Monday, April 2, 2018 

TokenReporter: Everybody was tokenizing...

those cats were fast as lightning

The Update

Thanks for joining us on TokenReporter this week. The space is heating up and the site and the service is really taking off. I’ll have some cool news coming up including an event I’m holding in New York. If you’d like to attend or speak please fill out this form and I’ll be in touch.

Best,

JB

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A quick thought

There are a couple of perspectives you can take as you think about tokenizing things from the non-tokenized worlds. One side says, token sales are 81% scams, 6% Failed, 5% had Gone Dead, and 8% went on to trade on a exchange (That’s from a study by Satis Corp). Now, I don’t have a problem with startups failing. That’s the norm. If a startup is a company in search of a business model (as Steve Blank defines it) then it should be expected that a decently large number of them fail on the way to figuring out whether they can become a business. But 81% is too high a risk rate for most investors to consider investing in.

At the same time, the other perspective isn’t slowing down. That says that the much of the physical world we live in has assets and those assets that can be tokenized, will be tokenized. This was the prevailing opinion at Full Tilt Capital, an early stage vc fund, who were purchased this week by Morgan Creek. For example, the housing market, hotels, anything that has equity can, and maybe should, be tokenized.

-VM

Two token sales to watch 👁️

The problem with token sales is that they’re all in an uncertain space, both from the SEC and states’ securities divisions. We’ve seen a number of interesting projects cancel or postpone their token sales in order to avoid conflict in these uncertain regulatory times.

One of the projects that isn’t canceling is Photochain. Photochain sets out to make the world of stock photography easier to use. The benefits here are storing the photo in the blockchain, having ownership recorded in the blockchain, and recording licensing transactions so that it’s clear that the owner was paid for the use of their property. There’s a demo of it here, and the whitepaper is available for your reading convenience, too.

MyCreditChain plans to bring the ownership of credit data back to individuals so that they can have a full control over their own information. Given that existing credit agencies have power over the consumer with no ability to opt-out from them, this idea of returning control to the consumer is interesting. If we recognize that personal information is an asset, and personal information is required to asses credit-worthiness, this sort of project is one of the uses that blockchain could excel at. It certainly exists because of the uneasiness people have with the traditional big three credit agencies. The whitepaper is here.

The Good, the Bad, and the Ugly 😊😠👹

😊GOOD: Despite claims that the global interest in cryptocurrency in on the decline, South Korean cryptocurrency landscape looks optimistic. Financial News reports that South Korea’s Ministry of Strategy and Finance is going to release a taxation framework for cryptocurrencies by the end of June, which coincides with the a virtual currency conference that is going to be held on June 14 for the G20 members. South Korean official looked to the US, Japan, Germany, and the UK to study the various crypto tax frameworks. Things may indeed be going well for big businesses and regular crypto-traders alike.

A survey conducted by the Korean Central Bank informs that over 20% of citizens (predominantly in their 20s and 30s) are not only aware of cryptocurrencies, but also willing to invest. It comes as no surprise then that a major crypto Exchange Bithumb plans to introduce crypto payments to everyday use by partnering up with Korea Pay, just as it has done by entering the kiosk business to allow customers to pay in crypto at restaurants and cafes. This time the move will give about 6,000 shops the option to accept crypto as payment for goods and services.

With large conglomerates jumping on the bandwagon, many factors are fueling the adoption of cryptocurrency in the country. As Seoul Mayor plans to launch the capital’s own cryptocurrency, it seems the state is embracing the virtual coin. Due to the growing crypto-ecosystem and solid governmental regulation on its way claims are made that South Korea may become the first crypto-powered nation.

 
😠BAD: In a single day, on March 27, Five Initial Coin Offerings (ICOs) were suspended by the Massachusetts Securities Division. Massachusetts’ Secretary of the Commonwealth, William Gavin, issued a series of Consent Orders to 18moonsAcross PlatformsMattervestPink Ribbon and SparkCo, having found they were all in violation of the state’s regulations that define securities as stocks, bonds, or investment contract that guarantee a financial return. This is a warning for any Massachusetts-based ICOs that the US authorities are keeping an eye on the cryptocurrency-linked fundraising.


👹
UGLY: Twitter bans cryptocurrency advertising from its website. The prohibition covers not only the ads related to ICOs and token sales, but also ads made by cryptocurrency exchanges and wallet services, unless they are registered as public companies and listed on major stock markets.

The move met with an outcry from the crypto-community. Twitter explains the prohibition as a means of preventing fraud and crypto-related scams. Customers aren’t happy, calling the ban as “censorship.”

Facebook had already implemented a ban on crypto-related ad content due to its “deceptive promotional practices” and, similarly, Google’s update of the financial services policy bans crypto advertisers from using Google Adwords since June, 2018.

The list of cypto-ad blocking sites is growing, with the most recent addition of LinkedIn and MailChimp.

The community won’t passively take it — the cryptocurrency and blockchain associations in Russia, China, and South Korea are already planning to sue the sites, calling the imposed prohibition a “collusion.” For that purpose a new organization is formed, aptly called the Eurasian Association of Blockbearers.

"We believe that this is the use of the monopoly position of the four companies (Google, Facebook, Twitter, Yandex) that entered into a cartel with each other to manipulate the market. The ban on these four organizations led to a significant drop in the market in recent months," explains Yuri Pripachkin, the head of the Russian Association of Crypto-Currency and Blockchain.

News 🆕

In Europe, the adoption of cryptocurrency payment is on its way. Coingate joins Prestashop, an open source ecommerce solution, to reach about 80,000 merchants and give small and medium stores to accept crypto for goods and services.

“Encouraging adoption among people beyond the tech-savvy early-adopters is one of the biggest priorities for us,” says the CEO of Coingate. This is another step towards wider use of cryptocurrency and its adoption in mainstream, giving users another opportunity to trade in crypto.

Disclosure

We will run advertising in the newsletter and if would like to appear at the beginning or end of this newsletter please email joanna@cabalpartners.com We do not expect that we will run a token sale to fund this newsletter but Victor or I may run our own token sales later in the year.

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