Monday, February 5, 2018

TokenReporter: Popping that Bubble

This week at TokenReporter we’ve instituted a few changes. First, the newsletter now costs $9 a month or $60 a year. If you’ve received this newsletter in your inbox then you’re golden - I’m grandfathering in the 5,000+ folks who have been reading this for a while. This small amount of cash allows me to add a new mid-week post as well as hire some new talent so be on the lookout for changes in the system. I encourage you to tell friends and neighbors about the site and the newsletter.

Second, I’m expanding the newsletter to twice weekly, with a bit more token discussion coming to you every Wednesday. Look for it in your inbox this week.

Now on with the show.

JB

Sponsors

Typewriter.Plus offers white paper editing, website proofreading, and presentation management for startups. Our rates are low and our experts have worked at the New York Times, Gizmodo, and other amazing tech sites. Upload your document today or try our inexpensive Startup Pitch Pack.


MetaCert - MetaCert protects companies of all sizes from risks when using messaging apps. This is especially important when running a token sale and ensuring every link in your Slack is secure.

What to reach 5,000+ crypto fanatics? Email joanna@cabalpartners.com

Feature: Where do we go now?

The crypto crash is reverberating through the Internet while the "rest" of the economy - namely the stock market - enters free fall. Commentary on the very human and thus flawed stock market is still well within the realm of pundits and guys who press funny buttons on TV, whither crypto?

First, the die hards are chiming in noting that they are retaining their investments - HODLing, as it were. Still others are buying. My favorite crypto-pundit, Jameson Lopp, chimed in today:

And the mysterious "Bitcoin content creator" Vortex brings up a very important point:

First, I don't think this is the bottom of the fall. Expect things to hover around $5,000-$10,000 or even a bit less as the folks begin thinking long and hard about why they're in the space. I suspect we'll see a rise in interest as Wall Street bonuses are paid out this month and savvier investors "buy the dip."

But what cause this and why am I still bullish on the market? First, we have news that China has banned foreign crypto exchanges. Writes CoinTelegraph:

China will add offshore cryptocurrency exchanges and ICO websites to its Great Firewall, the South China Morning Post reported Monday, reported Feb. 5, quoting a publication affiliated with the People’s Bank of China (PBoC).

This sort of news - seemingly definitive and seemingly catastrophic - is actually a dud. In China the Great Firewall is not nearly as effective as the government would have you believe. While it does lock out the inexperienced or non-technical investor, I doubt many of the miners or crypto exchanges are worried. VPNs - essentially ways to circumvent the Great Firewall - are easily available. In short, this has no teeth and the panic selling associated with this will eventually stop as investors figure things out.

We must understand the FUD cycle for cryptocurrency is very strong. While Microsoft and other entrenched enterprise players had a lot of skin in the game when it came to talking down and trying to bury Open Source and, more specifically, Linux, the Internet of Value is dealing with real money and real economies. The drive to take control of all sides of the equation is great and ultimately it will be subsumed, just as many open source platforms have been subsumed, into the fabric of the Internet.

Betting on crypto is a bet on a new way of doing this. I discussed analogs to this current market to a fascinating investor who has watched the rise and rise of the Internet and she equated the current crypto market to the Internet in 1993 - it was there, it wasn't popular, and it would take a few short years to enter our lives and change it permanently. We also must remember that computer networking has been around since the late 1960s yet it did not permeate our lives until about the turn of the century. In 1993 we were reading email on Elm and editing our away messages with Vim. Now we think nothing of dashing off a Word document to someone a thousand miles away and expecting it to arrive safe and unharmed. The same is not yet true of, say, a payment to a contractor because middle men and heritage technologies are ensuring we must all sit on our hands while tools like SWIFT and ACH muddle along.

We all know that something big is happening. Whether it's tied to BTC price or not is uncertain, but we do know that these technologies have a part to play in our brave new future.

Two tokens to watch 👁️

Metal is one we’ve talked about before but it is definitely one of the few companies with a solid CEO, solid product, and actual code. It is also one of the few tokens you can trade right now. It is available for conversion on Binance (although I wouldn’t keep my cash on Binance right now, especially given the China news.) The company has its own wallet, called the MetalVault, and the fundamentals on this token are strong.

Spherepay just launched its SAY token in Singapore. The mission is to let users buy actual things - clothes, groceries, etc. - with the SAY, creating a decentralized cryptocurrency that is actually spendable in the world. The mission is similar to Metal’s and I would argue that anything in the payments space is a no-brainer when it comes to the need for a real, usable token. You can read the white paper here.

The Good, the Bad, and the Ugly 😊😠👹

😊GOOD: Singapore Airlines is creating a blockchain-based loyalty wallet, a move that points to increased adoption of enterprise blockchain tech. This is another perfect problem for crypto to tackle and I expect we’ll see more moves like this in the next few months.

😠BAD: The true value of the equities market is being tested by Wall Street as the down falls 1,000 points. These types of corrections are common and, all told, the market has lost more than the Bitcoin market cap. Everybody hurts.

👹UGLY: The Equifax probe is “on ice” after the company leaked millions of personal records from 143 million Americans. The Consumer Financial Protection Bureau will no longer investigate Equifax for the breach. From Reuters: “Three sources say, though, Mulvaney, the new CFPB chief, has not ordered subpoenas against Equifax or sought sworn testimony from executives, routine steps when launching a full-scale probe. Meanwhile the CFPB has shelved plans for on-the-ground tests of how Equifax protects data, an idea backed by Cordray. “


News 🆕

Hackers are working hard to phish cryptocurrencies according to security firm Kaspersky. The phishing attempts often appear as password resets for popular exchanges including Coinbase and Kraken and encourage users to type in their passwords. Kaspersky writes:

The simplest version of cryptocurrency phishing, aka cryptophishing, involves good old-fashioned spam mailings. In this case, such e-mails appear to originate with providers of cryptocurrency-related services — Web wallets, exchanges, and so on.

The messages are markedly more detailed and sophisticated than the average phishing e-mail. For example, one might be a security alert saying that someone just tried to sign into your account from such and such address using such and such browser — all you have to do is click the link to check that everything’s OK. The potential victim might even have requested such messages on the cryptowallet site, in which case they will notice nothing untoward.

Please, please, please check your browser URL bar before doing anything on an exchange. If you don’t see the site’s name and you don’t see a little padlock you’re going to have a bad time.

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.

By accepting this material, you acknowledge, understand and accept the following:

This material has been prepared at your request by Cabal Partners, LLC (“Cabal Partners, LLC”). This material is subject to change without notice. This document is for information and illustrative purposes only. It is not, and should not be regarded as “investment advice” or as a “recommendation” regarding a course of action, including without limitation as those terms are used in any applicable law or regulation. This information is provided with the understanding that with respect to the material provided herein (i) Cabal Partners, LLC is not acting in a fiduciary or advisory capacity under any contract with you, or any applicable law or regulation, (ii) that you will make your own independent decision with respect to any course of action in connection herewith, as to whether such course of action is appropriate or proper based on your own judgment and your specific circumstances and objectives, and (iii) that you are capable of understanding and assessing the merits of a course of action and evaluating investment risks independently. Cabal Partners, LLC does not purport to and does not, in any fashion, provide tax, accounting, actuarial, recordkeeping, legal, broker/dealer or any related services. You should consult your advisors with respect to these areas and the material presented herein. You may not rely on the material contained herein. Cabal Partners, LLC shall not have any liability for any damages of any kind whatsoever relating to this material. No part of this document may be reproduced in any manner, in whole or in part, without the written permission of Cabal Partners, LLC except for your internal use. This material is being provided to you at no cost and any fees paid by you to Cabal Partners, LLC are solely for the provision of investment management services pursuant to a written agreement. All of the foregoing statements apply regardless of (i) whether you now currently or may in the future become a client of Cabal Partners, LLC and (ii) the terms contained in any applicable investment management agreement or similar contract between you and Cabal Partners, LLC.