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The future of crypto investing
24.01.2019
January 10th – Weekly Crypto Digest
ANDREW LEE
@alee

Chris Dixon invents the term “strong technologies”, which are products that adapt the world to themselves, such as the iPhone, while “weak technologies” don’t have a profound impact on the world but may seem closer to mainstream adoption, like the Blackberry. Dixon says “permissionless blockchains powered by cryptocurrencies” are the strong technology, but “permissioned/private blockchains” are the weak technology. – Link

Balaji writes an in-depth piece covering the history and differences between Grin and Beam, two privacy-oriented currencies based on the MimbleWimble protocol. – Link

Crypto exchange ShapeShift lays off 37 employees, or a third of its staff. CEO Erik Voorhees admits to having too many projects pulling ShapeShift in too many direction. – Link

Privacy coin Beam reports a critical vulnerability in its desktop wallet. Beam roughly costs $0.60 to mine one token at $0.085 per kW/h (approximately the rate in Washington), it’s currently trading at $1.51 on HOTBIT (ROI 2.51x), according to W3J’s tests. – Link

Pantera Co-Chief Investment Officer Joey Krug says blockchain tech and cryptocurrency are “the underpinnings of a new financial infrastructure”: – Link
• Now “is the time to be invested if you believe the technology will scale.”
• We are at “the early beginnings of a revolution of the entire financial system.”
• We could see could see a “flourishing of a bunch of mini Red Hat style businesses” on top of blockchain protocols.

Brock Pierce says the internet is broken due to backdoors from state-sponsored hacking and hackers are getting better; predicts a blockchain-based tech stack will fix that & be the “security layer.”- Link

Balaji makes crypto predictions in 2019 & recaps adoption progress in 2018: – Link
• We could enter a phase of boredom which could last months of years where people speculate what’s next for crypto adoption.
Unlikely Bitcoin will break ATHs in 2019
• Short-term adoption can be driven by uncertain monetary regimes such as Venezuela, the idea that Bitcoin is effectively a call option on becoming a future store-of-value, & buying tokens in crypto-networks, such as ETH, which represent “Web 3.0”

A brief summary on Grin:
• Grin does not have addresses or transaction history, so users must keep track of the tokens they hold on their own.
• The way it works requires both parties to interact with each other before a transfer can occur.
• Mainnet for Grin is expected to launch on Jan 15th, however there will be a lack of exchanges supporting it because the tech is so new.

A survey of 26 EOS Block Producers reveals they are all operating with losses, with break-even price points at around $4 for the top 84 block producers. EOS has 5% per year inflation, 1% of which goes to the Block Producers. EOS is at $2.85 today. – Link

A16Z partner Chris Dixon says internet is “swinging back to an internet governed by open, community-controlled services” & predicts a societal backlash on fake news, state-sponsored bots, privacy laws, and algorithmic biases. “Instead of placing our trust in corporations, we can place our trust in community-owned and -operated software,” Dixon says. – Link

USV partner Fred Wilson predicts the bottom of crypto prices will happen sometime in 2019 before we slowly enter another bullish phase. – Link

Placeholder parner Joel Monegro says crypto protocol tokens are a three-sided market between miners, users and investors. He calls it a “Cryptoeconomic Circle”. – Link

Ethereum classic loses $1.1M (219,500 ETC) after 51% attack as of Jan 7, according to Coinbase. Coinbase disabled all sends and receives for ETC, but trading is still enabled. The Ethereum Classic Twitter account recommended all exchanges and mining pools to increase confirmation times to over 400 blocks, and says “ETC network is operating normally.” – Link

Charlie Lee says a decentralized cryptocurrency must be susceptible to 51% attacks via permissionlessly-acquirable resources. – Link

On Dec 7, Coinbase published a list of 31 cryptocurrencies it’s exploring to support. Four of those coins mentioned have been listed so far (Loom, Decentraland, Mainframe, Civic), which surged 30-50% in USD terms on the listing news and increased in daily trading volume by by 2-5x. – Link

ETH’s price chart since Sept 2018 has mimicked the bitcoin bear market in 2015. Fear & greed drive price action, so it’s not unrealistic ETH will yield a similar bottom pattern, according to Coindesk’s market analyst. – Link

Medium suspends an account for posting a guide on how to buy Bitcoin anonymously without KYC/AML. Crypto community on Twitter questions Medium’s stance on censorship. – Link

Gemini buys full-page at in the New York Times on Jan. 7. – Link

Bitmex buys front-page ad in British daily paper The Times on Jan 3rd for Bitcoin’s 10th birthday. – Link

Chromapolis, a dapp platform founded by the Colored Coins creators, releases a dev preview of on Rell, a new relational blockchain programming language. – Link

Censorship-free video sharing site BitTube grows in traffic to reach 31,758 rank on Alexa.com. BitTube pays viewers for watching videos in $TUBE coin, which has $11k in daily volume today. – Link

Jeff Bezos and wife MacKenzie divorcing after 25 years of marriage. AWS was founded in 2006 and accounts for 12% of Amazon’s total revenue. – Link

Web3 Foundation board member Ryan Zurrer says “we are at the knee of the curve of tremendous growth in innovation around P2P Web3 networks.” – Link

Crypto publication The Block publishes an apology for tweets by Larry Cermak and Mike Dudas that implied that CNBC host Ran Neuner acted unethically or participated in a “scam related to Blockchain Terminal.” – Link

CBInsights publishes 2019 blockchain trends report. Cites stable coins, security tokens and NFTs as experimental low industry adoption technology. – Link

What’s Happening on Twitter:

Vitalik tweets about non-financial blockchain apps, including publishing history of data, graduation certificates, self-sovereign identity, auctions, supply chain, collectibles and receipts. – Link

“Holding Bitcoin is a more powerful way to change the system than voting.” – @sthenc

“The TCP/IP protocol from 1975 that some said wouldn’t be able to download anything meaningful is the same TCP/IP that powers our web today. Open source protocols get better over time by nature of them being in existence around smart, ambitious people.” – Bitcoin Magazine

“51% attack on BTC is really hard. Not only do you have to get 51% of the hash power in terms of mining equipment, but you also have to get access to enough electricity to feed those machines. Over time, this is going to be the much harder thing to obtain.” – Jimmy Song 

“Over past 3 mos, demand for $ETH for collateral on DeFi platforms $MKR, @compoundfinance, etc was ~10,000 ETH each day. The new supply of ETH each day is ~19,000 ETH. The supply rate will soon be reduced to ~12,000. Natural demand for ETH will soon outstrip natural supply.” – Head of digital currency research at TradeBlock John Todarot

“Gaming companies won’t be able to print items / skins like they do now. Industry is $50 billion, new generation of players will want to: -actually own the item -move the item cross-game/platform -trade the item at 3rd party markets -know the item scarcity” – Ravencoin contributor Jon 

“Bitcoin average DAILY value change during:
2010: +0.82%
2011: +0.76%
2012: +0.26%
2013: +1.11%
2014: -0.25%
2015: +0.09%
2016: +0.22%
2017: +0.78%
2018: -0.33%” – Jameson Lopp

“Really important to align yourself with work that is not suffering. Talent matters so much more than hard work.. Although the idea of suffering and sacrifice is romantic it is misleading” – Naval Ravikant

“A money like #bitcoin is likely to be the greatest *single instance* of value capture within the programmable value universe, which is why many of the top #cryptoassets today are battling for this position.” – Chris Burniske

ConsenSys founder Joseph Lubin calls crypto bottom of 2018/19 on Dec 21: “This bottom is marked by an epic amount of fear, uncertainty, and doubt from our friends in the 4th and crypto-5th estates… We have been on the receiving end of an epic amount of conjecture and preemptive paranoia — filled with damning rhetoric about situations journalists and bloggers don’t have real data for, actual insight into, or understanding of.” – Link

Thanks everyone!

– Andrew

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