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Black Stone

Black Stone

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Dec 6, 2016
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Hello Abacus readers! It’s been a while since we did a crypto market report but the good news is we’ve been working on something differentiated and hopefully unique. Token Economy and CryptoChat do an excellent job of updating us all on market activity and the most important tidbits in crypto, so we’ve been discussing what we could do that adds value to the community at large.
With our new Crypto Around The World reports we want to highlight the stories and actions that are pushing the global landscape towards the interconnected crypto economy we foresee in our futures. We’re focused on monitoring how crypto will be incorporated into our lives today and how it will change them ten years from now. And because we can’t help it, we may throw in a few other interesting articles along the way.
If that sounds good to you, keep reading! If you want a report on the most pertinent news items, check out Token Economy and Crypto Chat! They’re truly excellent and deserve a weekly read!
Keep Your Eyes On Venezuela
In every issue we’ll be tracking Venezuela’s interactions and adoption of cryptocurrency. The country has experienced massive inflation of its local currency the Bolivar. Its citizens are a prime example of how Bitcoin could be used as a substitute for fiat currency and connection to global markets in a destabilized economy.
As the charts below indicate, Venezuela’s flight towards Bitcoin is unabated by Bitcoin’s price; citizens have a strong desire to get their hands on the decentralized asset out of necessity:

Compare this to the same exact time frame in a country like Japan where transactions historically appear much more speculative:

My favorite Venezuela crypto related story this month is that of Jonathan Wheeler. The ex Goldman Sachs banker has started non-profit that intends to implement a massive Bitcoin airdrop to a multitude of Venezuela’s citizens. For a full explanation of his plan, look here. This would be quite the novel form of international aid. If this model proves implementable, it opens the doors for crypto aid distribution world wide. Also, it makes me think: what’s stopping a billionaire from implementing some form of UBI system distributed via crypto in a community or nation of her/his choosing?
Blockchain Based Loans Could Be Key To Equitably Distributing Human Populations
This is a fascinating article on how crypto loans could service rural areas and power a new global P2P lending system. I also see this as critical infrastructure for crypto on-ramps. Some highlights and thoughts:

  • Approximately 3 billion people seek access to the global financial system in rural areas; these people are currently highly underserved.
  • As populations increase and the world becomes more interconnected, deploying and distributing capital to these individuals is critical for global food security and economic mobility. I personally believe this could also reorchestrate the movement of individuals towards urban areas. Historically rural residents have moved to cities in order to be closer to capital and gain more opportunity. In a world in which capital is globally interconnected and less geographically bound, it becomes easier to imagine individuals staying in rural areas, possibly leading to a decrease in urban congestion. As Google expands its Loon project and smartphones continue to proliferate access to technology will not be the gating factor.
  • Beyond highlighting the interesting needs of rural individuals around the world, Greenfield also highlights how NFT’s (non-fungible tokens) could be used to create collateral in exchange for a stablecoin as part of a global lending system. Other pieces of infrastructure need to be put in place before that could happen though, such as: A) stablecoins being accepted globally B) Platforms to connect loan seekers with financiers and C) Metrics to quantify/ a framework for assessing interest rates in a new economy. Regardless, this article is a fascinating peek into how blockchain based loans could one day change the financial futures of 3 billion individuals.
While we’re talking about crypto changing how and where people economically connect and live look no further than Japan. Cheap electricity is enabling rural residents to make a pretty penny off of mining. As cities become hyper congested, opportunities to generate income from any location are critical and could help redefine the current geographical constraints of economic opportunity. There’s so much unused space!
Bitmain’s Opera Web Browser Investment Could Be An Adoption Game Changer
Remember Opera, the mobile web browser you downloaded once because your friend told you to that you subsequently deleted a week later? Well, that little web browser has 50% market share in Africa and just a received a $50M dollar investment from arguably the world biggest crypto company, the one and only mining behemoth Bitmain. Opera has announced they will soon be supporting an in-browser wallet. On a continent where many of the fiat currencies have a decent chance of failure, this is a huge step towards Africa becoming the first crypto continent.
Blockchain Bonds
On the corporate side of the equation, the Thai Bond Market Association (TBMA) is “studying the use” of blockchain tech for corporate bonds,according to a report by the Bangkok Post. Nation states and corporations seeking capital from the crypto economy makes a lot of sense, but the infrastructure is far from ready. As Southeast Asia and Africa become more interconnected within the global financial system, it’s an easy leap to imagine companies from these jurisdictions turning to blockchain powered bonds for financing. In fact, I think it’s most likely that we will see examples of blockchain-powered bonds from these jurisdictions first. They have already leapfrogged the West in terms of mobile internet and seem the most inviting to novel solutions.
Renewable Energy Meet Blockchain
Wondering how Power Ledger will actually generate revenue? Here you go. I still think the intersection of renewable energy and blockchain tech is fascinating; many solar advocates have been arguing for decentralized energy grids for years. I’d love to see a project like Power Ledger become the new normal. We’re probably a couple decades away, but one can dream!
Will Baseball NFTs Strike Out?
The MLB formed an official partner with LA based blockchain company Lucid light to create “sport moment collectibles.” These will be in the form of non fungible tokens, but to the consumer we’re basically talking about the future of digital baseball cards. One interesting component here is the idea of capturing moments vs. static pictures or players. For example, a collector could buy a digital recording of the moment when their favorite player made a game winning homerun. Honestly, I’m not sure this is going to take off, but it is the most notable use of mainstream NFT’s we have to date. I’m interested to see how users interact with the new platform, as the market of individuals who love both baseball and crypto is probably small. Usability will be key here as it is throughout the entire industry if a majority of people are going to move out of pure speculation mode any time soon.
Crypto Companies Doing Real Things
While the ICO acronym has unfortunately become synonymous with scams, fraud, and blatant disregard for investors, a handful of crypto companies have used this novel fundraising mechanism to actually release a product and begin transforming the world towards a more integrated and seamless global economy.
In the last couple weeks there have been several companies worth highlighting and whom I have been tracking since their ICO. Pundix, Brave, Augur, and — in my opinion the biggest ICO success story of all — Binance all took big strides forwards in July. Let’s take a look.
Asian based Pundix has partnered with FAMA, a Hong Kong based organic restaurant group. Pundix will be installing their crypto friendly POS systems at Fama group restaurants. According to Bitcoin News, Pundix has already installed 5500 POS systems across various Asian markets and according to their website they now employ 150 employees.
Crypto POS systems will enable customers across the world to freely use their cryptoassets. Adoption seems especially possible in Asian markets where mobile payments are already part of citizens financial habits (80% mobile payments in China). Additionally, in other developing markets, users are beginning to be paid directly in crypto via bounty programs like BountyOX or being tipped for their content via platforms like Brave.
Speaking of Brave, the novel web browser from the founder of Mozilla should be gaining more attention as a positive ICO story. To date, they claim to have 3 million users and are in the top 10 for communication apps in US, France, Singapore, Indonesia, and South Korea among other markets. As more publishers use Brave and content creators are tipped in Bat Tokens around the world, platforms like these inadvertently become integral crypto on-ramps. On a ten year time scale, solutions solutions like these power a transition towards a global crypto economy, where an American could quickly tip a content creator in Nigeria, opening up markets in for even small scale global entrepreneurs in a meaningful way.
As I’m sure you are well aware, Augur has finally launched. I’m less excited about Augur’s potential in becoming an integral part of a crypto economy transition because it’s inherently a speculative market, as opposed to a platform enabling real world payments or interactions. That being said, it will be fascinating to monitor how the world’s first global decentralized prediction marketplace forecasts events. More importantly, it opens the doors to some unexpected controversy: some users have decided to open prediction markets on assassinations which leads to a… shall we say, strange set of incentives. How will decentralized prediction markets deal with these types of bets? Will this push governments to become more involved? Even if a government want to shut down an assassination market, how would it even going about doing so? For an overview of all Augur market activity check this out.
In addition to starting a fund supporting decentralized applications, Binance is now launching the first decentralized bank in… you guessed it, the wonderful blockchain island of Malta. I’m still trying to get information on what exactly a decentralized bank means and what the real world effects are beyond some semblance of communal ownership. Binance sees it as part of the process in bridging the traditional banking system with crypto. We’ll see where this leads.
Keep It Simple Stupid
Great article from Joe Merill on the “3 Economic Rules Every Crypto Start Up Must Obey.” Let’s not overthink this whole blockchain thing. Decentralization, global currencies, and a a global interconnected ledger are pretty cool. My favorite of the three rules:
“Rule 3: Blockchain should only be used when it lowers transaction costs to securely share and maintain information critical to the underlying economic exchange.”
Phones On The Blockchain:
Speaking of usability, did someone say phones on the blockchain? It’s sounds silly but there are actually some advantages here. The key value proposition with blockchain powered phone is ownership of ones keys and data. So in the age of hacks this could be a solution.
Sirin Labs smartphone and HTC’s Exodus are the two most lauded Blockchain based smartphones coming to market. HTC has announced they will launch by the end of 2018 and Sirin Labs has said they will release their phone as early as November. I expect sales to be dull in comparison to the traditional smartphone market. That being said, the evolution of blockchain powered phones are critical to get crypto in the hands of users via an accessible method and promote real world use.
South Korean Banks Hold 2 Trillion Won Worth of Crypto
2 trillion Won “is equivalent to some 8 percent of the total deposits operated by South Korean brokerage houses, which are worth 26 trillion won.” This is actually a pleasant surprise and falls in line with my thinking that crypto adoption is blasting off at a much faster rate in Asia than in North America. Will the first central bank to hold crypto be in South Korea?
Because Without Government Regulations, We Would Be Lost! Well, Probably Not But Overall This Is Positive.
Like most crypto enthusiasts I never knew I’d care so much about securities and anti money laundering law but here I am.
Coindesk put together a great global regulatory summary which you can check out here. My main insight here is that the future looks quite bright in South Korea and Japan. They seem to be the only two countries that combine traces of real world crypto adoption with a constantly evolving and sensible policy on transactions and ICOs Unlike Switzerland, which also has provided a defined ICO framework, Japan and South Korea’s developer ecosystems are robust. Switzerland seems to be acting as more of a corporate shelter. The U.S. continues to offer unclear guidance, allowing other countries to lead the way. If this continues, more founders will find solace in the east than the west.
Some Articles Worth Checking Out:
Brief History of Stablecoins
Bitmex is a great source for crypto research. Check this out for a history of stablecoins and what they believe to be the most promising stablecoins of the future. Spoiler alert… they haven’t found any they feel to have major staying power.
Thing About Crypto As Slow Money
I really liked this piece from Mike Maples. What did I learn most from this article? Focus on people and not on the companies. Which minds seem to be ahead of the curve on a ten year timescale? Outside of thinking about protocols and token models, who are the big thinkers that can be identified today? As noted earlier, perhaps opinions of Binance founder Changpeng Zhao should be getting a bit more attention. The guy is starting a community funded bank, doesn’t have a car or house and is fully embracing a decentralized future. He’s definitely embodies the “think different” ethos of Mr. Jobs from th0e bygone times when Apple was innovative.
The Web 3 Stack
Kyle Samani does a solid job of mapping out the current state of the web3 universe. My biggest takeaways are:
1.) We’re far from having the infrastructure to produce highly usable consumer facing dapps.
2.) Ethereum is far and beyond sucking up the greatest amount of developer talent.
3.) The world will be ok if people stop building new consensus protocols.
4.) I find it surprising that he left out Tenzorum which could be an excellent solution for key management and engender increased usability throughout the world.
To a globally interconnected crypto powered future :)