The Daily Bit July 17, 2018

Tweet of the Day

1) Recently finished @nntaleb‘s Skin in the Game. Like others (@naval) who have had their worldviews shifted by Taleb’s writings on probability, randomness, and society in general, SITG changed how I think about numerous parts of the economy and society. Some takeaways:

– @Jimmy_Rosen


We know a good tweet thread and we see one. And, speaking of good ones: congrats to France on their 4-2 victory over Croatia to win the 2018 FIFA World Cup. Hopefully you got a kick…. out of the 32-day tournament…

ba ding.

Top Cryptos By Market Cap

BITCOIN (BTC) |  2.81% | $6,510.47
ETHEREUM (ETH) |  5.28% | $465.81
RIPPLE (XRP) |  2.81% | $0.455
BITCOIN CASH (BCH) |  6.31% | $760.45
EOS (EOS) |  7.62% | $7.63
LITECOIN (LTC) |  5.28% | $81.71

*As of 6:00AM EST

The markets are on the rise, gaining roughly $6 billion in market cap since midnight yesterday. Causes? None can say, though recent news about BlackRock’s interest in receiving crypto exposure, The Coinbase Effect, and hopium surrounding a long awaited Bitcoin ETF are likely catalysts.

*PSA: Our full newsletters are back. Without further ado…

Word On The Street

Coinbase Ready to List it All (Maybe)
Although the news broke midday Friday, the fact that Coinbase is exploring the addition of 
five new assets is worth revisiting because (1) there are multiple takeaways worth noting, and (2) it blows all weekend headlines out of the water.

Before diving in, let’s introduce the tokens up for integration. Descriptions are courtesy of this tremendous article prepared by Invest in Blockchain that introduces the Top 100 tokens:

  • Cardano (ADA): Open and democratic smart contracts platform.
  • Basic Attention Token (BAT): Replacing online ads with direct consumer-to-creator payments.
  • Stellar Lumens (XLM): Super-fast payments with incredibly small fees.
  • Zcash (ZEC): Similar to Bitcoin, but with anonymous transactions.
  • 0z (ZRX): Decentralized exchange framework with fast smart contracts.

Digging into the details
Coinbase made it rather clear that this is how the exploration of future assets will be revealed. Dual public-internal reveals will expectedly minimize the potential for Round Deux of Insider Trading allegations.

But, here’s the kicker: there’s no guarantee any asset will even be listed. That’ll continue splitting hairs with individuals who disagree with their delivery and provide troll fuel for exchanges such as Kraken that is also “contemplating the exploration of maybe adding over 1600 new coins”.

Other noteworthy notions:
Interaction with some assets may be limited. For instance, Coinbase may only support transparent, aka non-privacy addresses for Zcash if the coin is listed. Given that U.S. competitor Gemini already provides Zcash support, our hunch is that it will.

Assets may be limited by country. That’ll depend on the legal and compliance measures each region requires. Due to outstanding security labels by the SEC, it’s likely that U.S. customers will see asset offerings broadened later than most areas.

XRP was not mentioned. A huge blow to Ripple holders that adds more gusto to the theory that XRP will be deemed a security by the SEC and is therefore too at-risk for Coinbase at this time.

All mentioned tokens jumped over 10%. Ari Paul covered the phenomenon back in May 2017, and it holds true today despite the bear market.

Homework
More announcements will come. Get ahead of the ball and produce a short list for tokens that could make Coinbase’s next blog post. Odds are The Coinbase Effect isn’t going away anytime soon.

Where’s Blockchain?

Blockchain 101
Blockchain and academia are perfect for each other. After all, universities are breeding grounds for some of the greatest minds on earth – introducing them to blockchain at an early age will only plant the seeds for future innovations.

So it’s no wonder universities are racing to assemble the appropriate coursework for their students. Looking at regions across the globe, there are several locations where crypto and college are fomenting undergraduate unities:

  • United States: Georgetown, Stanford, UC Berkeley, NYU, Duke, MIT, UCLA, UPenn
  • Argentina: Buenos Aires Institute of Technology
  • Australia: RMIT University
  • Cyprus: University of Nicosia
  • Denmark: Copenhagen Business School
  • Russia: Voronezh State UniversityDon State Technical UniversityNovosibirsk State University
  • Spain: The Universidad de AlcalláUniversidad Autónoma de Madrid

The bottom line: Not everyone will walk away with MBAs in distributed ledgers, but at least conversations are being discussed in classrooms rather than tucked away online forums.

What Else You Should Read Today

Adoption

  • Segwit support reached a milestone, breaching 40% for the first time.
  • Motivated by the popularity of CryptoKitties, Major League Baseball will be releasing their own digital collectibles that commemorate significant in-game events and related memorabilia.
  • Watch your six, Coinbase – Circle released the official Poloniex mobile app for iOS and Android.
  • The Ethos Universal Wallet, self-described as a way to “securely store, send & receive, track and learn” about 100+ cryptocurrencies, is available on the App Store for iOS and Android.

***BREAKING***

  • BlackRock, the world’s largest ETF provider with nearly $6.3 trillion in Assets Under Management, created a team to assess how they can gain crypto exposure.

Education

  • An Introduction to Cryptoassets, by Jeremy Gardner of Ausum Ventures.
  • NuBits was a stablecoin… until it wasn’t. Reserve’s Research Team reviews Nubit’s punctured peg and presents takeaways from its first crash.
  • For blockchain content galore, consider taking a peek at a new site called SatoshiLinks.
  • Token swaps and mainnet launches go hand in hand – David Gutteridge explains the full process here.

Markets

  • Swiss Infrastructure and Exchange Group, Switzerland’s largest stock market operator, may support cryptoassets on its digital trading platform when it launches in mid-2019.
  • Pomp is back on Twitter, and his latest Medium article covers a key technological trend: digitally native or bust. That’s why digital wallets are replacing brokerage accounts.
  • Jesus Rodriguez’s latest post introduces five privacy initiatives that he believes are worth keeping an eye on: CryptoNotezk-SNARKSTEEEnigma, and Oasis Labs.

Regulation

  • The Crypto Finance Conference ranked the most favorable countries for ICOs, with the United States taking 1st (30 of top 100), Switzerland 2nd (15), and Singapore 3rd (11).
  • Chile’s Banco Estado took an L in the country’s Court of Appeals and will have to reopen the account for crypto exchange Orionx due to the “arbitrary and illegal action” of the initial closure.

Bulls and Bears

Expect other central banks to follow in the footsteps of the Bank of Thailand, whose governor, Dr. Veerathai Santiprabhob wishes to harness blockchain to tackle core aspects to the bank’s activities.

What we’re talking:

  • Cross-border payments
  • Document authentication
  • Supply chain financing

How will other banks follow suit?
Tracking their footsteps, of course. While blockchain is disruptive, the tech still requires a test run in a supervisory sandbox before full-scale deployment.

Quoting the governor, the arena will allow “firms to test new technologies and operating standards in a safe environment before the products and services are launched by the general public.”

Where else we’ve seen this: Down Under and across the pond from the United States. The Australian and UK governments signed an agreement in March that discussed the sharing of regulatory expertise for a smoother transition of blockchain startups into their respective sandboxes.

Why this is smart: As we’ve seen, many blockchain projects tend to drown… or disappear. Better to place them in the kiddie pool to prove themselves before sending them off to the Big Leagues.

Some childhood lessons transcend generations: don’t talk to strangers, don’t accept rides from unmarked vans, and most importantly – be mindful of ICOs piloted by former-Macau gangsters.

Apparently, Wan “Broken Tooth” Kuok-koi has a knack for fundraising. The retired gangster raised a whopping $750 million in under five minutes for HB tokens, which are intended to back chess and poker tournaments in mainland China.

The project’s details are off-center
An internet tech company that is supposedly working with Wan couldn’t be reached by phone (disconnected number) or email by South China’s Morning Post. And their expansion plans are aspirational, to say the least, with plans to increase “from the seven or eight [games halls] it has so far to 10,000 in the following three to five years.”

There are other problematic areas:

  • Game winnings paid in tokens is disguised gambling (read: illegal).
  • Vague references to HB’s technology in its investment document.
  • HB is traded on an exchange… listed as an electronics store on Google.

Our take: We wish Broken Tooth all the best, though it wouldn’t surprise us if he breaks into a toothy grin following a possible HB exit scam.

Education

Crypto Backed Loans
If you’re in the market for financing and want to remain invested in the crypto markets, CBLs are the way to go. As noted by 
Archer Tax Group, “by taking a loan and using crypto as collateral, you can unlock the value of your holdings without having to recognize a gain.”

But, go figure… there are risks. Volatility being a more notable one. Don’t expect CBLs terms to match those of more stable asset-backed loans. Collateral as steep as 2:1 per dollar lent and double-digit interest rates can be expected to compensate the lenders bold enough to provide financing.

What to watch: Archer suggests to look for CBL services that won’t dump your positions at a moments notice (i.e. in the event that a liquidation threshold is breached) as doing so can have negative tax implications.

Where to look: Unchained CapitalDharma ProtocolSALT LendingETHLend.

 

THAT’S ALL FOR TODAY!

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