Facebook’s Libra Launch


This post is by jlk from The Barefoot VC


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The big news heading out of last week and into the upcoming week is Facebook’s long-awaited GlobalCoin (or Libra Coin), likely to be a stablecoin pegged to a basket of global currencies. Details of its initial consortium leaked late last week – industry website The Block broke the news of members who are contributing $10M each – these include Visa, Mastercard, Coinbase, Spotify, Women’s World Banking, Paypal, eBay, Farfetch, Mercado Libre, PayU, Stripe, Lyft and Uber. While more details will be revealed on June 18th, the listed members are expected to be operating “nodes’ on the network and will earn fees in return for validating transactions. A Facebook subsidiary called Calibra is also expected to run one of the nodes. Given recent regulatory scrutiny, it’s not a surprise that Facebook is building out a consortium to appear as decentralized as possible. A big question yet to be answered is who Continue reading “Facebook’s Libra Launch”

Audio Of The Week: How About Howey?


This post is by Fred Wilson from AVC


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This Unchained Podcast with Patrick Gibbs of the law firm Cooley and Ted Livingston founder of the Kin cryptocurrency project is a great discussion of the Howey Test that the SEC has put forward as the framework through which to evaluate whether a crypto token is a security.

Here are links to some interesting parts of the discussion:

1/ Ted Livingston explains who Howey was and the details of that case.

2/ Patrick explains why Kin (and most crypto tokens as well) is not a security.

This is the kind of stuff that mostly interests law nerds, but it is very relevant to all developers who are building crypto tokens and putting them out into the market. So it is worth getting knowledgeable about this stuff.

And if you want to support this Kin case as it works its way through the court system and ends up creating a new

Continue reading “Audio Of The Week: How About Howey?”

DefendCrypto.org


This post is by Fred Wilson from AVC


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Over the last year, the SEC has been investigating a significant number of token offerings that took place in 2017. While some of those offerings were scams or worse, many of the ones that are being investigated by the SEC are serious projects, started by some of the top cryptographers and computer scientists in the world, and backed by the leading token funds and venture capital firms in the US and around the world.

Sadly, the SEC looks at crypto tokens and sees securities that they want to regulate as such. They cannot seem to understand that not all of these assets are securities, they cannot seem to understand that most are commodities, currencies, or utilities like frequent flyer miles. They cannot understand that crypto tokens are unlike any assets that have come before them and that crypto tokens need new regulatory structures. They cannot understand that their unwillingness

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Blockchain Week Bull Run


This post is by jlk from The Barefoot VC


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Unlike last year’s NYC Blockchain Week, which was more form over substance (anyone recall Lambos parked in front of the Hilton?), this year’s conferences focused on the progress that had been made over the past year and the future promise of the sector as institutions prepare their entries.
While bitcoin’s price experienced a significant price hike from May 8 through the end of the week (albeit at one point retreating back to $7K before reaching $8K again), there was other noteworthy news.
Amazon Web Services, used by many tech startups and larger companies for their cloud infrastructures, announced the expansion of its Blockchain as a Service offering. Microsoft announced the first decentralized identity infrastructure implementation by a major tech company built directly on the bitcoin blockchain (most have built on top of ethereum or private blockchains). While Microsoft continues to work with the ethereum blockchain for other projects, I Continue reading “Blockchain Week Bull Run”

Custody, Trading, Staking


This post is by Fred Wilson from AVC


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In our talk at Consensus last week, we talked about security in crypto land.

There are a few highly trusted custody services in crypto, including the popular consumer and institutional custody services offered by our portfolio company Coinbase.

These companies have invested tens of millions, sometimes more, in building highly secure storage systems to keep their customer’s crypto assets secure.

There are also exchanges all over the world that people can use to trade crypto assets. While they may be great places to trade, they are often not great places to custody your assets.

And then there is “staking” which is a term I am using for all sorts of validation services that crypto holders are increasingly doing to secure networks that use proof of stake and other approaches to consensus. There are and will be more staking services that crypto holders can use to participate in these services

Continue reading “Custody, Trading, Staking”

Crypto Spring?


This post is by Fred Wilson from AVC


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On Monday, I wrote:

With the crypto winter seemingly coming to an end and spring on the horizon,

So why do I think winter is behind us and spring is on the horizon?

Well you can see in the chart of the entire crypto market that there has been a meaningful move off of the bottom in the last five months.

The entire crypto market hit the low point in mid December at roughly $100bn and has rallied over the winter and spring to almost $250bn. While there is no guarantee that we won’t go back and test those lows, I do think we hit rock bottom in December.

It is also worth noting that the daily trading volumes are now higher (almost double) than they were at the height of the crypto bubble in January 2018. Investors are back in the market and pushing it higher.

And this

Continue reading “Crypto Spring?”

Audio Of The Week: Coinbase Custody


This post is by Fred Wilson from AVC


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And now a word from your sponsor:

Coinbase is a USV portfolio company, I am on the board, and I am deeply invested in this business.

Coinbase’s regulated custody subsidiary is an important part of their overall business and I am also on the board of it.

This Unconfirmed Podcast with Sam McIngvale is a really good explanation of what Coinbase is doing in the custody market and how they are developing new income earning options for their customers.

A Registered Token Offering


This post is by Fred Wilson from AVC


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Our portfolio company Blockstack tweeted out this today:

Given that USV is an investor and one of my partners is on the board, I don’t want to opine on this in any way.

But I do think this is an interesting development in the evolution of tokens as investable assets.

So here is a Coindesk post on this news.

Orthodoxy


This post is by Fred Wilson from AVC


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I am not a fan of Orthodoxy.

I appreciate the power of religion although I am not religious personally. I respect the followers of Allah, Jesus, Moses, Buddha, and other religious figures. I know that the beliefs of religious people give them great comfort and a purpose in life.

What I don’t appreciate is when a person of faith believes so deeply that they cannot tolerate beliefs that are different from theirs. I call this Orthodoxy and it has led to wars, horrible crimes, and many other bad things. It is the downside of what is and should be a very positive thing for humanity.

We see this same behavior developing in the cryto sector. Bitcoin and other cryptoassets have become a belief system. That is at the core of their value. Why would I give you $5000 of my dollars for one of your Bitcoin? Because I believe in

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Video Of The Week In Two Parts


This post is by Fred Wilson from AVC


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This past week Laura Shin did an interview with Vitalik Buterin, the founder of the Ethereum project. I am going to run a video of that conversation next week.

Laura started her interview with Vitalik by playing for him and everyone else in the room a bit of this conversation Tushar Jain and I had last fall.

So I am reblogging this conversation so it is fresh in everyone’s minds when I run Laura’s Vitalik interview next week.

Decentralized Finance


This post is by Fred Wilson from AVC


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While we wait for the blockchain/crypto technology to scale to the point where it can be the foundation of mainstream consumer applications (games, social media, e-commerce, etc), there is a sector where scalability is a little less important and where blockchain/crypto is starting to show some real signs of life.

In the crypto space, it is called Decentralized Finance, or DeFi for short. It includes, of course, all of the ICO activity largely built on top of Ethereum and the ERC-20 token. But it also includes thinks like Maker which is both a stable coin and a collateralized lending sytem. The collateral for the loans is what stablizes the Maker stablecoin. We also are seeing other lending offerings develop in the DeFi world and we are seeing things like hedging, shorting, derivatives, and more, all built on a decentralized platform where there are no intermediaries, no clearinghouses, and the need

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The Business Model Pivot


This post is by Fred Wilson from AVC


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I saw Zuck’s post on pivoting to private interactions from public posts yesterday and I had a flashback to Bill Gates’s Internet Tidal Wave memo to his company almost twenty-five years ago.

I have always seen a lot of Gates in Zuck. They both have this incredible ability to see someone else’s product and realize that they need to build their own version of it.

But copying someone else’s product is a lot easier than copying someone else’s business model, particularly when you already have a fucking great one that makes you and your shareholders billions of dollars a year.

It will be interesting to watch Zuck do what Gates was ultimately unable to do – completely reboot the company’s business model to position itself to win the next wave in tech.

In the case of Gates, it was the pivot from paid software to free advertising supported software (aka

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Audio Of The Week: Chris, Joel, Jesse, and Denis on Crypto


This post is by Fred Wilson from AVC


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One of our first crypto investments maybe five years ago was Mediachain, founded by Denis Nazarov (@Iiterature), and Jesse Walden (@jessewldn). They sold that company to Spotify and eventually landed at A16Z crypto. One of the USV analysts who worked on our Mediachain investment was Joel Monegro (@jmonegro) who later teamed up with Chris Burniske (@cburniske) to start Placeholder, a crypto VC fund.

So we know these four people very well and all of them are now deeply involved in funding early stage crypto projects.

This podcast is a great conversation among the four of them on how to design cryptonetworks so that they function well over the long term.

Full disclosure: USV is an investor in Placeholder and my wife and I are individual investors in A16Z crypto.

Token Summit IV


This post is by Fred Wilson from AVC


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Chris Burniske reminded me yesterday of something I said a while ago:

We are in the post crash cycle in crypto and that has made the sector interesting to me again. Prices are way down and there is a lot of great work being done on projects we are invested in and projects we want to invest in.

And no better place to soak up all of that progress than at Token Summit IV, run by our friends William Mougayar and Nick Tomainoon May 16th in NYC.

When William asked me if I thought they should do it this year, I

Continue reading “Token Summit IV”

Security Token Discussion


This post is by Jeff Carter from Points and Figures


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Here is a video from a recent cryptocurrency conference. OFN CEO Juan Hernandez is on the panel talking about creation, sales, and trading of security tokens. It’s 27 minutes and I hope you get something out of it.

We are investors in OFN, and I am on their board.

They talk about security token structure as well. Does it have a capitalization table hit? Does it get a dividend? Does it get get voting rights?