portfolios of assets that connect with liquid markets doing instant exchange and settlement.
What an enormously interesting thing this is.
This is one of the most solid self-governance attempts I’ve seen to date.
IGF set up a Swiss foundation and ready a standard ICO disclosure form it’s encouraging companies to submit. They maintain an open database of all the submissions for everyone to search (targeted mostly at national regulators, with which they seem to want to collaborate strenuously).
They then also provide custodial services and brainy contract management for the ICO suggesting itself.
Jake Brukhman from Coinfund is a believer ter decentralized social media and thinks they could become a very significant very first type of dapps.
“These products are likely to be some of the very first mainstream application of blockchain networks. Especially given scalability solutions, they are poised to waterput a dent te traditional media te a big way.”
This is one that makes you think.
Is business travel truly one of the very first markets that needs decentralized applications? 🤔
I mean, wij did already see one for dentists, but still.
“Winding Tree is a blockchain-based decentralized open-source travel distribution toneel. Wij make travel cheaper for the end user, while making it more profitable for suppliers. No intermediaries means no exorbitant transaction fees and no barriers for entry. Moreover, wij permit puny companies to challenge with big players, eventually bringing innovation back into the travel industry.”
The webstek is truly well done, and the team has some travel-tech practice, but there is a thicker theme here I’d like to discuss:
Sometimes, just sometimes, I get this strange vibe that someone might be making shit up just to raise specie even if there’s absolutely no need for what they’re doing and they’re very likely never going to be able to build it anyways.
Is it just mij hallucinating? 🤒
This one for some reason has indeed got mij thinking.
There voorwaarde be a limit on the number of random dapps that can go out and fundraise from the same demographic.
– How will the ICO funding market evolve from here?
– Will investors just embark to concentrate on apps they use or markets they like?
– How will random speculators (the bulk of investors today) determine what to invest te? Will they only concentrate on the super hyped / high quality ones?
– If this moves towards the standard VC monster (eg. there are people who are paid to sort through all the potential startups ter the world), wouldn’t that be pretty bad for the investor-user use case of dapps?
Hopefully I get to response thesis questions ter a postbode soon.
The nugget of informatie here is that this author claims to have a source inwards the NSA telling he NSA knows who Satoshi is, or are — spil he seems to think it’s more than one person.
They achieved this supposedly by running his writing through the Big Brother’s stream of gegevens.
Add to the movie. 🍿
“Quietly, thesis are the kinds of conversations that are happening ter Silicon Valley.”
A VC with Founders Collective rounds up his thoughts on tokens, and what’s next for VC.
#1: Venture Capital is facing an existential threat.
#Two: Unlimited resources can bring serious challenges. (Chance ≠ Concentrate)
#Three: Crypto’s “Day 1”: a loterijlot of work and building remains to be ready for “Real Work”
#Four: How much will switch about about the hard work of building and selling?
So to the fresh challengers, the greedy, the builders — take your marks. The wedloop to build the next generation of the valley is just beginning.
Oh man, way to kill a party! ☹️
Preston Byrne thinks we’re reaching the line of insanity with ICOs and he can’t wait till we’re done.
He lays down three different bear scripts for how it’ll all go down.
It’s worth a read to build your own conclusions.
“I just think that ICOs are to the future of networks/investment what the Railway Mania wasgoed to the Industrial Revolution: a vast misallocation of capital arising from misapprehending the true utility of revolutionary technology and misapplying that technology to contemporary problems.
The ICO bubble and its promise of cheap, quick gains is rightly the concentrate of attention for most folks at the ogenblik. It is the promise of the greatest gains te the shortest time with the least effort. That bubble needs to speelpop before wij can get down to business with the utility-driven applications of this technology. And speelpop it will, spil surely spil the zon rises ter the morning.”
🚨 Growing anguishes
This seems to be a very first: a project shut down after being ter touch with the SEC post-ICO.
It just seems so very odd that the SEC would target such a puny and unknown project, without any announcement or go after up comment. So odd te fact that a conspiracy theory suggests the founders of Protostarr may have fabricated the entire plot.
But by reading the article, it also seems like it’s a possibility that people are just doing shit without even thinking about it.
Another effortless explanation here is that the team realized no one indeed cared about their ICO given they *just* had launched the project on Aug 6th, and determined to do a fancy vertoning uitgang.
If the SEC actually did get te touch with thesis guys, spil odd spil it may seem on the surface, it shows they are clearly hard at work on this and have their antennas out. They told us they were watching te July after all, and now they embark making calls.
To be fair, this wasgoed fledgling hour at its finest: thesis guys incorporated spil a US LCC and referred to their token spil ‘investor coin’.
The fact that they reached out to a ‘small fish’ may suggest that:
a. they are doing their own diligence from the bottom up, learning their way up without scaring off the thicker fishes until they are ready to grill them. Ter fact they may not even have expected so much coverage for a project that only raised 120 ETH via an ICO, and perhaps didn’t even expect such project to pro-actively shut down without debate.
b. they are playing the hellion at schoolgebouw who goes after the effortless targets very first to build up respect and cause FUD.
Whatever happened, this headline no doubt sent cold shivers down the spines of many founders of projects that have ended an ICO.
Now the founder is supposedly advising others on their ICOs, or at least that’s what he states.
Out there te China, there have bot rumours that authorities are discussing a project that to limit the size of ICOs, to strengthen the information disclosure, supervise tokens and publish investment risk alerts. Potentially even suspending all ICOs ter case of market risk.
China is not fresh to this sort of interventions, earlier this year the central canap suspended trading from all local exchanges.
The latest regulator to speak about ICOs is the ISA. Unlike the SEC however, the ISA hasn’t actually yet done the homework, but simply stated that they are getting began.
Israel is huis to some large crypto projects such spil Bancor, Coindash, Zen Protocol, Stox and others (Kin’s Kik is also being developed there, with the surplus of the team being based ter Canada).
Udi Wertheimer made the effort of translating the next steps from Hebrew:
The war resumes, and it’s not truly clear what’s going on here.
Anyways, there is activity and BTC-e is partially back online, with assurances of debt tokens and recommendations of security precautions for users.
Doesn’t seem like the funds are there tho..
🤡 ICO madness
August 2018 update
Our friends at Token Gegevens counted 39 finished ICOs raising $307 million ter August. A down month overheen July due to the absence of mega ICOs (Filecoin will close ter September).
Wij are at $1.85 billion for 2018 YTD.
September is not gonna be a slow month it looks like. Just on September 1st, there were 17 fresh ICOs, according to the awesome ICO Waaks.
Ok so we’re getting te insane territory right now.
I’ve scoured the web, but I haven’t found a single news about this successful ICO.
Monetha, a company that wasgoed just commenced THIS YEAR, raised its hard cap te Legitimate minutes.
Now I don’t know at which amount of $ or minutes, things begin to get crazy, but I do think here we’re out of the limit.
Monetha wants to be a payment system and a decentralized review system for online transactions.
Now, without getting into the details of the project (oh to hell, right now it’s insane spil they process a elementary Ethereum payment and get 1.5% of the transactions for just providing a nice UI and not even escrowing the transaction) this is a project that should realistically have raised $500k-$1M, at the most.
We’ve had this discussion before, but it doesn’t seem to be slowing down.
A nice vormgeving, a turtlenecked super slick CEO and a whiff of an MVP send the crowds into total on delirium, and I commence to worry that only a nuclear crash can get people back to their senses.
FWIW, I do think there that could have bot something cool built te this space, but now we’re again te the position where there’s a company and team that have $38M te specie and the same precies chances at succeeding spil anyone else on the planet.
😤 Very first they disregard you, then they laugh at you, then…
Utility Settlement Coin is moving into its third phase — building a zuigeling of blockchain-based fiat testnet — with six fresh fucking partners.
The very first live collateralized token exchange using the toneel could occur spil soon spil the end of 2018.
I love thesis articles just for the quotes of thesis dinosaurs that have no idea what’s coming for them.
“It is a fad that will diegene down and it will be used by less than 1 procent of consumers and accepted by even fewer merchants,” said Sumit Agarwal of Georgetown University, who wasgoed previously a senior financial economist at the Federal Reserve Canap of Chicago. “Even if wij can make the digital currency safe it has many hurdles.”
Sure, ter Five years he’ll very likely be right, but te 15? I wouldn’t want to take his side on a bet.
😎 Cool fresh projects
Last week wij had Kim’s announcement on Twitter, this week wij have more details on what he’s bot up to (spoiler: no ICO):
- It’s a fresh opstopping sharing service called K.im, expected to launch te mid-to-late 2018 (te closed beta now)
- all files are to be hosted te a decentralized cloud-based system
- uploaders can to set a price for the files, and users pay for downloading them with bitcoins via Bitcache
- content is encrypted and can only be unlocked when a Bitcache payment is made
- rightsholders can voorkeur content spil theirs and opt to liquidate or re-set the price and charge a toverfee of the revenues
The main pain-point this is attempting to solve is geographical licensing limitations to content, a root cause for piracy. If people who are willing to pay for content, but can’t access it ter their geography, this could be the solution (VPNs are another solution, but the legal implications are a bit muddy). Kim reckons this chance is worth $Ten billion a year te lost revenues.
This seems unlikely to zekering those who are already pirating content, they will just keep looking for free alternatives. It could be a product for the fair masses, but ultimately it will only work if copyrights owners come aboard, and they have their good reasons for restricting content geographically. But let’s not discount Kim just yet…
Decentralized credit scoring.
Man, this is gonna be hard to build.
Yet another example of a company that had a product and is now adding post-facto a token to it, to boost its usage spil well spil obviously raise capital.
Spil much spil it may seem nonsense to the trained eye, I do think that there is something into adding crypto network effects to a community and user base.
It will be interesting to see who are the very first companies that will do this successfully.
💰 VC funding
Traditional VC fundings are a rarity te crypto land thesis days!
BitPesa, the Kenyan online payment company focused on the African continent, has close what would emerge to be an extension round, led by Alan Patricof of Greycroft, to the $Two.5m Series A closed te January.
ℹ️ About us
Token Economy is written and curated by Stefano Bernardi and Yannick Roux.
If you’re building a fresh fundamental chunk of technology for the future, please reach out 🤙