Dissident Tech

thank god bitcoin is boring before it's not

Your daily snapshot from our Messari screener.

Dissident Tech

“Like frogs in the proverbial pot, we’ve collectively spent the last few decades actually and metaphorically signing away our rights when it comes to our data and our privacy.”

-NLW on Long Reads Sunday

I wrote last week about PayPal’s snap decision to cut off 100k PornHub performers from the online payment giant’s services. It’s part of a long list of alarming trends towards Orwellian surveillance of every aspect of the financial system, and the tendency to suspend “others” access to products that most of us take for granted.

If those others are deemed unworthy of access, of course.

But who’s to judge exactly?

This encroachment of financial rights and privacy started as part of the post 9/11 effort to choke off terrorists and criminal networks. (The PATRIOT Act admittedly sounds better than the “this actually solidified the fact that Bin Laden won the war” Act.) But that encroachment has moved deliberately towards less dangerous, still iffy legal gray areas like porn, pot, and gambling.

These days anyone can be de-platformed from social media and unplugged from the financial matrix. For any reason, really.

In fact, they don’t even tell you why anymore.

Bank of America even suspended a random VC’s bank account earlier this week without explanation.

Except the random VC is actually Sequoia partner, Roelof Botha who took over Sequoia's US operations from legendary investor Jim Goetz, and is…

THE FORMER CFO AT PAYPAL.

Disturbing.

And one of the most meaningful canaries in the coal mine I’ve seen in a while.

People may cheer the Alex Jones ban from Facebook. He’s an easy-to-hate villain. They may shrug their shoulders when protests erupt on the other side of the world or citizens try to flee hostile regimes with the clothes on their back (“sucks for them, but not my problem”). They may crack jokes about sex workers or marijuana entrepreneurs getting cut off from banking services.

But seriously. This guy?

They’re coming after the white guys in the Patagonia vests now?

For any ongoing debate as to whether the addressable market for anti-surveillance or dissident tech is large enough to command attention - and help crypto cross the chasm to the mainstream - this should provide an alarming signal. If people like Botha are losing bank accounts now, we’re closer to crypto’s mainstream moment than you think.

It may be better to think about the addressable market size of crypto as “everyone eventually” by reframing the conversation entirely.

I like Peter Thiel’s quip here that “Crypto is libertarian. AI is communist.”

It’s a catchy meme - with more mainstream proponents these days - that the industry may need to catch fire and finally expand from niche to necessity.

And it may take a patriotic sounding meme to resist the surveillance cancer that has metastasized from the original PATRIOT act.

-TBI

P.S. This weekend’s Long Reads Sunday fully captured all sides of this emerging narrative. I have little to add in the way of curation. It’s perfect. Read it here.


Messari Compression Algorithm

Content and thoughts from around the web as summarized by the Messari team.

🔒 Today MakerDAO ($MKR) is transitioning to the long-awaited Multi-Collateral Dai system that introduces support for different types of collateral besides ETH and makes some key structural changes. The first type of collateral to be available is Basic Attention Token ($BAT) which will have an initial debt ceiling of three million Dai compared to 50 million for Ether ($ETH).

The current single collateral Dai (“Sai”) will continue to exist while users are encouraged to migrate to the new Dai. Another major change is the introduction of the Dai Savings Rate (DSR) which acts as an interest-bearing savings account. Unlike traditional accounts, it does not lend the money out, but rather it pays interest to depositors using funds from the Stability fee.

Why it matters:

  • New collateral types should increase the addressable market of collateralized debt as well as the stability of the system by diversifying the debt pools.

  • The Stability Fee has been changed significantly throughout the year jumping from 0.5% to over 20% back down to 5%. The DSR provides another lever to adjust in order to keep Dai around $1 which should lessen interest rate volatility.

♎️ In a recent update, Libra Association developer Michael Engle revealed the project’s testnet is seeing continued improvement, logging more than 51,000 transactions since mid-September, and its (currently private) “Pre-mainnet” staging environment features seven deployed nodes, with fourteen more in-process. Engle also said the testnet now supports 34 projects created by community contributors, though over 30 of these projects are either wallets, clients, or block explorers.

Why it matters:

  • The update shows Libra is continuing to progress in development despite being under regulatory cross-fire from multiple jurisdictions. Based on the evidence provided in the update, any delays to mainnet launch will not result from technical complexities but from a legal impasse or lack of node operator interest.

  • Community engagement is promising with 34 projects added in just seven weeks. Now, Libra needs to onboard more partner nodes on its Pre-mainnet, which at seven deployed nodes is 93 nodes short of its live mainnet goal.

🚀 The Oasis Foundation announced its first public testnet is now live. The current version only allows users to spin up a node, but the Oasis team intends to add staking and delegations features soon. In the long-term, the Oasis protocol aims to provide a smart contract platform with built-in data privacy through the use of secure enclaves and zero-knowledge proofs (ZKPs).

Why It Matters:

  • Once staking and delegation incentives are live, the Oasis Foundation will host a testnet staking competition, dubbed “The Quest,” and allocate ~1% of its native token supply to the event’s participants. Incentivized testnet competitions help early-stage projects bootstrap a network of validators and stress test the technology in a realistic environment. We cover these experiments in more detail in our Incentivizing Testnet Participation Pro research report.

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Messari's Annotated Pitch Deck

and vision for the future of crypto data

Your daily snapshot from our OnChainFX markets dashboard.

Good morning! 

Lots of exciting posts teed up this week. From dissident tech and why it's good crypto is boring (before it’s not). To Zcash and its major new coming developments and political resolutions. To my book recommendations for the year (i.e. all the books I bought but didn’t read.) 

For today, though…someone leaked our pitch deck over the weekend!

They conveniently tagged all crypto media in a mini-thread with all the slide screenshots and the claim they were our “fans”, even though they purposely misspelled our company name and didn’t tag us. I suppose so that it would be harder for us to find the tweets?

There’s nothing overly sensitive in there, though. So we released it over the weekend on slideshare for all to enjoy.

For today, I’ll go a step further and annotate the deck for your enjoyment (and for our selfish reasons) because: 

a) We got lots of VC feedback, but we’d love community feedback! 

b) Many of the insights we shared throughout the pitch narrative track to theses you might be interested to know are mine.   

c) This is a good, complementary post to my guest write up for Pomp on Friday. 

Of course, this is one deck for one company, and the ideal deck for your business is probably structured very differently. 

I share it, though, because I think it’s a great deck (h/t Ben O’Neill) and probably took ~250 hours of cumulative hours to polish over a multi-month period. Might as well get one more mile out of it before we retire it for good. (For those wondering, I raised $2mm in 2018 without a deck. So nothing to compare this to.)  

Here we go! 

Opening slide: 

Goals: Show purpose, company one liner (at the time), tease of the product

We’re raising money for our crypto data and research company.

No frills here, we wanted to set the tone for the meetings, and this was where I would spend time on my backstory and the company’s before diving in to the real pitch. This intro was the style I was most comfortable with because it’s more conversational, helped me establish credibility without an opening slide all about me, and flows well into the “formal” pitch.

I know some VCs will jump around frenetically during a pitch, but I’ve found that’s not usually the case with a tightly scripted narrative. To the extent they interject, 90% of the time, it’s a leading question for something that is answered in the next slide or two. It’s always nice when someone you’re pitching does the slide transitions for you.

Slide #1

Goals: Show big future market, historical parallels, and a path for skeptics. 

If crypto really is the "internet of value" it’s about more than just currency.

This one was important. We were pitching crypto funds and non crypto funds alike. The non-crypto funds needed something to latch on to beyond bitcoin if they were more excited about “blockchain”, while the crypto funds needed to get excited about the "asset class” play. 

We called this our "great filter” slide both internally and in meetings. If you don’t buy that this thesis has a chance of playing out, you’re not going to be interested in backing our company, so we can keep things short.

Slide #2

Goals: Show breadth of problem, which requires a broad platform solution.

What data/information do we need if the market is to mature to that $10 trillion size?

We were able to highlight the work that our team had done uncovering sizable errors in calculating circulating and future supplies, market caps, and trading volumes, plus speak to some of my / our bona fides as research curators that were pretty good at filtering through bullshit and noise.  

Slide #3

Goals:  Show scale of comps (real $$$), embrace the crypto market cycle.

There’s been a major winner in crypto’s previous two bull cycles. Who’s next? 

This was our money slide. 

We postponed our fundraise until the Q4 2018 bleeding had stopped, but still entered fundraising in a bear cycle. The narrative that worked (and that I believe in) is that there will be four major four year cycles. The first two spawned massive data businesses: Blockchain started out as data and resources for developers and bitcoin hobbyists; CMC became the dominant platform for retail speculators; in 2021 there would be an emergent option for crypto professionals; and in 2025, you’d have data giants serving the enterprise market. 

No way we were about to skip straight from retail shitcoiners to JPMorgan. There was a middle step that we were addressing.

Slide #4

Goals: Show common sense medium term model; long-term vision

Before we can build the “Bloomberg of crypto” we need to build EDGAR.

Some people are getting way ahead of themselves. We are not.

This ecosystem will take a decade to take shape and fully thrive, and we have a game plan for bad markets (like now), and moon markets (where we are well-positioned if we get things right now). 

EDGAR isn’t a sexy comp, until you realize that whoever builds that effectively will have created a global public utility whose standards sit outside of any SRO or government regulator. We aren’t necessarily at the mercy of the SEC, but we can be a terrific tool for them and their international brethren.

Slide #5

Goals: Show THIS TEAM SHIPS, and highlight the important pieces we’ve built

We’ve followed through on the vision we outlined to investors in late 2017. 

This was an important one to us. We wanted to show that we were picking up steam on the product front, that our registry business was cruising, and that we had been a model of consistency in turbulent times: we were executing on the same vision we outlined at the market top and cycle low with very little variance.  

Slide #6

Goals: Show how those pieces can come together for a bigger whole

We’re ready to take this company to the next level with a killer SaaS product. 

The token economy fell wayyyyy out of favor, but we were ready to hit the market with a business intelligence product (as we’d outlined in late 2017) right on time. This raise wasn’t for a token-curated registry (although we still think there is promise in the concept), but for a highly intuitive picks and shovels software business that sat outside of the token ecosystem. 

Slide #7

Goals: We’ve build serious IP on the back-end

This is our moat, we’ve built a data ingestion machine and robust API. 

[redacted] come on guys, you don’t get to see everything.

Slide #8

Goals: We’ve got an unfair brand advantage right now, and broad reach. 

How many data companies have brand affinity? We’re doing something good.

From day one, we invested heavily in building a community and solving a problem that was ultimately about crypto’s values. Were we building an ethical ecosystem that could say - with a straight face - we were making things better than the existing status quo?

We thought 2017 was a set back for crypto’s values.

Transparency, collaboration, proactive communication could fix things, and we worked to reinforce that thesis at a brand level. It generally worked.   

Slide #9

Goals: We’ve built a killer team.

We’re not just tinkerers. We're a team that loves crypto and has done this before.

This was also my opportunity to explain why we had so many investors at such a small initial valuation and round size: we “recruited” them as part of our extended global business development team without taking on risk of tying ourselves too closely with any single crypto fund and their affiliated investments. 

Slide #10-11

Goals: Show traction 

This market sucks, but we’ve still been growing nicely.

Not much to add here. Other than the fact we felt we were one of the few companies that could pitch investors on real traction vs. vision. We felt we had the right vision as well, but the traction was keeping the lights on and preventing us from running out of money despite our low cash balance.

Slide #12 - path to scale

Goals: Show medium term viability of our model and hint at Series A milestones

We’ve delivered with a skeleton crew, here’s what happens with funding. 

Not too aggressive, not too conservative. And these are numbers we feel like we could hit. (This slide was the only thing that got me really pissed off at the chicken shit leaker. Now this is floating in the ether, and we’ll have our feet held to the fire by VCs in 2021 re how we delivered versus this slide. C’est la vie. We can do it.)  

Slide #13 - TAM

Goals: Show the bridge between the first "$10 trillion” slide, and current reality

Yes, the market is small, but we want to dominate small markets & ride the wave.  

This is the set-up for the big finish, and also confronts the biggest question we were getting in “pre-meetings” head on. “Is this a market that could command a $100 million revenue business in the medium-term?” There was (and maybe still is) skepticism around this point. BUT

Slide #14 - Big finish

Goals: Show the path to a moonshot.

There’s an even bigger opportunity here in the moon case... 

If you believe:

  • crypto will be as disruptive to finance as the internet was to information; AND

  • you believe that data is the most valuable commodity in the world / the data giants are the most valuable companies in the world…

Then:

  • it’s not farfetched to see most value in crypto accrue to the winning data providers in the long-term. exchange margins will get whittled away, and most marketplace rents will disappear in these decentralized networks. data still needs to power dapps.

Believable, if a bit fuzzy.

But so were the models around “search for anything”, “connect with your friends”, and “call a black car from your phone.”

Some of our investors wanted us to kill this slide because it was over the top. 

I say “nah, we’re gonna keep it.” 

So that’s that. What do you think? 

-TBI


Messari Compression Algorithm

Content and thoughts from around the web as summarized by the Messari team.

🏛 On November 12, 2019, the SEC ordered a review of the disapproval by the Division of Trading and Markets’ (TM) of the NYSE Arca application to list shares of the Bitwise Bitcoin ETF Trust. The orders opens a 30 day comment period following publication in the Federal Register in which the Commission seeks input from the public on the disapproval order. Industry participants may submit comments here or by emailing rule-comments@sec.gov with SR-NYSEArca-2019-01 in the subject line.

Why it matters:

  • This review is unlikely to result in a reversal of TM’s disapproval action. Still, this review gives the industry the opportunity to provide direct comments to the Commission and Staff regarding the analysis – both by Bitwise and by TM – of bitcoin markets.

  • The Commission-level review was triggered under Rule 431, a little-used procedural maneuver through which a Commissioner may stay (temporarily halt) an action taken by a Division. Rule 431 was used at the request of CBOE BZX when TM disapproved the application to list Winklevoss Bitcoin Trust shares in 2017 and resulted in the more robust 2018 rejection. It appears, in this circumstance, however, that one or more Commissioners pulled the order for review without third party request. Rumor is it was Commissioner Hester. Interestingly, there’s no time limit for this sort of review. Stay tuned.

🌏 A group consisting of five emerging markets including Brazil, Russia, India, China, and South Africa, recently revealed a plan to create a unified payment system that settles transactions in a single cryptocurrency.

Kirill Dmitriev, CEO of the Russian Direct Investment Fund (RDIF), a $10 billion sovereign wealth fund by the Russian government who proposed the plan suggested that the BRICS cryptocurrency will not be a full-fledged settlement tool, rather “Most likely, it will be like certain obligations that can be transferred from one legal entity to another to confirm that the recipient will have claim rights, and the contractor will have obligations for a specific amount. It will not be money, we can say that it will be a paperless document flow to facilitate transactions.”

Why it matters:

  • BRICS consists of the most powerful emerging economies in the world. The group is explicitly attempting to reduce its reliance on the U.S. Dollar and United States financial system in facilitating international trade. The Economic Times reported yesterday that three of the BRICs members, China, Russia, and India, are also “exploring an alternative to the US-dominated SWIFT (Society for Worldwide Interbank Financial Telecommunication) payment mechanism in a bid to smoothen trade with countries facing American sanctions.”

  • Sovereign interest in cryptocurrencies has risen dramatically in 2019 since the announcement of Facebook’s Libra. In the past month alone there have been numerous announcements of government cryptocurrency projects. This latest revelation adds more fuel to what is shaping up to be a digital currency arms race as many nations are slowly recognizing the opportunity to re-architect the international monetary system using blockchain technology.

Send me the link, your twitter handle and your best imitation compression algorithm write up. If I like it, I’ll include your bit next issue (with attribution).

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Messari's Weekend Reads - Issue #52 😎

reading, sleep, and self-care

Weekly Wrap:

I subbed in on Pomp’s Off-the-Chain newsletter this morning with some thoughts on the fundraising process for crypto companies in 2019. I provided some nuggets of feedback from our various investor conversations in Q2 and Q3.

Check it out if you want the gory details on what it’s like to run a process that begins with 80+ investor conversations and ends with a lead + 14 other supporting investors in a cooler seed/small Series A market.

I also sat down with my friend, Tom Shaughnessy, from Delphi Digital for his excellent Chain Podcast. He had to add the explicit mark for iTunes because I lack self-control when it comes to talking about the lack of common sense in crypto. One of my favorite pods to date, and Tom is a great interviewer.

Enough about me, though. The other thing you absolutely must read this weekend (aside from all of our weekend reads below), is this epic “state of crypto” presentation from the CoinShares team. Meltem has also been writing weekly (and the first three posts have been fire), but there are some gems in the 134-page beast of a presentation her team just published.

My top highlights:

1) Millennials are inheriting the earth and they care about digital gold more than just about any other asset.

2) Store of value *is* this industry’s killer app. And it will be until proven otherwise (if ever). Disrupting money - the underpinning of all financial services - is a big enough use case to capture and seize from nation-states.

3) Decentralization has been performance theater. I agree with this, although I’m not convinced that development concentration is a major concern for more adversarial-minded communities such as bitcoins. More worried about identifiable node and miner/ validator concentration in any one geopolitical region (e.g. China) than any other part of the the “decentralization” challenge.

Enjoy the full epid read here. and have a great weekend!

-TBI

Weekend Reads:

Your daily snapshot from the Messari screener.

Have a good weekend y’all.

The Messari Team

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Messari Compression Algorithm

Content and thoughts from around the web as summarized by the Messari team.

🤔At Consensus Invest, U.S. Commodity Futures Trading Commission (CFTC) chairman Heath Tarbert hinted the government agency is thinking about classifying Proof-of-Stake (PoS) tokens as securities. This view would complicate many existing and soon-to-launch blockchain networks that selected a PoS consensus mechanism over its Proof-of-Work (PoW) predecessor. Tarbert clarified his position by adding “[m]ining is, by its very nature, more decentralized as compared to a stake which reduces energy costs by giving it just one validator or a line of validators.” Tarbert’s statements put Ethereum ($ETH) directly in the spotlight, as the premier smart contract platform aims to transition to a more eco-friendly PoS design.

Why it matters:

  • The SEC and CFTC previously stated they do not consider ETH as a security in its current state. The government agencies reached these suggestions after studying Bitcoin’s PoW-based network and level of decentralization for years before applying their process to Ethereum. PoS is a new (and therefore scary) model regulators still need to wrap their heads around. Judging by Tarbert’s comments, they are still a little off in their assessment. PoS elects a single validator to propose a new block akin to an individual miner winning the PoW hash race. The specifics of PoS are more complicated and still in development, so do not expect any guidance from the SEC or CFTC anytime soon.

  • Tarbert also said, “America needs to lead” in crypto regulation but do so in a way that encourages innovation. Contrary to this thought is labeling all PoS tokens as securities, which will further push innovations in crypto overseas.

💰Compound, a leading DeFi protocol with over $125 million loans originated this year, raised $25 million in a Series A led by a16z crypto with allocations from Bain Capital and Polychain Capital. CEO Robert Leshner said he plans to use the fresh capital to make the service more available to ordinary people by integrating with popular exchanges, custodians and wallets.

Why it matters:

  • Interest rates that are multiples higher than existing alternatives represent an opportunity to bring in a large non-crypto native market into the ecosystem. The biggest hurdle is making consumers feel comfortable with using these systems which can be accomplished by integrating into these more user friendly interfaces.

  • As global interest rates are at historic lows and trending more into negative territory, people will start to rethink their savings accounts and DeFi protocols will likely gain more attention.

Did I miss something?

Send me the link, your twitter handle and your best imitation compression algorithm write up. If I like it, I’ll include your bit next issue (with attribution).

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Messari News Week #3 - We Closed a $4M Round

also bitcoin actually fixes this (gambling, porn, dissent)

Your daily snapshot from our OnChainFX markets dashboard.

Three major Messari items to share today. The first leads to the second two.

PLUS a quick note on Porn(Hub).

Come for the news, stay for the porn in today’s double feature is not a thing I thought I’d ever be able to write in a professional memo. But here we are…

Messari News

1) We’ve closed a $4 million funding round led by Uncork Capital. Jeff Clavier, Uncork’s founder, and a former Thomson Reuters executive, will join our board of directors. Great team, awesome track record, but perhaps Jeff’s greatest flex as a VC is owning the @Jeff twitter handle. We’re excited to bring another world-class investor (officially) into the industry as this is Jeff’s / Uncork’s first crypto deal.

The round included support from existing investors Anthemis Group, Blockchain Capital, CoinFund, Danhua Capital, Fabric Ventures, Fenbushi Capital, Semantic Ventures, and Underscore VC. New investors Coinbase Ventures and Balaji Srinivasan participated as well. Off to the races.

2) How does this impact you?

Well, we’ve doubled the size of our research and engineering teams in the past 2.5 months. This funding (and expanded headcount) will help us invest in the tooling necessary to further automate our data ingestion processes and broaden the feature set of our Messari Pro beta research product. If you’re not a paid subscriber, you’re missing out. It’s like CoinMarketCap, but for crypto professionals who would rather use FactSet or Bloomberg, but who also want to spend $300 / year vs. $3000 / month.

AND we’ve added depth to the marketing team. That means these newsletters will arrive punctually and consistently in your inbox at ~9am ET everyday henceforth. No more “TBI hits send right before he passes out” bullshit. Thanks for bearing through that transition process. I think you know by now that writing daily is a labor of love for me, so the new staffing + process will ensure this is something I can do every morning in between deadlifts / breakfast steak and playing with my kids for a minute.

3) If you’re an “enterprise customer” - token creator, exchange, fund, broker, info service, etc. - we should talk about some of the more advanced tools we’ve recently launched. (NO NEED TO FILL OUT A FORM, YOU CAN REPLY DIRECTLY.)

Our token registry business is en fuego (as the kids used to say), and every day we get closer to having a ubiquitous public utility that serves as a single source of truth for the industry. On Monday, we wrote about our new and improved asset pages (major depth on bitcoin and smaller, legit up-and-comers alike). That’s the real-time overview of every project in our library. But let’s say your a compliance team or investment analyst or product person that needs to *track changes* to these profiles and understand the impact a potential project update could have on your business: that’s what our new asset monitoring service is for.

We send alerts and reports on major governance updates, changes in sentiment or business/technical roadmaps, potential forks or airdrops, and more. It can be a nightmare to get blindsided by one of these edge cases if you’re managing a portfolio or leading a product that relies on consistent, high-quality qualitative information. That’s where we can help as your compliance research team.

Enough about us.

Let’s read some porn.

***

“Bitcoin fixes this” PornHub edition

Set aside cracks about PayPal screwing PornHub performers. This is important.

What happened:

PornHub announced last night that PayPal had abruptly cut off 100,000+ performers (don’t worry this is the CoinDesk link!!!) from using their payments service. Porn has always been a risky business for regulated payments companies to service, and this sort of suspension has plagued smaller players in the past.

But PornHub is not a small player.

It’s a top 10 global website. Just behind twitter, and just ahead of Instagram and Wikipedia. The ban amounts to an attack on an entire class of sex workers.

It also does truly open up a massive opportunity for crypto, as literally everyone was quick to point out last night.

Why it matters:

The “bitcoin fixes this” meme is effective, even if it’s gotten annoying. It’s more than a trite catchphrase though in the realms of porn, pot, and poker (gambling).

Perhaps the only actually interesting crypto applications today are in legally murky, but arguably ethical markets like these.

Areas where you might break the letter of the law, but still hold the moral high ground, and with a good lawyer avoid things like jail, are ripe for crypto innovation. These also happen to be the areas where change can actually happen publicly at much lower risk to those involved.

Yes, you can use bitcoin to evade capital controls, and yes, that may be life-saving and liberating, but it’s a rather extreme stakes sort of game that won’t be relevant to a huge population.

It’s also an easier use case for outsiders and enemies of free speech and free money to attack. “Of course they like bitcoin, it enables tax evasion and money laundering” is an effective line because it boxes proponents into the defensive "well ackshually” camp. There’s no effective one-line rebuttal other than “banking is worse.”

Much better to save the cam girls!

And point out the absurdities of restricting gambling and marijuana businesses in some states, but not others!

Banking and financial services are extremely sticky. High switching costs and long customer lifetimes. Any time there’s a disruption of service that impacts 100k potential crypto power users all at once, I hold out hope that 10% of those impacted will try crypto because it really does solve an acute need. A window of opportunity has opened - slightly and briefly - for a sticky new set of customers.

Time for plan ₿ for sex workers.

And finally:

I make sacrifices for you. Like brazenly opening PornHub in front of my wife this morning to search for the original post and text.

She had…some questions.

***

Thanks for reading and supporting us along the way.

NOW GO TELL YOUR FRIENDS AND BOSSES to…

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Until tomorrow,

-TBI


Messari Compression Algorithm

Content and thoughts from around the web as summarized by the Messari team.

💵 Paxos, a New York based regulated trust company for digital assets, announced today the launch of its Fiat Gateway Solutions and APIs.The solutions provide crypto-native businesses the ability to accept dollar deposits and convert them into stablecoins issued by Paxos for use on their platform. The solutions also allow users to swap stablecoins freely for all stablecoins custodied by Paxos. At launch Paxos will support both Paxos Standard ($PAX) and Binance USD (BUSD) stablecoins.

Why it matters:

  • Part of what drove Tether's success is that it allowed cryptocurrency exchanges, which have historically had trouble maintaining banking relationships, to outsource custody of fiat currencies to Tether Limited. Tether’s existence on public blockchains allows traders and exchanges to efficiently move USD between exchanges using the blockchain as a settlement layer. With it’s new Fiat Gateway solution, Paxos may be able to provide this utility more seamlessly, transparently, and effectively.

  • The announcement marks yet another fiat gateway for Binance, which has been rapidly rolling out fiat-to-crypto exchanges around the world throughout 2019.

📊 Chicago Mercantile Exchange (CME), the largest derivatives exchange in the world, announced options on its Bitcoin futures contract starting January 13th, 2020 pending regulatory review. Each contract is based on one futures contract which is currently worth five bitcoin.

Why It Matters:

  • The futures contract trades over 30,000 bitcoin per day and the addition of a new hedging instrument gives these clients a new means to hedge their risk.

  • A more robust derivatives market should improve the price efficiency and liquidity of the underlying spot market, an important step for any regulatory approval on future financial vehicles.

💱In an interview with The Block, Bitfinex CTO Paolo Ardoino discussed the exchange’s plans to offer options as soon as Q1 2020. He also mentioned the addition of gold-backed stablecoin, perpetual swaps, and basket futures, although did not disclose any more details.

Why it matters:

  • As we noted with CME’s foray into bitcoin options, more derivative providers will create more ways to hedge price exposure and help create a more efficient market.

  • In the last two months two gold backed tokens have been announced, Paxos ($PAXG) and CoinShare ($DGLD). The increased availability of gold investments comes at a time of macroeconomic uncertainty where stores of value are likely to be in high demand.

💰Google announced today that it would launch a checking account next year with Citigroup and a credit union at Stanford University. Customers would access the checking account through Google’s Google Pay digital wallet, which is on pace to reach 100 million users in 2020. Google believes it can create value for customers through services that could include loyalty programs. The company remains undecided on whether it will charge fees on the accounts.

Why it matters:

  • The news follows a slew of financial service product announcements and launches from tech giants including Uber Money, Apple’s joint card with Goldman Sachs, and Facebook’s digital currency project Libra.

  • Tech giants are among the best positioned for the future of financial services leveraging their massive user bases and global reach to distribute innovative financial products.

Send me the link, your twitter handle and your best imitation compression algorithm write up. If I like it, I’ll include your bit next issue (with attribution).

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Messari News Week - Messari Academy

learn lots, stack sats, beat the bear, etc.

Your daily snapshot from our OnChainFX markets dashboard.

Community, Community, Community, Community…

Over the past few months, our Community Analysts have been hard at work completing “resource pages” covering terms and concepts for anyone looking to learn more about crypto.

These pages cover basics such as hash power, scaling solutions like lightning network, and more technical topics like hashed timelock contracts (HTLCs).

We’ve finally compiled them all in one place to create the backbone for the new Messari Academy, your go-to resource for important terms and concepts about crypto. We’ll update this regularly, and would love to hear your feedback.

If you’d like to make edits to existing pages or add to the library reach out to research@messari.io with some details, and help us level up the industry.

***

Ugh, meanwhile: did I mention that full historical price downloads are now a thing on all Messari asset profiles?

Free.

Advanced filters are available for the 301 level crypto investors out there, though, for those who would like to pay for this sweet service.

Otherwise, free.

It’s kinda like a crypto research and data site for adults. Right?

-TBI

P.S. Share. Subscribe. Spread the love. Tweet at me or Messari for requests, feedback, comments, or questions.


Messari Compression Algorithm

Content and thoughts from around the web as summarized by the Messari team.

The IEO boom of 2019 was a marked improvement on previous attempts to access the capital markets through the issuance of a digital token - at least from an investor standpoint. The IEO introduced higher levels of third-party due diligence, clearer documentation by issuing teams, and better incentive alignment across fundraise participants as early venture capitalists were no longer receiving massive pre-sale discounts. We also analyzed aggregate returns and found that despite massive spikes in the first week and sustained returns over the first 30 days, only a quarter of IEOs are currently up from their original offering price.

Read the full report here.

Send me the link, your twitter handle and your best imitation compression algorithm write up. If I like it, I’ll include your bit next issue (with attribution).

Should your colleagues read daily? We now offer discounts for corporate access. Email us, and we’ll onboard your whole team.

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