The Daily Bit: September 5, 2018

Issue #171 | September 5th, 2018


Tweets Of The Day

“In my 20’s, I worried about what people were thinking about me.

In my 30’s, I stopping caring what people were thinking about me.

In my 40’s, I realized no one was really thinking about me very much.” 

– @adwane

– @eriktorenberg

Quotes in quotes are all the rage – especially when they provide helpful advice.

Or when it’s wisdom from Wayne Gretzky. Or intros for email newsletters…

BITCOIN (BTC)  |  -4.74%  |  $7,019.11

ETHEREUM (ETH)  |  -10.24%  |  $260.08

RIPPLE (XRP)  |  -8.90%  |  $0.307978

BITCOIN CASH (BCH)  |  -11.72%  |  $566.41

EOS (EOS)  |  -11.08%  |  $5.84

STELLAR (XLM)  |  -1.99% |  $0.219895

*As of 9:45am EST

Fundstrat released their weekly benchmark of crypto indices. The top performing sectors:

  • Privacy, +33%
  • Exchange, +10.2%
  • Commodity, +9.9%

Our thoughts? It speaks volumes on how much investors value tokens with privacy features. That is, at least in the past week – Fundstrat’s privacy sector had week-over-week returns of -5.4% to the week prior.

One Hitters

  • Peepeth, aka decentralized Twitter, is having a second go at crowdfunding.
  • A maritime society is streamlining shipping registrations with a blockchain prototype.
  • Belgium regulators added 28 sites to their crypto-related fraud blacklist.
  • Changelly revealed they can seize a user’s Monero if transactions appear suspect.
  • FYI, gaming enthusiasts – BlockMagic is the latest blockchain-based RPG.


Know Your ShapeShift

“You either die a hero, or you live long enough to see yourself become the villain.” – Harvey Dent
-Erik Voorhees, CEO of ShapeShift (maybe)

You’re probably wondering why today’s headliner kicked off with a quote (an iconic one, while we’re on the subject) from The Dark Knight. Rightfully so. Let’s provide some context, shall we?

According to Crunchbase, ShapeShift was founded in August 2014 “to provide instant Bitcoin and altcoin conversion with the maximum level of consumer protection and efficiency.”

Emphasis on consumer protections. Circling back to the Batman quote jar, ShapeShift users were effectively born in the darkness:

  • No account required
  • No fiat deposits necessary
  • Zero personal info demanded

By all definitions, ShapeShift was a safe haven for cryptocurrency enthusiasts. And relatedly, a potential black box for money launderers… but we’ll get to that. The point is that ShapeShift had a reputation for upholding a person’s fundamental right to privacy.

That’s why ShapeShift Membership is so contentious
As Erik Voorhees explained, accounts are on the horizon for ShapeShift users. That means their anonymity is officially on notice, and alternative decentralized, anonymous exchanges like (1) CryptoBridge, (2), and (3) could see more traffic in the coming weeks.

Unsurprisingly, an uproar followed. From accusations of selling out to becoming “a state compliant multicoiner“, Voorhees’ announcement did not sit well with Crypto Twitter’s peanut gallery.

But there’s another reason why ShapeShift just did “it”.
Understand that there’s no beating Uncle Sam in the ring – especially when you’re in the business of selling to Americans. Contesting regulations that were undoubtedly inbound wasn’t the right hill for Voorhees to die on.

Besides, let’s be real: Law enforcement will do whatever it takes to monitor crypto transactions. And DEXs aren’t necessarily out of the crosshairs. Unless their team members go the route of Satoshi Nakamoto, regulatory officials can leverage their real world identities to win KYC/AML compliance.

Two: The business pivot is part of a larger vision. Other changes include (1) a cryptocurrency rewards program using FOX tokens – a motive for the ‘sell-out’ jabs – and (2) membership perks, both of which are intended to be long-term value add-ons for the industry.

And their entire product suite has roles to play:

  • ShapeShift: Digital asset marketplace
  • CoinCap: Real-time market data
  • KeepKey: Hardware wallet
  • Bitfract: Multi-currency transactions

Sure… it’ll take time for Voorhees’ vision to pan out. But let’s not jump down his throat just yet.

(1) We’ll spare you the expected one-liner and cut to the chase: Abra added a new fiat on-ramp in European markets. Now folks in the single euro payments area (SEPA) & six other countries can channel (magic pun) fiat from their bank accounts to Abra’s platform, opening the floor to 28 digital currency products.

If today’s headliner was any indication, KYC/AML is kind of a big deal. Until service providers meet regulatory standards, certain markets are off-limits. On par with building towns in unexplored areas of Age of Empires, or getting a table at Fogo de Chão in board shorts – it simply can’t be done.

Abra’s fix: Coinify. The established trading platform (founded May 2014) is Abra’s first regulated exchange partner in Europe. Expect competitors looking to tap into new regions to strike up similar romances.

(2) It’s no secret that international payments are an attractive target for disruption-by-blockchain. A January IBM report marked annual cross-border e-commerce growth at 20%, with north of $135 trillion in payment flows during 2016.

With the release of Blockchain World Wire, IBM is paving the way for institutions to bag traditional clearing and settlements for a system that meshes with digital assets. The financial rail will run on the Stellar protocol and likely use the Stronghold stablecoin for many transactions.

Per IBM, the buzzword benefits are:

  • Faster payment processing…
  • Lower costs…
  • Increased efficiency…
  • and Any-sized payments….

…to name a few. And our number junkies will love this – IBM’s payment rail slashes 5 steps (of 11 total) from the standing international payment system. If you think we’re full of it, check out the infographic yourself.

Brain Fuel

  • 6 min read: Growing a Healthy Software Ecosystem (Edward Faulkner)
  • 9 min read: Bitcoin’s Path to Method of Payment (Jimmy Song)
  • 9 min read: Why Bitcoin and why sooner rather than later? (Jonathan Cheesman)