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Blockchain & Crypto Analysis

Decrypto Daily Update – June 20, 2018

Wednesday, June 20, 2018

Market Snapshot

Total Market Cap: $282,940,473,130
24 Hour Volume $14,278,427,971
BTC Dominance: 40.1%
BTC-O: $6,742.39
BTC-H: $6,822.50
BTC-L: $6,709.92
BTC-C: $6,769.94

South Korean exchange, Bithumb, hacked for ₩35,000,000,000.

In an official statement on their website, Bithumb said they “noticed that between last night and today early morning, about 35,000,000,000 KRW (~$30 million USD) worth of cryptocurrencies was stolen.” As a result of the hack, deposits and withdrawals have been halted for the time being. To ease panic, Bithumb has stated they will compensate users for any lost funds.

  • Great response from Bithumb on the PR and damage control front. Fortunately, $30 million is only about two weeks of revenue for Bithumb.
  • I’m putting on my tin foil hat here, but the market really feels scripted to me – an exchange hack right as the market is showing some signs of life. A $30 million heist also seems like the right amount to cause a small drop, but not enough to cause a huge panic in this already bearish market. BitGrail lost $200 million and Coinrail lost 37.5 million – Bithumb dwarfs these two exchanges in terms of volume and market dominance. $30 million from a Top 5 exchange? Weird.

Decrypto Daily Update – June 15, 2018

Friday, June 15, 2018

Apologies for missing the daily update yesterday. I was busy networking with some crypto folks in town, and spent the evening installing the MacOS Mojave Beta. Night Mode is awesome.

Market Snapshot

Total Market Cap: $286,093,292,456
24 Hour Volume $15,948,130,949
BTC Dominance: 39.6%
BTC-O: $6,342.75
BTC-H: $6,707.14
BTC-L: 6,334.46
BTC-C: 6,675.35

The SEC has confirmed that ETH is not a security.

At today’s Yahoo! Finance All Markets Summit, the SEC’s William Hinman stated that “putting aside the fundraising that accompanied the creation of Ether, based on my understanding of the present state of Ether, the Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions.

  • It looks like Ethereum is definitely not a security, but this is not the case for 99% of the other projects that conducted ICOs. Based on Hinman’s speech today, it’s pretty clear to me that the SEC is going to start cracking down on quite a few projects very soon.
  • This part of the speech was especially interesting to me:
  • But this also points the way to when a digital asset transaction may no longer represent a security offering. If the network on which the token or coin is to function is sufficiently decentralized – where purchasers would no longer reasonably expect a person or group to carry out essential managerial or entrepreneurial efforts – the assets may not represent an investment contract. Moreover, when the efforts of the third party are no longer a key factor for determining the enterprise’s success, material information asymmetries recede. As a network becomes truly decentralized, the ability to identify an issuer or promoter to make the requisite disclosures becomes difficult, and less meaningful.

  • I hope we get some clarity on this in the coming weeks, but it almost sounds like the SEC will allow tokens to morph into non-securities over time. I’m only speculating, but perhaps the SEC will give current ICO-funded projects some sort of grace period to get a functional and decentralized network up and running. I suppose this would be an example of regulation without regulating.
  • The market showed some signs of life after this announcement.

Overstock announced they generate $120,000/week in crypto revenue.

Jonathan Johnson, who serves on Overstock’s Board of Directors said, “we have somewhere between $68,000 and $120,000 a week in cryptocurrency revenues; people buying sheets and toasters using bitcoin or ethereum or other coins.

  • This figure was actually shocking to me. Sometimes I forget there are people out there who actually use Bitcoin for its intended purpose. It’s easy to get lost in the Sea of HODL.
  • Crypto only accounts for 0.2% of Overstock’s revenue. From what I understand, crypto payments are only available for shoppers in the USA and Canada. I suspect Overstock’s website in other countries processes payments through a third party service that doesn’t support crypto. Still, 0.2% for a major mainstream retailer like Overstock is impressive and an actual sign of real world adoption.

Decrypto Daily Update – June 13, 2018

Wednesday, June 13, 2018

Market Snapshot

Total Market Cap: $273,927,678,341
24 Hour Volume $15,778,829,093
BTC Dominance: 40.4%
BTC-O: $6,905.82
BTC-H: $6,907.96
BTC-L: $6,542.08
BTC-C: $6,582.36

QuantStamp doesn’t accept QSP for its audit services.

Last year, QuantStamp raised over $30 million of QSP in their initial coin offering. In an article posted today, CoinDesk claims they have received documents indicating that “that the company has accepted ether (ETH) for services in one instance and priced its offerings in U.S. dollars in another.” QSP investors are upset that QuantStamp is not accepting QSP for their auditing services – a move which allegedly make the QSP token worthless.

  • In order to request an audit from QuantStamp, the client must first hold a minimum of 200,000 QSP, worth ~$19,350 at today’s prices. I actually think this is preferable to transactions via QSP, as this form of temporary (or permanent) staking effectively reduces QSP’s circulating supply.
  • At ~$60 million, QSP is a fairly low market cap token with no fiat pairs. QuantStamp is in the business of providing audits, and they pay their bills with their profits. If you’re QuantStamp, why would you accept payments in the form of a low liquidity token that you can’t cash out at a stable price? When it comes to financial commitments, like paying your employees, you want a relatively stable form of income. Thus, I don’t see the issue in accepting ETH, which is relatively more stable due to its much higher market cap. As a startup business, the predictability and stable value of USD is even better.
  • ICO buyers, you purchased a utility token, and you were never promised a ROI. If QSP is required for QuantStamp’s services, there’s value. If that’s not good enough for you, sell your tokens.

Binance has signed a MOU with Jersey, a country that uses the British Pound.

According to Changpeng Zhao, Binance has “chosen Jersey to be the next big step in [their] global expansion strategy for its clear and pro-crypto investment and regulatory environment.” In a following statement, Binance CFO, Zhou Wei said, “with the set up of the fiat exchange here, there will be a lot of interest from the blockchain universe looking at Jersey.”

  • If Binance manages to secure EUR and GBP pairs against their extensive altcoin offerings, they’ll truly become a powerhouse in the cryptocurrency industry. Coinbase is doing too little, too late.

ICON’s token swap has been announced by Binance.

Binance has released a statement about supporting ICON’s ICX token swap. The exchange plans to suspend ICX deposits and withdrawals at 12 AM (UTC) on June 20, 2018.

  • It seems like Binance has a history of releasing ICON-related news before ICON. Last year, they announced ICX trading before ICON did. Now, they’ve announced the token swap before an official statement from ICON. It’s a little amusing.
  • Binance has also announced a ICX/USDT trading pair.

Decrypto Daily Update – June 12, 2018

Tuesday, June 12, 2018

Market Snapshot

Total Market Cap: $301,110,288,427
24 Hour Volume $15,355,508,631
BTC Dominance: 39%
BTC-O: $6,799.29
BTC-H: $6,910.18
BTC-L: $6,706.63
BTC-C: $6,906.92

Binance will support EUR trading pairs by the end of 2018.

In an interview with Bloomberg, CZ revealed Binance will start supporting EUR trading pairs from it’s Malta location by the end of this year, with more fiat pairs to come in the near future.

  • It will be interesting to see how trading dynamics on Binance will change (if at all) as a result of a real fiat pair.
  • Malta is a SEPA participant, so hopefully Binance’s Euro operation will be SEPA-compliant, allowing for quick and low cost bank transfers for traders in SEPA countries.
  • There will definitely be KYC.
  • Now might be a good time to load up on BNB.

Justin Sun, founder of TRON, has acquired Bittorrent, Inc.

Bittorrent, Inc. has been acquired by Justin Sun for an undisclosed amount. TRON Foundation claims this acquisition is part of a plan to build a “decentralized Internet” for developers to build DApps on.

  • When most people hear “Bittorrent”, they automatically think of “that thing that lets you download movies and software for free.” Yes, that’s what most people use it for, but that’s not what it was originally designed for. Bittorrent, or BT, is simply a P2P file transfer protocol for decentralized data transfer. I suppose “decentralized transfer of HTML files” is technically a primitive decentralized Internet.
  • The Bittorrent (BT) protocol is an economy of leechers (downloaders) and seeders (uploaders). Let’s say a band wants to use BT to distribute their latest album on the Internet. The band uses their torrent client to create a .torrent file – a small file containing metadata about where the album is stored on the band’s computer, a list of trackers which are “computers that help participants in the system find each other”, and a cryptographic hash of the album data . After the .torrent file is created, the band uploads it to the Internet. A fan sees the .torrent file and downloads it. Once this initial file transfer starts, the band is the seeder and the fan is a leecher. During the download process, the fan can also seed the part of the file that he has to other leechers on the network. In this kind of network, file availability and bandwidth increase as more seeders join.
  • The current “problem” with Bittorrent is that there aren’t really any tangible incentives to contribute to file availability via seeding. Certain “illegal” websites offer imaginary Internet points and special access to forums, but these incentives don’t translate into real world financial value. Of course some people like to seed out of good will, but let’s face it… money wins. That’s why TRON’s acquisition of Bittorrent is so interesting to me. By introducing a token, whether it’s TRX or some other token, as an incentive for seeding, suddenly people will have financial motivation to contribute to file availability and network bandwidth.

Dennis Rodman shills Potcoin at the USA-North Korea summit in Singapore.

I’m just going to leave this here.

Yes, that’s Dennis Rodman arriving in Singapore for the monumental USA-North Korea summit wearing a Potcoin t-shirt. The shill is strong. Meanwhile, Potcoin has pumped 15% as a result of this… sign of adoption?

Watch the full video here.

Ethereum Classic, ETC, to be supported on Coinbase.

In a recent tweet, Coinbase has announced it will be supporting ETC on its exchange platform in the “coming months”.

  • I haven’t been paying much attention to ETC, so I was pretty surprised to see it consistently has more network transactions per day than BCH.
  • In light of the recent CFTC probe into market manipulation by exchanges, it will be interesting to see how Coinbase will dump its large stash of ETC that it never distributed to ETH holders on the platform following the fork. Remember what happened after the Bitcoin Cash listing last year?

Decrypto Daily Update – June 11, 2018

Monday, June 11, 2018

Market Update: This past weekend was a bloody one. Down, down, down we go. BTC has fallen 7% in the last 24 hours, and broke three critical support levels – $7200, $7000, and $6800. The Top 10 are all red with TRX and EOS experiencing the biggest drops – 10% and 15%, respectively.

  • Total Market Cap: $299,400,243,230
  • 24 Hour Volume $19,864,888,116
  • BTC Dominance: 38.8%
  • BTC-O: 7,499.55
  • BTC-H: 7,499.55
  • BTC-L: 6,709.07
  • BTC-C: 6,786.02

Bitcoin plummets 10%, a sign of the apocalypse for sure.

As expected by me and many others, BTC has dumped yet again. This time, it plunged 10% breaking supports at $7200, $7000, and $6800. Yikes.

  • It’s statistically safer to be a bear in a bear market. Yes, a godlike green candle could wreck everyone’s shorts at any moment, but why try to trade against the trend? Better yet, why even trade in such terrible conditions?
  • BTC is dumping because more people want to sell than buy. It’s not because of Chinese New Year or those mythical institutional investors “waiting on the sidelines”.
  • When moon? When lambo? Last December, and whenever the next cycle of clueless retail “investors” FOMO into the market.

Coinrail has been hacked for $40 million.

South Korean-based exchange, Coinrail, has been hacked for $40 million USD worth of cryptocurrency. According to an official statement from the exchange, the hacked coins include NPXS, ATC, and NPER.

  • I don’t like how this story is being reported by the mainstream news networks and even crypto-centric publications. Here’s CNN’s headline: Billions in cryptocurrency wealth wiped out after hack. Here’s Quartz: Bitcoin crashed after another crypto exchange got hacked. I like CoinDesk’s objective headline: Crypto Exchange Coinrail Hacked With $40 Million Worth In Cryptos. It’s impossible to prove Bitcoin’s 10% dump was directly caused by a low volume exchange getting hacked, but I guess “journalists” don’t care about the concept of “cause and effect”. Let’s not put too much thought into this. Bitcoin dumped because there are simply not enough buyers to support this price level. It’s really that simple.
  • This ETH address (0xF6884686a999f5ae6c1AF03DB92BAB9c6d7DC8De)
    allegedly belongs to the hacker. Looks like 26,195,420 NPXS has been transferred to IDEX, a decentralized P2P exchange, for dumping. Aurora has locked deposits and withdrawals on IDEX to assist the Pundi X team in recovery of funds.
  • It’ll be interesting to see what happens to these stolen coins. I think Coinrail should do its best to reimburse any users who lost coins. On the other hand, I don’t think the stolen coins should necessarily be locked. In the grand scheme of things, crypto devs should not be allowed to block or reverse transactions at the protocol level if we really want crypto to become a successor to fiat.

Ari Paul accused of pumping and dumping.

Ari Paul is the cofounder and CIO of BlockTower Capital, which manages over $150 million worth of cryptocurrencies. Here’s a leaked conversation with @Kazonomics on Twitter, where Ari Paul is accused of pumping and dumping on his followers.

  • First of all, no one even knows if this conversation is real. It’s so easy to photoshop these things. Even if it were real, it the pump and dump accusation makes no sense. Ari mentions he buys cryptocurrencies based on fundamental analysis of the project and that he’s not a technical analysis guy. He then says he likes sharing his favorite coins with his followers. Nowhere does he say he dumps his coins on his followers. I’m not saying he doesn’t, but this isn’t proof that he does. My guess is, like the majority of us, Ari occasionally sells portions of his portfolio, but I don’t think this is done with malicious intent.
  • Twitter crypto drama is the best kind of drama.