Cryptocurrent Newsletter October-November 2018
The Impact of Regulatory Involvement and Delays:
For those of you who follow the SEC movement on cryptocurrency acceptance, you have no doubt engaged at some level in the drama. Where are we at in acceptance, adoption and general usability?
Generally speaking, the SEC views cryptocurrencies as futures, while the CFTC views them as commodities. This is part of the regulatory snafu saga. According to Brian Quintenz (CFTC Commissioner in 2017 through 2018), tokens in a pre-sale can evolve in their role from securities used to raise capital to commodities in the end for commerce and exchange. Arguably, for Bitcoin enthusiasts, the original BTC is a currency. Why would that be different? And how can the folks in the regulatory agencies view digital currency as either when fiat, a simple currency, merely gains or loses value based upon acceptance and markets? So, to the bottom line, how does all this affect adoption, evolution and advancement of the blockchain currency universe?
What’s a Masternode and Why Should I Care? (hint: Opportunity!):
A masternode is a full node or computer wallet that keeps the full copy of the blockchain in real-time, as if you have a wallet always open and running. Masternodes increase the privacy of transactions. A masternode can perform instant transactions, and is also capable of participating in governance and voting, not just the function of the ledger. Masternodes are useful, too, in budgeting the outputs and treasury system in cryptos. There is, of course, a barrier to entry to prevent malicious activity in running a masternode. Generally this involves collateral and commitment. In essence, lots of money. The owner of a masternode must have skin in the game.
To run a masternode, a person should strive to be well versed in crypto and the currency with which they will buy in (entry limit examples, 1000 DASH, 10,000 PIVX). Other requirements include a VPS or server that can host 24/7, a dedicated IP address, and adequate storage space to save and log the blockchain.
By running a masternode, individuals can earn incentives. Basically, weekly interest in personal crypto holdings. As always, decide on your own abilities and risk tolerance. That’s a personal decision, but one that could be a very worthwhile investment.
What has Coinbase Been Up To?
In the past two months much has changed within Coinbase. Not the least, but certainly obvious, the team added ZRX and USD Coin. Is this THE Fed Coin that has been anticipated? That certainly deserves a closer look. See the next column, where we touch on USDC. Coinbase formed a joint venture with Circle, a GS-backed company, following the exit of Charlie Lee and the extreme lull in price discovery.
October 23, 2018 Coinbase received a license under NY State banking law to act as a custodian for XRP (Ripple). a centralized cryptocurrency. Certainly, the most current information is available on https://blog.coinbase.com
So, is it obvious that XRP will be the next great listing on Coinbase? Certainly, it would be no surprise.
That said, if you are a Coinbase user, perhaps you have noticed the plethora of newly listed coins and tokens. If you have not yet, scroll to the bottom of your mobile screen while in the Coinbase App and click the tab ‘Discover More Assets”. It’s only a matter of time. This comes as regulations impact the trading and buying/selling of cryptocurrencies.
For now, it is a battle between Security and Commodity, but as adoption grows and fiat loses ground, there are exciting times of change directly ahead.
Yes, Really…USDC. How does USDT Compare?
Some would pose the question first, ‘Does it matter?’. Not for some Bitcoin loyalists. The first stablecoin pegged to the US Dollar. To many in decentralized finance, laughable. Circle and Coinbase partnered to offer a 1:1 pairing to the USD, having listed live on October 23, 2018.
Circle is backed by Goldman-Sachs, so there’s the money trail. A similar coin called TUSD (True USD) is listed on Binance. Ah yes, another stablecoin. Circle’s UDSC is more or less a simple tokenization of USD fiat brought into the exchange.
Basically, USDC takes a chip out of the USDT (Tether) market share, which allegedly makes the cryptosphere less prone to magnificent volatility we’ve all come to adore.
LD2 Advertising Tokenized Silver ‘Safe Haven’:
Otherwise known as Liberty Dollar 2, LD2 “is an asset-backed cryptocurrency that facilitates vaulted, physical ownership of redeemable precious metals and real-time trading of those assets’. Note before digging deeper that the physical vault is actually located in the state of New York.
LD2 claims to function as a stablecoin, an attempt to offset the fiat-backed tokens such as USDC (see above). In spite of the physical location of the vault, this is a globally liquid, value-stable, low-volatility crypto without a central bank. It is meant to link precious metals and cryptocurrency in the New Money System we’re swiftly migrating to.
To summarize, it is 100 percent backed. Each token is equal to the value of 1 troy ounce of .999 silver. Very appealing with current spot prices. The tokens and vault are audited monthly by an outside entity with no other ties to the token issuer. In addition, all transactions are verifiable and traceable on the blockchain. Each token is fully redeemable from the depository (in New York State, US). So, you can simply request delivery of your assets at any time and relinquish as many tokens as you hold or desire, pay a little shipping and the precious metals arrive on your doorstep.
LD2 tokens are 100 percent redeemable and are ERC-20 based, so they can be used across many platforms. Food for thought: the website states that these tokens will be available on centralized exchanges. Perhaps that is countering the inevitable addition of centralized tokens like XRP to decentralized exchanges. Is there such a thing?
Wish for the whitepaper, an overview or a more detailed explanation of the lay of the land for asset-backed crypto? You can read further and explore this exciting new venture at https://ld2coin.io .
Seasonality of Cryptocurrency and An Apparent ICO Drought:
We are nearing the gift-giving season and in many cultures globally this means gifting gold coins, silver bars or cash. How many individuals will be giving or receiving Bitcoin (commodity?) this Holiday Season? Your guess is as good as ours. Is the ICO drought real? Not likely. Initial Coin Offerings drum on, perhaps less heartily in some jurisdictions. One major underlying factor in the apparent lull is the depressed price of Ethereum (which many ICOs use to raise capital – security).
At the end of 2017, every cryptocurrency seemed destined for the moon. Ambiguity, as more masses try to grapple with what crypto is and how to best implement it, has left its mark. While regulation is perhaps what takes the fun out of decentralized economics, the bickering over regulation for New Money Systems simply stands in the way of progress and a better way ahead for established and emerging markets.
For now, the CFTC and SEC cannot come to full agreement and regulations are in the works. Look ahead to 2019 and it is becoming clearer that popularity and asset allocation is demanding swift decisions. There are no lack of ideas, there is no lack of enthusiasm. And at this point, nothing is really a bubble anymore. Mainstream doubt has quashed that for a season.
KYC, AML and International Law continue to muddy these waters. But take heart! Elad Roisman was recently comfirmed by the US Senate to the SEC. Between this gentleman, a crypto-positive, and Hester Pierce, another crypto yes, the vote on ETF forward motion is tied. Five chairpersons at SEC and two are pro, while two are against. The swing vote will decide. Perhaps in time for the Ides of March, 2019.
DISCLOSURE: We are not financial advisors. We are merely a group of enthusiasts sharing information and educational resources. Your investments and participation in crypto currency are yours. We cannot advise, buy, sell, trade on your behalf. We cannot offer trading tips, we can simply share our own perspectives and we cannot be held liable for your personal investment in any digital asset. “The primary mission of this group is to on-board people and businesses into the cryptocurrency space. We encourage all levels and backgrounds to participate and we are eager to teach and learn. Our meetings focus on educating the general population about benefits of cryptocurrency and its applications to the modern world.