Bitcoin – The Gateway Drug


This post is by Fred Wilson from AVC

The first crypto asset most people purchase is Bitcoin. It has the highest market capitalization. It has way more search interest.

But Bitcoin is not all there is to the crypto sector. There is about $160bn of market value in the crypto sector outside of Bitcoin.

The “non-Bitcoin” portion of the crypto sector has risen over $100bn in 2020 and is up 2.7x this year.

Bitcoin is up about 2.2x in 2020.

What seems to happen is that individuals, and increasingly institutions, purchase Bitcoin to start their crypto portfolios and journeys, but over time they move some of their gains into other assets.

According to Coinbase, there are now 24 crypto assets with a market capitalization of greater than $1bn. I expect that list to expand greatly over this crypto bull run we are in that started this past spring.

We are starting to see sectors of the economy decentralize using blockchain technology, starting with the finance sector, naturally. This is a ten to twenty year trend that is just getting started. And owning crypto assets is the way to play that trend. Starting, but not ending, with Bitcoin.


USV TEAM POSTS:

Albert Wenger — Nov 8, 2020
We Must Strengthen Our Democratic Institutions

Educating Electeds


This post is by Fred Wilson from AVC

A number of members of Congress sent a letter to the Office of Comptroller of the Currency (OCC) on Tuesday. I have embedded it below but readers via email may need to click here to read it.

Letter to the OCC on Fintec… by CoinDesk

These elected officials are correct that way too many people in the US are unbanked or underbanked. They are also correct that community banks and minority owned banks are closing at a rapid rate, which is contributing to these alarming unbanked and underbanked numbers.

However, I think that the OCC and, more importantly, the crypto industry, owe these elected officials an education on how crypto can address these important issues and why it is not a distraction from them.

In the letter, the members of congress mention “the immediate needs of millions of at-risk individuals who have not yet received an economic stimulus check and/or cannot deposit their funds in a bank.”

If the United States was developing (as is China), a digital currency stablecoin (a digital dollar), then those millions of at-risk individuals would have been able to receive their economic stimulus funds via any one of the popular mobile apps that support or will soon support digital assets, like Coinbase, Square, PayPal, Robinhood, and many more.

It would have been less expensive (by an order of magnitude or more) and much simpler to get funds to these at-risk individuals with blockchain based assets vs outdated technologies like paper checks.

I am not taking a swipe at these well-meaning elected officials. I am saying that the crypto sector needs to sit down with them and their staffs, pull out their phones, have them do the same, and send them some money. And then talk about regulations that will accelerate the adoption of these new technologies among the at-risk communities instead of what we have now which are regulations that are holding all of this progress back.


USV TEAM POSTS:

Albert Wenger — Nov 8, 2020
We Must Strengthen Our Democratic Institutions

Coinbase’s Transparency Report Is a Welcome First Step


This post is by Hayley Tsukayama from Deeplinks

Coinbase has released its first transparency report, and we’re encouraged to see the company take this first step and commit to issuing future reports that go even further to provide transparency for their customers.

Last month, we renewed a call for Coinbase—one of the largest cryptocurrency exchanges in the country—to start releasing regular transparency reports that provide insight into how many government requests for information it receives and how it deals with them. Financial data can be particularly sensitive, and decisions about turning over that data or shutting down accounts should not be made in the dark.

Coinbase’s first transparency report shares some important information. It offers an aggregate number of requests received from law enforcement agencies in more than thirty countries and a breakdown of what types of agencies have asked for information in the United States. Overall, Coinbase has received 1,914 requests—the vast majority of which it’s categorized as for “criminal” investigations.

Transparency reports are important tools for accountability for companies that make decisions about when to turn over financial information or shut down accounts, which can have a huge impact on individual privacy and speech online. Publishing information about law enforcement requests that providers receive—and their responses to them—enables users to make informed decisions about the services they use. Reports also help journalists, advocates, and the public get insight into the patterns and practices of law enforcement data collection.

Coinbase’s report is an important but modest step toward the transparency reports that people should expect from their financial institutions. We’re encouraged to see Coinbase acknowledge the limits of this report in its own announcement: “While we are restricted from disclosing some of the information requests we receive, over time we hope to update and improve our reports with additional information, resources, and observations to provide more granular insights into our government response process.”

We have some ideas on how Coinbase can improve its reports in the future. First, it would be helpful for consumers and advocates to know how many requests Coinbase may have challenged, or how many accounts were shut down as a result of these requests. Other companies routinely provide that level of detail.

For future reports from Coinbase and other financial institutions, EFF would also like to see transparency reports that outline informal government requests that don’t come from a subpoena, warrant, or other legal process, such as when law enforcement agencies have bullied companies to shut down accounts through coercion. We’d also like to see more information on how companies such as Coinbase handle government requests, which companies often make publicly available. It would also be useful for financial services such as Coinbase to start publishing how many Suspicious Activity Reports they file with the Financial Crimes Enforcement Network annually, and about how many accounts.

It’d also be valuable for payment processors to offer aggregate information about how many accounts are either frozen or terminated, broken down by the justification, such as for fraud or Terms of Service violations.

We also want to echo the call that Coinbase General Counsel Paul Grewal made asking others in the financial services industry to step up with their own reports. “[While] transparency reports have become more common in tech, they remain rare in financial services,” Grewal said, “We think it is important not just for cryptocurrency companies, but for fintechs and banks at large to shed light on financial data sharing practices and contribute to the understanding of industry trends in a meaningful way.”

We agree, and call on other payment intermediaries and custodial blockchain services to follow the lead of Kraken and Coinbase in providing this vital information to their users.

Multis is a business bank account for cryptocurrencies


This post is by Romain Dillet from Fundings & Exits – TechCrunch

Meet Multis, a French startup that is building business bank accounts, except that it lets you store, send and receive cryptocurrencies. The startup just raised a $2.2 million seed round.

Investors in today’s funding round include White Star Capital, Y Combinator, Coinbase Ventures, eFounders, Greenfield One and Digital Currency Group.

“It’s very complicated to manage crypto as a company. As soon as you want to hold crypto or start paying employees and contractors, it’s a giant mess,” co-founder and CEO Thibaut Sahaghian told me.

If you’re familiar with startups working on business banking, such as Qonto, you already know what to expect from Multis. It’s a software-as-a-servie product designed for teams.

Image Credits: Multis

After creating a Multis account, you can add other team members and set permissions and limits. Behind the scene, Multis is a multisignature Ethereum wallet. The company doesn’t control the keys, which means Multis can’t access your funds.

“From a regulatory point of view, it’s been very useful because we don’t hold assets and we can’t review and block transactions,” Sahaghian said.

Thanks to the multisignature design, you can create an approval workflow so that each transaction needs to be approved by a certain number of people on the team.

Multis supports Ethereum-based ERC20 tokens, which means you can also use stablecoins, such as USDC and DAI. This way, you’re not exposed to cryptocurrency volatility when you choose to keep all your assets in USDC for instance. You can swap tokens from Multis directly.

Once you have assets in your Multis account, you can issue payments to employees, contractors, partners, suppliers, etc. You can save addresses and other relevant information to streamline payments in the future.

Centralizing all your crypto transactions on Multi can be useful when you need to file your taxes. You can export all your transactions and hand them over to your accountant.

And if you have too many assets on your hands, you can invest some assets and earn interests thanks to DeFi products. The company uses Compound for that feature.

Right now, Multis clients are mostly companies working on blockchain products, generating revenue in cryptocurrencies or paying people using stablecoins. But the company wants to simplify its product by adding EUR and USD accounts with cards and IBANs.

Multis could act as a bridge between fiat currencies and cryptocurrencies. Companies with offices in multiple countries could use it to save money on intercompany fees. The startup is still working on those new features, but it could lead to some interesting use cases.

Episode 127: Self Sovereign Identity with Evernym’s Drummond Reed


This post is by Bo Lau from Georgian Partners

In real life, we identify ourselves with a passport, driver’s license, or other government ID – and we use the same ID in multiple places. But digital identity isn’t so easy, and doing digital credentials badly can leave users and systems vulnerable.

Drummond Reed is our guest on this episode of the Georgian Impact Podcast. He is the Chief Trust Officer at Evernym – a company at the forefront of a rapidly growing movement to decentralize digital identity. Their approach is called Self Sovereign Identity or SSI, and it makes the process of proving your identity in a digital space much more straightforward.

You’ll Hear About:

  • Self Sovereign Identity or SSI, and how a Digital Wallet and Digital Agent will streamline the process of sharing the necessary credentials within the digital realm.
  • The role biometrics play as one piece of the “chain of trust” of authentication.
  • How SSI differentiates itself from federated identity when it comes to privacy and security.
  • The possibility to store not only your credentials in your digital wallet but also micro-credentials.
  • The growth and adoption of verifiable credentials and SSI.
  • The different roles of Evernym and Sovrin Foundation.

 

 

Listen to every episode:
iTunes | Spotify | Google Play | SoundCloud | Stitcher | RSS

Who is Drummond Reed?

Drummond has spent over two decades working on Internet identity, security, privacy, and trust frameworks. He joined Evernym as Chief Trust Officer after Evernym’s acquisition of Respect Network, where he was CEO, co-founder, and co-author of the Respect Trust Framework. Drummond has served as co-chair of the OASIS XDI Technical Committee since 2004, the new semantic data interchange protocol that implements Privacy by Design. Prior to starting Respect Network, Drummond was Executive Director of two industry foundations: the Information Card Foundation and the Open Identity Exchange, the international not-for-profit clearinghouse for Internet trust frameworks. He has also served as a founding board member of the OpenID Foundation, ISTPA, XDI.org, and Identity Commons.

The post Episode 127: Self Sovereign Identity with Evernym’s Drummond Reed appeared first on Georgian Partners.

It’s Past Time for Coinbase to Issue Transparency Reports


This post is by Hayley Tsukayama from Deeplinks

EFF has become increasingly concerned that payment processors are being asked to turn over information on their customers, without any mechanism for the public to know who is making those requests, or how often. That’s why we are calling on Coinbase—one of the largest cryptocurrency exchanges in the country—to start releasing regular transparency reports that provide insight into how many government requests for information it receives, and how it deals with them. These are difficult decisions with serious consequences, and they should not be made in the dark.

Cryptocurrency exchanges should especially understand the importance of the privacy of this information

Financial data can be among the most sensitive types of information we produce. How you spend your money can reveal a lot about your daily habits, the causes you care about, who you hang out with, and where you go. Choosing to comply with or reject a government request for this user data—or choosing to shut down an account—can have a huge impact on what types of speech can thrive online. Transparency reports are important tools for accountability for companies that make these important decisions. Cryptocurrency exchanges should especially understand the importance of the privacy of this information, as their users tend to prize both the cash-like anonymity of cryptocurrency, and its inherent resistance to censorship. For these reasons, cryptocurrency transactions are often sensitive—and more likely to carry with them an expectation of privacy.

At least one of Coinbase’s competitors, Kraken, has already recognized the importance of being open on this topic, and publicly released information on global law enforcement requests it receives. Providing this accountability is particularly important when it comes to financial data, as they can often be turned over with a subpoena, a 314 (a) request, or a National Security Letter— none of which require review from a judge before being sent to the financial service provider. And the need for cryptocurrency companies such as Coinbase to be open with consumers is only growing, as courts have not sided with consumer privacy when it comes to these requests.

As we wrote in July, in U.S. v. Gratkowski, the U.S. Court of Appeals for the Fifth Circuit ruled that law enforcement does not need to get a warrant in order to obtain financial transaction data from cryptocurrency exchanges—in this instance, the exchange was Coinbase. In that case, the court relied on the third-party doctrine. This doctrine holds that when people use services such as banks, they lose their reasonable expectation of privacy in the information that they turn over to a third party.

The third-party doctrine, and the court’s reliance on it in Gratkowski, is wrong. Storing your data with a third party should not mean that users lose any reasonable expectation of privacy. That makes no sense in a world where everyone navigates through their daily life by relying on services such as email that provide third parties with access to sensitive information.

But we do not know how many other cases are out there like Gratkowski, which is why we need more transparency from Coinbase. In providing the public with data on how often law enforcement seek user data and how often services comply, transparency reports show whether companies are living up to their user privacy. They also serve an important secondary role by providing details on government surveillance activities.

As one of the largest individual companies in the U.S. cryptocurrency market, Coinbase wields tremendous power and influence over this dynamic. It should stand up for its users and also use its market power and influence to show others that transparency reports are an industry standard for all cryptocurrency exchanges. Releasing a transparency report would be one way for Coinbase to display leadership and fill in the gaps in our current knowledge, by simply shining a much-needed light on government requests for information.

Startup Spotlight: Fluree


This post is by The Startup Grind Team from Startup Grind - Medium

Data management platform for data-driven applications.

Brian Platz is the co-founder and co-CEO of Fluree, a data management platform for data-driven applications. Fluree is a blockchain-backed data platform built to power next-generation applications, interoperable data sources, and data-driven ecosystems. It serves as a platform for emerging architectures and services that rely heavily on high-quality, trusted, and shared data, and has been adopted by the public and private sector companies building data-driven applications and blockchain ecosystems.

Brian was an entrepreneur and executive throughout the early internet days and SaaS boom, having founded the popular A-list apart web development community, along with a host of successful SaaS companies.

Previous to establishing Fluree, Brian co-founded SilkRoad Technology which grew to over 2,000 customers and 500 employees in 12 global offices.

— In a single sentence, what does Fluree do?

Fluree organizes blockchain-secured data in a highly-scalable, highly-insightful graph database. supporting the next web’s demands for data-centric trust, interoperability, and security.

– How did Fluree come to be? What was the problem you found and the ‘aha’ moment?

With over 40 years of collective experience, building successful IT companies, Flip (my co-founder and co-CEO) and I have applied our frustrations and knowledge in the space to forge a new path forward in data management. We saw the shortcomings of the traditional legacy three-tier architecture stack — with security vulnerabilities spread out across middleware, bloated webs of APIs to accomplish data sharing, and a complete lack of provable integrity to the very data that drives businesses today. We founded Fluree and brought to market Fluree’s data management platform, a modular “data sack” that brings unprecedented flexibility, scale, and security to data management; a marked departure from the legacy “black box” database server.

— What sets Fluree apart in the market?

Fluree focuses on being the foundation of data-backed apps, where most blockchain technologies focus on moving assets or transactions. Like some other blockchains, Fluree allows programmatic control with its SmartFunctions. Unlike those blockchains, Fluree always outputs structured data in the W3C RDF standard for rich data query and instant interoperability with other enterprise systems. Fluree assembles this output into a rich, time-traveling, queryable graph database. Fluree queries can combine data across blockchains to power full enterprise applications and entire connected ecosystem.

In sum, most blockchains don’t excel in data management — Fluree combines data managament with customizeable blockchain capability.

— What are people most excited by when they first see Fluree?

Folks are very excited about our “data-centric security” philosophy, where instead of deferring cyberscurity to APIs, we allow data to “defend itself” with co-resident security protection rules as code. Data-Centric Security emphasizes the security of the data itself rather than the security of networks, servers, or applications. By storing permission logic as meta-data alongside data at the source, we can securely leverage and share information with a zero risk of API leakage, opening up a world of data management and data analytics possibilities.

Folks building apps on the Fluree platform can build real-time data pipelines to highly secure data, without having to pass through an API discovery layer. Data-centric security is becoming increasingly important — 75% of total attacks in the financial services industry in 2019 were targeted on APIs. Your data is replicated, duplicated, shared, and vulnerable.

— Have you pursued funding and if so, what steps did you take?

Yes — we pursued a seed round and closed in June (4.74M). We leveraged our network from past work in the Enterprise software space and we recently closed a ~5M seed fund round bringing in some fantastic investors — 4490, Revolution’s Rise of the Rest, and most recently, Engage Ventures.

— What KPIs are you tracking?

For a company as foundational as Fluree, developer community growth and user adoption is key, and can point to promising revenue growth in the years to come. You can measure that growth in a variety of ways, “downloads” or “signups” being the most direct, but engagement is more nuanced and differs in every business.

— How do you build and develop talent?

We found it incredibly important to hire local right here in Winston Salem, North Carolina. We worked with a reputable human capital placement firm to grow our team post fundraising.

Developing talent takes a few things: good documentation, goal-setting, and an environment for growth. That last one — environment for growth — is key.

— What are the biggest challenges for the team?

Right now we are adjusting to our new normal in COVID-19 and working through a barrage of zoom meetings.

— What’s been the biggest success for the team?

We are quite proud of our work with the U.S. Airforce, announced earlier this year. https://www.computerworld.com/article/3519917/us-air-force-to-pilot-blockchain-based-database-for-data-sharing.html

— What advice would you give to other founders?

Focus on building a great product, and don’t get distracted by the shiny objects 🙂

— Have you been or are you part of a corporate startup program or accelerator?

No, but from my perspective they seem highly-beneficial for startups that have immense potential for scale in niche industries.

— Who is your cloud provider?

Our hosted version of Fluree runs on AWS, but we have partnered with the following cloud providers: AWS, Google Cloud, and Microsoft Azure. Other cloud partnerships include Storj.io and Zeeve Platform.

— Anything else you’d like to share about Fluree?

Fluree is free to use and our developers are always active on Slack — if you are building a blockchain application for any industry, give us a try!


Startup Spotlight: Fluree was originally published in Startup Grind on Medium, where people are continuing the conversation by highlighting and responding to this story.

Here Comes Digital Sports Collectibles*


This post is by David Pakman from pakman.com - Medium

*on a blockchain!

Dapper Labs, in partnership with the NBA and the NBPA has launched the beta of their NBA TopShot crypto-collectible game. The first part of the experience allows consumers to buy packs of compelling NBA game moments. Users buy packs and try to complete various collections, build their teams and showcases, and start trading with others!

The stats from the beta are fantastic and show consumers are gobbling up these collectibles like many of us do in other collectible categories:

  • The first 900 users have bought more than $1.2M of NBA packs in the last 5 weeks (>$1300 ARPU)
  • We have sold out of 96% of available packs thus far (22,000+ packs), often times within 3 minutes of each drop (pack pricing varies from $22–$250 each)
  • 51% of payment transactions conducted with with credit card, the remaining with crypto, demonstrating some nice traction from non-crypto users

The team has done a fantastic job “hiding” the complexities of wallets, crypto tokens, blockchains and account security. To users, this feels like a simple ecommerce or in-app purchase experience. After a pack purchase, the user watches an exciting unveil of their Moments:

My collection is pretty weak so far, but my son has collected some great ones:

Surprisingly to many, this entire experience is a decentralized app built atop a layer one smart-contracts blockchain called Flow. Flow was designed and built by Dapper to handle mainstream and highly-scaleable games and other consumer experiences. Each moment you buy or trade is actually a non-fungible cryptotoken (NFT) sitting atop a smart contract. This enables true ownership in perpetuity, verifiable provenance, and allows other developers to build games in which your moments can be used.

The experience opens to the public (and the other 13,000+ people on the waiting list) sometime this fall, but, in the meantime, you can sign up here to jump the line.

In addition, Dapper is announcing the completion of an additional $12M financing to help scale Flow and TopShot, with participation by some notable NBA players like Andre Iguodala, Spencer Dinwiddie, Aaron Gordon, Javale McGee.

Back in November, 2018, I detailed our investment thesis in crypto collectibles and why I thought they might usher in a wave of consumer blockchain usage. We are about to see whether this view is right or not, but the early data looks super-promising…


Here Comes Digital Sports Collectibles* was originally published in pakman.com on Medium, where people are continuing the conversation by highlighting and responding to this story.

Appeals Court Decision Fails to Protect Privacy of Cryptocurrency Exchange Users


This post is by Marta Belcher from Deeplinks

Financial records contain a trove of sensitive information about people’s personal lives, beliefs, and affiliations—which is why law enforcement should be required to get a warrant in order to obtain financial transaction data. Courts and lawmakers have gotten this wrong in the context of traditional banks—and a June 30 ruling by a federal appeals court applied this outdated thinking to cryptocurrency. This is particularly concerning because one of the most important aspects of cryptocurrency is that it imports the privacy protections of cash into the digital world.

In U.S. v. Gratowski, the U.S. Court of Appeals for the Fifth Circuit ruled that law enforcement does not need to get a warrant in order to obtain financial transaction data from cryptocurrency exchanges. In deciding that Gratowski lacked a reasonable expectation of privacy in records of his cryptocurrency transactions, the court relied on the third-party doctrine. Under that doctrine, when people use services like banks, they lose their reasonable expectation of privacy in the information that they voluntarily turn over to a third party. This means that, instead of getting a warrant, law enforcement can use subpoenas—which do not require probable cause or prior approval by a judge—to obtain people’s data from those third parties.

This doctrine, and the court’s reliance on it in Gratowski, is wrong. Users should not lose their reasonable expectation of privacy in their data just because it is stored by a third party. In today’s digital world, it is almost impossible to navigate daily life without using essential services like email that give third parties access to sensitive information. With cryptocurrency transactions, people’s expectations of privacy are arguably even stronger, given that the technology allows for anonymous transactions online.

The defendant in the case, Gratkowski, was accused of accessing a child pornography website. Federal agents found him by analyzing transactions on the Bitcoin blockchain and asking a cryptocurrency exchange for information about his identity and cryptocurrency transactions. The defendant challenged the legality of obtaining this information without a warrant. 

The Bitcoin blockchain is a distributed ledger that publicly and permanently records all Bitcoin transactions. For each Bitcoin transfer, the information that is publicly displayed includes the Bitcoin address of the sender and the receiver—an alphanumeric string akin to a username, which a user can use once or for multiple transactions. Bitcoin addresses are pseudonymous. While the information recorded on the Bitcoin blockchain ledger might be that address “123…” transferred 1 bitcoin to address “456…,” if someone independently knows that Jane Smith controls address 456, they will know that in fact the user who controls address 123 transferred 1 bitcoin to Jane Smith. 

In today’s digital world, it is almost impossible to navigate daily life without using essential services like email that give third parties access to sensitive information. With cryptocurrency transactions, people’s expectations of privacy are arguably even stronger, given that the technology allows for anonymous transactions online.

There are a few ways to obtain Bitcoin. One way is to “mine” Bitcoin. But the more common way is to exchange Bitcoin for something else of value, like U.S. dollars or another currency. There are a variety of cryptocurrency exchanges that allow people to exchange their Bitcoin (and other cryptocurrencies) for U.S. dollars and other currencies. There are also hosted wallet services that act like a bank account for Bitcoin and other cryptocurrencies, and many exchanges offer wallet services as well. These exchanges typically collect the real identities of their users—in addition to knowing at least some of their users’ Bitcoin addresses. 

In this case, federal agents learned the Bitcoin addresses of a website they were investigating. In order to find out who had transferred Bitcoin to that website, federal agents asked a popular cryptocurrency exchange for the identities of anyone who had sent Bitcoin to the website’s Bitcoin addresses. Federal agents could have sought and obtained a warrant in order to get that information from the exchange. But instead of getting a warrant, the agents served the exchange with a subpoena—a less onerous process. The exchange responded by providing Gratkowski’s name and personal information, as well as records of his Bitcoin transactions, leading to his arrest.

Gratkowski asked the trial court to suppress the evidence because the analysis of the blockchain and the subpoena to the exchange violated the Fourth Amendment; the trial court denied this request. On appeal, the Fifth Circuit court agreed with the trial court’s denial of the request, and found that the government had not violated Gratkowski’s reasonable expectation of privacy in (1) the information published on the Bitcoin blockchain, and (2) the information customers shared with the exchange.

The Bitcoin blockchain is public—albeit pseudonymous—so it is easy to understand the court’s holding that there is no reasonable expectation of privacy for information that is shared publicly on the Bitcoin blockchain.

But the court’s second holding—that there was no reasonable expectation of privacy for information shared with an exchange—is troubling.

The court missed an opportunity to follow the Supreme Court’s lead in recognizing stronger privacy protections for digital data held by third parties. In Carpenter v. U.S., the Supreme Court ruled in 2018 that individuals have a privacy interest in their cell phone location records, even though that information is held by third parties. In Carpenter, the Court noted that location records provided “an all-encompassing record of the holder’s whereabouts” and “an intimate window into a person’s life, revealing not only particular movements, but through them [their] familial, political, professional, religious, and sexual associations.” 

In Gratkowski, the court held that a person’s virtual currency transactions do not “provide agents with ‘an intimate window into a person’s life.’” But a person’s financial transactions are deeply personal and revealing. Like the location records in Carpenter, financial records reveal “familial, political, professional, religious, and sexual associations”—what organizations a person donates to, what family members a person supports, what services a person pays for, and what books and products a person buys. Indeed, financial records are often revealing of a person’s location—and location data was exactly what was at issue in Carpenter.

This outcome is perhaps unsurprising in light of how courts and lawmakers have treated financial records in the past. In 1976, the Supreme Court held in U.S. v. Miller that bank customers lack a reasonable expectation of privacy in their bank records, pointing to Congress’s enactment of the Bank Secrecy Act, which requires banks to maintain financial records because of their usefulness in investigations. But the fact that the transactions are made through cryptocurrency rather than through traditional financial channels indicates that the transactions are more likely to be sensitive, and that the person making the transaction may be turning to cryptocurrency precisely because of the privacy protection it provides.

Cryptocurrency allows for anonymous transactions online, which—like cash—is important for protecting civil liberties. For example, news reports from the Hong Kong protests showed long lines at subway stations as protestors waited to purchase tickets with cash so that their electronic purchases would not place them at the scene of the protest. These photos underscore that a cashless society is a surveillance society, and the importance of importing the anonymity of cash to the digital world.

Cryptocurrency is also important because it is censorship resistant. Many traditional financial intermediaries have engaged in arbitrary financial censorship, cutting off access to financial institutions for adult social networks, adult booksellers, and controversial websites, even when these websites have not violated the law. In some of those cases of financial censorship, the censored organization has turned to cryptocurrency (most famously, in the case of Wikileaks). That is why cryptocurrency transactions are more likely to be sensitive—and more likely to carry with them a reasonable expectation of privacy.

The federal agents in this case could have easily sought a warrant from a judge, rather than merely sending a subpoena to the exchange. The court’s decision that the agents could obtain this sensitive cryptocurrency transaction data without a warrant sets a dangerous precedent. A decision that the government can obtain certain information without a warrant is not just about individual criminal cases like Gratkowski’s; rather, it enables the government to partner with private companies to implement mass surveillance programs like the one at issue in EFF’s lawsuit against the NSA for its warrantless dragnet surveillance of Americans in cooperation with AT&T. This is particularly concerning against the backdrop of regulators applying certain data collection obligations of the Bank Secrecy Act to cryptocurrency.

EFF is increasingly worried about law enforcement turning to intermediaries such as cryptocurrency exchanges and hosted wallet providers to obtain sensitive user data. That is why EFF has called on cryptocurrency exchanges to publish regular transparency reports about how many law enforcement requests they recieve, how many they fulfill, and how many user accounts are implicated, as well as to publish policies clearly setting forth procedures for protecting user data from overreaching requests. The court’s disappointing decision in this case is all the more reason for cryptocurrency exchanges to provide this transparency and to fight for users’ privacy. 

Appeals Court Decision Fails to Protect Privacy of Cryptocurrency Exchange Users


This post is by Marta Belcher from Deeplinks

Financial records contain a trove of sensitive information about people’s personal lives, beliefs, and affiliations—which is why law enforcement should be required to get a warrant in order to obtain financial transaction data. Courts and lawmakers have gotten this wrong in the context of traditional banks—and a June 30 ruling by a federal appeals court applied this outdated thinking to cryptocurrency. This is particularly concerning because one of the most important aspects of cryptocurrency is that it imports the privacy protections of cash into the digital world.

In U.S. v. Gratowski, the U.S. Court of Appeals for the Fifth Circuit ruled that law enforcement does not need to get a warrant in order to obtain financial transaction data from cryptocurrency exchanges. In deciding that Gratowski lacked a reasonable expectation of privacy in records of his cryptocurrency transactions, the court relied on the third-party doctrine. Under that doctrine, when people use services like banks, they lose their reasonable expectation of privacy in the information that they voluntarily turn over to a third party. This means that, instead of getting a warrant, law enforcement can use subpoenas—which do not require probable cause or prior approval by a judge—to obtain people’s data from those third parties.

This doctrine, and the court’s reliance on it in Gratowski, is wrong. Users should not lose their reasonable expectation of privacy in their data just because it is stored by a third party. In today’s digital world, it is almost impossible to navigate daily life without using essential services like email that give third parties access to sensitive information. With cryptocurrency transactions, people’s expectations of privacy are arguably even stronger, given that the technology allows for anonymous transactions online.

The defendant in the case, Gratkowski, was accused of accessing a child pornography website. Federal agents found him by analyzing transactions on the Bitcoin blockchain and asking a cryptocurrency exchange for information about his identity and cryptocurrency transactions. The defendant challenged the legality of obtaining this information without a warrant. 

The Bitcoin blockchain is a distributed ledger that publicly and permanently records all Bitcoin transactions. For each Bitcoin transfer, the information that is publicly displayed includes the Bitcoin address of the sender and the receiver—an alphanumeric string akin to a username, which a user can use once or for multiple transactions. Bitcoin addresses are pseudonymous. While the information recorded on the Bitcoin blockchain ledger might be that address “123…” transferred 1 bitcoin to address “456…,” if someone independently knows that Jane Smith controls address 456, they will know that in fact the user who controls address 123 transferred 1 bitcoin to Jane Smith. 

In today’s digital world, it is almost impossible to navigate daily life without using essential services like email that give third parties access to sensitive information. With cryptocurrency transactions, people’s expectations of privacy are arguably even stronger, given that the technology allows for anonymous transactions online.

There are a few ways to obtain Bitcoin. One way is to “mine” Bitcoin. But the more common way is to exchange Bitcoin for something else of value, like U.S. dollars or another currency. There are a variety of cryptocurrency exchanges that allow people to exchange their Bitcoin (and other cryptocurrencies) for U.S. dollars and other currencies. There are also hosted wallet services that act like a bank account for Bitcoin and other cryptocurrencies, and many exchanges offer wallet services as well. These exchanges typically collect the real identities of their users—in addition to knowing at least some of their users’ Bitcoin addresses. 

In this case, federal agents learned the Bitcoin addresses of a website they were investigating. In order to find out who had transferred Bitcoin to that website, federal agents asked a popular cryptocurrency exchange for the identities of anyone who had sent Bitcoin to the website’s Bitcoin addresses. Federal agents could have sought and obtained a warrant in order to get that information from the exchange. But instead of getting a warrant, the agents served the exchange with a subpoena—a less onerous process. The exchange responded by providing Gratkowski’s name and personal information, as well as records of his Bitcoin transactions, leading to his arrest.

Gratkowski asked the trial court to suppress the evidence because the analysis of the blockchain and the subpoena to the exchange violated the Fourth Amendment; the trial court denied this request. On appeal, the Fifth Circuit court agreed with the trial court’s denial of the request, and found that the government had not violated Gratkowski’s reasonable expectation of privacy in (1) the information published on the Bitcoin blockchain, and (2) the information customers shared with the exchange.

The Bitcoin blockchain is public—albeit pseudonymous—so it is easy to understand the court’s holding that there is no reasonable expectation of privacy for information that is shared publicly on the Bitcoin blockchain.

But the court’s second holding—that there was no reasonable expectation of privacy for information shared with an exchange—is troubling.

The court missed an opportunity to follow the Supreme Court’s lead in recognizing stronger privacy protections for digital data held by third parties. In Carpenter v. U.S., the Supreme Court ruled in 2018 that individuals have a privacy interest in their cell phone location records, even though that information is held by third parties. In Carpenter, the Court noted that location records provided “an all-encompassing record of the holder’s whereabouts” and “an intimate window into a person’s life, revealing not only particular movements, but through them [their] familial, political, professional, religious, and sexual associations.” 

In Gratkowski, the court held that a person’s virtual currency transactions do not “provide agents with ‘an intimate window into a person’s life.’” But a person’s financial transactions are deeply personal and revealing. Like the location records in Carpenter, financial records reveal “familial, political, professional, religious, and sexual associations”—what organizations a person donates to, what family members a person supports, what services a person pays for, and what books and products a person buys. Indeed, financial records are often revealing of a person’s location—and location data was exactly what was at issue in Carpenter.

This outcome is perhaps unsurprising in light of how courts and lawmakers have treated financial records in the past. In 1976, the Supreme Court held in U.S. v. Miller that bank customers lack a reasonable expectation of privacy in their bank records, pointing to Congress’s enactment of the Bank Secrecy Act, which requires banks to maintain financial records because of their usefulness in investigations. But the fact that the transactions are made through cryptocurrency rather than through traditional financial channels indicates that the transactions are more likely to be sensitive, and that the person making the transaction may be turning to cryptocurrency precisely because of the privacy protection it provides.

Cryptocurrency allows for anonymous transactions online, which—like cash—is important for protecting civil liberties. For example, news reports from the Hong Kong protests showed long lines at subway stations as protestors waited to purchase tickets with cash so that their electronic purchases would not place them at the scene of the protest. These photos underscore that a cashless society is a surveillance society, and the importance of importing the anonymity of cash to the digital world.

Cryptocurrency is also important because it is censorship resistant. Many traditional financial intermediaries have engaged in arbitrary financial censorship, cutting off access to financial institutions for adult social networks, adult booksellers, and controversial websites, even when these websites have not violated the law. In some of those cases of financial censorship, the censored organization has turned to cryptocurrency (most famously, in the case of Wikileaks). That is why cryptocurrency transactions are more likely to be sensitive—and more likely to carry with them a reasonable expectation of privacy.

The federal agents in this case could have easily sought a warrant from a judge, rather than merely sending a subpoena to the exchange. The court’s decision that the agents could obtain this sensitive cryptocurrency transaction data without a warrant sets a dangerous precedent. A decision that the government can obtain certain information without a warrant is not just about individual criminal cases like Gratkowski’s; rather, it enables the government to partner with private companies to implement mass surveillance programs like the one at issue in EFF’s lawsuit against the NSA for its warrantless dragnet surveillance of Americans in cooperation with AT&T. This is particularly concerning against the backdrop of regulators applying certain data collection obligations of the Bank Secrecy Act to cryptocurrency.

EFF is increasingly worried about law enforcement turning to intermediaries such as cryptocurrency exchanges and hosted wallet providers to obtain sensitive user data. That is why EFF has called on cryptocurrency exchanges to publish regular transparency reports about how many law enforcement requests they recieve, how many they fulfill, and how many user accounts are implicated, as well as to publish policies clearly setting forth procedures for protecting user data from overreaching requests. The court’s disappointing decision in this case is all the more reason for cryptocurrency exchanges to provide this transparency and to fight for users’ privacy. 

Rosetta


This post is curated by Keith Teare. It was written by Fred Wilson. The original is [linked here]

Our portfolio company Coinbase released an open source framework for crypto asssets to make it easier to list them on crypto exchanges. It is called Rosetta. Coinbase is encouraging blockchain projects to integrate Rosetta so that they can more easily list new assets on the Coinbase Exchange.

But as this Coindesk post outlines, any crypto exchange can adopt Rosetta so this could be something that levels the field for everyone.

Coinbase is putting Rosetta out to the broader community under an Apache license in the hopes that other exchanges will kick the tires on it. “All the code is available, it can be forked, it can be edited, so if there’s another exchange or another project that wants to put their code on it they can do that and also suggest their own changes,” Dalal said. “In a perfect world there are people building on top.”

https://www.coindesk.com/coinbase-open-sources-technical-standard-to-streamline-token-listings

Because different blockchains work differently, each crypto exchange needs to build their own interfaces to the blockchains in order to list them. That takes time and slows down listing new assets.

An open source middleware framework like Rosetta should make it much easier for exchanges to list new assets and allow them to support new assets more quickly. This would be great for innovation in the blockchain sector.


USV TEAM POSTS:

Nick Grossman — Jun 11, 2020
The 1k Project

Albert Wenger — Jun 10, 2020
Meet Clarity

Rosetta


This post is by Fred Wilson from AVC

Our portfolio company Coinbase released an open source framework for crypto asssets to make it easier to list them on crypto exchanges. It is called Rosetta. Coinbase is encouraging blockchain projects to integrate Rosetta so that they can more easily list new assets on the Coinbase Exchange.

But as this Coindesk post outlines, any crypto exchange can adopt Rosetta so this could be something that levels the field for everyone.

Coinbase is putting Rosetta out to the broader community under an Apache license in the hopes that other exchanges will kick the tires on it. “All the code is available, it can be forked, it can be edited, so if there’s another exchange or another project that wants to put their code on it they can do that and also suggest their own changes,” Dalal said. “In a perfect world there are people building on top.”

https://www.coindesk.com/coinbase-open-sources-technical-standard-to-streamline-token-listings

Because different blockchains work differently, each crypto exchange needs to build their own interfaces to the blockchains in order to list them. That takes time and slows down listing new assets.

An open source middleware framework like Rosetta should make it much easier for exchanges to list new assets and allow them to support new assets more quickly. This would be great for innovation in the blockchain sector.


USV TEAM POSTS:

Nick Grossman — Jun 11, 2020
The 1k Project

Albert Wenger — Jun 10, 2020
Meet Clarity

Meet Clarity


This post is by Continuations by Albert Wenger from Continuations by Albert Wenger

Today Algorand and Blockstack are announcing that they are collaborating on the Clarity smart contract language. Clarity is a decidable (i.e. non-Turing complete) language inspired by lisp. I am extremely excited about this development and have spent a few hours this week writing a smart contract in Clarity.

I have long argued that Turing complete smart contract languages are problematic because the only way to really understand the system as a whole is to run it and see what happens. Still this is the route most projects have chosen and even more odd to me has been the embrace of WASM as an execution environment which optimizes for speed over safety and analyzability. Given that the key point of decentralized systems is censorship resistance that has long struck me as the wrong order of priorities. After all, there is no-one you can call to just unwind a mistake (modulo the DAO hack reset, I suppose).

Clarity instead is all about safety. Avoiding costly mistakes long before they can cause millions of dollars in damage. Decidability is one key aspect of that. To give just one example of the power of decidability: with Clarity you can know the precise gas fee of a contract in advance. Another key aspect is making actions such as issuing non-fungible tokens, which are a critical component of many applications, completely straightforward. There are many more aspects of Clarity that are a delight, such as the simple and clear type system. And being inspired by Lisp, Clarity naturally lends itself to building up code out of short functions (if you have never seen Lisp before, the language may strike you as odd at first – but I promise that learning it will make you a better programmer).

Now some people may think that you lose a lot by giving up Turing completeness, so I wanted to write a non-trivial example. One came to mind easily: an all-or-none funding mechanism. There are many possible use cases for such a contract, including a system such as Kickstarter, or my personal favorite, the second coming of Kitchensurfing (I hope). For readers who may not remember Kitchensurfing, it was a wonderful service where a chef would come to a home and cook there. The key missing feature though was the ability to get everyone to split the payment upfront, so that meant the host had to put up the entire bill and then collect from guests which is more than a bit awkward.

I won’t post the (nearly) complete contract here, you can find it on github. There is a bit more argument checking I need to add in one of the functions and I also have been remiss in writing a test harness (yes, I know I should have written that first, but I was too damn excited).

Here are some key things I would like to call out. How do you define a non-fungible token in Clarity?

    (define-non-fungible-token event-pass uint)

That’s all there’s to it. Later, when you want to issue an event-pass to someone who has paid, all you need to do is

    (unwrap!
        (nft-mint? event-pass event-pass-id tx-sender)
        (err "unable to issue event pass"))

Again, that’s it. Three lines of code and that includes the error handling!

Let’s look at a different part of the code to show another elegant feature of Clarity. With asserts! I can easily check if a condition is met and if it is not met issue an error. Doing so will abort execution and leave all blockchain state untouched

    (asserts! (< (get expires-at event) block-height)
              (err "event still funding"))

There is a lot more to discover and I encourage everyone who is interested to check out Clarity. The tooling is still growing but there is already a Clarity LSP for VS Code (which helped me find a number of mistakes). A full blown REPL running against a chain instance is in the works and will be a great way to interact with Clarity contracts during design.

Over time Clarity will become an independent project. It would be wonderful to see other chains support Clarity as a development language (possibly even the only one). In the meantime there are many amazing opportunities to contribute, from just writing contracts in Clarity (and providing feedback) to working on the virtual machine or on development tooling.

Meet Clarity


This post is by Continuations by Albert Wenger from Continuations by Albert Wenger

Today Algorand and Blockstack are announcing that they are collaborating on the Clarity smart contract language. Clarity is a decidable (i.e. non-Turing complete) language inspired by lisp. I am extremely excited about this development and have spent a few hours this week writing a smart contract in Clarity.

I have long argued that Turing complete smart contract languages are problematic because the only way to really understand the system as a whole is to run it and see what happens. Still this is the route most projects have chosen and even more odd to me has been the embrace of WASM as an execution environment which optimizes for speed over safety and analyzability. Given that the key point of decentralized systems is censorship resistance that has long struck me as the wrong order of priorities. After all, there is no-one you can call to just unwind a mistake (modulo the DAO hack reset, I suppose).

Clarity instead is all about safety. Avoiding costly mistakes long before they can cause millions of dollars in damage. Decidability is one key aspect of that. To give just one example of the power of decidability: with Clarity you can know the precise gas fee of a contract in advance. Another key aspect is making actions such as issuing non-fungible tokens, which are a critical component of many applications, completely straightforward. There are many more aspects of Clarity that are a delight, such as the simple and clear type system. And being inspired by Lisp, Clarity naturally lends itself to building up code out of short functions (if you have never seen Lisp before, the language may strike you as odd at first – but I promise that learning it will make you a better programmer).

Now some people may think that you lose a lot by giving up Turing completeness, so I wanted to write a non-trivial example. One came to mind easily: an all-or-none funding mechanism. There are many possible use cases for such a contract, including a system such as Kickstarter, or my personal favorite, the second coming of Kitchensurfing (I hope). For readers who may not remember Kitchensurfing, it was a wonderful service where a chef would come to a home and cook there. The key missing feature though was the ability to get everyone to split the payment upfront, so that meant the host had to put up the entire bill and then collect from guests which is more than a bit awkward.

I won’t post the (nearly) complete contract here, you can find it on github. There is a bit more argument checking I need to add in one of the functions and I also have been remiss in writing a test harness (yes, I know I should have written that first, but I was too damn excited).

Here are some key things I would like to call out. How do you define a non-fungible token in Clarity?

    (define-non-fungible-token event-pass uint)

That’s all there’s to it. Later, when you want to issue an event-pass to someone who has paid, all you need to do is

    (unwrap!
        (nft-mint? event-pass event-pass-id tx-sender)
        (err "unable to issue event pass"))

Again, that’s it. Three lines of code and that includes the error handling!

Let’s look at a different part of the code to show another elegant feature of Clarity. With asserts! I can easily check if a condition is met and if it is not met issue an error. Doing so will abort execution and leave all blockchain state untouched

    (asserts! (< (get expires-at event) block-height)
              (err "event still funding"))

There is a lot more to discover and I encourage everyone who is interested to check out Clarity. The tooling is still growing but there is already a Clarity LSP for VS Code (which helped me find a number of mistakes). A full blown REPL running against a chain instance is in the works and will be a great way to interact with Clarity contracts during design.

Over time Clarity will become an independent project. It would be wonderful to see other chains support Clarity as a development language (possibly even the only one). In the meantime there are many amazing opportunities to contribute, from just writing contracts in Clarity (and providing feedback) to working on the virtual machine or on development tooling.

Tencent to Invest $70 Billion in New Technologies Including Blockchain


This post is curated by Keith Teare. It was written by Julia Bahr. The original is [linked here]

Chinese Internet-based company looks to move past Covid-10 impact

How does a blockchain-type Distributed Ledger system work?


This post is curated by Keith Teare. It was written by James Woods. The original is [linked here]

TheMerkle Celer Network Blockchain

In order to explain the operation of blockchain-type Distributed Ledgers, it can be useful to refresh the mind on how traditional Ledgers operate, ie the “old” “Ledgers “.

How old ledgers work

Companies, but above all banks and public administrations have used Ledgers to manage the accounting and archiving of data and accounting transactions. The Public Administrations, in turn,  based on the Ledgers the registrations and transfers of properties for land, buildings and real estate assets .

With every change, for example in the ownership of a property and every time a transaction took place, a change was made to the Ledger through a central authority in charge of managing the Central Ledger . With this organization, by acting on the Central Ledger, the public administration offices or credit institutions could at any time know and identify the owner of a property or certain resources . This control allowed the banks themselves or the public offices to verify that any passages related to new transactions on certain assets were actually possible and above all legitimate. In other words, with the Central Ledger it was possible check whether the subject X about to sell the property Y was actually in possession of that property or had not already sold it to a subject Z. The bank, in turn, could check that the person H about to buy the property Y from subject X was actually in possession of the necessary sum and had not already used it for other acquisitions, or that the same sum was not used for multiple transactions.

The basis of the Central Ledger is all in trust in a central entity

The basis of the Central Ledger is all contained in the trust that each, indeed, everyone, must have in the manager of the Central Ledger. Banks and public administrations must have that authority capable of instilling this trust. If there is this trust, people can buy and sell even without having met before and in the absence of mutual trust. Because, precisely there is a third party that guarantees for everyone. The Ledger manager – Ledger – also controls access to the information contained in the Ledger and has the power to decide who can access the identity of a building owner and who can check the balance of a checking account. All defining the rules that make up an overall design of guidelines is that establishes the Governance of the Central Ledger.

In the case of banks, only current account holders have access to and visibility of their current account. But when these owners are engaged in the purchase of an asset (for example a property) it is the bank that guarantees, during the acquisition procedures, that these subjects actually have the amount necessary for the acquisition without that other subjects can have access to their Bank account. Click on Teekia Tiwari 5 coins to $5 million masterplan to know more.

The logic of the Central Ledger: the example of the Bank

Digitization has changed the Ledgers. The Ledger goes digital

With digitization, this process has undergone evolutions and accelerations. Digitization has changed the Ledgers, like many other elements of our professional and personal life, but the Ledgers have undergone a radical change, well before other work tools.

In a first phase, digitization made the Ledgers faster, easier to use, more performing and allowed to add many features. Digitization did not change the logic of the Ledger, however. The old Central Ledger has not been questioned. The Ledgers remained in the hands of a central structure that took advantage of the digital opportunities for management and above all remained closed and reserved .Governance has not changed, access and management rules have remained with the central operator of the Ledger, even when the relationship with this manager taking advantage of digital opportunities, ceased to be personal and physical and became virtual by going over the Internet.

The big change comes with the blockchain

The big change comes with lab Blockchain which allows guaranteeing the same functionality in the management of the Ledger, but without having to refer to a centralized structure, it is possible to authorize the legitimacy of a transaction.

Image(s): Shutterstock.com

The post How does a blockchain-type Distributed Ledger system work? appeared first on The Merkle News.

Buzzy Ethereum wallet app Argent comes out of stealth


This post is by Romain Dillet from Fundings & Exits – TechCrunch

Argent is launching the first public version of its Ethereum wallet for iOS and Android. The company has been available as a limited beta for a few months with a few thousand users. But it has already raised a seed and a Series A round with notable investors, such as Paradigm, Index Ventures, Creandum and Firstminute Capital. Overall, the company has raised $16 million.

I managed to get an invitation to the beta a few months ago and have been playing around with it. It’s a well-designed Ethereum wallet with some innovative security features. It also integrates really well with DeFi projects.

Many people leave their crypto assets on a cryptocurrency exchange, such as Coinbase or Binance. But it’s a centralized model — you don’t own the keys, which means that an exchange could get hacked and you’d lose all your crypto assets. Similarly, if there’s a vulnerability in the exchange API or login system, somebody could transfer all your crypto assets to their own wallets.

At heart, Argent is a non-custodial Ethereum wallet, like Coinbase Wallet or Trust Wallet. You’re in control of the keys. Argent can’t initiate a transaction without your authorization for instance.

But that level of control brings a lot of complexities. Hardware wallets, such as Ledger wallets, ask you to write down a seed phrase so that you can recover your wallet if you lose your device. It requires some discipline and it’s hard to understand if you’re not familiar with the concept of seed phrases.

Even Coinbase Wallet tells you to back up your seed phrase when you first create a wallet. “We see them as advanced tools for developers,” Argent co-founder and CEO Itamar Lesuisse told me.

That’s why a new generation of wallets tries to hide the complexity from the end user, such as ZenGo and Argent. Creating a wallet on Argent is one of the best experiences in the cryptocurrency space. Your wallet is secured by something called ‘guardians’.

Trust your friends

A guardian can be someone you know and trust, a hardware wallet (or another phone) or a MetaMask account. Argent also provides a guardian service, which requires you to confirm your identity with a text message and an email. If you lose your phone and you want to recover your wallet on another phone, you need to speak to your guardians and get a majority of confirmations. If they can all confirm that, yes, indeed, your phone doesn’t work anymore and you want to recover your crypto assets, the recovery process starts.

Let’s take an example. Here’s your list of guardians:

  • Argent’s own guardian service
  • Two friends who are also using Argent
  • A Ledger Nano S hardware wallet

In total, there are five different factors involved, you including. If you lose your phone, you can recover your wallet by downloading Argent on another phone (factor #1), asking Argent’s guardian service to send you a text and an email to confirm your identity (factor #2) and confirming your identity with the Ledger Nano S (factor #3).

You have reached a majority and the recovery process starts. You’ll get your funds in 36 hours so that you have enough time to cancel it it’s a hijacking attempt.

But you could also have downloaded the Argent app on another phone (factor #1) and pinged your two friends (factor #2 and #3) directly. If they can confirm the same sequence of characters (emojis in that case), the recovery process would start as well.

“I’m interested in social recovery, multi-key schemes,” Ethereum creator Vitalik Buterin said in a TechCrunch interview in July 2018. It’s not a new concept as social media apps already use social recovery systems. On WeChat, if you lose your password, WeChat asks you to select people in your contact list within a big list of names.

In Argent’s case, social recovery adds an element of virality as well. The experience gets better as more people around you start using Argent.

In addition to wallet recovery, Argent uses guardians to put some limits. Just like you have some limits on your bank account, you can set a daily transaction limit to prevent attackers from grabbing all your crypto assets. You can ask your guardians to waive transactions above your daily limits.

Similarly, you can ask your guardians to lock your account for 5 days in case your phone gets stolen.

Betting on Ethereum

Argent is focused on the Ethereum blockchain and plans to support everything that Ethereum offers. Of course, you can send and receive ETH. And the startup wants to hide the complexity on this front as well as it covers transaction fees (gas) for you and gives you usernames. This way, you don’t have to set the transaction fees to make sure that it’ll go through.

The startup plans to integrate DeFi projects directly in the app. DeFi stands for decentralized finance. As the name suggests, DeFi aims to bridge the gap between decentralized blockchains and financial services. It looks like traditional financial services, but everything is coded in smart contracts.

There are dozens of DeFi projects. Some of them let you lend and borrow money — you can earn interest by locking some crypto assets in a lending pool for instance. Some of them let you exchange crypto assets in a decentralized way, with other users directly.

Argent lets you access TokenSets, Compound, Maker DSR, Aave, Uniswap V2 Liquidity, Kyber and Pool Together. And the company already has plans to roll out more DeFi features soon.

Overall, Argent is a polished app that manages to find the right balance between security and simplicity. Many cryptocurrency startups want to build the ‘Revolut of crypto’. And it feels like Argent has a real shot at doing just that with such a promising start.

The Remote Work Renaissance Will Demand Decentralized Technology


This post is curated by Keith Teare. It was written by Cointelegraph By Noam Levenson. The original is [linked here]

The world’s digital migration driven by the COVID-19 pandemic requires more transparent and trusted technology such as blockchain

Bitcoin: Resilience in Crisis


This post is by jlk from The Barefoot VC

As investors try to navigate the COVID-19 world, they’re taking a hard look at their portfolios and solving for the new normal. In the midst of highly volatile traditional financial markets, savvy investors are searching for new avenues for not only higher returns, but the best risk-adjusted ones as well.

I’ve been investing in the cryptocurrency and blockchain sectors since 2013. I’ve often faced questions from institutional investors who considered Bitcoin a passing fad and too volatile for any serious consideration. Those in countries that have previously experienced massive inflation (Zimbabwe, Venezuela, Argentina) or capital controls (China, India) have long seen relative value in an asset that is independent of government financial manipulation. In the past month however, I have fielded an increasingly number of inquiries from investors in more developed countries who want to enter the sector.

This pandemic seems to be a catalyst that has led investors to rethink their strategies and warm up to the idea of crypto and its underlying blockchain technology. To put it simply, the high volatility in equities, credit, and oil have made the relative volatility of bitcoin more palatable for the typical investor and redefine what is a risky investment during these times.

For example, crude oil prices are down nearly 19% since 2015. On the other hand, bitcoin is up over 3,000% in the past five years, and over 58% in the past year alone. Bitcoin is up 25% from January 1 through April 30, and has seen less volatility on many days than the equity markets, with the major exception of its Black Thursday on March 12, when it crashed over 50%. That day the S&P 500 was down 9.5% and the DJIA was down 10%. While the future is still uncertain, Bitcoin has been living up to its narrative as a store of value, especially in the financial environment of today. As I write this it is close to $10,000 once again.

With central banks across the globe committing to cushion the fallout from the COVID-19 pandemic, low and even negative interest rates have driven investors to look for higher returns elsewhere. This macro environment has dovetailed with an upcoming event for bitcoin – the halving.

Roughly every four years, the Bitcoin reward for miners – those who work with high-powered computers to solve complex mathematical problems in order to validate Bitcoin transactions – are halved to keep inflation in check. Currently, the reward for miners is 12.5 Bitcoin per block mined, but next week the reward will decrease to 6.25 new Bitcoin, leading to a decrease in supply. The low interest rates, high volatility of traditional financial markets, and upcoming halving event have together spurred an interest in the sector that I haven’t seen since 2017. Just like other technologies such as telemedicine and video conferencing that have been around for the past 10 years but have seen a boost given their relevance in today’s times, Bitcoin and blockchain will be part of the new normal.

The post Bitcoin: Resilience in Crisis appeared first on The Barefoot VC.

Bitcoin: Resilience in Crisis


This post is by jlk from The Barefoot VC

As investors try to navigate the COVID-19 world, they’re taking a hard look at their portfolios and solving for the new normal. In the midst of highly volatile traditional financial markets, savvy investors are searching for new avenues for not only higher returns, but the best risk-adjusted ones as well.

I’ve been investing in the cryptocurrency and blockchain sectors since 2013. I’ve often faced questions from institutional investors who considered Bitcoin a passing fad and too volatile for any serious consideration. Those in countries that have previously experienced massive inflation (Zimbabwe, Venezuela, Argentina) or capital controls (China, India) have long seen relative value in an asset that is independent of government financial manipulation. In the past month however, I have fielded an increasingly number of inquiries from investors in more developed countries who want to enter the sector.

This pandemic seems to be a catalyst that has led investors to rethink their strategies and warm up to the idea of crypto and its underlying blockchain technology. To put it simply, the high volatility in equities, credit, and oil have made the relative volatility of bitcoin more palatable for the typical investor and redefine what is a risky investment during these times.

For example, crude oil prices are down nearly 19% since 2015. On the other hand, bitcoin is up over 3,000% in the past five years, and over 58% in the past year alone. Bitcoin is up 25% from January 1 through April 30, and has seen less volatility on many days than the equity markets, with the major exception of its Black Thursday on March 12, when it crashed over 50%. That day the S&P 500 was down 9.5% and the DJIA was down 10%. While the future is still uncertain, Bitcoin has been living up to its narrative as a store of value, especially in the financial environment of today. As I write this it is close to $10,000 once again.

With central banks across the globe committing to cushion the fallout from the COVID-19 pandemic, low and even negative interest rates have driven investors to look for higher returns elsewhere. This macro environment has dovetailed with an upcoming event for bitcoin – the halving.

Roughly every four years, the Bitcoin reward for miners – those who work with high-powered computers to solve complex mathematical problems in order to validate Bitcoin transactions – are halved to keep inflation in check. Currently, the reward for miners is 12.5 Bitcoin per block mined, but next week the reward will decrease to 6.25 new Bitcoin, leading to a decrease in supply. The low interest rates, high volatility of traditional financial markets, and upcoming halving event have together spurred an interest in the sector that I haven’t seen since 2017. Just like other technologies such as telemedicine and video conferencing that have been around for the past 10 years but have seen a boost given their relevance in today’s times, Bitcoin and blockchain will be part of the new normal.

The post Bitcoin: Resilience in Crisis appeared first on The Barefoot VC.