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Month: November 2018

Understanding the Different Types of Airdrops

Understanding the Different Types of Airdrops

The term “airdrop” describes a distribution event
that occurs when a cryptocurrency decides to distribute tokens to users for any reason.

For example:

  • A distribution event that occurs after an ICO goes live and the smart contract for the ICO sends new tokens to the existing addresses of users who participated in the pre-sale. For example, one buys into an ethereum-based ICO, then on the airdrop date the token is sent to user’s wallets and they can then “add the token” to their Ethereum wallets (see the KIN and UKG ICOs for example).
  • A distribution event after a hard fork or the creation of a new token which results in existing coin holders getting “free coins,” but where the platform being used requires the distribution of tokens. For example, a fork on the Ethereum network that creates a new token on the Ethereum network or another coin’s network (see fork-airdrop hybrids like the Ethereum Classic Callisto Airdrop and the Loopring Airdrop for example).
  • A distribution event where tokens are given to existing holders as a reward for sticking with the cryptocurrency or as an incentive to get people to hold the cryptocurrency or a related token (see the WAVES Bitcoin Cash airdrop for example).

With the above in mind, we can say then that the term “airdrop” refers to an event where tokens not associated with addresses become associated with them, generally due to a person participating in a pre-sale (like with an ICO) or holding existing coins (like with some forks). However, with the above noted, sometimes the term “airdrop” is used loosely to describe distribution events regardless of the specific mechanics (like in the case with some forks that use the term “airdrop” in their PR).

Since there is a little bit of disconnect between how the term is sometimes used (especially factoring in how it is used on social media) and what the term means in a more pure sense, it is helpful to understand the different definitions. That is the gist. If you want to understand token airdrops (the kind where new tokens are associated with existing wallets), see: The latest crypto PR craze: ‘Airdropping’ free coins into your wallet by Venturebeat.com.

Airdrop Snapshot Block Height and Airdrop Distribution Date:
An airdrop may include either/or 1. an Airdrop Snapshot Block Height, a block height that one has to hold an existing cryptocurrency during to qualify for the airdrop (a snapshot of the existing ledger is taken at that block height), and 2. an Airdrop Distribution Date, a date upon which the tokens are airdropped to existing wallets. Airdrop snapshot dates would be be used with fork-airdrop hybrids, Airdrop Distribution Dates are common to all airdrops and simply describe the date on which the airdrop occurs.

The Semantics of Airdrop:
Airdrop has become somewhat of a PR term here in 2018 and that has led to some questionable usage of the term. As noted, sometimes the term is used to describe a distribution event that occurs after a hard fork goes live and coins can be claimed… even in cases where nothing is technically being airdropped. In cases like this, the term “airdrop” is being used loosely. The slightly confusing thing here is that, as noted above as well, a fork can have an airdrop. For example, in the case where a snapshot of the ledger is taken, the software is forked, but the distribution after the fork occurs on another coin’s network (like with the Loopring example above). I think part of the confusion is due to the fact that there is no good word to describe the distribution date after a fork where the whole of the software is forked (and of course, that distribution is the exciting part where people get “free” coins)… Thus, sometimes the term airdrop gets borrowed to describe distribution events that aren’t actually airdrops.

The General Meaning of the Term Airdrop:
If you want to airdrop a file from your iPhone to another iPhone, you take your file, share it over WiFi or Bluetooth, and then it appears on the other person phone. The person didn’t have the file, now they do. It was “dropped,” through “the air;” “airdrop.”

Article Produced By
Cryptocurrency Facts

https://cryptocurrencyfacts.com/what-is-a-cryptocurrency-airdrop/

David https://markethive.com/david-ogden

Judge Refutes SEC’s Claim on Blockvest ICO Token Being a Security, Will Go to Trial

Judge Refutes SEC’s Claim on Blockvest ICO Token Being a Security,
Will Go to Trial

  

The crypto world received a surprising win from the U.S. justice system today.

Earlier this week, a California judge slapped down an SEC attempt to classify an ICO token as a security. U.S. District Judge Gonzalo Curiel of the Southern District of California declared yesterday that the Securities and Exchange Commission (SEC) has failed to provide adequate proof that the Blockvest ICO tokens should be considered securities. For that reason, Judge Curiel has turned back a request from the SEC for a preliminary injunction against the backers of the Blockvest ICO and its BLV tokens. It’s the first federal decision finding that the SEC hasn’t shown a digital asset offered in an ICO is a security. This is a big win for the crypto community.

As reported by CCN.com, the SEC uses three crucial metrics to determine whether or not a token is a security. These metrics date back to the 1946 SEC v. Howey Co. case. That case led to a landmark decision that governs the SEC’s enforcement of securities laws to this day. The SEC claimed that the Blockvest ICO involved the illegal sale of securities in the form of tokens, and that the tokens failed to pass the Howey Test. Judge Curiel disagreed with the evidence presented by the SEC and was not satisfied with the SEC’s arguments.

The judge took particular issue with one specific requirement: in order to prove a token is a security, the SEC needs to prove that the tokens were sold to investors with the promise of expected profits. Judge Curiel was reportedly not convinced that investors had expected to make a profit on the purchase of Blockvest ICO tokens. Instead, Judge Curiel was convinced that the tokens were simply used to test the platform – not as a genuine investment.

The Blockvest ICO Used a Fake SEC Logo to Feign Regulatory Approval

Blockvest, for its part, appears to be far from innocent in this case:

Blockvest was one of the shadier ICOs of the last year. Part of the problem was that Blockvest appeared to create a fake SEC logo to feign approval. Blockvest created a logo for a fake organization called the Blockchain Exchange Commission, apparently for the sole purpose of convincing investors that it was a regulated entity. Blockvest allegedly created the Blockchain Exchange Commission (complete with an official-looking “BEC” symbol) because they wanted to convince investors that Blockvest’s ICO had been approved by a legitimate regulator. The BEC symbol looked suspiciously like the SEC’s symbol.

The Blockvest ICO Attracted Just 32 Investors

Ultimately, the Blockvest ICO failed to generate a splash in the crypto community – despite the best efforts of the Blockvest team. The project received less than $10,000 in total investment from just 32 investors.

The Judge Believes Blockvest Tokens Pass the Howey Test

The Howey Test refers to the 1946 decision in the case between the SEC and the Howey Co. The test states that something can be considered a security if it has certain properties associated with a security. Judge Curiel clearly believes that the Blockvest tokens pass the Howey Test. Therefore, they should not be considered securities.

Here’s how CCN.com summed up the issue:

“According to the judge, the SEC was unable to prove what promotional materials that investors – who numbered only 32 and whose total investment was under $10,000 – had responded to. While the SEC was able to demonstrate that investors were purchasing coins due to evidence shown on checks cashed, the judge did not feel this satisfied the evidence requirements in the Howey Test.”

Part of the reason the judge slapped down the SEC’s request was because of intelligent defending by the Blockvest team.

Blockvest Gave a “Brilliant Defense”

Blockvest’s defense has been described as “brilliant”. Blockvest claims its tokens were only used for testing of the exchange – nothing more. The defense’s claim rests on the idea that most investors were actually well-known friends of defendant and Blockvest ICO creator Reginald Buddy Ringgold III. Blockvest also faced scrutiny for claiming to have raised $2.5 million during the ICO. Blockvest, however, defended that claim by stating that the $2.5 million figure was “overly optimistic” and relied on a single investor. That deal later fell through. The judge ultimately agreed with Blockvest’s defense. Blockvest’s BLV tokens should not be considered securities because the way they were marketed and sold did not meet the standard of a security sale. Thus, BLV tokens cannot be declared as securities at this time.

Here’s how the judge summed up his decision, as reported by Law.com:

“Based on the above, the Court DENIES Plaintiff’s motion for preliminary injunction. The Court also DENIES Defendants’ ex parte motion for evidentiary hearing and leave of court to file supplemental declarations. (Dkt. No. 30.) The Court also STRIKES Plaintiff’s Supplemental Declaration of David Brown and Defendants’ Opposition and Response. (Dkt. Nos. 39, 40.)”

After the decision was announced, Blockvest’s assets were unfrozen. However, the battle between Blockvest and the SEC is far from over.

Blockvest
Isn’t Off the Hook and Could Face Penalties for Using the SEC’s Logo

The judge has struck down the SEC’s claim that Blockvest tokens should be considered securities. The judge feels that the SEC has insufficiently proven previous wrongdoing on the part of Blockvest, which means there should be no reason for the injunction. However, that doesn’t mean Blockvest has escaped without penalty.

The biggest problem with Blockvest could be in the use of the SEC logo. As mentioned above, Blockvest fabricated an organization called the Blockchain Exchange Commission (BEC). The logo for that organization looked identical to the logo of the SEC. The fake BEC logo was displayed on the Blockvest ICO website, indicating to users that the Blockvest ICO had received official approval from the SEC. The SEC, as you can imagine, does not take kindly to people abusing its logo, and Blockvest could face further penalties.

Conclusion:
This is Good News for Future ICOs Seeking to Avoid Repercussions

The Blockvest ICO was one of the sleaziest ICOs in the crypto space. The creators of the ICO went so far as to create a symbol that looked like the SEC logo. Despite the low-quality ICO, the SEC was still unable to prove that Blockvest’s tokens could be considered securities. This case is a big deal: it’s the first federal decision on whether the SEC can regulate digital assets from ICOs as securities. It remains to be seen what impact this will have on other ICO cases moving forward.

Article Produced By
Bitcoin Exchange Guide News Team

https://bitcoinexchangeguide.com/judge-refutes-secs-claim-on-blockvest-ico-token-being-a-security-will-go-to-trial/

David https://markethive.com/david-ogden

Not Too Big to Fail: Why Facebook’s Long Reign May Be Coming to an End

Not Too Big to Fail: Why Facebook's Long Reign May Be Coming to an End

Sears and Blockbuster fell because neither was able to adapt and grow with its consumer base. Is Facebook making the same mistakes?

  

Over the last several years,
Facebook has gone from facilitating the free flow of information

to inhibiting it through incremental censorship and account purges. What began with the ban of Alex Jones last summer has since escalated to include the expulsion of hundreds of additional pages, each political in nature. And as more people become wary of the social media platform’s motives, one thing is absolutely certain: we need more market competition in the realm of social media.

Facebook might seem too big to fail, but rest assured it is not. Unless it is protected by a government monopoly, every single product and service is vulnerable to market forces, even those considered too powerful. Just a few weeks ago, the once-mighty Sears announced its plans to file for bankruptcy and close 142 of its department store locations. It also wasn't so long ago when Blockbuster Video, a staple of weekend fun in the 90s, announced its closure, as well. These institutions were at the top of their games at one point but were each unable to satisfy their customers as they once did. And both were inevitably replaced by better services like Amazon Prime and Netflix.

Facebook might seem different from other traditional market entities since it technically doesn’t sell anything to the bulk of its users. But just like Sears and Blockbuster, its success relies on its ability to attract and maintain its customers. And in the wake of the recent purges—and its recent security breaches—it is quite possible that, like Myspace and Friendster, Facebook is not long for this world.

The Situation

When it was announced that Facebook, YouTube, iTunes, and eventually Twitter had banned the accounts associated with Alex Jones, it elicited mixed reactions from the public. On one hand, Alex Jones is infamously known for building his career on being an instigator and a “troll,” rendering him an unsympathetic character to most of the American public. On the other hand, the sweeping ban of Jones was concerning as it threatened the future of independent media. After all, if this could happen to Jones, who would be next? To be sure, Facebook is privately owned and is allowed to curate its own content as it sees fit. However, just because someone can do something doesn’t necessarily mean that they should.

To be sure, Facebook is privately owned and is allowed to curate its own content as it sees fit. However, just because someone can do something doesn’t necessarily mean that they should. And it most certainly doesn’t mean that, as users of this platform, we should not voice our concerns. As the summer droned on, independent media held its breath waiting to see how the “Jones” decision would impact their own accounts.  A few weeks ago, the situation escalated when Facebook went one step further and announced it would be deleting nearly 800 pages it said violated its terms of service. Specifically, these pages were accused of “spamming” users, though Facebook’s use of the word was not clearly defined.

However, the fact remains that many of the deleted pages were right-leaning and libertarian, leading many to assume that these purges were politically motivated. And given the prior accusations made against Facebook in regards to suppressing conservative-leaning links and news stories, these assumptions did not seem off-base even if Zuckerberg claimed that content was not a contributing factor.

Carey Wedler, editor-in-chief of Anti-Media, an independent news platform that just had its page deleted by Facebook, told FEE:

According to Facebook, we were not suspended for our content but for “spamming” and using “misleading” practices, but these are tactics we have never employed, and other large pages that employ posting strategies like ours, such as Occupy Democrats (also known to share fake news), were not removed. Curiously, in July, Facebook assigned us a representative to help us manage our page. They also gave us $500 in free advertising to boost our content in September, and these actions seem to imply they had no issues with either our content or our practices.

Even though the purge’s proximity to the approaching midterm elections appears suspect, Facebook maintains that its decision to delete these accounts was purely the result of spam violations and not because of the actual page content. This allowed Zuckerberg to hold firm to his claims that Facebook was not practicing censorship but was instead just enforcing policies that already existed in the user terms of service. However, last week the popular libertarian Facebook account “Liberty Memes” had its page deleted, adding more fuel to the fire. Unlike the previous purge, Liberty Memes was not deleted under the guise of spamming its users like the others. Instead, Facebook openly admitted that the page was being deleted directly because of its content.

In the digital age, it is highly probable that at some point you will come into contact with content you find offensive or untrue. While offensive content can simply be ignored and dismissed, ideally, each individual should be responsible for determining whether or not the information they are exposed to is credible. But with the “fake news” hysteria we are currently experiencing, Facebook has taken it upon itself to protect its users from potentially misleading or even offensive content. And even if these decisions were made in an attempt to appease the many users who would like to see all opposing thought suppressed, this may inevitably come back to haunt the company.

Facebook has not had a great couple of years. In addition to being blamed for both the suppression of conservative links and Trump being elected to office, the popular social media site was also found to have compromised its users’ data on more than one occasion. And while the decision was voluntary, Zuckerberg also found himself testifying in front of Congress just a few months ago. And on the business side of things, market shares have slumped 7.5 percent over the year. In fact, over the past year, Facebook use has also been dwindling, and over 44 percent of young users have admitted to deleting the app off of their phones entirely. In droves, young people are flocking to sites like Snapchat, Instagram, YouTube, and Twitter, instead. And without this younger crowd, Facebook could soon find itself desperate for users.

As written in INC:

Recent findings make it clear that a large number of users have changed their relationship with Facebook over the past year following the company's privacy and security scandals. With ripple effects still being felt over six months after Cambridge Analytica, it's unlikely migration from the app will slow down any time soon.

So, what does this mean for those of us who are dissatisfied with the behavior of Zuckerberg and Facebook? It means the situation is ripe for new platforms to rise up and take its place. And we should be diligently searching for its replacement or replacements.

Voice and Exit

Voting with our dollars is one of the most powerful actions we can take as consumers. While we might not be paying for Facebook memberships, each time we log-on to the site and actively engage with other users, we are voting in favor of the social media company. And for many of us, we feel as though we have no other choice. As a writer, I will be the first to admit that I personally rely on Facebook as a means of sharing my work with others. In fact, the thought of deleting my account fills me with unease and isolation. After all, if I am not on Facebook, how can I stay connected to all my contacts around the globe? And since many of us are so hesitant to leave, Facebook has maintained its power in the social media space. But this can easily change.

In order for the market to work, consumers must diligently vote with their feet and their money in order to prop up the brands and products they prefer. There is a grave misconception that the market process is passive when quite the opposite is true. In order for the market to work, consumers must diligently vote with their feet and their money in order to prop up the brands and products they prefer. If a company does something a consumer is opposed to, the consumer can decide to take their business elsewhere or, in extreme conditions, turn to protests and boycotts as we have seen recently with brands like Nike. Consumers have substantial potential to cause financial harm to these companies, they just have to choose to use this power.

We are living in an era of disruption. Just a few years ago, the potential for Bitcoin and other cryptocurrencies to compete with global currencies seemed unfathomable. And while we are still years away from a full-fledged monetary revolution, crypto has proved itself to be a force to be reckoned with in the finance world. If anyone has any doubt of this, just look at how many governments and Keynesian economists fear its widespread adoption.

In the earlier days of Bitcoin, users were small in number as the network was still in its infancy and needed to grow. But over the last couple of years, more and more users have been flocking to cryptocurrencies after becoming disenchanted with centralized financial institutions. The very same thing could happen to Facebook. And speaking of the world of cryptocurrencies, many of the platform alternatives to Facebook that are popping up are utilizing blockchain technology.

Minds, Telegram, Steemit, Mastadon, and other burgeoning social media companies are looking to blockchain to not only keep private user data safe but also to keep the networks decentralized and safeguarded against the same type of censorship we have seen coming from the authority figures in charge of Facebook. But in order for any of these platforms to take off, they will need early adopters and users willing to build a modern social network that has learned from the errors of its predecessors. Sears and Blockbuster fell because neither was able to adapt and grow with its consumer base. Facebook has routinely gone against the wishes and needs of its users and is just now starting to face the consequences.

As Wedler says:

Just as people across the political spectrum are fed up with the current system, so, too, are social media users frustrated with the major platforms currently dominating the market. In both cases, it seems not only obvious but also vital that instead of simply tolerating the current paradigms, individuals must take tangible action to make their preferences known. With respect to social media, if enough people walk their increasingly dissatisfied talk, there is huge potential to spark an exodus towards platforms that better meet their demands and expectations.

Article Produced By

Brittany Hunter

Brittany is a writer and editor for the Foundation for Economic Education. Additionally, she is a co-host of Beltway Banthas, a podcast that combines Star Wars and politics. Brittany believes that the most effective way to promote individual liberty and free-market economics is by telling timely stories that highlight timeless principles.

David https://markethive.com/david-ogden

The Making of the First US ICO Fraud Case

The Making of the First US
ICO Fraud Case

In common law systems, it is precedent that informs judicial approaches

to new and previously unaddressed matters. The precedent that will likely shape the body of U.S. case law on fraudulent initial coin offerings (ICOs) is currently being forged in a federal court in the New York borough of Brooklyn, where a 39-year old entrepreneur, Maksim Zaslavskiy, has pleaded guilty to committing securities fraud. The development that will most likely result in a landmark decision – the jury will gather in April 2019 to decide on a sentence – is yet another twist of a now 14 month-long effort, involving both the U.S. Department of Justice and Securities and Exchange Commission (SEC). Previously, the process has already yielded a fateful ruling by a federal judge who in September established that securities law is applicable to ICO-related cases.

The case that is poised to become so consequential for the whole ICO space deals with two ventures that neither issued a token nor developed any blockchain-powered infrastructure: REcoin and Diamond Reserve Coin both only existed on paper. Yet it also makes perfect sense that the authorities first went after the most brazen instances of ICO fraud, the ones that hurt rookie retail investors the worst and inflicted the most reputational damage on the industry.

When the SEC first filed a complaint against Zaslavskiy in a federal court in September 2017, it was estimated that REcoin and Diamond Reserve Coin ICOs resulted in around 1,000 investors losing some $300,000. Having fallen for Zaslavskiy’s aggressive marketing campaign, these people were led to believe that they either invested in a digital asset that was backed by real estate located in developed countries (REcoin), or purchased a tokenized membership in an elite club for wealthy business people, with physical diamonds in the company’s custody underlying the value of tokens.

In fact, though, they were buying “worthless certificates,” as U.S. district attorney, Richard Donague, put it, on Nov. 15, 2018, Zaslavskiy admitted in his guilty plea: “We had not yet purchased any real estate.” He now faces up to 5 years in prison, pending the decision of a jury panel. The regulator is also filing a civil lawsuit against Zaslavskiy.

The making of a fraudster

The Ukrainian city of Odessa, overlooking a scenic coastline of the Black Sea, is known for its vibrant spirit and unique culture. Throughout both the Imperial and Soviet periods of its history, the city has been home to a large Jewish community. As the final years of the USSR saw the liberalization of immigration policies, many Odessan Jews chose to leave for either Israel or the West. Born in Odessa, Maksim Zaslavskiy was 12 when his family relocated to the U.S. While Maksim was destined to make ICO history, his brother, Dmitry, chose a banking career and later became an executive director for Morgan Stanley. Zaslavskiy’s social media pages, as well as websites of many organizations he ran at various points of time, were either deleted or became unavailable in the wake of the high-profile investigation into his activities. The main source of information about his pre-trial life is now the four-hour interview to the SEC representative that he gave in September 2017, of which the Fast Company magazine managed to obtain a transcript.

In 2003, Zaslavskiy received his degree in finance from Baruch College, followed by a LLM from Yeshiva University’s Cardozo School of Law three years later. He worked as an IT consultant for several banks before starting his own international business, whose nature is difficult to infer from the interview. Zaslavskiy also claimed to have been involved in real estate business since the age of 18, yet Fast Company’s investigation failed to verify his employment with the firms he claimed to have worked for. According to the interview, the 2008 crisis became a major blow for Zaslavskiy’s business, further entrenching him in his resentment of the U.S. financial system. He turned to charity work, founding a philanthropic organization called Live Love Laugh. However, it is impossible to say whether the ambitious statements on its website (which is now down) were ever backed by any real actions, since the entity appears to never have been properly registered.

Zaslavskiy has also written at least three books (under the name Avi Meir Zaslavsky) that can be still found on Amazon. These are how-to guidebooks on the ins and outs of real estate business. Another one, which appeared around the time his two ICOs were in full swing in August 2017, sets out to explain the reader that “what you perceive and use as money is designed in such a way that the wealth created by the economy truly benefits only large banks and multinational corporations.” Apparently, the book was meant to lend credibility to Zaslavskiy’s claim for intellectual leadership in the crypto space, as its press release presents him as “one of the world’s leading currency decentralization proponents.” The publicity campaign around the book provides a glimpse into Zaslavskiy’s approach to marketing himself and his ventures: bold, extravagant, overblown. Unsurprisingly, this style carried over to the way his two ICOs were presented to potential investors.

Real estate tokens and Initial Membership Offerings

For someone disenchanted with both the traditional financial system and traditional means of making money, the ICO rush of 2017 presented innumerable opportunities. The beauty of the ICO model was that it opened up the world of venture capital, previously reserved exclusively for professional investors, to anyone with a few spare dollars and some interest in the uncharted space of blockchain applications. The flipside of it is that some of the newcomers were unable to tell legitimate projects from outright scams replete with red flags.

Megalomaniac language and exaggerated promises are usually telltale signs of something not being right with the venture that’s taking off. Zaslavskiy’s projects had both. REcoin, announced in June 2017, presented its founder as a “Real Estate guru” and proclaimed that the 101REcoin Trust held properties “in developed and stable economies like the USA, Canada, Japan, Great Britain, and Switzerland” without providing any evidence in support. Also, an “international team of attorneys and programmers” was allegedly there to “work tirelessly” on increasing token holders’ fortunes. As the court proceedings later revealed, no such team ever existed.

In August, after facing the first signs of SEC interest to REcoin, the “Entrepreneur, Philanthropist, and Author Max Zaslavsky” began his marketing campaign for an allegedly diamond-backed digital asset, the Diamond Reserve Club token. The release (beginning with “If the Holy Scriptures have taught us anything at all…”) touted a brand new Initial Membership Offering model, which was supposed to tokenize investors’ participation in a large ecosystem of interconnected businesses. It also suggested that the tokens could be inherited by the investors’ grandchildren. One would think that the theatrical language and gargantuan assurances of the two ICOs’ public-facing documents would only make any reasonable person scoff. Yet from July through September Zaslavskiy and his accomplices managed to amass around $300,000 before the SEC took the matter to court.

The fallout

On Sep. 29, 2017, the SEC brought a civil complaint to the U.S. District Court for the Eastern District of New York against Zaslavskiy and his two companies for violating U.S. securities laws. Recoin and DRC responded on their websites with a joint statement that argued that it was due to “lack of legal clarity as to when an ICO or a digital asset is a security,” suggesting that their operations were not within the SEC’s purview.

However, the Feds seemed to disagree. On Nov. 1, Zaslavskiy was apprehended by FBI agents and criminally charged with a conspiracy to commit securities fraud. In early December, he pleaded not guilty and secured a $250,000 bail backed by his family’s Brooklyn house. In February, Zaslavskiy’s defense filed a motion to dismiss the indictment on the grounds of inappropriate application of securities law to cryptocurrencies. Yet both the DoJ and SEC insisted that REcoin and DRC tokens passed the Howey test – a legal standard that determines whether a contract is a security.

In September, U.S. district judge Raymond Dearie concluded that for the purposes of the case, the tokens could, indeed, be treated as securities, potentially setting a precedent that could shape the future of ICO regulation. The judge was also unequivocal in characterizing the nature of

Zaslavskiy’s enterprises:

“Stripped of the 21st century jargon, including the Defendant’s own characterization of the offered investment opportunities, the challenged indictment charges a straightforward scam, replete with the common characteristics of many financial frauds.”

Article Produced By
Kirill Bryanov

Kirill Bryanov is a PhD researcher at Lousiana State University. His scholarly interests center on political and societal implications of communication technology, with a focus on blockchain-powered decentalized architectures.

https://cointelegraph.com/news/the-making-of-the-first-us-ico-fraud-case

David https://markethive.com/david-ogden

What is a crypto currency Airdrop?

What is a crypto currency Airdrop?

     How to get free tokens on Airdrop?

In cryptocurrency, the term “airdrop” is used to describe a type of distribution event for a cryptocurrency where tokens are distributed to existing wallets. Or more simply, an event where “free coins” or coins purchased during a pre-sale are “dropped” in existing wallets. In other words, the term “airdrop” describes a distribution event that occurs when a cryptocurrency decides to distribute tokens to users for any reason. For example: A distribution event that occurs after an ICO goes live and the smart contract for the ICO sends new tokens to the existing addresses of users who participated in the pre-sale. For example, one buys into an ethereum-based ICO, then on the airdrop date the token is sent to user’s wallets and they can then “add the token” to their Ethereum wallets.

A distribution event after a hard fork or the creation of a new token which results in existing coin holders getting “free coins,” but where the platform being used requires the distribution of tokens. For example, a fork on the Ethereum network that creates a new token on the Ethereum network or another coin’s network (see fork-airdrop hybrids like the Ethereum Classic Callisto Airdrop and the Loopring Airdrop for example). A distribution event where tokens are given to existing holders as a reward for sticking with the cryptocurrency or as an incentive to get people to hold the cryptocurrency or a related token.

How to participate in crypto airdrop?

This can also be done on other blockchains, but Ethereum and Bitcoin are the most used for this airdrop format. Other (often smaller) airdrops require social media posts or you need to contact a member of the team on the Bitcointalk forum. This form is gaining more popularity since September 2017.

  1. An Ethereum Wallet:
    not one that is on an exchange. It has to be a personal address that is ERC20 compatible because most of the tokens that are airdropped are ERC20 tokens, which are or were originally Ethereum-based ICOs.
  2. The Ethereum Wallet Must be ACTIVE.
    By active, we mean that you have to show at least some human use of it. Lots of airdrops have checks in place to make sure that you aren’t just randomly generating a bunch of addresses and signing them all up to unfairly obtain more coins. This means that if your wallet doesn’t show activity, it might not receive the airdrop. Sometimes, coins will be explicit in what they look for, including some type of balance in the account.
  3. Telegram Account:
    I’m sure there are amazing reasons why Telegram is the chatting tool of choice for many of these ICOs. The coins want to boost the audience count. Usually, these airdrop coins will also require you to sign up for their Telegram accounts. Until you receive the coin in your Ethereum wallet, do not leave the Telegram accounts or you risk disqualification for the airdrop.
  4. Twitter Account:
    Similar to the reasons behind the Telegram account, many of the airdrop coins will also require you to follow them on Twitter. Some of them will even ask you to retweet some tweet.
  5. Email address.
    sometimes airdrops will ask for your email, too. If you don’t feel comfortable with giving them your real email, just create a spam one. Remember the password, though; some of them actually ask you to confirm your email.

Another possible way to get free e-coins is a faucet. This means you get a small amount of free crypto for a longer period of time. Some wallets, crypto casino's or crypto promotion sites run this type of airdrop.

Why would anybody give away free cryptocurrency?

To offer coins for free the people are the product. With doing an airdrop the project creates awareness about their ICO or token. It brings people to the project that otherwise would not have owned or heard about it. It could lead to token price appreciation, since people value a token they own higher then a token they don't own. This is called the endowment effect: "In psychology and behavioral economics, the endowment effect (also known as divestiture aversion and related to the mere ownership effect in social psychology) is the hypothesis that people ascribe more value to things merely because they own them." In addition to that I think people are more likely to buy a token that they previously owned or still own, since they are already familiar with it.

A crypto airdrop would create a community/network of people who own the tokens. If you would list the token distribution after an ICO in a pie graph, a large part of the pie is still owned by the Dev's or project. Another large part is owned by people who joined a pre-sale. And a reasonable part is owned by people who invested in the ICO. An airdrop adds a extra slice to the pie and that slice will have the most people in it. Decred still shows a pie-graph like this example on their homepage.

An crypto airdrop also plants a seed. When you look at Coinmarketcap you will see a list of thousand coins. Just on page one you can see 100 coins listed. However if you have or had a coin that name is still in your brain. The seed is planted and whenever you check coinmarketcap and scroll down, the name of the free e-Coin will jump out and people will check how it is doing. If they see an article that the free e-Token is doing well or bad, they are more likely to click it if they own it or previously have owned it. It's just like advertising.

Article Produced By
Bitcoin Wiki

https://en.bitcoinwiki.org/wiki/Airdrop

 

David https://markethive.com/david-ogden

IBM and Columbia University Launch Two Blockchain Startup Accelerators

IBM and Columbia University Launch Two Blockchain Startup Accelerators

 

 IBM and Columbia University announced the introduction of two new blockchain

startup accelerators as critical components of their center for research, education, and innovation in blockchain technology and data transparency.

IBM Network and Columbia Launch to accelerate industry adoption

The joint venture, part of the Columbia-IBM Center for Blockchain and Data Transparency, will provide 20 entrepreneurs and blockchain network founders worldwide with access to the assets, knowledge, and support they need to build sustainable blockchain businesses and enterprise-grade blockchain networks. IBM’s Network Blockchain Accelerator will expedite the global development of ten later-stage growth companies, and focus on building out an enterprise-grade business network and client base for their blockchain solution.

According to David Post, Managing Director of IBM Blockchain Accelerator, “The possibilities presented by blockchain technology are seemingly endless, and we see strong dedication by technical talent to build game-changing applications.” He believes that adoption is inevitable and “what is also needed to truly bring about this sea change is the right technology and expertise which is why IBM is working with Columbia to help give these early- and mid-stage founders a way to build enterprise-grade networks that can move blockchain innovation forward.”

In contrast, the Columbia Blockchain Launch Accelerator is intended to provide ten pre-seed, idea-stage companies with the necessary expertise and tools on how to build a blockchain startup, as long as it is in affiliation with the Columbia or any NYC-based University. Satish Rao, Executive Director of the Columbia Blockchain Launch Accelerator, expressed confidence that “Early- and late-stage teams will undoubtedly benefit from IBM’s technology resources, expertise and established network coupled with Columbia’s ground-breaking research and talent in blockchain and data transparency, all while benefiting from rapidly growing NYC blockchain communities.”

Beyond Blockchain Tech: Sustainable Business Development

The two accelerator programs will empower companies and their teams with the aid of an expert network of business and technical support teams, workshops from IBM, as well as access to connections to the Columbia research community, student talent pools, and the IBM Cloud technology. As part of the accelerator plan, entrepreneurs will investigate what are the best practices for building a secure and sustainable blockchain network and ecosystem with the guidance of academic, technical, and business tutors from IBM, the Columbia University and other organizations.

Both programs are expected to launch in Q1 of 2019, while IBM Network has already opened nominations. Since they are invite-only, to apply, companies must look for the recommendation of investors, customers or IBM representatives. The Columbia Launch program is designed to help up to seed-funded startups. Upon completion of the accelerator, IBM may decide to enter into strategic partnerships with the firms to assist them with establishing and/or scaling the concepts developed during the program.

Article Produced By
Mauro Sacramento

Mauro is a Portuguese crypto journalist in pursuit of his digital nomad dream. Although he graduated in scriptwriting, he spent the past decade in corporate environments. Now that he's rediscovering what freedom feels like, he can't get enough of blockchain and its decentralization.

https://www.ccn.com/ibm-and-columbia-university-launch-two-blockchain-startup-accelerators/

David https://markethive.com/david-ogden

Facebook to appeal against ICO fine – says it’s a matter of principle not to pay 18 mins’ profit

Facebook to appeal against ICO fine – says it's a matter of principle not to pay 18 mins' profit

Get Zucked, basically

Facebook is to appeal the £500,000 fine handed down

in October by the UK's Information Commissioner's Office over the data-harvesting scandal. The penalty – the highest the ICO was able to dole out for the firm's part in the Cambridge Analytica scandal because it took place before GDPR kicked in – equates to about 18 minutes of profit for the firm.

Nonetheless, the Zuckerborg is insistent that no UK data was involved, arguing that not only does this mean it shouldn't have to pay up, but also that it's a matter of principle about the way people behave online. The ICO said when it handed down the fine that, on the information it had, "it is not possible to determine" if Facebook's assertion that only US resident's data was shared with Cambridge Analytica is correct. However, it contended that the personal data of UK users was "put at serious risk of being shared" for political campaigning – and thus issued the enforcement action for failing to do enough to protect that info.

Remind me what happened again?

The fine came as part of an investigation into the misuse of data in political campaigning, much of which focused on how data-slurpers Cambridge Analytica used an app to collect information on 87 million Facebook users. The app, created by academic Aleksandr Kogan, sucked up so many people's profiles because Facebook's policies for developers using its Graph API originally allowed apps to gather data not only from users, but also all of their friends. Although the firm changed this policy in 2014, there was a year's grace period for existing apps. Cambridge Analytica approached Kogan to make use of this loophole before it closed.

Facebook has insisted Kogan was a rogue dev who broke the rules when he sold the data on to Cambridge Analytica – but has also admitted it could have done more when they discovered the incident in 2015.And it's this, broadly speaking, that the Facebook is taking issue with. "The ICO's investigation stemmed from concerns that UK citizens' data may have been impacted by Cambridge Analytica," said Anna Benckert, the firm's associate general counsel for EMEA. However, she said, the ICO "have confirmed that they have found no evidence to suggest that information of Facebook users in the UK was ever shared by Dr Kogan with Cambridge Analytica, or used by its affiliates in the Brexit referendum.

"Therefore, the core of the ICO's argument no longer relates to the events involving Cambridge Analytica." Facebook is arguing that the ICO's reasoning "challenges some of the basic principles of how people should be allowed to share information online" and that this has implications that "go far beyond Facebook". Benckert – taking a real ad absurdum approach – said the ICO's theory meant that "people should not be allowed to forward an email or message without having agreement from each person on the original thread". "These are things done by millions of people every day on services across the internet, which is why we believe the ICO's decision raises important questions of principle for everyone online which should be considered by an impartial court based on all the relevant evidence."

An ICO spokesperson sent us a statement following Facebooks' confirmation it will appeal the fine:

“Any organisation issued with a monetary penalty notice by the Information Commissioner has the right to appeal the decision to the First-tier Tribunal. The progression of any appeal is a matter for the tribunal. We have not yet been notified by the Tribunal that an appeal has been received.” Information commissioner Elizabeth Denham has made it abundantly clear that she would have fined Facebook more if she had been able to, and said that, in particular, its follow-up after it discovered the breach was "less than robust".

She told MPs earlier this month that her team "found some problems with the signing of [Facebook-ordered] authorisations [from organisations]; some of them weren't signed at all". The ICO has also referred other, ongoing concerns about the firm's targeting functions, its monitoring of individuals' browsing habits and interactions, to the Irish Data Protection Commissioner (Facebook's European HQ is in Ireland). Meanwhile, the firm's decision to appeal the UK's fine will do little to bolster goodwill among the nation's lawmakers, especially as Zuckerberg has repeatedly rejected requests to appear in front of parliament's digital committee.

Article Produced By
Rebecca Hill

https://www.theregister.co.uk/2018/11/21/facebook_to_appeal_ico_fine/

David https://markethive.com/david-ogden

Airdrop of Crypto Tokens Hits Regulatory Flak

Airdrop of Crypto Tokens Hits Regulatory Flak

On August 14, 2018, the U.S Securities and Exchange Commission (“SEC”)

issued a cease and desist order (the “Tomahawk Order”) against Tomahawk Exploration LLC (“Tomahawk”) and David Thompson Laurance (“Laurance”) for their actions in connection with an initial coin offering of digital assets called “Tomahawkcoins” or “TOM” (the “Tomahawk ICO”). Tomahawk and Laurance’s actions were problematic for the same reasons cited by the SEC in other recent orders related to digital assets (e.g. the Munchee Order). Consistent with such orders, the SEC determined that Tomahawkcoins are securities because they constitute investment contracts under the “Howey” test. However, what makes the Tomahawk Order particularly noteworthy are the lessons to be gleaned regarding cryptocurrency “airdropping.”

What is Airdropping?

“Airdropping” is the distribution of tokens or cryptocurrencies without monetary payment from the token recipient. The practice of airdropping tokens became prevalent in late 2017 and early 2018 when ICOs began to face stricter regulatory scrutiny. Token airdrops or “free crypto” distributions have been particularly popular in conjunction with ICO marketing campaigns, such as the Bounty Program (“Bounty Program”) offered in connection with the Tomahawk ICO. As part of its Bounty Program, Tomahawk dedicated 200,000 Tomahawkcoins, and offered third-parties between 10-4,000 Tomahawkcoins for activities such as making requests to list Tomahawkcoins on token trading platforms, promoting the coins on blogs and other online forums, and creating professional images, videos or other promotional materials. Ultimately, Tomahawk airdropped more than 80,000 Tomahawkcoins to approximately 40 wallet holders as part of its Bounty Program.

Airdropping as a Section 5 Violation

Under Section 5 of the Securities Act of 1933, as amended (the “Securities Act”), any offer and sale of securities must be registered with the SEC or exempt from registration. Section 5 regulates the timeline and distribution process for issuers who offer securities for sale. In the Tomahawk Order, the SEC found that Tomahawk’s Bounty Program constituted an offer and sale of securities because “[Tomahawk] provided TOM to investors in exchange for services designed to advance Tomahawk’s economic interests and foster a trading market for its securities.” Despite not receiving payment in exchange for the airdropped Tomahawkcoins, the SEC nonetheless found that the airdrops made in connection with the Bounty Program constituted the offer and sale of securities: “a ‘gift’ of a security is a ‘sale’ within the meaning of the Securities Act when the donor receives some real benefit…Tomahawk received value in exchange for the bounty distributions, in the form of online marketing…in the creation of a public trading market for its securities.” By offering and selling Tomahawkcoins without having a registration statement filed or in effect with the SEC or qualifying for an exemption from registration, Tomahawk and Laurance were found to be in violation of Sections 5(a) and 5(c) of the Securities Act.

Potential Consequences of a Section 5 Violation

In light of the Tomahawk Order, it is important to understand the potential consequences of a Section 5 violation, which may include the following:

  1. SEC Enforcement Action:
    In addition to having the power to impose monetary penalties, the SEC can also bar an individual from serving as an officer or director of a public company for a period of several years. Through the Tomahawk Order, the SEC not only imposed a $30,000 penalty (a reduced amount due to Laurance’s inability to pay a civil penalty) but also barred Laurance from acting as an officer or director of a public company or from participating in any offering of a penny stock.
  2. Rescission Rights:
    Under Section 12(a)(1) of the Securities Act, purchasers of securities that were sold in violation of Section 5 of the Securities Act have a right of rescission. This right of rescission is essentially a “put right” whereby the purchasers can force the seller of the securities to buy the securities back at cost plus interest.
  3. Control Person Liability:
    Even if a person did not directly take part in the airdrop, under Section 15 of the Securities Act, such person might still face liability. Under Section 15 of the Securities Act, each person who, by or through stock ownership, agency, or otherwise, controls any person who violates Section 5 of the Securities Act, may also be jointly and severally liable for such Section 5 violation.
  4. Accounting Consequences:
    Potential payments in respect of rescission rights may be required to be booked as contingent liabilities under GAAP, which can negatively impact financial statements and the issuer’s ability to comply with financial covenants under bank documents.

Conclusion

Any company considering airdropping tokens or other digital assets should make sure to work with their securities lawyers to confirm that such actions do not run afoul of federal or state securities laws. Directors and Officers Insurance Policies do often cover these types of claims, but just because someone has car insurance does not mean they should drive recklessly.

Article Produced By
Robert Wernli, Jr.,
Robert Weber
Osama Khan

https://www.corporatesecuritieslawblog.com/2018/08/crypto-tokens-regulatory-tomahawk/

David https://markethive.com/david-ogden

Exclusive Lunar Insight: ICO Performances Are Mostly Unaffected By Bear Markets

Exclusive Lunar Insight: ICO Performances Are Mostly Unaffected By Bear Markets

Introduction: A Statistical Analysis Of ICO Performances
In Differing Market Conditions

These past several months, an analysis of ICO performances in the midst of varying market volatility was conducted by the data science team at Lunar Digital Assets. Intuition would probably lead a typical retail investor to believe that an ICO will perform better in bull markets as opposed to bear markets (and in stable markets which are void of any particular direction).

A SURVEY OF 288 CRYPTO INVESTORS:

At the inception of the idea for this study, we were curious to see what cryptocurrency traders and ICO investors thought regarding the performances in bull and bear markets. So we asked various networks of traders and investors a fairly simple question. The results were astoundingly favored towards bull markets, as most would expect. However, it should be pretty noteworthy that 29% of those surveyed disagreed with the majority. (29% because the 12% that voted for «Anytime» would be investing in bull markets as well.) In hindsight, we probably should have had «I don't know» added to the list of choices.

SURVEY RESULTS: WHEN'S THE BEST TIME TO BE INVESTING INTO ICOs?

  • Bull Markets: 171 (59%)
  • Neutral Markets: 40 (14%)
  • Bear Markets: 35 (12%)
  • Anytime, doesn't matter: 33 (12%)
  • Never: 9 (3%)

In this analysis, we aim to bring credence to or dispel this commonplace notion using statistical analysis and hypothesis testing. We strongly believe that this study is especially helpful in the relatively young market of cryptocurrencies and initial coin offerings, whereas traditional financial markets have a much longer history and established patterns and trends. We will attempt to answer the question that everyone thinks they know, but doesn't really know: Do ICOs really—statistically—perform better in bull markets?

DATA SCRAPING, CLEANING, & EDA

DATA OVERVIEW AND EXPLORATORY ANALYSIS: FINDING RELIABLE DATA IN THIS FRAGMENTED, YOUNG MARKET CAN BE CHALLENGING.

The data for this study was acquired from Coinist, which provided a sample data size of 457 initial coin offerings. Although we are aware that there were many more ICO's conducted, we believe that 457 is an ample size to draw inferences from. Coinist was also the only data source that readily had ROI information (the figures were also spot checked for accuracy), and went as far back as 2013 up until the data the captured in May 2018 when this study was being conducted.

As basis of analysis, we will be using each coin’s Return on Investment (ROI) since the ICO Ending date as a measure for investment performance. Due to the varied nature of ROI across ICOs, I will be using a common logarithmic function (Base 10) of each coin’s ROI as reasonable means of comparison. This is especially useful as we are concerned about relative performance in different market conditions and not an associated scalar value.

CAPTURED DATA: 

  1. Name of Coin
  2. 1-Hour % Change
  3. 24-Hour % Change
  4. Weekly % Change
  5. ICO Date (last day of token sale)
  6. ICO Price
  7. Current Price
  8. ICO Return on Investment (ROI)

DATA CLEANING

We did not find any major issues with the data other than one mislabeled adte for the coin APX. The ICO date was set to May 21, 1970. While cross referencing with other sources, we had determined and fixed the APX ICO date to May 21, 2017. Outliers: NXT's overall ROI of ~24,000% was an obstacle to proper comparison and analysis. Despite being a significant outlier (the next best performer was Ethereum at ~1,900%), we decided to keep this data and regularize it via a common logarithmic function for analysis.

EXPLORATORY DATA ANALYSIS

The goal of EDA is to visualize the data in different perspectives to glean additional insights for further analysis, anomaly detection, and data consistency. In this section, we will visualize the data from a high level. First, we wish to explore the pace of ICOs and visualize the rise of ICO as a means of capital funding: We see a staggering yet unsurprising increase in ICOs in 2017 followed by a decline in 2018 YTD. However, we would not be surprised to see the annual 2018 value exceed 2017’s ending tally. It should be noted that since the data was taken in May, as predicted, the number of ICOs is steadily rising.

MORE EDA: VISUALIZING WINNERS AND LOSERS

In the full article published on Lunar Digital Assets, you can visually see the ROI of ICO's categorized in different segments:

  • Yearly ROI —
    Our dataset captures the following years and the associated numbers of ICOs held in that year. The below violin plot provides a visual summary of statistical descriptors of the ROI performance by ICO Year 
  • Monthly ROI —
    On a monthly basis, ICOs that end in April have the best median performance but also likelier to perform the worst of any month other than December. Otherwise, there does not seem to be a significant difference in ICO performance based on Ending Month.
  • ROI by Market Conditions:
    Another important distinction to consider when analyzing ICO ROI was whether or not the ICO occurred in a bear, bull, or purgatory market environment. Date ranges were leveraged from Thomas Lee, Head of Research at Fundstrat Global Advisors. Please also note that any date ranges not included are considered “purgatory runs” or what traders like to call «sideways markets.»
  • ROI per Year by Market Environment:
    When taking out the year dimension of the view, the plot suggests very little difference in median ROI performance.
  • ROI of all ICOs in Bull, Bear, and Purgatory Markets:
    The plot suggests very little difference in median ROI performance, but one very odd statistic was that bull markets see more outliers of negative performance and purgatory markets see more outliers of positive performance (likely due to NXT's ROI as the coin had its massive run-up in a purgatory market in 2013).

    It appears that the market conditions do not have a significant impact on the median returns of ICO's. Now we can move on to see if, on average, ICOs perform better in bull markets than in bear markets.

 

METHODOLOGY AND STATISTICAL ANALYSIS 

MEDIANS AND AVERAGES ARE NOT THE SAME!
The primary method of analysis used to assert our assumption is a hypothesis test using a Z-Test. In order to appropriately perform the test, we require that the distribution of the data be unimodal and normally distributed. In our sampling method, the sample size must be larger than 30 and our samples be independent. We find that each market environment contains 173 ICOs during a bull market, 143 during bear markets and 142 in purgatory markets. As a result, our population and ensuing sample sizes will be greater than 30. Moreover, our population samples are assumed to be independent.

To assert our data is unimodal, an Exponential Cumulative Distribution Function was constructed. The theoretical model takes the mean and standard deviation of our ROIs and plots hypothetical data points. We compare this with the actual plot of our ROI data. In the below graph, we find that our real data is closely aligned with the ideal model and thus can be assumed to be unimodal and normally distributed. The goal of our statistical analysis and hypothesis test is to determine whether ICOs, on average, perform better (has a higher average ROI) during a bull market than in a bear market. To accomplish this, we need to construct the confidence intervals and then the hypothesis test parameters.

We begin with establishing a 95% confidence interval to provide insight on the range of differences that we can observe. Taking 100 random samples from the Bull and Bear populations, the difference in the mean is -0.159. At the 95% confidence level, the difference in Logarithmic ROI can range between -0.52 and 0.21. For our hypothesis tests, our statements will be expressed as:

  • H?: μ1 — μ2 = d?
  • Hα  μ1 — μ2 > d?

Where μ1 is the mean bull market ROI and μ2 is the mean bear market ROI. D? will be 0 (zero) to signify the difference in the means. Our null hypothesis posits that there is no difference between bull and bear market returns while our alternative hypothesis posits that there is a positive difference. Our critical rejection region will be [1.64 to infinity]. Following a stratified sampling method, we arrive at the two population means:

  • Mu1 (Bull Market): -0.19
  • Mu2 (Bear Market) -0.04

The Z-Test statistic formula will be the difference in means (μ1−μ2) less D0 divided by the square root of the standard error of both the bull and bear market ROIs. We arrive at a test statistic of -0.717. This value does not fall into our critical rejection region of [1.64 to infinity] and therefore fail to reject the null hypothesis. This suggests that there is no difference between the average ROI (and by extension performance) between bull and bear markets. This assertion continues to hold true at both the 99% and 99.9% confidence levels.

We additionally tested if this holds true when we change the Alternative hypothesis from Ha:μ1−μ2>D0 to Ha:μ1−μ2≠D0 (which denotes that there is a significant difference between the average ROI in bull and bear markets). We find that at the 95%, 99% and 99.9% confidence levels we still fail to reject the null hypothesis.

SUMMARY OF FINDINGS

SURPRISE! BAD PROJECTS WILL BE BAD PROJECTS, REGARDLESS OF THE MARKET'S HEALTH.

In summary, we found there to be no statistical significance in the average ICO performance in either a bull or bear market. In fact, we find that

1) there tends to be far more performance losers than winners regardless of market environment
2) ICOs, on average, tend to underperform in both bull and bear markets (where the market is driven by incumbent coins and tokens), and
3) bull markets see more outliers of negative performers!

We can safely say that there needs to be more studies done, and there are so many more variables at play here. But those looking to raise working capital through an ICO should not focus on trying to time the market but rather focus their efforts on other aspects such as the actual product, the white paper, marketing hype, building the community, and etc.

When I assigned our research team this task, I thought that I was going to prove to the world that investing in ICOs during a bear market was a bad idea. Not only was I proven wrong, but this study has given me new epiphanies on how to further capitalize the downtrends. Since then we have embraced the philosphy of truly growing organic communities and building a strong foundation for projects. While most would think that a bear market would have negative effects on all projects, the numbers were fairly clear here, and numbers don't lie. During bull markets, I suppose there's more confirmation bias as there are many more ICO's going on, which means more headline news of X, Y, and Z coins doing 500x returns. 

To all the projects that are on the sidelines waiting for the bull market to come, that is a bit concerning — ultimately, it means you have no faith in your own project. True tech and true community will overcome bear markets, as projects like Chromapolis and Cloudbric has proven.

Article Produced By
Han Yoon
Lunar Marketing

https://icobench.com/thebench-post/126-exclusive-lunar-insight-ico-performances-are-mostly-unaffected-by-bear-markets

David https://markethive.com/david-ogden

Decentralized Identity Systems and the Future of Marketing

Decentralized Identity Systems and the Future of Marketing

What if SSI evolved into more freedom for Content creators and influencers that resulted in an Ad-free blockchain internet?

Instagram stories have become intercepted with Ad-spam,

it’s a pretty terrible user experience. As Facebook seeks to monetize Messenger, WhatsApp and Instagram?—?since Facebook’s flagship app is a dying app; the message is clear. Centralized Ads are polluting the internet. Whatever you believe self-sovereign-identity is, blockchain needs to decentralize identity systems on the internet to ensure consumer privacy, control and freedom.

The Emergence of the Next Web Based on Blockchain

A digital identity that’s accountable to human rights, is that so much to ask? Digital creators and influencers need to have full-rights to their creations just as consumers should have full rights to their data, which they can then barter or sell or trade via tokens with advertising platforms. Facebook and Google’s model is all wrong, it’s the past.

I’m following a lot of crypto projects related to UBI and the decentralized identity systems that reward people better. One of the terms I like the most is called “self-sovereign marketing”, where several startups are looking into creating more fairness in content and referral traffic for influencers in a more transparent way.

Everytime I post on LinkedIn, in the back of my mind I’m wondering why I don’t get paid. On Medium, I can put my articles behind a paywall and make a living wage. Why would I ever post again on Instagram or Twitter without some measurable return on investment? I need social media to work for me. If I have 195,000 followers on LinkedIn, that has to mean something.

Human Rights on the Internet

What people do should matter, and their digital rights not just to privacy, but to empowerment is key for how we build the internet and restart it with blockchain. SSI should not just serve Governments in how they track citizens on centralized blockchains. There must be an aspect of decentralization where the peer-to-peer aspect empowers people globally. Imagine if LinkedIn actually worked that way, and wasn’t just a spin-off of Microsoft? Imagine if Facebook stood for something more than a “family of apps” that is just an advertising machine?

SSI should complement existing advertising and government digital identity systems, just as Bitcoin and over 2,000 digital assets already complements how fiat transactions, investment, trading and assets work. Decentralization is about bringing the internet a new era of freedom, stability and alternatives to what’s not working. Let’s be honest, Google and Facebook should probably be broken up. (We don’t need the inventor of the Internet to tell us that). They are too centralized and have become corrupt.

In a future world of decentralized identity,

consumers will have more rights and advertising and
brands will open up a new era of ethical influencer marketing.

The Sociology of Decentralization

As mistrust of centralized tech companies grows, in proportion the movement towards decentralization syncs with our collective values.

At the same time now you have people like JP Morgan saying they are behind Ethereum. We can only assume the rise of digital assets and a token based economy will herald new options and alternatives for consumers on the next phase of the internet. We can’t stay on Facebook family apps and think it’s okay anymore. Consumers will demand better experiences, just like I as an indie journalist need incentives that motivate me and don’t just exploit me for my creativity.

Decentralization is the Key in How we Transition Past Advertising to the Next WebSelf-sovereign identity platforms need to scale with the future of how the internet will work. Their dApps need to empower consumers where new ecosystems of value can emerge that create more level playing fields.Capitalism without trust and blockchain might have trouble sustaining its value based on the old tricks (like vanity metrics for instance).As Instagram itself becomes saturated with stories that no longer have relevance to our fleeting attention, a new generation of apps will take its place.Many of those will have self-sovereign marketing built into them. This is already happening with many micro-video apps, you just might not be aware of it yet.

Self Sovereign Marketing will scale a new model of advertising

and change the internet forever.SSM will Hardcore Opportunity and Authenticity in the next Era of Social Marketing Advertising just like physical retail, needs to adapt to the values of the new consumer. Decentralization identity systems will augment how consumers participate in the future of advertising. Any blockchain startup that’s pioneering better incentives for these apps is ultimately contributing to the future of self-sovereign identity and self-sovereign marketing, SSI and SSM respectively. One day I’ll do a survey covering the main ones.

In a world of cryptoeconomic freedom, social platforms won’t own our data, we will. We’ll be driven by economic incentives to collaborate and create, in an open-source and permissionless manner where we’ll have unparalleled self-governance to explore our interests and abilities online compared to the enslavement of the internet today. Digital assets are pointing to a new model of how the internet of the future will work.

Article Produced By
Michael K. Spencer

Medium member since Apr 2018

Blockchain Mark Consultant, tech Futurist, prolific writer. WeChat: mikekevinspencer

https://medium.com/futuresin/decentralized-identity-systems-and-the-future-of-marketing-c6e1fde04552

 

 

David https://markethive.com/david-ogden