Sunday, 18th December, 2016
| Allies, or frenemies?
TL;DR What do you get when two opposing philosophies start to get along? (Answer in THE TAKEAWAY below.)
TOP 5 STORIES ON COINDESK Most influential. This week we announced the winner of our 2016 Most Influential Person in Blockchain survey. The winner is… the DAO hacker. Whatever you think of what he (or she or they) did, you can’t deny that it had a huge impact on the technology and the sentiment. And it put a very welcome dent in the overinflated hype. In places 2-10, we have (in order): Vitalik Buterin, Andreas Antonopoulos, Satoshi Nakamoto, Adam Ludwin, Pieter Wuille, Don and Alex Tapscott, Richard Gendal Brown, Chris DeRose and Junseth, and Perianne Boring. Read more.
Changing the target. A Coinbase client has filed an injunction against the IRS to stop it from executing its subpoena of user data, on the grounds that it is an “abuse of process”. Interesting tactics. Coindesk can’t do that, for fear of alienating the authorities. This could actually be deeper than it seems – it will necessitate a pronouncement as to what extent data is private. It could also trigger a probe into bitcoin use, which could lead to the beginning of a push to regulate. Read more.
High standards. The US branch of XBRL, an international business reporting standards consortium, is working on developing standards for blockchain-based asset tokens. Its partner in this project is ethereum developer Consensys. Given XBRL’s reach, this initiative could (and should) spread. International standards are a good idea. They would provide guidelines for developers and users, and facilitate the development of fair accounting policies. Read more.
Another tentacle. Kraken has made another addition to its stable, the third in 2016 so far. This time the cryptocurrency exchange has purchased Glidera, a Chicago-based service that allows users to fund bitcoin wallets directly from their bank accounts. Glidera will be rebranded to Kraken Direct. Read more.
Opinions and predictions. We are currently running our annual Year in Review series, with opinion pieces from blockchain leaders, thinkers and builders. With an impressive lineup, you’ll find a lot here to think about. The series will run until January, so bookmark the landing page and check in often. There are surprises in store.
You asked, we listened. In response to a number of requests, we’re launching CONSTRUCT, our invite-only summit for senior engineers.
The first will take place this January in San Francisco, USA. We're bringing together ~350 senior technologists from bitcoin, ethereum, hyperledger and other blockchain communities, as well as from related industries such as network security, identity and access management, and financial services. Want to come?
😎 APPLY TO ATTEND 😎
More Blockchain News →
QUOTE OF THE WEEK “The biggest concern the U.S. has about virtual currencies… is that terrorists and other enemies might create one so powerful and so untrackable, that they’ll no longer need the global banking system, which the U.S. uses to financially starve them.” – Leah McGrath Goodman, Bitcoin is Being Monitored by an Increasingly Wary U.S. Government, for Newsweek |
THE TAKEAWAY
Two unrelated news items this week could, when looked at together, point to where bitcoin development is heading.
The first is that bitcoin’s price breached its previous annual high on relatively strong volume, and more or less held its position.
The digital currency has managed to recover not only from the Bitfinex hack earlier this year but also from the Mt. Gox debacle in 2013. This sends a clear message of resilience. The support shows that governance and scalability problems are not enough to make a significant dent in the interest. And the relatively narrow trading band has to reassure skeptics concerned about volatility.
With this performance, bitcoin is taking steps towards dispelling financial institutions’ fears that it is an unsuitable blockchain. While work will no doubt continue on private blockchains (as it should), this is likely to lead to an increase in banks’ interest in public blockchains over the next few months.
The second item is that bitcoin wallet startup Blockchain has signed Barclays’ ex-CEO Antony Jenkins to its board.
As far as I know, this is the first time an ex-CEO of a big bank has joined a bitcoin-related startup. Is it a sign of bankers starting to engage with bitcoin? Or are bitcoin startups becoming interested in banks, the very entities the currency was created to circumvent?
Let’s face it: Bitcoin wallet providers are already similar to banks. Most of us choose to leave our holdings in accounts at exchanges or with services like Blockchain, knowing that they are not the most secure or decentralized option. Why? For convenience, just as we choose to keep our fiat money in a bank account rather than in wads of cash under mattresses.
But banks are not like bitcoin wallet providers. They are not simple custodians or app builders. They are complex financial networks, powered by a wide array of users with different needs and priorities.
There you have it. That is what wallet companies such as Blockchain most likely want to be: complex institutions with a range of services that will not only bring resilience to the business model, but will also be instrumental in pushing bitcoin closer towards mainstream use. Relationships between bitcoin startups and bankers will set both on a steep learning curve that will most likely end in a transformation of each.
So here are my predictions for bitcoin in 2017:
1) Banks will be less afraid of associating with the cryptocurrency. Bitcoin has proven itself to be not nearly as volatile and fragile as they thought. They will be more open to collaborations, willing to test bitcoin-related functions and eager to engage with the community.
Private blockchains will earn their place in the banking structure. But the scope and security of the public bitcoin network will open up easy connectivity and new use cases, provide a relatively low-cost sandbox for testing new applications and help existing institutions adapt to new environments.
2) Major cryptocurrency wallet businesses will focus on developing more complex services in order to appeal to a wider base of users and to offer an increasingly attractive alternative to fiat banking.
In some cases, they will do this by leveraging relationships with fiat banks. In others, they will embellish the custodian services already on offer, joining forces with other startups to reinforce innovation.
Who the main players will end up being, I don’t know. But I am certain that the end of 2016 will come to be seen as a tipping point, the moment when the bitcoin and fiat banking worlds began to think about how to collaborate instead of compete.
– Noelle
More background:
| | | |
OTHERS ARE TALKING ABOUT...
It was hard not to bring up the bitcoin price this week. Bloomberg did a good job of going over some of the underlying fundamentals, and pointed out that bitcoin has outperformed the two top fiat currencies (the ruble and the real) by a factor of four.
Bloomberg also contested the alleged demise of cash and the corresponding rise of digital money, and insists that cash isn’t going to disappear any time soon.
Newsweek claimed that investigators from US defense agencies are looking into virtual currencies’ potential to undermine national security. Really.
Nasdaq talked about how the blockchain can reduce the flow of counterfeit drugs. And The Conversation took a look at how the technology can change our cities.
Closer to home, EconoTimes wrote about our partnership with Brave. At least I think they did. I confess that I couldn’t drag myself away from the part where they called us a “media giant”.
I know you’re probably up to your ears in holiday shopping, but if you could take a couple of minutes to help us improve this newsletter, we’d really appreciate it. We’ve designed a survey to aid us in figuring out what kind of emails you would like to receive from us. It's short, with no difficult questions. Will you take it?
To say thank you, we’ll enter your name in a draw for a $100 Amazon gift voucher. I hope you win, and can treat yourself to a nice holiday present.
🎁 TAKE THE SURVEY 🎁
UPCOMING EVENTS
WHAT WE’VE BEEN UP TO As we promised, our Year in Review series launched on Tuesday. We hope that you’re finding them as thought-provoking as we are. A truly impressive amount of hours has gone into this, not just on our side, but also on the contributors’. For us, anyway, it’s been a lot of fun.
Since the span of opinions is wide, you’re bound to find some that you agree with, some that you don’t, and others that just might change your mind on something. Feel free to comment and debate! That’s what we’ll be doing around the beer keg, I mean water cooler… 😉
Do you like this? Do you hate it? Are you getting overwhelmed by everything you have to do before the end of the year? Just hit "Reply" and tell me what you think. I'd love to hear from you!
And if you like it, how about sharing it with your friends? You can tweet, post (links below) or simply forward. We'd appreciate it!
| | | | | Share this email |     | | |
0 Comments