Crypto for Porn, Malta is where the Blockchain is, Exit Scam. (maybe) week #16

 newsletter / week #16

hi,

Research

Analysis and reports published this week on Resarchly

Privacy coins vs. coins with a privacy feature: analysing privacy coins

Analysis how crypto privacy coins (Monero, Dash, Verge, Zcash, Bytecoin etc.) differ.

Differentiating factors privacy coins: How privacy coins differ (Source: Researchly)
Differentiating factors privacy coins: How privacy coins differ (Source: Researchly)

There are fully private coins and coins with privacy as a feature. Further differentiators: scope of anonymity, depth of technical integration, type of privacy technology, mining algorithm, and ASIC-resistance.

Read full analysis

Scams, scaling, and dapps: working on the right things at the right time

Argues that different industry participants are working on different things. The issues with that, however, is that those things depend on each other. Unless technical core issues (e.g. scalability, decentralized exchanges or ASIC) and market issues (e.g. loss of trust or proof of concepts) are solved, building mass marked ready applications is impossible.

Read full analysis

Appcoins — product rewards matter more than financial rewards

Looks at different ways how startups are building centralized products with tokens. Concludes by stating that many of these startups don’t need a token in the first place and if they do need, very often a non-cryptographic token (e.g. loyalty points) or tokens based on existing platforms (e.g. Ethereum) would suffice. Furthermore, the analysis argues that appcoins such focus on product rewards (what can I do with the token) instead of financial reward (how much money can I earn with the token)

Read the full analysis

Decentralized applications — “experimenting with blockchain” is more than tech

By looking at different blockchain startups that are re-creating already existing applications such as Facebook, YouTube, or Spotify the analysis shows how „experimenting with Blockchain“ involves far more than just developing the technology. The image below provides a short summary.

What it means to use blockchain
What it means to use blockchain

Market map privacy coins, protocols, and platforms: cryptos bringing privacy to blockchain

Overview of cryptos bringing privacy to blockchain including privacy coins, privacy protocols and privacy platforms.

Market map privacy coins: privacy protocols, coins, and platforms (Source: Researchly)
Market map privacy coins: privacy protocols, coins, and platforms (Source: Researchly)

Read the full analysis on Researchly

Coinbase

Coinbase, after acquiring dapp browser Cipher Browser last week (see news in newsletter for week #15), this week acquired Earn.com, a company where people can earn money for completing tasks, for allegedly $100 Million (recode).

Exchanges and trading

OKEx exchange, has announced that it is expanding to Malta (OKEx). This comes after Binance’s announcement end of March saying that they are moving to Malta as well. Moreover, this comes after New York’s Attorney General’s inquiry into the operations of 13 crypto exchanges (coindesk). Also, this news appears in the context of Malta announcing their “Consultation Paper on the Financial Instrument Test“ (see Regulations below).

More exchanges and trading apps

  • Germany’s #2 Stock Exchange Unveils Crypto Trading App (coindesk)
  • Yahoo Japan Buys Stake in Cryptocurrency Exchange (coindesk)
  • Kraken CEO: Crypto Exchange Won’t Answer New York AG’s Inquiry (coindesk)
  • User claims that Localbitcoins required identification (cointelegraph) Maybe time to explore other decentralized exchanges

Related: Market map: blockchain startups working on decentralized exchanges

Overview of selected Cryptos working on decentralized exchanges _Researchly
Overview of selected Cryptos working on decentralized exchanges (Source: Researchly)

Malta is where the Blockchain is.

The Malta Financial Services Authority (MFSA) published their “Consultation Paper on the Financial Instrument Test“. The paper aims at determining regulations for DLT-based assets and is currently seeking public feedback (MFSA). Malta is generally very positive towards blockchain. End of March, Joseph Muscat, Malta’s prime minister, tweeted how they “aim to be the global trailblazers in the regulation of blockchain-based businesses“. That tweet came out when Binance exchange announced that they were moving to Malta.

Porn.

Pornhub starts accepting Verge. Verge (ticker XVG), a privacy-focused currency (see here for an analysis of privacy coins), did an impromptu crowdfunding around the end of March asking for 75 Million XVGs (back then worth about $3 Million). The crowdsale was scheduled to last five days (until 26 March) and the proceedings were supposed to be used to establish a certain partnership. That partnership is now Pornhub. (theverge)

Pornhub is a well-frequented site and I am extremely curious to see how the adoption will be. In Two mental steps towards cryptoasset diffusion, I made the point that the adoption of cryptocurrencies is a two-step process where we move from one mental model to the other. These models are:

  1. Acceptance of cryptoassets in general: Initially, people must accept the concept of cryptoassets per se.
  2. Acceptance of one particular cryptoasset. Secondly, once people understand cryptoassets and believe they are better than whatever they replace, people must accept that one particular coin for that one particular use case.

I am curious to see how far people’s mental models have already developed.

Besides that, it is worth-noting how much medial reception Verge received for something that happens daily outside the crypto industry. In the „non-crypto world“, Verge’s partnership would be the equivalent of an online shop accepting a payment system such as PayPal (admittedly Verge is a currency and PayPal a payment system but conceptually it is the sam).

Recommended readings:

Exit scam. Or not. Or yes. Or…

Savedroid, the Germany-based savings and investing app for cryptocurrencies, faked an exit scam. In short:

  1. Their website went offline and was replaced by an “And It’s Gone“ meme.
  2. Their CEO tweeted two images suggesting he had underdone an exit scam
  3. The community went crazy, became threatening and angry
  4. Finally, their CEO posted a video explaining that the whole action was only to remind the community that the crypto industry is wild west and needs regulations. In the same video they offered to work with regulators and announced an ICO checklist and expansion into ICO advisory.
  5. Mixed medial and public reactions ranging from
  • considering the explanation fake and that the initial plan was an exit scam after all (businessinsider)
  • labeling savedroid’s action inappropriate (paymentandbanking, link in German)
  • an investigation by the German prosecution (wiwo, link in German)

Besides all that, it is still unclear whether savedroid really needs a crypto token

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