governance. gatekeepers. privacy coins. newsletter | week #17

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Research

Analysis and reports published this week on Resarchly

Governance

Decred’s Funding governance

Decred is a currency with focus on privacy. The post explains Decred’s rather complex (but not necessarily complicated) Funding Governance. Funding governance regulates how projects manage collected funds.
Related:
Market map privacy coins: privacy protocols, coins, and platforms (Source: Researchly)
Market map privacy coins: privacy protocols, coins, and platforms (Source: Researchly)

 

  • Privacy coins vs. coins with a privacy feature: analysing privacy coins Analysis how crypto privacy coins (Monero, Dash, Verge, Zcash, Bytecoin etc.) differ. 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.

Qtum’s Blockchain governance

Explains Qtum’s Blockchain governance. In text and as an infographic.

Qtum's blockchain governance model
Qtum’s blockchain governance model

Read the full explanation here

 

Blockchain governance: takeaways from nine projects

A longer post – it examines what blockchain governance is, elaborates on its importance, describes the governance model of seven Blockchain projects (Cosmos, DFINITY, Qtum, Decred, Tezos, aeternity, Dash, Bitcoin, and Ethereum) and concludes with resulting takeaways.

How Coinbase is building a crypto empire for users’ crypto lifecycles

By now Coinbase has acquired five different companies. The most recent ones were task-platform Earn and dapp Browser Cipher Browser (as reported in issue #15).
Overview of Coinbase’s acquisitions
Overview of Coinbase’s acquisitions
The post argues that given Coinbase’s product and company portfolio they are on their way to becoming a “crypto empire“ serving a user’s whole „crypto lifecycle starting with earning and buying cryptos (through Earn and Coinbase), to trading (gdax), and finally to spending and accepting cryptos (through Coinbase’s merchant platform Coinbase Commerce and dapp browser Cipher Browser).
Related
Dapp browsers market map
Dapp browsers market map

See the full market map here

New market map! Stablecoins – Overview of 19 projects working on stablecoins

For the crypto industry to mature certain things are needed. Besides dapp browsersdecentralized exchanges, and privacy coins, stablecoins are essential as well.
Market map: Stablecoins. Overview of 19 cryptocurrencies working on coins with a stable price
Market map: Stablecoins. Overview of 19 cryptocurrencies working on coins with a stable price

Read the full overview here!

Blockchain as process innovation and technological foundation

Contrasts blockchain to the Internet and shows among other things:
  • If the Internet (or software) is eating the world, Blockchain seems to be eating software/Internet
  • If the Internet needs supporting tools, Blockchain does so as well
  • If the Internet poses process innovation as well as business foundation, blockchain seems too
  • If the Internet-enabled, second-order innovations blockchain will too

Gatekeepers and platforms

CoinList created a new project called „Airdrops“. Airdrops should help crypto projects conduct compliant airdrops. Moreover, Blockstack and ShapeShift are partnering and have created a $50.000 for the team that can build the best crypto wallet using Blockstack and ShapeShift. Additionally, Coinbase has only recently acquired task-app Earn (see How Coinbase is building a crypto empire for users’ crypto lifecycles from above).
Each of these projects could acquire significant gatekeeper functionality given adequate scale:
  • CoinList’s Airdrops and Coinbase’s Earn serve as the first touch point between new projects and end-users. If a project is not listed on Airdrops it doesn’t exist for users. Analogously, if something cannot be found on Google, it doesn’t exist.
  • Wallets in general operate in a winner takes it (almost) all market: Like with normal, non-crypto wallets they are mostly undifferentiated and supporting multiple wallets is cumbersome for developers. In fact, we can already observe that with hardware wallets such as the Ledger Nano S.
Some companies such as Ledger, Coinbase or Coinmarketcap have already become go-to resources  in their respective fields and with Earn and Airdrops we might see two other candidates going in that direction. However, it must be noted that many of today’s top ten Internet companies are companies from the second generation (i.e. after the dot-com crash). This being said, current go-to resources (and those slowly becoming one) might either keep their status or be overtaken by yet younger startups.
Sources

Tezos not getting a break

Tezos is a blockchain that distinguishes itself by having built-in on-chain governance. Now, Tezos’s still unresolved story has gotten another twist. FINRA, the Financial Industry Regulatory Authority has imposed a $20,000 fine on Tezos co-founder Arthur Breitman. Furthermore, Tezos has been banned from “associating with broker-dealers for two years“ (bitcoin). When Tezos came out, one of its most exciting features was the built-in on-chain governance. How Tezos’ story will end (or how Tezos will perform for that matter) is unclear. Clear, however, is that blockchain governance is important.

Privacy coins

About two weeks ago Verge, a currency with focus on privacy,  announced their partnership with Pornhub (see issue #16). This week, MobileCoin announced a $30 Million funding by Binance Labs. (techcrunch). MobileCoin is a currency focusing on privacy that should be integrated into messengers like WhatsApp and Signal. Few observations:

MobileCoin wants to diffusion through hybridization

As explained in Blockchain and socio-technical systems – diffusion through hybridization startups which follow this strategy work on solutions that can be incorporated into existing „normal“ products. Through that integration, those „normal“ products can be enhanced with features that – in the best case – are only achievable using blockchain technology. There are three advantages to this approach:

  1. Companies which are enhancing existing products are not positioning themselves as competitors and thus aren’t a threat to incumbents. Because incumbents are very powerful, this strategy allows Blockchain startups to work without having to worry that much about competition. This leads to the second advantage.
  2. Because startups must not fight incumbents they have enough time to study the industry and work on bigger products which will eventually end up being direct competitors. Until then, however, those startups are operating under the „competition radar“.
  3. Accustom people slowly to the new „world“: By not confronting users directly with something completely new, startups can slowly accustom people to the new paradigm and incrementally lead them towards the new world.
The privacy coins “industry” is still in development

Some would argue that today’s privacy coins have already “won” this industry. Although I believe that today’s coins could be “tomorrow’s” winners due to network effects, I believe that it is still too early to judge. MobileCoin’s funding is one of many examples that there are a lot of other people out there who believe that the winner is not yet decided.

Privacy coins matter

If we look at the crypto industry there are certain things that are needed for the industry to mature. Besides dapp browsersdecentralized exchanges, stablecoins, and blockchain governance, privacy coins are essential as well. MobileCoin’s funding undermines this point further.

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