Tuesday, May 22, 2018

TokenReporter: Monopoly!


The Update

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Quick thought

We’re beginning to see a few different things: There are countries that are eager to adopt blockchain-based currencies, and countries that view them as a threat. There are industries that seem receptive to adopting blockchain and crypto (Advertising! Supply chain! Real Estate!) and fields that do not (HR is slow to adopt anything. The only thing slower). This week, we look at the concept of fractional real estate assets, and using blockchain to try and eliminate email. Where have we heard that before? Google Wave, Facebook, and a hundred others, for sure - but it’s worth hearing one more time.

Two token sales to watch 👁️

Phantasma started out trying to replace email. Email is notoriously insecure, and insecure means a few different things in this context: Is the email from who it claims to be from? Did it get read by other people in the process of moving around the world? And does it still say what the original sender intended it to say? These are fantastically difficult problems to solve, and Phantasma attempts to solve the problem. Having addressed email, it makes sense to apply the same solution to photos, and videos.

For the artists that make amazing videos, games, music and other copyrighted content, giving up a large percentage of your revenue can be very discouraging. Plus content creators usually become locked-in to those centralized platforms with the overhanging danger of arbitrary rule changes cutting their revenues.

Phantasma has a very cool token name, the SOUL coin, and is going to maintain compatibility with non-Phantasma email senders, although I’m not entirely certain how they’ll maintain the encryption solution in that case. The whitepaper is worth a deeper look.

SwissRealCoin is a token focused on tokenizing Swiss real estate. Their experience highlights the difficulty of running a compliant ICO. They applied for a letter of no action from Swiss FINMA in February with the intention of launching in May. They did not receive guidance from FINMA on how to structure the ICO in a compliant way, and have decided to postpone the ICO to restructure it in a way they can be sure is compliant. Why on earth would I highlight them if they’re delaying launch? Because I think it’s notable that they’re working to make sure that they’re bulletproof from the regulatory standpoint. The update explains a little more, and the whitepaper is here. It’s going to be interesting to watch them and see how regulatory compliance is addressed - if token sales are to be viable in the future, we need people to do it deliberately with integrity. Otherwise, it’s just Monopoly money, and doubly so with real estate.

The Good, the Bad, and the Ugly 😊😠👹

😊GOOD: 

Seminole County of Florida announced on May 14 that starting this summer they will begin accepting cryptocurrency (Bitcoin and Bitcoin Cash) as payment for various services offered by the county, notably property taxes, driver license and ID card fees, tags and titles.

This move aims to eliminate the third-party processor involved in paying taxes by credit or debit card. At the same time, cryptocurrency ensures complete accuracy, transparency, and improves the efficiency of the payments.

In the announcement, Seminole County Tax Collector Joel M. Greenberg explains:

“We live in a world where technology has made access to services on demand, with same-day delivery and the expectation of highly efficient customer service and we should expect the same from our government … The aim of my tenure in office is to make our customer experience faster, smarter, and more efficient, and to bring government services from the 18th century into the 21st century and one way is the addition of cryptocurrency to our payment options.”

 
😠BAD: 

It is a widely held concern that crypto-holders evade paying their taxes. This week the fourth biggest exchange Bitfinex decided to join hands with the British Virgin Islands government in getting its crypto investors to pay taxes. Bitfinex sent out a notice requiring its clients to disclose certain personal information that will be shared with relevant tax authorities.

The clients took to Twitter to express their disappointment with the exchange. The trading community named Whalepool called out for a withdrawal of funds as means of showing discontent.

In the light of the recent Coinbase’s battle with the U.S. government over the disclosure of personal information to the IRS, Bitfinex’s approach is a little disheartening.

Microsoft’s Search Engine Bing is going to ban cryptocurrency ads. The move adds another service provider to the ever-growing list, right next to Facebook, Twitter, Yandex, Google, and LinkedIn.

In an official blog post, Bing explains:

“Because cryptocurrency and related products are not regulated, we have found them to present a possible elevated risk to our users with the potential for bad actors to participate in predatory behaviors, or otherwise scam consumers.”

“Advertising for cryptocurrency” and “cryptocurrency related products” will be banned worldwide between June until early July. Although many news outlets indicate that the bans are temporary, they still leave a mark on the cryptocurrency market.


👹
UGLY: 

Three co-founders of a high-grossing initial coin offering (ICO) have been indicted for defrauding investors. Centra Tech was backed by a boxer Floyd Mayweather and DJ Khaled.

On Monday, the US Attorney’s Office for the Southern District of New York announced that it had filed charges against Sohrab Sharma, Raymond Trapani, and Robert Farkas.

In a press release, the U.S. Attorney’s Office informs:

“Following their arrests, this Office and the Federal Bureau of Investigation (“FBI”) seized 91,000 Ether units, consisting of digital funds raised from victims as part of the charged scheme. This seized digital currency is presently worth more than $60 million.”

Centra Tech falsely claimed to have partnered with Visa and Mastercard to issue cards that enabled customers to convert cryptocurrency to USD to spend it in stores.

 

 

News 🆕

Consensus 2018 is the biggest blockchain summit in the US, and it just took place on May 14-16 at the New York Hilton Midtown. Organized by CoinDesk, the event gathered a huge crowd and many important personages in the industry as well as government officials. Among others, they discussed the potential of blockchain technology, its possible applications, privacy and security issues, and its socio-economic potential.

Fred Wilson addressed the negative remarks recently made by Warren Buffett about cryptocurrency, saying:

“Calling it rat poison, to me, suggests that they haven’t taken the time to really understand what’s going on here. If all you think of it as is some new asset class and some new thing that you can trade, then I think you’ll come to that conclusion. But if you really understand that this is a fundamental innovation in foundational technology for the internet that provides a bunch of new functionality that didn’t exist before this, then what I see it as is like the LAMP stack or something. This is an entirely new stack that we’re going to get to build new applications on top of, and the tokens are just the fuel that lights up that stack.”

 

Despite negative comments made by Jamie Dimon, JP Morgan’s CEO, the bank is now pursuing a crypto-directed policy. JP Morgan has just appointed Oliver Harris as the head of the bank’s crypto-asset strategy. Harris will now work directly with the head of blockchain initiatives at JP Morgan, identifying and leading new cryptocurrency projects, analyzing cryptocurrency, and possible applications of the decentralized network.

"I think it's coming sooner than people probably think," Amber Baldet, Former head of J.P. Morgan's blockchain arm told CNBC.

Meanwhile, Goldman Sachs, another prominent Wall Street has already announced plans to establish a Bitcoin trading service. 

 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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