And the Bitcoin/Ethereum uncoupling.
Happy first work week of 2020! Hope you all eased back into the swing of things. It was a bit of a slow news week, but there are still some juicy reads on Telegram and the Grams cryptocurrency, the Bitcoin halving, Binance and DAOs.
Unchained kicked off 2020 with a fantastic show featuring Alex Pack and Haseeb Qureshi of Dragonfly Capital. Definitely check it out to find out why they think Bitcoin looks like a better investment than anything built on top of Bitcoin and why Ethereum is so far in the lead in the smart contract space and for their outlooks on 2020.
And on Unconfirmed, we have a great show with Nate Maddrey of Coin Metrics diving into where the major crypto networks ended the year 2019 by usage, transaction fees, and other useful factors.
Thanks to everyone who entered our end of year giveaway. Rob Fox won a Ballet Crypto Wallet, Crypto Khai won the book Bitcoin Billionaires, Soham Bhatia won a Ballet Crypto Wallet sample and an Unchained rabbit hole sticker, Ed Rodriguez won our old school cap, Steven Applegate won a Black Unchained crypto rabbit hole shirt for his kids, Kiko won a gray Unchained crypto rabbit hole shirt and an Unchained rabbit hole sticker, David Orloff won the Little Bitcoin Book, and Kerry Allen won an Unchained rabbit mug and a black Unchained logo sticker. Congrats to you all!
If you don’t yet have any Unchained swag, check out our wares at shop.unchainedpodcast.com.
This Week’s Crypto News…
Wow. Someone’s gotten the message from the SEC. Telegram published a notice that practically had “Howey was here” graffitied on it. The subheadings alone are pretty indicative. The first subheading — “Nobody can buy or sell grams yet” — practically blares “our tokens are not trade-able until the network is live,” the second subheading — “TON will be decentralized and maintained by third parties” — says “we do not satisfy the fourth prong of the Howey test.” I could go on, but the rest of the subheadings hammer on that last prong.
The notice then finishes, “1) Telegram is under no obligation, and makes no promise or commitment, to ever establish a TON Foundation or similar entity in the future. 2) At the time of the anticipated launch of the TON Blockchain, Telegram’s TON Wallet application is expected to be made available solely on a stand-alone basis and will not be integrated with the Telegram Messenger service.” You can practically hear Kik’s leaders, well, kicking themselves for not doing this.
Plus, a court ordered Telegram, which is battling the SEC, to explain why it should not have to explain how it spent the $1.7 billion it raised from its token sale.
File this under, “Do they not care about optics?” Former Bakkt CEO, Kelly Loeffler, who was recently sworn in as a US senator, has been appointed to the Senate Agriculture Committee. Sounds like an appropriate placement for Loeffler, who grew up on a farm, except that the same committee oversees the CFTC, which is the regulator for the derivatives on her husband’s exchange, ICE. In a statement, Loeffler said, “I will recuse myself if needed on a case by case basis.”
As we all enter 2020, a number of us are wondering what effect the Bitcoin halving this year will have on price. Nic Carter explores the efficient market hypothesis as applied to the Bitcoin halving. His conclusion? It’s priced in. He writes, QUOTE, “Anyone with an interest in Bitcoin has been aware of the supply trajectory from inception. Supply was encoded in the very first implementation that Satoshi released to the world in January 2009. Long-scheduled changes in the rate of issuance do not constitute new information. Any presumed demand-side reactions to the ‘halving catalyst’ can also be anticipated by sophisticated funds who have a strong incentive to frontrun investor optimism.”
Changpeng Zhao, or CZ, the CEO of Binance, wrote a New Year’s letter that summarizes what the company was up to in 2019 and where it’s going, and it’s worth a read just to see the sheer number of products and services Binance is launching and to experience that sensation of seeing the future. One interesting part of the letter is when he describes how both centralized and decentralized entities use the name Binance. He writes, “Just because something has the name Binance in it does not mean it is operated by the centralized entity binance.com.” He then explains he doesn’t view centralization and decentralization as a binary thing but more of a spectrum, giving examples of things that are more and less decentralized. Bitcoin is at one end of the spectrum, Ethereum a little less decentralized since the creator is known, and finally Binance Chain being more centralized since it hasn’t open sourced its code and features a small number of validators.
Moloch DAO kicked off what ended up being a year of mini-revivals in DAOs, and its end-of-year recap is a nice way to seeing all the developments, even if they’re small in scale, in one go. Here is a selection of the highlights listed at the top: Moloch DAO launches on Valentine’s Day at ETHDenver on Feb 14, in May Metacartel created the first fork of Moloch, in August, a grant for YangDAO passed, in August, OrochiDAO forked Moloch to fund DevCon events, in September, Mariano Conti built SelloutDAO, in November, Democracy Earth announced a Quadratic Voting fork, and in December, Metacartel began the for-profit Venture DAO. Until I went to write this I missed that it also noted Ameen Soleimani coming on Unchained to talk about MolochDAO as a highlight of the past year, which is hilarious. I don’t know if I’d consider that an accomplishment, but I do urge everyone who missed that episode to check it out, as it was a really great discussion, and I included it in the Best of 2019 episode. Also be sure to check out the episodes with Santiago Siri and Glen Weyl which covers quadratic voting, and with Mariano Conti of MakerDAO and SelloutDAO and Peter Pan of Metacartel DAO.
Coin Jazeera delivered again with a hilarious parody of the kerfuffle over Nakamoto.com, which was a pro-Bitcoin website whose contributors included people working on other coins, which caused some Bitcoin maximalists to get all up in arms. Anyway, CoinJazeera has the perfect parody: Buterin.org, with contributors including Samson Mow, Peter McCormack, Nick Szabo, Dan Held, Safidean Ammous, Tone Vays, Jimmy Song, Willie Woo, Nic Carter, Peter Todd, Tuur Demeester, Vortex, and Jack Dorsey. Some of the articles include:
- “Why a Lower Ethereum Price Increases The Security of The Network” by Dan Held
- “Successful Flawless Governance in The Modern Age: A Study of the Ethereum Foundation” by Udi Wertheimer
- “Why Keynesian Economics Works Perfectly for Ethereum” by Jimmy Song
- “How Ethereum Can Create Global Financial Inclusion with Oppressive Regimes such as North Korea and Iran” by Samson Mow
- “The Case for a Child King: How Things Get Done Quicker When One Person Is Totally In Charge” by Nick Szabo
- “DeFi: The Intellectual’s Way to Gamble with Ethereum” by Tuur Demeester
Coin Jazeera, don’t ever change.