A brief update this week, as I need to focus on prepping for CoinDesk’s Consensus conference in New York in just over a week. See you there?
Last week at Collision in New Orleans was epic – the best thing about these events is the people you meet. My panel was apparently one of the most attended in the entire event – it was pretty basic, since the audience was “general tech” rather than crypto fans, but most of the audience held some, a major change from similar conferences a year ago.
You can see it here.
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Great street art in New Orleans:
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Nathaniel Popper of the New York Times wrote an interesting contribution to the growing literature on blockchain standards… with a twist: blockchain as geopolitical tool. Blockchain as national strategy. Blockchain as power play.
“The Russian interest in the normally wonky technical sessions has caused concern among other delegations, who worry that individual countries could push standards that would make the security of the blockchain technology vulnerable to surveillance and attack.”
The Russian aims seem obvious:
“Another delegate who had a separate conversation with the head of the Russian group remembers a slightly different wording: ‘The internet belonged to America. The blockchain will belong to the Russians.’”
And the potential consequences are worrying:
“One of the Russian delegates to the I.S.O. blockchain group, Maxim Shevchenko, gave a talk last summer in Russia in which he spoke about the country’s goals in the I.S.O. group. The bullet points on the slide included “possibility to influence the technology” and ‘implementation Russian standards and solutions worldwide.’”
Blockchain technology development has for some time been used as a tool to attract funding and investment, but generally at the margins. The game seems to be intensifying.
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Ripple seems to be coming under increasing public scrutiny… Apart from its curious declaration before the UK Parliament…
“We didn’t create XRP … What we do have is we do own a significant amount of XRP, it was gifted to us by some of the open-source developers that created it. But there’s not a direct connection between Ripple the company and XRP.”
… you have an investor suing it because it might be a security. Since XRP is currently not used (with one exception) in cross-border transfers, its future value depends on Ripple’s success in getting it used. Therefore, it could be considered a security in that its value depends on the efforts of others.
“The development of the XRP Ledger, and the profits that investors expected to derive therefrom, were, and are, based entirely on the technical, managerial, and entrepreneurial efforts of Defendants and other third parties employed by Defendants.”
If XRP does get designated a security, it was not registered as such, and so would face some legal and economic problems. But that designation is not clear: it’s an open-source token, freely traded by many. Ripple’s recent efforts to boost its value, however, leaves a trail of breadcrumbs that isn’t going to help its defense…
Preston Byrne’s thread highlighting the inconsistency of Ripple’s stance regarding its token XRP is scathingly brilliant:
"XRP is open source and it was not created by our company, so that existed as an open source technology… there's not a direct connection between Ripple the company and XRP." https://t.co/U7BTqnqdTp
— Preston Byrne (@prestonjbyrne) May 2, 2018
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Karen Hao wrote one of the most thoughtful and thorough pieces that I’ve seen on the prickly subject of “women in crypto”. Definitely worth a read, whatever your gender.
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The news that Goldman Sachs will start trading bitcoin futures is intriguing, in that (in spite of what several headlines implied) they are not touching the underlying asset, actual bitcoin… because it’s unlikely that the OCC would be ok with banks holding cryptocurrencies. In most of the rest of the world, it’s either expressly forbidden, or “advised against” (which is pretty much the same thing).
But, as we’ve repeatedly seen, derivatives are fine… even though they are usually more volatile than the underlying asset.
Rather than boost bitcoin’s liquidity, this will boost the liquidity of hedging strategies… which could support the price of bitcoin itself, if more institutions decide that the enhanced hedging facilities (increased liquidity on the acknowledged exchanges) make a crypto strategy less expensive.
Meanwhile, Barclays is denying reports that it is also planning to launch a crypto trading desk… although, if I understand correctly, its CEO was talking about the underlying asset, not derivatives. Where Goldman goes, others are sure to follow.
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This is kinda cool in terms of increasing crypto’s diversity: the number of bitcoin developers is increasing, as is the number of submissions and pull requests on GitHub, apparently a result of education efforts.
“’One of the things that surprised me is what kinds of people take my class. I expected it to be all developers,’ said Song.
But as it turned out, participants ranged from teenage girls to hedge fund managers and retirees.”
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