Bits and stuff – January 7, 2018

After a whirlwind December and a good chunk of time offline, I’ve been trying to remember how to type. And catch up on blockchain news.

With so much to catch up on, I can’t stress enough the value of stepping back every now and then and taking a non-blockchain break. The trope that it helps with perspective turns out to be true. Catching up is tough but interesting, and surprisingly less overwhelming than I expected. And the feeling of loss in missing out on news and ideas is easier to bear when you realise that you’re going to feel that anyway, no matter how much time you put in – there is so much great blockchain-related content these days that it is impossible to read everything.

I’m back at CoinDesk now, working on new projects. More details to follow. There are some interesting things in the pipeline.

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Ripple was a big theme this week, with an excellent deep dive by Michael Castillo and Bailey Reutzel on the relationship between Ripple’s network and its token XRP. It seems that the company has not been as transparent as it could (should?) have been, although it doesn’t seem to have overtly misled anyone.

With Ripple and its token a touchy subject at the moment (exacerbated by its meteoric price increase of 1500% in the past month alone, as of Jan 4), Twitter has been ablaze with controversy and extremism. While some point out the dubious fundamentals behind the valuation, XRP holders scream FUD accusations. Meanwhile, the press tries to make sense of it. The Financial Times, the New York Times and the Wall Street Journal are just some of the big names covering this now. The CoinDesk article was the best I’ve seen. I also recommend Ryan Selkis’ lucid take on Medium.

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Stunning photographs of the neon stillness of Hamburg at night by Mark Broyer (via MyModernMet):

Mark Broyer, via MyModernMet
Mark Broyer, via MyModernMet

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This article highlighted the jurisdictional spaghetti that is US securities regulation: the securities regulator for Texas (not the federal SEC) stopped a token sale due to various infractions.

I confess that I didn’t realise the state authorities had the power to do that. Combine this oversight with that of the SEC, and the outlook becomes more reassuring for those of us concerned about the lack of regulation. Of course, it becomes tougher for would-be token issuers – but I don’t think that’s a bad thing.

And things could be just warming up. According to this article, 94% of state and provincial securities regulators (you mean there’s also provincial ones??) think that cryptocurrencies carry a “high risk of fraud”. Which implies that scrutiny will get tougher. Good.

Breaking rules in the name of innovation is one thing. Breaking laws is another.

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Here’s an intriguing shift: George Soros’ Quantum Fund invested $100 million (through the exercise of a warrant) in retail giant Overstock. According to Overstock’s CEO Patrick Byrne, much of this will be invested in blockchain development.

This is intriguing for two reasons: 1) it’s traditional finance – no digital token shenanigans; and 2) Overstock is an unusual blockchain play.
As well as a successful e-commerce business, Overstock owns Medici Ventures, which oversees the retail giant’s blockchain activities. Many of these are likely to benefit from the funding.

One of those is tZero, which is building a distributed ledger platform for capital markets and which is currently in the pre-sale phase of a token issue. Since my personal thesis is that capital markets will be one of the main areas of focus for blockchain efforts in 2018, this is worth keeping an eye on.

In a further twist, the firm’s CEO recently announced a desire to focus on his “personal mission” of developing blockchain-based property rights. $20 million of the funding will go to DeSoto Inc, a joint venture Byrne set up with Peruvian economist Hernando De Soto to further this end.

Since this is another compelling use case, with the potential to further financial inclusion and unlock value through reliable ownership titles, we could be looking at one of the most high-impact blockchain-related investments of the year. And it’s only the beginning of January…

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Daft story of the week:

You may remember that late last year the Long Island Iced Tea company changed its name to the Long Blockchain Corp., which probably makes sense to someone, somewhere (go figure). It turns out that it wasn’t just a naming exercise – they do actually plan to start mining bitcoin. I mean, it’s gotta be easier than making and selling iced tea, right? Of course, first they need to raise the money. And, no, they have not (yet) mentioned an ICO.

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More to come next week, although not as much as I’d like. All of my non-working time is taken up with physiotherapy – I’m SO looking forward to getting my shoulder back to normal.

I’ll leave you today with a taking-a-break recommendation: the second season of Dirk Gently. (If you haven’t seen the first season, that’s recommendable, too.) Totally weird and strangely enjoyable. One of those series where not understanding what is going on is part of the gleeful charm.

Dirk Gently