Mind. Blown.

Our weekly opinion piece and overview View this email in your browser   CoinDesk Weekly is sponsored by  January 7, 2017  You can't take it with you Not your personal data. Not today. It's locked up in silos like Facebook, Google and Apple. It's debatable whether blockchain technology can decentralize control of this invaluable digital asset, but CryptoKitties (of all things) offers a glimmer of a hope. Read more in the THE TAKEAWAY below.   TOP TRENDS ON COINDESK Ripple Rising XRP, the native token of the Ripple network, has been on a tear lately, climbing to the third-largest, and then the second-largest, cryptocurrency by market capitalization. But do the new buyers understand what they're investing in, and the cryptocurrency's complicated relationship with Ripple, the enterprise software company that created it? CoinDesk's Bailey Reutzel and Michael del Castillo take a hard look at how one of the most prominent startups in the space has been talking about the token that not too long ago it all but disowned. In any event, don't hold your breath for an XRP listing on Coinbase or GDAX any time soon. However, Ripple claims three of the top five money transfer companies worldwide will be using the token in 2018. One thing's for sure: CoinDesk will to stay on story like gravy to potatoes. Hall of Fame From Bitcoin Core developer Pieter Wullie's quiet resolve to JPMorgan CEO Jamie Dimon's Trump-like bluster, from miner Jihan Wu's rage and machinations to Bitcoin Sign Guy's charm and idealism, you'd be hard pressed to find a more colorful and diverse cast of characters than CoinDesk's 2017 Most Influential list. If you haven't already done so, read our long-form profiles of these 10 fascinating and complicated personalities who mightily shaped the industry last year. And be sure to watch our video interviews with ShapeShift founder Erik Voorhees (1,2), Litecoin creator Charlie Lee, ConsenSys CEO Joe Lubin, and of course the seersucker-sporting Sign Guy, who may be bitcoin's greatest pseudonymous hero since Satoshi. That Was the Year That Was CoinDesk's 2017 Year in Review series, winding down this week, has offered a wide variety of provocative and informed opinions on everything from Japan's rise as a bitcoin hub (China who?) to privacy enhancements on the blockchain (lotsa hard trade-offs) to crypto's love-hate relationship with fiat (trigger warning: Tim Swanson byline!).  More than 50 articles in all, this collection is as good a crash course as any in how far blockchain technology has come, where it's gone astray, and where it might go in 2018, for better and for worse.   Read them all this weekend, and you'll be the smartest person in the office on Monday. (Well, depending on the office...) See all CoinDesk stories ⭐ COINDESK SPONSOR ⭐ 167 Times Bigger Than Bitcoin! New digital currencies are delivering profits faster than we've ever seen. Find out how just $10 could hand you a fortune from a trader who's collected wins of 600%... 1,981%... and more than 3,500%. Click here.   QUOTE OF THE WEEK "Nobody cared who I was ... 'til I held up the sign." – Bitcoin Sign Guy, channeling "The Dark Knight Rises" THE TAKEAWAY  Last month I had the plum assignment of interviewing Naval Ravikant for CoinDesk's Most Influential in Blockchain 2017 series. During our conversation, the AngelList co-founder shared an insight that I just couldn't fit into the profile, but it was pretty mind-blowing, so I'm going to lay it on you here. Stepping back, for the last few years I've watched the cryptocurrency community's efforts to disrupt finance and, in parallel, the self-sovereign identity movement's attempt to decentralize control of personal data. By studying the former, I've learned the importance of censorship-resistance – the inability of a third party to veto a transaction between peers. From the latter I've become familiar with the concept of data portability: the notion that consumers should be able to easily and securely transfer their records from one service to another – be it a bank, a doctor's office or a social media platform – the way they can port their mobile number when they get a new phone.   What Ravikant helped me to grok is that these two ideas are tightly related – and so the fact that both digital currency and digital identity projects are employing distributed ledgers is more than coincidence or fashion.   Because you don't use a blockchain unless you really need it. Despite some of the hype, blockchains are "incredibly inefficient," Ravikant said. "It's worth paying the cost when you need the decentralization, but it's not when you don't." Most CoinDesk readers are probably familiar with the usefulness of decentralization in a monetary context (and if you're not, take a look at the articles linked in the next section about Iran, Venezuela, Russia and, ahem, the alt-right). But why is decentralization worthwhile in the data use case? "Today, every piece of content and media you have is living somewhere owned by somebody," Ravikant explained. "Your data is inside Facebook, your photos are inside a Google silo or an Apple silo." Then the conversation took a turn that I have to admit made me roll my eyes at first. "If someone creates a new Pokemon card game or a Magic the Gathering card game" online, he continued (cue the eye-roll), the characters are "living and owned by a certain company in a certain format. You can't just go and reuse those assets." This is why CryptoKitties, the app running atop ethereum that allows users to buy, collect, sell and "breed" unique digital pets, is more than just a goof. Although it's not a fully decentralized app, Ravikant said, it offers a glimmer of hope for such an innovation. "Those assets are on the blockchain and you own that kitty and anyone can show up and remix that asset," Ravikant said. "They could put your CryptoKitty into a different kind of game," say a fighting game. Yeah, I still thought, so what? But then Ravikant zoomed out the lens and talked about the broad implications of this seemingly silly example. "Assets that normally would have been in a silo are, in a sense, censorship-resistant to developers," Ravikant said. "New developers come along and as long as you, the user, agree to share your content, they can reuse your content to give you new applications." Hence the potential of a distributed database. "Imagine if every mobile app shared the same database underneath, or had access to the same data, what they could do," Ravikant said.   And then he tied it all together. "All your data today is censored in terms of what boundaries it can cross and what applications it can live in," he said. "These silos are a form of censorship." Whoa. To be sure, Ravikant has skin in the game here (or, if you prefer to put it this way, he's talking his book) – he was an early investor in Blockstack, a startup trying to build a new decentralized internet where users control their data. (Blockstack also used CoinList, the platform Ravikant founded and spun out from AngelList, to conduct its token sale last year.) And unlike digital cash, identity is not yet a clear-cut, proven use case for blockchains. You can read some skeptical takes on the matter from some of the smartest members of the identerati here, here and here, Some even question the need for decentralization in this context. "Large services that control large portions of a market gain power over individuals, but large businesses tend to stay in business longer and have more resources in case users have problems," noted a report last year from the blockchain and smart contracts discussion group of the Kantara Initiative, an identity trade group. "Further, there is a long tradition of innovation in client-side applications and centralized services meant to be employed by individuals for the purpose of their own empowerment," the report continued, citing PGP encryption and ad blockers as examples. Then again, how many people do you know outside of tech circles who use PGP, or even know what it is? Heck, how many techies you know use it? Perhaps this is revealed preference, and most people just don't care about autonomy – but wouldn't they, if they took a second to think it through? Clearly, the cause of empowering individuals in a digital world has a long way to go, and now is hardly the time for complacency. Which is why Ravikant's vision is so captivating.  "We're going to see a giant remixing of the internet as all the data becomes unshackled from the silo that it's in," he told me. In the future, he concluded, "any data you own...will be under your control and you'll be able to pass it into any app." I sure hope so. – Marc Hochstein Share Tweet Beyond CoinDesk... OTHERS ARE TALKING ABOUT Next time some smart-ass tells you there's no use case for blockchains (American Banker), point them to the reports of increased bitcoin adoption in Iran amid the civil unrest there (International Business Times) and about Russia and Venezuela looking at crypto as a way around blockades (New York Times). More awkwardly, bitcoin is also gaining popularity among white nationalists, neo-Nazis and the alt-right, according to Forbes. But that's because they've been kicked off respectable payment platforms like PayPal. The neutrality, censorship resistance and openness of a permissionless network mean it will attract the odious along with the oppressed, and the software can't decide which is which.   According to The Hill, a newspaper covering the U.S. Congress, regulation of cryptocurrency is among the major policy fights facing the broad technology sector in 2018. WHAT WE'VE BEEN UP TO Congratulations to Michael J. Casey, chairman of CoinDesk's advisory board and writer of the weekly Token Economy column, on the imminent publication of The Truth Machine: The Blockchain and the Future of Everything. It's the second book he's co-authored with Wall Street Journal reporter Paul Vigna, the sequel to their 2015 page-turner The Age of Cryptocurrency.  And if you're in New York on Jan. 30, come to the Japan Society, where Michael will be speaking on a panel about blockchain and bitcoin along with bitFlyer CEO Yuzo Kano and Hogan Lovells attorney Lewis Cohen. The session will be moderated by CoinDesk managing editor (and your friendly neighborhood newsletter compiler) Marc Hochstein, but don't worry, he promises to confine his rants to CoinDesk Weekly. Tickets are only $20 for nonmembers; details here. Send feedback on this newsletter to marc@coindesk.com or tweet @MarcHochstein. And of course follow us on Twitter @CoinDesk.  See you next week... Copyright © 2018 CoinDesk, All rights reserved. You're receiving this email because you subscribed for updates on our website. 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