I am retiring the previous list name “Cryptocurrency in the news” because I think that fintech (financial technology) is a more accurate, all encompassing term for this space. There are other possible names like “dapps” (decentralized applications) however I prefer fintech because decentralization may not be what the market chooses as an end game.
One of the most interesting story this week is commentary from Robert Sams, “Some Crypto Quibbles with Threadneedle Street,” who discusses the marginal costs of mining and addresses some of the statements from last weeks Bank of England papers.
Closing tabs. Some China related news scattered below as well.
The Bank of England published a couple of papers that have been making the rounds. One area of contention, by some, is a section in the 2nd paperThe sustainability of digital currencies’ low transaction fees which discusses some of the issues brought up in Chapter 3.
Mobile Money Accounts are Outnumbering Bank Accounts in Africa from Let’s Talk Payments (“there are 242 mobile money service providers operating in 89 countries holding a total of 203 million mobile money accounts. Although Kenyans have been using such service for more number of years as compared to others, but they are not the leader anymore. In Tanzania, in 2013, 44% of adults used some form of mobile money as compared to 38% of Kenyans. Tanzanians conducted 99.9 million mobile money transactions worth $1.8 billion.”)
If you’re interested in a blast from the past — to see just how fast the cryptocurrency space has moved in the past 16 months, look at the list of Panelists and Speakers from the San Jose 2013 conference and the projects they were working on. Or is the more appropriate word, “pivoting?”
Below are links of interest and are not an endorsement for services:
Anonymous remailer (it would be curious to know how many sock puppets on /r/bitcoin are managed by certain special interest groups because their “script” and talking points are similar to one another at times)
Got an email asking me more about the War of Spanish Succession related to gold. My point on that panel wasn’t so much that France only used gold, but their finances were directly tied to specie (technically the French livre was in two forms: silver écu and gold Louis d’or; see also Livre tournois). The reason I brought it up at all is because of the meme today, that Bitcoin would somehow prevent war because it neutralizes the states ability to expand its money supply, etc.. It won’t though. Probably a better historical example are European countries from mid-19th century which adopted some form of a gold standard, yet then went on to wage a global war eventually dropping the peg altogether. Be sure to read a new article from The Economist that discusses this, “Not floating, but flailing.”
Thanks to Izabella Kaminska (follow her on Twitter) and Zaki Manian for a couple links.
Also, be sure to check out Izabella’s thread today on Coinbase. Based on a conversation with one lawyer I had two weeks ago it looks like a big legal challenge for Coinbase (and others in their vertical) is that they’re acting as depository institutions without having gone through the necessary “Safety & Soundness” tests which opens them up to legal action from a variety of state/federal agencies.
The Opportunities of Digitizing Payments — a report by the World Bank Development Research Group, the Better Than Cash Alliance, and the Bill & Melinda Gates Foundation to the G20 Global Partnership for Financial Inclusion.
A few interesting stories, the first of which is from The Economist, “The dollar’s sterling work.” One notable passage from the article is, “people exaggerate the importance of the yuan. Just $0.3 trillion of Chinese assets are open to foreign investors, compared to $56 trillion of American ones. That makes the yuan a poor candidate for a global reserve currency.”
As I explored in chapter 13, Bitcoin adopters who continue to claim bitcoin will become a reserve currency usually do not understand how or what foreign currency reserves are. The Chinese RMB, not bitcoins, has a more probable future as a reserve currency and as discussed by The Economist and others cited in chapter 13 (such as Patrick Chovanec), this is not going to happen anytime soon for the RMB, if ever.
I also recommend reading through “Inside Visa’s Data Center” published last year to give you an idea of the quality and security of their network. Significantly different (42 firewalls, mirrored center in Midwest) than the cartoon caricature that some vocal “decentralize the worlders” claim it as.
Thanks to Izabella Kaminska and others for a couple of the links.
Well I’ll be damned by Preston Byrne (the jump in activity started with the casual conversation with Vitalik and Daniel two weeks ago, then snowballed onto Chinese-language based forums including QQ, Wechat and even BitShares own forum where the Chinese-language section has more posts than any other subforum. getting trolled on twitter by Bitshares holders is probably not a good sign either.)
Venture Capitalists Get Paid Well to Lose Money from Harvard Business Review (I suspect the returns and performance by VCs heavily invested in the Bitcoin space will probably be poor for now due to a dearth of real revenue generating activities)
Map of Coins a visualized history of the cryptocurrency world from the first bitcoin whitepaper up to present days (looks a little like fragmentation of Linux distros)
O(1) Block Propagation by Gavin Andresen (talks about the issues discussed in Chapter 2 and 3 and a potential solution regarding propagating headers)
Mnet and Mojonation from several notable people including Zooko Wilcox O’Hearn and Bram Cohen (it used digital currency)
Closing a bunch of my tabs, I only posted a few of these links in my book.
First link must have been inspired from the picture by Mac in It’s Always Sunny in Philadelphia.
Thanks to Dave Harrison and others for a couple links below:
A top contender for best irrational exuberance in day trading: Moon from Trading View
Hacker makes $84k hijacking Bitcoin mining pool from The Guardian (bitcoin “thought leaders” are always saying how this is either impossible, unlikely or how in order to disrupt Bitcoin rogue actors have to brute force the network. this is untrue, lots of other ways to temporarily or permanently disrupt a pool or the network)
Bankers Trust controversies on Wikipedia (really interesting story, I wonder how “cryptobrokers” would fare if their comments on reddit/Twitter were accounted for like that. all the people at conventions claiming bitcoin will hit $30,000 and that you should buy, does this constitute guidance?)
Crowdfunding and the Federal Securities Laws by C. Steven Bradford (cryptosecurities and cryptoequity are likely investment contracts under the Howey rule and the SEC has total discretion as to exemptions from its securities regulations; yet it is getting pressure from Congress to exempt crowd sharing sites; talk to a lawyer before getting involved in these)
Don’t Know – DK (one of the biggest “DK’d” in history can be found in this exchange between Barclays and JP Morgan regarding $40 billion sent to Lehman Brothers during its collapse)
Standards from XKCD (if there is one thing open source projects are good at, it’s fragmenting)
BTX Trader (allows you to trade on multiple exchanges, i haven’t used it, not an endorsement)
SoHelpful (supposedly helps build a company reputation, looks like it could work in conjunction with Clarity)
Is BitCoin a triple entry system? from Financial Cryptography (this is an old story that a friend asked me about: there really is no such thing as “TES.” if you hear someone say this is what will enable blockchains to defeat Intuit or Quicken, they probably do not understand accounting.)
bitcoinnerds comments on BitPay’s announcement last week (as he points out this is largely hype, BitPay has no margins and likely makes the bulk of its revenue from trading bitcoins on exchanges/OTC)
I removed all but one reference to MaidSafe in my book primarily because in the months since they went “live” they have not really produced or shipped anything. For more on that I recommend readers peruse twocomments on Hacker News
Open Crypto Review (an open source peer review platform of academic and research articles)
Cash transfers in Africa: Bitcoin for the poor from The Economist (money quote: “But first he will have to overcome a number of hurdles. Bitcoin’s remittance pioneers face the same anti-money-laundering and cash security issues that drive ordinary transfer fees so high. Then there’s the unknown of local governments’ reactions to such little-regulated exchanges.”)
Lot of interesting stories the past couple of weeks but I need to close some tabs. One older post of interest — for you statistics buffs — comes from Distributome Data & Activity: Horse Kicks which describes the use of a Poisson distribution to model how Prussian Calvary officers were kicked and killed by horses between the years 1875 and 1894.
Other notable links related to China as well cryptocurrencies (and sometimes both):
What gives a dollar bill its value? by Doug Levinson (from the feedback I’ve gotten from the last few weeks it seems as if a lot of the Bitcoin community is not really familiar with how money and credit work or exist)
Foreign Currency Translation from Cengage (“Develop the necessary understanding and skills to translate the financial statements of a foreign entity into U.S. dollars using the all-current and the monetary-nonmonetary translation methods.”)
51% Of The Network? by Dave Hudson (looks like you actually need to have closer to have 60% of the hashrate to really have 51%)
Probably the weirdest article was this one calling for Dogecoin to become the “national” currency of Venice (due to a historical spelling similarity). If this doesn’t illustrate “jumping the shark,” I don’t know what else can. But then again, I’m just one market participant.
Thanks to Petri Kajander and Andrew White for several of the links:
The air this past month in China and in particular, the Yangtze River Delta area (which includes Shanghai, Suzhou, Wuxi and Nanjing) has been incredibly bad. The worst in 50 years. I remember 2 weeks ago I couldn’t see the top of my apartment building in Changning district. While the air pollution is actually created outside of the city (sometimes by coal-fueled power plants, others from farmers burning left over crops), it has lingered over the eastern coast creating misery for millions. For a real-time view of the air quality indices in China visit AQICN.
The biggest news this past week has been the huge rise in cryptocurrency prices (BTC & LTC) pushed in part by the Chinese exchanges. Both BTCChina and OKcoin now have higher volume/liquidity than any other market and region on the globe. To give you an idea of what that competitive niche is like, check out BTC123 and Hao123 (both in Chinese).
Why the U.S. may lose the race to exascale from Computer World (very silly race, simply a metrics contest — what matters is what useful, productive tools and activities can be run on it — not merely getting to the arbitrary number)
In addition to reading Asia-related business I typically read through a number of online periodicals regarding science and technology topics. While this is a side hobby some readers may be interested in this segment as well. Feel free to send me stories as some of you have with China.