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The combined value of all publicly traded cryptocurrencies

has set a new record, surpassing $150 billion for the first time today. At press time, the value of ether, bitcoin and more than 800 other blockchain-based assets had reached a high of around $154 billion, according to CoinMarketCap. Overall, the figure indicates that the cryptocurrency market continues to grow at a steady pace. At $154 billion, the market is up 13 percent over the last seven days, 67 percent over the last month and an astounding 1,240 percent year-over-year. What might be most notable, however, is that the new high came during a trading session in which there were no individual all-time highs for major cryptocurrencies.

At $4,275 and $324, bitcoin and ether were edging up at press time, though still short of their highs above $4,500 and $400, respectively. Further, the new combined record came in spite of the fact there were no big gains in litecoin, monero or dash, some of the more popular alternative cryptocurrencies among traders. The lone breakout, in fact, was Ripple's XRP token – a cryptographic asset issued by a San Francisco startup seeking to build enterprise blockchain solutions. On the day's trading, XRP was up more than 50% to $0.28, a movement that built on impressive gains yesterday as well.

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Mark Cuban Backs Former Coinbase Employee's $20 Million Token Fund

 

A former employee of bitcoin's best-funded startup

is seeking to raise $20 million for a fund that will invest exclusively in cryptographic assets. Headed by one-time Coinbase product manager and Runa Capital principal, Nick Tomaino, the fund, called 1confirmation and launched officially today, already boasts impressive early backers. This includes celebrity investor Mark Cuban, who went so far as to praise the fund and its mission. "I think Nick is one of the sharpest minds in the space, and I'm a big believer that there will be transformational apps built on blockchain," Cuban told CoinDesk.

In interview, Tomaino provided more details about the fund's strategy, including its emphasis on moving computer networks from a centralized state to a distributed architecture so as to make them more robust and resilient against attack. 

Or, as Tomaino frames it:

"The most interesting and useful thing about blockchains is their ability to empower people in new ways. Blockchains put power in the hands of people, and take it away from large institutions."

According to documents reviewed by CoinDesk, 1confirmation will make initial investments in the $100,000 to $500,000 range in SAFTs and SAFEs, legal vehicles designed to help investors pre-purchase tokens or equity prior to an ICO. 1confirmation will then seek to provide support similar to a traditional venture capital firm, including business development, legal and engineering assistence. 

Philosophy of decentralization

Tomaino's fund follows a broader trend now underway in the space: early advocates starting funds to invest institutional money to cryptocurrency. Already, just shy of $2 billion has been invested in token sales, with recent months setting a string of records, according to the CoinDesk ICO Tracker. Yet, institutional investors have acknowledged the high signal-to-noise ratio in the market that makes it difficult to sort out the best ideas. When asked what specific implementations interesting him the most, Tomaino cited the concept of a "work token" – the idea that blockchain tokens can give users the right to contribute to a decentralized organization.

"I'm looking for projects that use tokens to create new organizational structures and behavioral models," he added When asked for some examples, Tomaino began by framing where he believes the industry is today. "The shift right now is around money. So, the biggest example is bitcoin. Fundamentally, what's interesting about bitcoin is the ability to shift the control of money from centralized institutions  to people," he said.

Toward tomorrow

Tomaino also provided a few examples of where blockchain technology may be heading. One type of work that seems a likely candidate for tokens, according to Tomaino, is governance functions. "If token holders can act as governors in organizations they can vote on decisions," he said. Prediction markets, where the work that needs to be done is reporting on the outcomes of events, is another area he believes is ripe for decentralization.

"To do that in a decentralized way you can't use an API, because then you are just relying on centralization. You need tokens. To create a model where you're not relying on a centralized source of truth makes a lot of sense," he said. Taken in total, the recurring theme Tomaino stressed is that blockchains create new organizational structure – and that by financially backing founders who understand how cryptography, he's enabling a reinvention of the way that individuals interact with each other and the organizations that they are connected to. In this way, Tomaino sees 1confirmation as transcending the initial coin offering model and its focus on fundraising,

concluding:

"I'm not interested at all in projects that use tokens as a fundraising mechanism."

 

Blockchain ID Startup ShoCard Raises $4 Million in New Funding

Blockchain startup ShoCard has raised $4 million in new funding from a range of investors.Co-led by AME Cloud Ventures and Morado Venture Partners, two of the company's existing stakeholders, the round also saw participation from Storm Ventures, Danhua Capital and Correlation Ventures, as well as Recruit Strategic Partners and investor Robert Tinker.The completed round brings ShoCard's total venture funding so far to $5.5 million. In July 2015, the startup raised $1.5m in funding from a group of investors that included AME, Digital Currency Group, Enspire Capital and Morado.

Along with the funding, the startup unveiled a new enterprise-facing product, dubbed ShoBadge. The idea, according to the startup, is to eliminate the use of passwords and usernames by using mobile-based encryption, with blockchain technology being used to preserve an immutable record of who has permission to access accounts.

"ShoBadge will use the ShoCard verification, enrollment and authentication tools that leverage mobile devices along with the blockchain as the next generation of identity management, offering CIOs and CISOs a consolidated approach and more secure identity management for their enterprise," Armin Ebrahimi, the firm's founder and CEO, said in a statement.

Chuck Reynolds

Marketing Dept
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US Lawmakers Draft Bill Protecting Cryptocurrencies from Gov Interference

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Reasons Why Central Banks Will Miss the Next Currency Renaissance

 

Eugéne Etsebeth is an ex-central banker who was employed as a technologist

at the South African Reserve Bank from 2013 to 2017. During his time at the reserve bank, he notably chaired the virtual currency and distributed ledger working group. In this opinion piece, Etsebeth outlines why he believes central banks won't be able to adapt to innovations in cryptocurrency, arguing they simply aren't set up to compete with sea changes in technology.

It's a familiar trend, one that happened in communications (internet), and that is now playing out in energy (solar), manufacturing (3D printing) and finance (cryptocurrency) – power and control are moving into the hands of the individual and away from nation states. This has huge implications for central banks, which today enable nation states to maintain their monopolies over the issuance of notes, coins and sovereign bonds. While communications and manufacturing are not their focus, cryptocurrencies and initial coin offerings (ICOs) fall predominantly in the realm of central banks.

In these systems, central banks don't issue legal tender. Rather, miners and algorithms now control the issuance of tokens – effectively, the money supply. Whereas previously banks were licensed to store, send and spend currency, now wallet providers and exchanges allow the same features. The currency renaissance has arrived and central banks are studying cryptocurrencies, though some central banks are more open to change than others. Singapore has been investigating the notion of using distributed ledger technologies to settle cross-border transactions in real time, and the Bank of England has experimented with Ripple. Central banks are even looking to build their own versions of central bank-issued digital currency (CBDC).

Even still, central banks are not well equipped to deal with the cryptocurrency renaissance. In fact, there are 10 good reasons why most central banks will find cryptocurrencies insurmountable. Sure, a small number of forward-thinking (and acting) central banks will maintain monetary competiveness with the burgeoning cryptocurrencies and ICOs that have reared their decentralized heads. Still, most will succumb to a mix of the following issues:

Workforce of the past

Central banks will need to attract and retain fresh talent that will enable them to deal with the new openness and transparency demands, as well as digital transformation and the increasingly complex global world.

Slow decision-making

Decision-making in central banks is like wading through treacle – decisions take months because of numerous layers of hierarchy. Working groups need to compile voluminous and detailed documents that need to be reviewed and signed by all parties before they can proceed to the heads of departments or the deputy governors.

Too few technologists and innovators

Academics, economists and big-picture thinkers excel in central banks. The academics ponder on conceptual issues and the economists make interpretations from data, whereas the policy makers and regulators mull over the cause and effect of promulgating laws. However, technologists are generally not part of the discussion when it comes to policy and economic decisions for currency.

Fear of experimentation

Although some central banks are engaging in experimentation, there is a fear of going from proof-of-concept to pilot phase. This is natural, should a central bank make an error, it may turn out to be a reputation buster – and reputation is the cornerstone of central banks. There is also some trepidation that the early regulation of cryptocurrencies, and associated new technologies, may legitimize their adoption.

Territorial and siloed thinking

Central banks are similar to conglomerates in that they have a number of different and distinct departments that require diverse skills and outputs. These differences make it difficult to approach a new technology and economic tour de force like cryptocurrency, because it doesn’t fit neatly into any one of the industrial-style conglomerate domains. To highlight the conglomerate type nature of central banks, the core departments and skill sets are listed below:

• Bank supervision: mainly supervisors and regulators who manage banking licenses and audit
• Currency management: manufacturing and logistical planners
• Financial markets: front, middle and back office currency and bond traders
• National payments: a combination of regulators for payments and technical resources running the RTGS system
• Research: mainly economists who produce statistics based reports and input into repo-rate decisions.

Buy versus build approach

Most central banks do not have substantial software development capability. Therefore any new project will have to buy its technology. There is an acute shortage of central bankers who can explain or use Merkle trees.

Stuck in the status quo

A large portion of central bankers are career central bankers, so the desire and ability to change are not incentivised. Change is often considered a threat to staff, and threats are met with jelly-like stickiness to the status quo.

Incumbent relationships

Banks are licensed to operate by central banks, giving them the ability to create money from customer deposits. The central bank asks the banks to protect depositor's hard-earned money and to serve as many customers as it can: i.e. maximizing financial inclusion. The task of banks is therefore to service a nation's citizens at the behest of the central bank. These relationships and licenses are expensive to buy and will not easily be changed to include new members.

Inter-governmental coordination

Just as the departments within central banks tend to be siloed, so too are the intergovernmental departments that look at currency matters. They cover treasury, financial intelligence (KYC), financial services conduct authority, central bank, tax revenue and secret service units. Each of these units may have different acts and regulations that overlap cryptocurrencies and ICOs.

International coordination

Internationally the nation-state must get guidance from a multitude of organisations like the G20 or G7, International Monetary Fund (IMF), Bank of International Settlements (BIS), Financial Action Task Force (FATF) and INTERPOL. International coordination often requires prolonged diplomacy and mismatched agendas.

Chuck Reynolds

Marketing Dept
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Cryptocurrency

What is a 'Cryptocurrency'

A cryptocurrency is a digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of this security feature. A defining feature of a cryptocurrency, and arguably its most endearing allure, is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation.

BREAKING DOWN 'Cryptocurrency'

The anonymous nature of cryptocurrency transactions makes them well-suited for a host of nefarious activities, such as money laundering and tax evasion.The first cryptocurrency to capture the public imagination was Bitcoin, which was launched in 2009 by an individual or group known under the pseudonym Satoshi Nakamoto. As of September 2015, there were over 14.6 million bitcoins in circulation with a total market value of $3.4 billion. Bitcoin's success has spawned a number of competing cryptocurrencies, such as Litecoin, Namecoin and PPCoin.

Cryptocurrency Benefits and Drawbacks

Cryptocurrencies make it easier to transfer funds between two parties in a transaction; these transfers are facilitated through the use of public and private keys for security purposes. These fund transfers are done with minimal processing fees, allowing users to avoid the steep fees charged by most banks and financial institutions for wire transfers.

Central to the genius of Bitcoin is the block chain it uses to store an online ledger of all the transactions that have ever been conducted using bitcoins, providing a data structure for this ledger that is exposed to a limited threat from hackers and can be copied across all computers running Bitcoin software. Many experts see this block chain as having important uses in technologies, such as online voting and crowdfunding, and major financial institutions such as JP Morgan Chase see potential in cryptocurrencies to lower transaction costs by making payment processing more efficient. However, because cryptocurrencies are virtual and do not have a central repository, a digital cryptocurrency balance can be wiped out by a computer crash if a backup copy of the holdings does not exist. Since prices are based on supply and demand, the rate at which a cryptocurrency can be exchanged for another currency can fluctuate widely.

Cryptocurrencies are not immune to the threat of hacking. In Bitcoin's short history, the company has been subject to over 40 thefts, including a few that exceeded $1 million in value. Still, many observers look at cryptocurrencies as hope that a currency can exist that preserves value, facilitates exchange, is more transportable than hard metals, and is outside the influence of central banks and governments. The smallest unit of the bitcoin cryptocurrency. Satoshi is named after Satoshi Nakamoto, the creator of the protocol used in block chains and the bitcoin cryptocurrency.

BREAKING DOWN 'Satoshi'

Unlike the physical versions of global currencies, such as the British pound or U.S. dollar, cryptocurrencies predominately exist in the digital world. Despite this difference, a cryptocurrency can be divided into smaller units, just as the pound is broken into pence and the dollar into cents. In the case of bitcoins, the smallest unit available is called the satoshi.

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Blockchain May Give Rise To Even Smarter B2B Marketplaces

At the same time, blockchain offers potential for easing and speeding up transactions between trading partners. “It certainly enhances the traceability of high-value items or highly regulated items such as meat, poultry and pharmaceuticals.” While the first application of blockchain has been digital money, “the physical supply chain takes it to a different level,” he continues. “If I’m in retail and I order high-value china — easily breakable stuff – with the Internet of Things, it becomes more relevant, with demand signals along the supply chain, with impact sensors, for example, in different providers, trucks, trains boats. Or, in another example if a certain item has to be kept at a certain temperature, it’s about monitoring the conditions of goods as they move through the supply chain." In current chains of custody for spoiled goods, "you really don’t have insight to what happened along the way,” he adds.

A report from IBM, issued earlier this year, agrees that there is an upside for digital marketplaces. “A blockchain-enabled digital marketplace is the one area where organizations anticipate significant disruption,” the report's authors observe. Two-thirds of executives in digitally advanced companies expect new blockchain-enabled marketplaces to spark significant disruption. "As more organizations anticipate a higher percentage of their revenues shifting into services, digital marketplaces that support blockchain-based peer-to-peer messaging and transactions could be more widely used. Smart contracts could automatically track consumption."

Corporate supply chain executives are seeing the possibilities in blockchain. A recent survey of 42 supply chain managers from Chain Business Insights finds that 43% intend to introduce blockchain into their supply chains over the coming year, and another 20% within the next two years.  Advantages seen include improving supply chain visibility and transparency (cited by 46%), while 24% see potential to reduce transaction costs. 80% of respondents indicate that blockchain will play a role in tracking products moving through the supply chain. Another 60% see it as a way to share information with suppliers. A similar number see it as a way to share payment information such as purchase orders.

Adoption hurdles include lack of awareness and understanding, cited by 28%, along with lack of standards an interoperability concerns, also cited by 28%. “There is still a long way to go before the technology gains widespread acceptance,” said Sherree DeCovny, co-founder and principal of Chain Business Insights. “Still, key capabilities such as product tracing and verifying product chain of custody will likely drive to higher levels of awareness in the near to medium term.”

Chuck Reynolds

Marketing Dept
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