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Square (SQ) is ranked 7 in the Fintech 50 Index of publicly traded Fintech stocks and describes itself as “tools to empower businesses and individuals to participate in the economy. Sellers use Square to reach buyers online and in-person, manage their business, and access financing. And individuals use Cash App to spend, send, store, and […]
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Apple makes big bucks from its App Store since it launched it in 2008 with an initial 500 applications. The app ecosystem has grown into more than five million apps and into a huge business, with users spending $380 billion worldwide on in-app purchases. In 2020, Apple made $72.3 billion and Google made $38.6 billion. […]
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What makes a stablecoin useful? Here is our pick of the 3 most important Stablecoin news stories during the week. One feature is that Stablecoins offer interim protection to traders from notorious crypto price volatility. They did so by almost maintaining their one dollar-peg and offering sufficient liquidity to traders who looked for a safety net […]
The post Stablecoin News for the week ending Wednesday 15th September. appeared first on Daily Fintech.
Funding is a prerequisite for any new crypto project or startup. At the dawn of the new decade, we’ve seen a decline in token sales as source of funding. Where is the capital for crypto projects going to come from? Will traditional investment vehicles, like venture capital become more significant or will we see another evolution in crypto fundraising?
Ilias Louis Hatzis is the Founder at Mercato Blockchain Corporation AG and a weekly columnist at DailyFintech.com.
In 2017, ICOs were the most popular cryptocurrency trend. During that year 875 projects sold $6 billion worth of their tokens. In 2018, 1253 ICOs raised $7.8 billion, but 2019 was a completely different story. In 2019, we saw the introduction of the IEO. In total, token generation events during 2019 raised $3.2 billion (ICOs raised less than $370 million). But very few IEOs last year were able to raise a decent amount capital and only on selected exchanges. The drop can all be attributed to lack of regulatory oversight, a large number of exit scams, failed projects and delayed developments, severely damaging investor sentiment around token sales.
While the price of Bitcoin bounced back after the first quarter of 2019, the fate for most of the other coins, like Ethereum, EOS and Tron, was not the same.
The introduction of IEOs provided an extra layer of trust and security, when compared to ICOs. An IEO is very similar to an ICO. Investors receive tokens at a discounted price, in exchange for investment. IEOs are conducted on cryptocurrency exchanges, that claim to perform strict due diligence checks, to filter out any bad actors and protect their users. At a first glance IEO figures are impressive. The launch of BitTorrent on Binance in January ended in 15 minutes with over $17 million worth of tokens sold. But only a small number of IEOs have been able to get this kind of activity.
IEOs have their own share of problems and many are still skeptical. For the most part, IEOs were more secure than the conventional ICOs. While the IEO experiment showed that ICOs can be rebranded, it also showed that some of the inherent flaws couldn’t be evaded. As smaller exchanges, with more lax requirements, launched their own IEO launchpads, once again fraudulent token sales appeared
With declining ICOs and IEOs, blockchain startups are looking for other ways to raise money.
Even when ICOs were red hot, there was venture capital investment in crypto companies. Companies like Coinbase and Circle raised money from VCs. In 2018, VCs invested around $3 billion in crypto and blockchain-related startups, around 40% of what was raised by ICOs. In 2019, venture capital investment took a step back. By the middle of 2019, VC funding in cryptocurrency startups accounted for USD 822 million.
Security Token Offerings (STOs) have emerged as an alternative. While launching an STO is a complicated process, in 2019 they gained more traction and capital, with 64 STOs, collectively raising almost $1 billion. STOs were born out of the need to raise money in a more regulated way, while keeping the flexibility that tokenized assets offer. Only a few platforms are licensed to host STOs, but a huge surge in interest has led many to seek licenses. Because of this, 2020 will likely bring a new wave of STOs, though these will mostly only be offered to accredited investors, while a regulatory framework evolves.
We are also seeing another trend, the Initial DEX offering (IDO). Very similar to IEOs, IDOs are conducted on decentralized exchanges, instead of centralized exchanges used IEOs. Last year, Raven Protocol (RAVEN) conducted an IDO on Binance’s DEX. But for now decentralized exchanges still need to mature in terms of users and volume. For example, Binance’s DEX has a daily trading volume that is under $2 million.
When ICOs first came out, I thought they were revolutionary. The IEO model fixed some of the flaws that plagued ICOs and gave developers an effective and faster way to get to market. Even though IEOs started early last year with some fireworks, they did not completely resolve the trust issues, so the investor enthusiasm quickly fizzled out.
To make investors feel comfortable again, we need more than ease and accessibility, that ICOs and IEOs offer. We also need to offer IPO-grade regulation and compliance. But most startups are not able to do that. So what’s the middle ground? Well, maybe the solution is STOs, tokenized securities that comply with regulations. But for now STOs are still a hard route, that lacks liquidity and regulatory clarity.
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Bitcoin started the year with a bang. In the last 24 hours it went up 3%, topping $9,000. The entire week has been exciting week, with one rally after another feeding the bulls. Bitcoin has exploded by over 30% since January 1, and we’re just a couple of weeks into 2020. What a difference from what happened in January 2018. Market watchers are pointing to Bitcoin’s halving as the catalyst for the next big price push.
Ilias Louis Hatzis is the Founder at Mercato Blockchain Corporation AG and a weekly columnist at DailyFintech.com.
There are two major forces we need to consider. On one end we have the Chinese New Year, which has always been bad for cryptocurrencies. On the other, political uncertainty is providing a fertile ground for the value of cryptocurrencies. Both these forces are pulling crypto from opposite ends and will cause major price swings in the moths to come.
For some reason Chinese New Year has always been bad news for Bitcoin. This year, just like the last four years, you can expect, a little dip right before the Chinese New Year. In January 2019, Bitcoin dipped to around $3,300. In 2018, the Chinese New Year, kicked off the bear market, with a huge slide from around $16,000 to $5,000. In 2017 we had a mini dip, dropping from $1,200 to $700. Some people attribute the price drops to the Chinese cashing out and giving gifts to family and friends. Personally, think a lot of market makers take time off, and as a result potential orders don’t get filled, which causes the entire market to drop.
On the other end of the spectrum, Bitcoin’s decentralized governance combined with the global uncertainty, because of the relations between the United States and Iran, Trump impeachment and the US and China trade war are pushing people towards crypto and driving prices up. People are trying to find ways to maintain the value of their assets, avoid potential confiscation and limit effects of the possibility of the US government printing money to fund a war.
On May 13th the halving will be important, because it will directly impact the amount of Bitcoin produced per day. Today, 12.5 coins are created every 10 minutes, with a total of 1,800 Bitcoins per day and a value of around $14 million. That number will drop to 6.25 and along with that, inflation will drop. Even though halving event is not a secret, it’s part of Bitcoin’s predictable monetary policy, most of the the general public does not know exactly what the halving means, and this will create most likely create FOMO.
But beyond halving, Bitcoin’s upgrade later this year the could be another important driving force. The soft fork, which will most likely happen int the last quarter fo the year is expected to improve Bitcoin’s privacy and scalability. Schnorr signatures, Taproot schemes and Tapscript language, will bring smart contracts to Bitcoin, eliminate penalties in terms of fees for multisig wallets and improve security with Taproot.
Crypto assets, are here to stay and prices will rise. Governments, central banks and big tech is coming in. Look at China’s central bank, Libra and JP Morgan for example. But thinking that Bitcoin and crypto will go ballistic because of the halving or something else, is just wishful thinking. Volatility is the name of the game, so expect a lot of crazy swings, as bulls and bears duke it out.
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Here is our pick of the 3 most important Security Tokens news stories during the week:
One. Securitize Opens IRAs to Digital Securities Investors With Partnership
Digital asset issuer Securitize has facilitated what it says is the first direct IRA investment in security token offerings (STOs). A customer of alternative investments gateway AltoIRA purchased an initial investment in security tokens representing CityBlock Capital’s $20 million venture fund, with tokens issued by Securitize.
IRA is a mainstream way for retail investors in America to get exposure to this new asset class. We can expect other pension friendly initiatives in other jurisdictions soon.
Two. US SEC Seeks $16 Million Penalty from Token Sales Platform Operator.
The United States Securities Exchange Commission (SEC) is seeking a default judgement against token sale platform ICOBox and its founder Nikolay Evdokimov. Documents filed with the Central District Court of California on Jan. 9 order the defendants to pay over $16 million in disgorgement to the agency within 14 days of the judgement’s entry.
This again shows why anybody operating in this market must pay close attention to regulation, particularly what the top cop (SEC ) is doing.
Three. Quantum-Resistant QAN IEO Is Officially Starting on Bitbay Exchange.
The first IEO to launch on BitBay exchange is poised to commence its token sale on January 20. QAN, an Estonia-based crypto project that proclaims to be the world’s first quantum-resistant blockchain, went live on the Launchpad on December 16.
This shows where the Security Token market is today – Blockchain centric startups launched by Crypto exchanges as an Initial Exchange Offering (IEO).
We have a self-imposed constraint of 3 news stories each week because we serve busy senior leaders in Fintech who need just enough information to get on with their job.
For context on Security Tokens please read the chapter on Security Tokens in our Blockchain Economy book and read articles tagged Security Tokens in our archives.
You get 3 free articles on Daily Fintech. After that you will need to become a member for just US$143 a year (= $0.39 per day) and get all our fresh content and our archives and participate in our forum.
The post Week ending 17 January 2020 in Security Tokens appeared first on Daily Fintech.
Defining what life is has always been a challenge. Scientists and philosophers have come up with many definitions to differentiate the living from the non-living. Are viruses alive? DNA molecules? Computer viruses? The inventor of cryptographic hashing, Ralph Merkle, has made the argument that “Bitcoin is the first example of a new form of life.” If something is alive, then it can be killed. Over the years, Bitcoin has survived technical attacks, internal conflict and outside criticism. Bitcoin has shown a quality that goes beyond resilience, that doesn’t just withstand the shocks, but improves when facing volatility, randomness, disorder and uncertainty. Bitcoin has an “antifragility” quality. But is there Bitcoin kryptonite? Can something kill Bitcoin?
Over the years, people have come up with all kinds of scenarios when they talk about the demise of Bitcoin and how it will eventually die. Recently, I’ve read things like Google’s Project Cache Could Kill Bitcoin, Governments Could Kill Bitcoin, Will China Kill Bitcoin?, The Way to Kill Bitcoin Is to Keep Price Under $1,000 and other stories along the same narrative.
Basically, there are two types of Bitcoin killers: Governments and hackers. You’ll hear things like governments will ban it or hackers will take it down. Technical attacks damage the network, while political hurt Bitcoin holders. potentially both can slow or prevent user adoption, create problems to the existing infrastructure and slow down innovation and development.
Generally these things can affect Bitcoin, but its not clear if they can kill Bitcoin completely. Cryptocurrencies exist today because the traditional financial system has failed. Many people, including myself would like to see an independent form of money emerge, that will force governments to compete. Competition brings innovation and gives consumers more choices and better service.
Bitcoin is apolitical and uncensored money. While nations discourage the use of Bitcoin, any ban is technically unenforceable. Any government control and censorship against Bitcoin, only communicates Bitcoin’s value proposition. Governments that threaten people with jail time, because they want to buy Bitcoin, are only confirming their control over money and the incentive to use Bitcoin becomes. stronger.
The are several stealthy ways to send transactions to blockchain using Tor, SMS, in encrypted emails or even using steganography to encode transactions.
Governments try to ban bitcoin? LOL
The image below includes a signed bitcoin transaction transferring $12m USD. pic.twitter.com/4QaH1s7br8
— Andreas
(@aantonop) May 27, 2015
The reality is that Bitcoin has many layers of redundancy and governments con’t really control it. Bans never work, they just lead to black markets situations. Also, censorship and restrictions usually drive innovation, with people trying get around them.
If the political and economic institutions of the gold standard in early 20th century, existed in 2008, would Satoshi ever create Bitcoin?
Bitcoin has thrived because the global monetary system is highly problematic. So far, the status quo has favored Bitcoin. The longer things stay as they are, this gives Bitcoin the time it needs to build more liquidity and become more competitive.
Its is highly unlikely Bitcoin will die.
If governments really wanted to take out Bitcoin, they would need to undermine Bitcoin’s economic incentive. They would need to improve and change their existing monetary policies. But they can’t and they won’t.
In the last 10 years, Bitcoin has gone from a white paper to a global market worth $150 billion. Banks like Bank of America and JPMorgan Chase are applying for patents on cryptocurrencies and blockchain. This ecosystem has been on a rollercoaster ride, with huge price swings, rapid expansion, big time hacks, and of course sensational headlines. On this wild ride, it has been easy to lose sight of what Bitcoin means and what it fundamentally represents, beyond speculation and making a quick buck.
Bitcoin’s community of early adopters is very unique and gave the world a free, private and uncensored single global currency.
Bitcoin is not in danger from any government or anything else from the outside, but only from within. The future of Bitcoin will not depend on the wishes of its early adopters. The fate of Bitcoin and cryptocurrencies will be determine by what the 7 billion people around the world want and Bitcoin’s community should be vigilant.
Ilias Louis Hatzis is the Founder at Mercato Blockchain Corporation AG and a weekly columnist at DailyFintech.com
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Here is our pick of the 3 most important Security Tokens news stories during the week that just ended:
One. WisdomTree leads $17.6 million funding round for security token startup
Securrency, a provider of compliance tech for digital assets, has raised $17.65 million in a Series A funding round led by WisdomTree, the $44.5 billion exchange-traded fund (ETF) and exchange-traded product (ETP) asset manager.
This shows traditional financial firms getting in on the security token action.
Two. SEC seeks to force Telegram to reveal how $1.7bn ICO funds were spent
According to SEC, the encrypted messaging service app provider has so far refused to provide any financial information, including how the money has been spent in the past two years.
The SEC is the top cop in this space and their actions are watched closely by all players in security tokens.
Three. Security Token Show features ZiyenCoin As One of the Leading Security Tokens in 2019
Ziyen Energy has been featured as “One of the Leading Security Tokens That Launched in 2019” by the Security Token Market (STM) on their latest podcast.
This shows Security Tokens breaking into mainstream markets as Ziyen Energy is in oil & gas, nothing to do with Crypto other than the financing mechanism.
We have a self-imposed constraint of 3 news stories each week because we serve busy senior leaders in Fintech who need just enough information to get on with their job.
For context on Security Tokens please read the chapter on Security Tokens in our Blockchain Economy book and read articles tagged Security Tokens in our archives.
You get 3 free articles on Daily Fintech. After that you will need to become a member for just US$143 a year (= $0.39 per day) and get all our fresh content and our archives and participate in our forum.
The post The Week ending 10 January 2020 in Security Tokens appeared first on Daily Fintech.
Tomorrow’s post will be the first in our weekly news curation on Security Tokens.
Each Friday we will choose the 3 most important news stories during the week (in the opinion of the News Curator for Security Tokens). Daily Fintech believes in constraints, because our mission is high signal to noise ratio. We do not want to overwhelm you by aggregating every news story (which is technically simple to do). We serve busy senior leaders in Fintech who need just enough information to get on with their job.
For each story we offer a) an extract from the news b) a link to the news report and c) a brief commentary on why our News Curator considered it important.
For context on Security Tokens please read the chapter on Security Tokens in our Blockchain Economy book and read articles tagged Security Tokens in our archives.
You get 3 free articles on Daily Fintech. After that you will need to become a member for just US$143 a year (= $0.39 per day) and get all our fresh content and our archives and participate in our forum.
The post Announcing the Daily Fintech weekly news curation on Security Tokens appeared first on Daily Fintech.
Decentralized finance (DeFi) has literally exploded this year. 2020 is set to be even bigger. DeFi offers a unique way to earn interest on digital assets without a middleman taking a cut. Decentralized finance is evolving and Ethereum based DeFi is at the forefront. While several other smart contract platforms have been taking pot shots at Ethereum’s lead, none of Ethereum’s would be killers have been able to gain significant traction this year.
When we look at the Ethereum ecosystem, 2019 was a year of continued growth and innovation. Looking at the numbers:
If you’ve have followed Ethereum’s narrative in 2019, you have likely noticed the growth of the Decentralized Finance ecosystem. DeFi brought in hundreds of millions of dollars in value into the Ethereum ecosystem.
The first killer app for Ethereum was ICOs and raising money for cryptocurrency projects. The ICO was a revolutionary shift in fund raising, which drove a massive bull market. The ICO craze in 2017 raised billions of dollars, peaking in January 2018, and launched the programmable money race and the crypto app ecosystem, we have today. DeFi is Ethereum’s second killer app. In 2019, the DeFi was the most impactful trend in the crypto ecosystem. I expect that will continue to be the story in 2020, as DeFi could be worth $5 billion this year.
The traditional banking system on the verge of collapse, interest rates are negative and people that save are penalized for putting money aside. The story use to be that when you would give your money to the bank, to keep it safe, the bank would lend it to others and charge them interest on the money they borrowed and in turn the bank would pay you interest for using your money, minus the cost of running the bank account.
Well, DeFi lets people earn interest again, this time from their crypto assets.
DeFi is an umbrella concept describing financial services built on top of public blockchains like Bitcoin and Ethereum. DeFi runs on trustless protocols, without the need for financial intermediaries. It lets individuals and businesses borrow, lend, trade, invest, exchange, hedge, and store crypto assets. DeFi includes things like Maker which is both a stablecoin and a collateralized lending system.
Today, just about all DeFi projects are built on Ethereum, making it the gold standard for dApps. DeFi accounts for a substantial share of Ethereum’s ecosystem, with applications like:
Today most of these projects aren’t making money. For example MetaMask processes thousands of transactions every day, but doesn’t have a way to monetize.
The way to measure DeFi’s growth is by the Ether (ETH) that’s locked in smart contracts. Currently it’s worth over $680 million (around 2.5 million ETH), 
with MakerDAO dominating across the major apps.
This year several contenders have tried to unthrone Ethereum, like Waves, Cardano, EOS and Tron, but Ethereum’s, network effects and abundance of developers (Ethereum has 4x more developers than any other crypto ecosystem), make it very difficult for other smart contract platforms to sway away DeFi apps, from Ethereum
What about Bitcoin, can DeFi be replicated on Bitcoin?
DApps are possible on Bitcoin, but coding them is much more complicated, than on Ethereum. So far, Bitcoin’s most successful DeFi application is the Lightning Network. In 2019, the Lightning Network had impressive growth, with more than 6,000 active users and $6.2 million locked in the network. Other Bitcoin dApps are decentralized exchanges like Bisq or Sparkswap.
Ethereum is growing and getting stronger. Network activity is up, development is on track, and DeFi is hitting record figures. The only thing not so positive, is Ethereum’s price. You would expect the price to follow suit as DeFi has been growing and it probably will in 2020.
With Ethereum becoming a programmable store of value, it’s well on track to find the niche that will fuel the next bull run. Because the last bull run was based on ICO speculation, some had written off Ethereum based finance. DeFi could provide a tangible value and an opportunity to build financial infrastructure that is open to everybody, and starts to change how we interact with markets. This is nothing to take lightly and I am excited to watch this growth and the applications that will develop in the coming months and years.
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The post Ethereum Strikes Back appeared first on Daily Fintech.
