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6 Questions for Andrew Levine of Koinos Group

Coin Telegraph
6 Questions for Andrew Levine of Koinos Group
6 Questions For...

We ask the buidlers in the blockchain and cryptocurrency sector for their thoughts on the industry… and throw in a few random zingers to keep them on their toes!

 

This week, our 6 Questions go to Andrew Levine, CEO of Koinos Group, which is focused on accelerating the transition to a more decentralized future by helping entrepreneurial developers, entrepreneurs and enterprises build disruptive blockchain-based solutions.

Andrew leads a team of industry veterans accelerating decentralization through accessible blockchain technology. Their foundational product is Koinos, a feeless blockchain with infinite upgradeability and a proof-of-burn consensus.

 

1 What kind of consolidation do you expect to see in the crypto industry in 2022?

There are too many general-purpose blockchains that are effectively competing with Ethereum (and one another) in a race to the bottom on fees. Only so many of them can survive.

 

2 If the world is getting a new currency, will it be led by CBDCs, a permissionless blockchain like Bitcoin, or a permissioned chain such as Diem?

CBDCs, in the eyes of many, will combine the best of both worlds: the internet-nativeness of cryptocurrencies and the confidence of state-backed assets (and their military might). If the world is going to get one currency, then the odds are it will be a state-backed currency (a CBDC). If the world is going to get many currencies, then people will have many options on the spectrum between permissionless and permissioned.

 

3 Do you subscribe to the idea of Bitcoin as a means of payment, as a store-of-value, as both… or as neither?

I do not. It is the on-ramp into the crypto economy as a result of its age and the depth of its markets, and it is the flight-to-safety asset people use when they lose confidence in more speculative crypto assets.

 

4 Does it matter if we ever figure out who Satoshi really is or was? Why, or why not?

It doesnt. Hes just some human who assembled a bunch of existing ideas into an innovative solution.

 

5 Do you think governments will try and kill crypto?

No. Theres too much tax revenue potential.

 

6 If you didnt need sleep, what would you do with the extra time?

Id spend more time with my child.

 

A wish for the young, ambitious blockchain community:

Focus on creating real value.

Read more
Analyst Issues ,000 Bitcoin Price Warning As Crypto Markets Retreat

Analyst Issues $80,000 Bitcoin Price Warning As Crypto Markets Retreat

Powers On… When will we learn from recent history to protect our crypto and ourselves?

Coin Telegraph
Powers On… When will we learn from recent history to protect our crypto and ourselves?
Coin Telegraph

Stablecoins provide a false sense of security. They give the impression to the uninitiated and/or uncaring that a particular coin is pegged to the U.S. dollar, or an equivalent of the dollar in terms of value and stability, and that if you want to convert your stablecoin to dollars, you can do so easily and instantaneously. Yet, they do no such thing, as demonstrated by the recent collapse of Terra and its TerraUSD stablecoin and LUNA token and also made clear in September 2008 by the collapse of the Reserve Primary Fund money market fund during the height of the global financial crisis.

Powers On… is a monthly opinion column from Marc Powers, who spent much of his 40-year legal career working with complex securities-related cases in the United States after a stint with the SEC. He is now an adjunct professor at Florida International University College of Law, where he teaches a course on Blockchain & the Law.

So, I now unequivocally state what is obvious: If you are an owner of or investor in any cryptocurrencies, you need to understand this lack of protection and safeguard the portion of your wealth held in digital assets. You can protect these assets by keeping them in cold digital wallets, on exchanges registered with the United States Securities and Exchange Commission, or with another entity regulated by the SEC, CFTC or Treasury. Even entities and exchanges with BitLicenses, such as Coinbase and Gemini, may not provide sufficient protection.

 

 

 

As I write this column, UST has a value of about $0.07. One month ago, it was one of the top 10 cryptocurrencies by market cap and maintained a steady value of $1. It was perceived as a reliable, safe cryptocurrency for trading activities, where transaction risks were eliminated and liquidity was provided to the trading parties, both for trading occurring on centralized exchanges and decentralized platforms. Not anymore.

 

 

 

 

Although some may disagree, cryptocurrencies are speculative in both value and utility. Their prices are volatile, and they are best understood when considered a nascent alternative economic, capital markets and financial system backed by a new technology that is still being developed and tested in innumerable ways. Crypto is tested by criminals wanting to hack vulnerable blockchains for illegal gains, studied by governments seeking to regulate or ban its use, and continually worked on by developers seeking to improve its public-source codes. Hence, it falls within the class of alternative assets.

 

 

 

Investments with full faith?

Those involved with investment management and analysis have been led to believe that stablecoins are a viable solution to avoiding the risks associated with cryptocurrencies no differently than the SEC-registered Reserve Primary Fund touted its money market fund, with over $60 billion in assets at its peak, as a safe haven to park money and earn interest. The Reserve Primary Fund, and most of the other money market funds in the early 2000s, promoted themselves as an alternative to keeping cash in bank deposit accounts and a way to earn better interest rates than banks were providing. Its share price was supposed to always maintain a $1 net asset value (the measure by which mutual funds are publicly traded) because it was supposedly backed one-to-one in U.S. bonds, which are guaranteed by the full faith and credit of the U.S. Treasury. Yet amid the financial crisis, on Sept. 16, 2008 the day after the venerable investment firm Lehman Brothers filed for bankruptcy the Reserve Primary Fund broke the buck. Its NAV fell to as low as $0.97 from its $1 peg.

Why? Well, for reasons parallel to the UST collapse. As it turns out, a portion of the Reserve Primary Fund was not invested in U.S.-backed bonds and treasuries but instead in commercial paper issued by corporations, not the government. This was done to boost the money markets return to offer a higher competitive interest rate to investors willing to park their money in the fund rather than a traditional bank. However, this approach had two fundamental problems, as Reserve Primary Fund investors would learn. At that point in time, money market funds were neither insured and protected by the Federal Deposit Insurance Corporation like bank accounts nor covered for losses by the Securities Investor Protection Corporation like stocks held in brokerage accounts.

Second, as previously noted, over half the funds portfolio was invested in commercial paper rather than U.S.-backed securities. When Lehman Brothers filed for bankruptcy, investors became concerned that money market mutual funds held Lehman Brothers commercial paper. So, the next day, a run on those funds began. And although the Reserve Primary Fund reportedly held less than 1.5% in Lehman Brothers paper, the NAV fell below $1. Ultimately, the fund was closed and liquidated, but not before the U.S. government stepped in with two forms of legislation: the Temporary Liquidity Guarantee Program and the Debt Guarantee Program. Both combined protected investor money in mutual funds and guaranteed short-term debt issued by participating banks. (These programs and protections ended in 2012.)

 

 

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With TerraUSD, Terraform Labs created a so-called algorithmic stablecoin one not backed by assets like cash or U.S. government bonds but instead relying upon trading and treasury management to maintain the value of the NAV at $1. This reportedly included collateralizing UST, in part, with Bitcoin. However, the actual assets backing UST were apparently less than its market capitalization by severalfold. So, when there was a run on UST, the whole thing collapsed.

Now, other stablecoin issuers, like Circle with USD Coin and Tether with USDT, will say this cannot happen to their coins. The problem was because UST was an undercapitalized, algorithmic stablecoin, while they are backed one-to-one by dollars and U.S. government securities. But that is not entirely true. An investigation of Tether by the New York State Office of the Attorney General revealed that a good amount of the collateral was not dollars but loans or commercial paper.

 

 

 

 

This is the same sort of collateral that took down the Reserve Primary Fund in 2008 in a run. It is also true that neither Circles nor Tethers stablecoins are protected against investor loss by a government-backed agency like SIPC or FDIC.

So, what are some takeaways from the UST/LUNA break the buck price collapse?

  1. What happened to UST/LUNA is neither new nor unique. It happened before with the Reserve Primary Fund in 2008 in spectacular fashion and with much hand-wringing at the time. And just as investors in the Terraform Labs stablecoin product were not insured by any government assistance, the same was true for the Reserve Primary Funds money market.
  2. There will likely be several U.S. government investigations into and/or hearings around this recent debacle. For those opposing crypto, there will likely be calls to regulate the entire nascent blockchain industry to protect investors. Yet it is important to remember that the Reserve Primary Fund was regulated by the SEC as a mutual fund. That fact did not prevent the run on the fund. So, knee-jerk over-regulation is not a panacea.
  3. Yes, there should be some regulation of and a regulator for stablecoins and their issuers if not the SEC or CFTC, then perhaps the Treasury. The role these coins currently play for capital markets and financial transactions in the crypto ecosystem is enormous and important. Investors should feel that when they use a stablecoin, it is properly and fully collateralized and that they have clear, unequivocal redemption rights to the collateral if requested.
  4. Terraform Labs and its founder, Do Kwon, will face both criminal and civil investigations and proceedings stemming from the UST/LUNA collapse. Kwon will likely end up before criminal prosecutors both in South Korea, where he is located, and in the United States. There will be class actions filed. It will not be pretty, and the cases will drag on for years. Last fall, the SEC began investigations into another Terraform Labs project, Mirror Protocol. In February 2022, a judge in the Southern District of New York held that Terraform Labs and Kwon had to comply with the SECs investigative subpoenas in that matter. Now, with UST/LUNA, things will get much, much worse for both.
  5. It was reported a few days after the UST/LUNA run that Coinbase added a risk disclosure in its filings. The centralized exchange noted that its customers could be considered unsecured creditors in the event of its bankruptcy. This puts front and center what I wrote about last year: Coinbase and Gemini are not registered with the SEC as an exchange they are only licensed under New York states BitLicense regime. The significance is manifold. Most importantly, it means that customer accounts are not protected by SIPC for up to $500,000 in cash and securities and that neither exchange is subject to the SECs segregation rules for customer assets and funds.

What this all means is that you, and only you, are responsible for protecting your crypto assets and wealth. So, be careful and thoughtful where you choose to hold digital assets and when deciding whether it is wise to hold significant value in stablecoins.

 

Marc Powers is currently an adjunct professor at Florida International University College of Law, where he is teaching Blockchain & the Law and Fintech Law. He recently retired from practicing at an Am Law 100 law firm, where he built both its national securities litigation and regulatory enforcement practice team and its hedge fund industry practice. Marc started his legal career in the SECs Enforcement Division. During his 40 years in law, he was involved in representations including the Bernie Madoff Ponzi scheme, a recent presidential pardon and the Martha Stewart insider trading trial.

The opinions expressed are the authors alone and do not necessarily reflect the views of Cointelegraph nor Florida International University College of Law or its affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice.

 

 

 

 

 

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Analyst Issues ,000 Bitcoin Price Warning As Crypto Markets Retreat

Analyst Issues $80,000 Bitcoin Price Warning As Crypto Markets Retreat

The Moon ‘created’ his lavish reality… and says you can, too

Coin Telegraph
The Moon ‘created’ his lavish reality… and says you can, too
Coin Telegraph

In the space of a few short years, former high-school dropout cashier from Sweden Carl The Moon Runefelt has been transformed into a top crypto influencer who shares videos of his life of private jets, supercars and million-dollar watches that inspire his followers and annoy his critics.

Drawing from quantum physics, he has an explanation for his unlikely success the universe isnt real but is merely a construction of our minds in which we are able to rearrange reality to match our wildest dreams. Despite critics and controversy, Runefelt continues on a mission to inspire his followers to live their dreams.

Law of attraction

My parents told me that I should stop this bullshit. They said it was shady, Runefelt recalls.

Runefelt, 27, came across Bitcoin and cryptocurrency in 2018 while researching ways to make money to climb out of his lowly job as a cashier. He was quickly captivated, seeing large price swings and the fact that coins that had recently peaked at $20,000 were bought for mere dollars only a few years earlier. This path seemed promising, and he committed himself to learning.

 

 

The Moon
Can self-belief and determination take you to The Moon?

 

 

Runefelt already had a YouTube channel, and very much like Gajesh Naik, the 13-year-old star of a previous Journeys article, he soon began making videos to explain the things he had learned, with a tutorial on CoinMarketCaps site being among his first. People loved watching his videos, Runefelt says, and his fan base grew quickly. Soon enough, sponsors came knocking.

When you teach, you push yourself to learn. So, I started making videos, and my my channel grew very, very fast in the beginning, getting 1,000s of views per video.

First, the money started to trickle in via sponsorships and affiliate deals, where Runefelt would earn money whenever his viewers clicked a link or created an account on a certain crypto exchange or service. Though his parents were initially very worried, imploring him to finish his education or get a real job instead of sitting at the computer all day, their tune changed when Runefelt began making several thousands of dollars a month just doing YouTube and crypto far more than he earned at the supermarket, a job he quit some months later in November 2018.

 

 

 

 

Almost all the money Runefelt earned, he invested into cryptocurrencies and companies related to them. Though there have been many losses to scams on the way, overall, the approach has gone well, with Runefelt investing in 350 crypto startups and telling me he makes millions per month through liquidity pools and yield farming. While Cointelegraph cant confirm the numbers, he certainly has an extravagant lifestyle befitting the newly rich.

 

 

 

 

Today, Runefelt sees himself as more a businessman than an influencer, managing his empire through TheMoonGroup, which he founded in November 2021. One of his primary entrepreneurial projects is Kasta, a payments app that he co-founded in early 2021. Payments should be dead simple, like sending an SMS, Runefelt says.

Runefelt also has a non-crypto YouTube channel, called simply Carl Runefelt, which he describes as a lifestyle channel where he can be seen in videos such as BUYING MY DREAM BUGATTI, IM BUYING A MILLION DOLLAR JACOB WATCH!!!!! and I PAID $80,000 FOR THIS 8 HOUR PRIVATE JET FLIGHT!!! to name a few recent titles. These videos lack the affiliate links of his crypto channel and feature an energetic and excited Runefelt presenting his luxurious Dubai lifestyle to the outside world.

 

 

 

 

Why does Runefelt need to show off? Privately enjoying watches and sports cars and jets is one thing, but why post about them for everyone to see? What does he have to prove? Though it goes against everything his (and the authors) Nordic culture taught him, Runefelts answer has an undeniable logic.

The only thing I want to do is inspire people to become as wealthy as they possibly can just open their minds and show them that everything is possible. Stop limiting yourself and start realizing that you deserve your dream life.

It was only 3.5 years ago, after all, that Runefelt lived an entirely different life. Today, he sees himself as an example to other versions of his past self, who see little inspiration around them. I was watching similar videos when unsuccessful, he recalls, adding that if he could make it in such a short time, anyone can. The first step is to visualize goals and write them down.

But why should people desire and work toward wealth?

Its more about the freedom that you get from wealth. With freedom, I think comes happiness because you decide what you want to do with your own time. Time is the true wealth anyways. Money is just something that you use as a tool to free up your time. When you have all the time in the world, youre the wealthiest person in the world, Runefelt philosophizes. When he gets up in the morning, he does only the things he wants to who can argue with that?

The Secret

His philosophy, however, goes deeper and is weirder than that, with Runefelt using quantum physics to explain his outlook on life. The universe and everything in it, he insists, is merely a hologram. Its just an illusion. Its just energy. Vibrational energy and our consciousness is the only thing that really truly exists, he explains with complete assuredness. Following this, it is via consciousness that reality is materialized using the Law of Attraction. To create an exciting reality, one must have the audacity to dream big. I literally am shaping my reality because its all energy anyways. In quantum physics, we learn that everything that we perceive to be solid is in fact not solid, he declares.

 

 

Runefelt shares the secret with Cointelegraphs Elias Ahonen, who has manifested you to read this article and click subscribe. Source: TheMoonGroup

 

 

This can lead to big changes, Runefelt assures. Three years and BOOM, you can be anything you want a famous musician, a billionaire. It doesnt matter what you want to do, anything can be done with the right mindset, he insists.

You can materialize anything in this world whether its a Bugatti, whether its your dream life, your dream relationship, your dream business or your employees. Everything that I have today was intentionally put in place by me.

What Runefelt describes give or take some quantum mechanics appears exactly as the premise of The Secret, a 2006 Rhonda Byrne self-help bestseller, which claims that people can change their lives using thoughts. The idea is not new Byrne herself was inspired by The Science of Getting Rich, published in 1910. This Law of Attraction, which many consider a revival of ancient philosophies, comes from the New Thought spiritual movement based on the mid-19th century teachings of Phineas Quimby.

The Law of Attraction is, however, considered a pseudoscience for the simple reason that its effect cannot be scientifically proven due to survivorship bias and availability error, among other limitations. While many attribute their success to the system, there is no proof that it will work for everyone.

 

 

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Tricks of the trade

I dont like making those thumbnails, but if I dont, my channel dies, explains Runefelt, whose YouTube videos feature thumbnails with comically exaggerated, open-mouthed expressions and all-caps titles followed by a half-dozen exclamation or question marks. This approach clearly differentiates him from Nicholas Merten, another Journeys crypto YouTube star, who made it clear that the last thing youll find on my channel is me making a shock-face. This is something Runefelt acknowledges but explains that the YouTubers getting the most views all use clickbait, referring to peers such as MMCrypto and BitBoy Crypto.

 

 

When I make thumbnails and titles like this, I get always 50% more views, Runefelt explains. Source: YouTube

 

 

I study what I need to do dont hate the player, hate the game, he rationalizes, explaining that YouTubes algorithm favors highly emotional expressions, capital letters and attention-grabbing punctuation. If he were to instead make a video with a normal thumbnail and descriptive title, no one is watching it, even if it was the best video that month. Its very sad that the world works like that, but its just how it is, he admits.

Though Runefelt is adamant that YouTube is today just a hobby, his team continues to spend time getting the titles and thumbnails just right to maximize views. Sometimes, this means changing the titles after publication in order to increase clicks, which he says has caused some misunderstandings. We simply use whatever words are more likely to gain traction at any given time. The titles are meant to get clicks instead of serving as recommendations or predictions. The purpose is to actually get people to watch the video itself, he emphasizes.

He considers his Attention Deficit Disorder, which caused him to drop out of high school, an asset in his work today because when you are doing something you really, really like, focus becomes a superpower someone with ADD will have laser focus, he explains.

 

 

 

 

Though Runefelt has managed to channel a potential disadvantage into an advantage, his younger brother who suffers from Downs Syndrome and a myriad of other diseases, including two near misses with cancer, has been less lucky. His hospital journal is, like, its one of the biggest ones that doctors have ever seen, Runefelt describes, adding that seeing these struggles led me to start my charity where Im raising money for children with disabilities. Racing4Charity is done through his Formula Two racing team.

I am giving $30,000 myself in Bitcoin every race weekend, and if my driver, Ralph Boshung, wins a race, Im giving $100,000. Along with a large image of Runefelts face, the car also features a QR code for Bitcoin donations.

 

 

The Moon car, complete with an image of Runefelts CryptoPunk. Source: automobilsport.com

 

 

Breaking the Law of Jante

Runefelt grew up in Swedens capital of Stockholm, where he dropped out of high school due to an inability to concentrate because of his ADD. He describes the following years as ones of aimless floating and partying. Though he eventually settled into a job making $1,500 per month as a supermarket cashier, his parents remained worried about his future prospects. Runefelt was not satisfied and refused to accept his position in life.

I decided Im going to be rich; Im going to be successful; and Im going to shape my reality. Im going to live my dream life. I started basically visualizing my dream life.

Imagining himself driving a Ferrari instead of catching the train to work in the mornings, I said these positive mantras to myself every single day to condition my mind and my subconscious into actually believing that these things are true, he explains.

For the moment, they were patently false. I am happy. I am successful. I love myself. I love my life. Im living my dream life. My parents are proud of me. Im proud of myself, he lists. He even went through the motions of pretending to buy private jets and yachts, putting an image of a business jet as his phone background for encouragement. His peers couldnt understand his mindset.

 

 

TheMoonGroup has an office in Dubai Marina, where Runefelt manages his investments. Photo by Elias Ahonen

 

 

As he read more about wealth, Runefelt came to the view that the entire banking system was a big Ponzi scheme because central bankers are printing money out of thin air and then they have the audacity to charge interest on this money which doesnt even exist. At times, this inspired a certain nihilism to compete with his ambitions if the world was corrupt, why feel bad about doing poorly in life? Beginning to research alternatives to the stupid system, he first encountered narratives around precious metals, which inspired him to use a lions share of his monthly savings to buy silver and gold.

While these themes of dreaming big and distrusting the system are ones that American readers may find familiar and even unoriginal, it must be pointed out how culturally unconventional they are in his native Sweden. In fact, Runefelts behavior goes completely against The Law of Jante, a Nordic sociological term to denote a social attitude of disapproval toward expressions of individuality and personal success, whose overarching principle is that no one is to think themselves as better than others.

When I left Sweden, I had to give up 70% of everything I made so far with crypto, YouTube, and investments. Thats horrible I think taxes are a scam.

This, in part, explains the countrys high tax rates and the fact that tax records are public in the country. Instead of wishing for private jets, Swedish society expects people to find peace with their lot in life and place their trust in the system, something Runefelt refused to do. With cryptocurrency itself billed as trustless and beyond broken governments, it is easy to see how the message gains little transaction in the Nordic countries where trust and transparency are the default and material success is something to be understated.

Ill never move back, declares Runefelt, who moved to tax-free Dubai in 2020. People encourage success here in Sweden people dont like it so much.

 

 

 

 

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Analyst Issues ,000 Bitcoin Price Warning As Crypto Markets Retreat

Analyst Issues $80,000 Bitcoin Price Warning As Crypto Markets Retreat

6 Questions for Sonali Giovino of Defiyield

Coin Telegraph
6 Questions for Sonali Giovino of Defiyield
6 Questions For...

We ask the buidlers in the blockchain and cryptocurrency sector for their thoughts on the industry… and throw in a few random zingers to keep them on their toes!

 

This week, our 6 Questions go to Sonali Giovino, head of communications at Defiyield, a cross-chain asset management protocol that empowers users to be a part of the DeFi ecosystem.

Sonali Giovino has been working in the crypto space since 2017 when she began holding weekly educational workshops, which lead to public speaking events on cryptocurrency and blockchain and her production of Vancouvers first Blockchain Yacht Cruise Conference. She brings 20+ years of experience as a technical communicator to her position at Defiyield, previously holding roles in marketing, project management, business development and event coordination. She is passionate about growing the DeFi community and introducing others to asset management and has emerged as a recognizable female thought leader in the tech space as a result.

 

1 What is the main hurdle to mass adoption of blockchain technology?

I think the main hurdle to mass adoption of blockchain technology is that there are still so many people who dont understand what blockchain or DeFi is, how it works, and what benefits it can bring to our society. The more we can support the industry through education, the more widespread adoption can be. Thats one of the biggest reasons I got involved in the space and with Defiyield specifically as a main focus is consistently educating new and existing users. It is still early for blockchain, and I believe consistent, gradual growth over time will lead to a more rapid growth as people have a better understanding of the space. When the internet was first growing, only a few businesses and people were using it. Fast forward to the present and its rare to hear of someone who isnt using the internet for work, play, everything. With each passing year, we are seeing new developments in the crypto and blockchain space, and now some governments are even building their own digital currencies. Despite hurdles, blockchain technology is the future.

 

2 If you were investing in startup companies right now, what kind of blockchain-based business opportunity would catch your eye?

Projects that are able to integrate and offer a connected network of blockchain, protocol and investing opportunities consolidated into one place are definitely gaining a lot of attention. I would be drawn to projects that simplify the process for users. Some projects require users to bridge their networks and blockchains, but anything with one click or one move is the type of opportunity that would catch my eye. People want to invest in projects that can simplify action steps into one place. Easy, simple and less work so you can spend more energy on growing, learning and finding the best opportunities.

 

3 What does decentralization mean to you, and why is it important?

Decentralization gives people more control, and its an important freedom to not have a single entity, like banks or governments, controlling your assets. If something goes wrong with the bank or an institution has a single point of failure, it could affect several other systems in the banking process. In decentralized systems, however, even if one node goes down or if there is a failure in the blockchain, there are several other nodes leaving the transaction safe and unaffected. Decentralization truly puts more control and power back into the peoples hands where it belongs.

 

4 Which two superpowers would you most want to have, and how would you combine them for good or evil?

If I could have any two superpowers, I would want to utilize teleportation and super-human strength. I would fly around the world and between the planets to explore the universe and all the mystical elements it has to offer. Id be eager to learn from different civilizations, share knowledge, and maybe hang out with an alien or two.

 

5 Close your eyes and think of a happy place. What do you see?

When I close my eyes and think of a happy place, I see palm trees, ocean views and sunrises and sunsets that start and end my days. I am with family and friends, all engaging in meaningful conversations and enjoying memorable nights of laughter and joy. In my happy place, a beautiful white dog is running around the garden, and I see myself thinking out loud about all the items on my bucket list Im excited to knock off for that month and the next. I see myself unfolding into all the beautiful things this world and the relationships I carry with it have to offer me in every moment.

 

6 What is the book that influenced you the most? Why?

The Seat of the Soul by Gary Zukav has influenced me the most because it speaks to me about ways to understand consciousness, breaking through inner patterns, and the differences between the personality and the soul. I love how the book speaks to understanding emotions and thoughts, and how it explains that everything is energy, which if misaligned, causes us to manifest or create misalignments in our personal reality. This book showed me that we have the power to make change in our lives.

 

A wish for the young, ambitious blockchain community:

I wish the young, ambitious blockchain community nothing but success in learning, loving and growing within the space. The community has so much to offer and can be a place where anyone can feel confident in the control they have over their finances, assets, artwork, whatever blockchain-integrated area of life they enjoy.

Read more
Analyst Issues ,000 Bitcoin Price Warning As Crypto Markets Retreat

Analyst Issues $80,000 Bitcoin Price Warning As Crypto Markets Retreat

Terra collapsed because it used hubris for collateral — Knifefight

Coin Telegraph
Terra collapsed because it used hubris for collateral — Knifefight
Coin Telegraph

The rise and fall of the Terra blockchain and family of related tokens is both one of the most convoluted and one of the most important stories happening in crypto right now.

Assembled here is a plaintext explanation of what Terraform Labs built, why it got so big, why it imploded, what it means for the markets, and what you need to know to keep yourself safe from similar projects in the future.

What exactly is Terra?

Thats a great question, and we will answer it. But first, lets found a bank.

Our bank will do all the usual bank things like take deposits, pay interest, enable payments and make loans. Obviously, we could restrict ourselves to only loaning out money we actually have, but that is tedious and unprofitable. So, like any bank, we will make more loans than we receive in deposits and keep only a fraction of our customers’ deposits available as cash to withdraw when they need it. The amount we will keep available as cash is 0%.

It will be fine! Since we are loaning out 100% of our reserves, we will be very profitable; and since we are very profitable, we will be able to pay very high interest rates. No one will want to withdraw! If we ever do need money, we can sell stock in our very profitable bank. When demand for our deposits grows, we can use the new money to do stock buybacks. Since everyone is confident in the value of our stock, they will know we can back up our deposits; and since everyone is confident in the demand for our deposits, they will value our stock. Nothing could go wrong.

 

 

Knifefight
Knifefight on Terra’s tragedy and the lessons learned.

 

 

Okay. One thing that could go slightly wrong is that this is all illegal for a variety of reasons, so well need to run our bank on a blockchain and issue our deposits as stablecoins but thats fine. The difference between a bank deposit and a stablecoin is mostly regulatory optics.

Thats roughly the business model of the Terra ecosystem. Terra is a blockchain built by Terraform Labs that uses a stablecoin, TerraUSD (UST), and a reserve token, LUNA, to stabilize the stablecoin’s price. You can think of Terra as a digital bank, with UST representing deposits and LUNA representing ownership in the bank itself. Owning UST was like making a deposit in an uninsured bank offering high interest rates. Owning LUNA was like investing in one.

What makes a stablecoin stable?

Stablecoins themselves are not necessarily all that hard to build. There are a lot of them, and for the most part, they work in that they largely trade for around $1. But most surviving stablecoins are collateralized, meaning they represent a claim of some kind on a portfolio of assets somewhere backing the value of the coin. UST, on the other hand, was not backed by any independent collateral the only thing you could exchange it for was LUNA.

 

 

 

 

To keep the price of UST stable, the Terra protocol used a built-in exchange rate where anyone could exchange 1 UST for $1 worth of LUNA. When demand for UST exceeded its supply and price rose above $1, arbitrageurs could convert LUNA into UST at the contract and then sell it on the market for a profit. When demand for UST was too low, the same traders could do the opposite and buy cheap UST to convert into LUNA and sell at a profit. In a sense, the Terra protocol tried to eliminate price movements in UST by using the supply of LUNA as a shock absorber.

The trouble with this arrangement (and with algorithmic stablecoins generally) is that people tend to lose faith in the deposits (UST) and the collateral (LUNA) at the same time. When Terra most needed LUNA to prop up the value of UST, both were collapsing, and the result was like offering panicking customers in a bank run shares in the failing bank instead of cash.

You could convert your deposit into ownership of the bank, but you couldnt actually withdraw it because the bank itself didnt own anything at all.

 

 

Terra
Terra experienced a crisis of confidence.

 

 

A brief history of catastrophic failure

TerraUSD was not the first attempt at building an uncollateralized stablecoin. The streets of crypto are littered with the bodies of previous failures. Some prominent examples include Ampleforth’s AMPL, Empty Set Dollar, DeFiDollar, Neutrino USD, BitUSD, NuBits, IRON/TITAN, SafeCoin, CK USD, DigitalDollar and Basis Cash. (Remember that last one in particular for later).

These arrangements work in a bull market because it is always possible to lower the price of something by increasing the supply but they fall apart in bear markets because there is no equivalent rule that says reducing the supply of something will cause the price to go up. Reducing the supply of an asset nobody wants is like pushing a rope.

We have a word for that already

To bootstrap demand for UST, Terra paid a 20% interest rate to anyone who deposited it into its Anchor protocol. That also created demand for LUNA, as you could use it to create more UST. But since there was no revenue stream to pay for that interest, it was effectively paid for by diluting LUNA holders. In a sense, Terra used UST investors to pay LUNA investors and LUNA investors to pay Terra investors. In traditional finance, the term for that is “Ponzi scheme.”

Terras real innovation on the traditional Ponzi was splitting its targets into two symbiotic groups: a conservative group that wanted to minimize downside (UST) and an aggressive group that wanted to maximize upside (LUNA). Pairing Ponzi-like economics with a stablecoin let Terra market itself to a much wider range of investors, allowing it to grow much larger than previous crypto Ponzis.

The infamous Bitconnect Ponzi reached around $2.4 billion before imploding. PlusToken and OneCoin grew to about $3 billion and $4 billion, respectively, before their collapse. The Terra ecosystem peaked with LUNA at a $40 billion market cap and UST at $18 billion. By comparison, Bernie Madoffs decades-long Ponzi only cost investors somewhere between $12 billion and $20 billion. A relative bargain!

 

 

Ponzi
If it looks like a Ponzi and it pays 20% interest…

 

 

Hubris as collateral

Most Ponzis lie to their investors about how they work, but Terra didnt need to the system was already complex enough that most investors were relying on someone they trusted to evaluate the risks for them. Crypto industry insiders familiar with the history of algorithmic stablecoins were sounding the alarm, but they were drowned out by the long list of venture capitalists, influencer accounts and investment funds that had invested in Terra in some way.

Ponzi schemes, algorithmic stablecoins and free-floating fiat currencies are all backed in some sense by pure confidence and the key figures in the Terra ecosystem were all overflowing with confidence. Many retail investors simply trusted in the overwhelming confidence of leaders in the space, and the leaders drew their confidence from the rapid growth of retail investors.

Do Kwon, the charismatic, controversial founder of Terra, is somewhat famous (now infamous) for his brash dismissal of critics on Twitter. He made a $1 million personal bet on the success of LUNA back in March. He named his infant daughter “Luna.” And he was hardly alone consider billionaire Mike Novogratzs recent tattoo:


The history of algorithmic stablecoins and their danger is well known to industry insiders, and it certainly would have been obvious to Kwon. Remember Basis Cash from the above list of previously failed stablecoins? A few days after the Terra collapse, news broke that Kwon was one of the two anonymous founders of Basis Cash. Not only should Kwon have seen it coming, but he had done it before.

So Kwon and his major investors werent oblivious to the risks of algorithmic stablecoins, they were just cocky enough to think they could outrun them. The plan was for Terra to become so large and interwoven with the rest of the economy that it was literally too big to fail.

This was ambitious but not necessarily insane. The free-floating fiat currencies of the world (like the USD) maintain their value because they are tethered to a large and functioning economy where that money is useful. The USD is useful because everyone knows it will be useful because there are so many people who use it. If Terra could jump start their native economy (and bind it together with the rest of crypto) perhaps it could achieve that same self-fulfilling momentum.

 

 

 

 

The first step was to build unshakeable confidence in the peg. As part of that strategy the Luna Foundation Guard or LFG (a non-profit dedicated to LUNA) began accumulating a reserve of ~$3.5B worth of Bitcoin, partially to defend the UST peg but mostly to convince the market that it would never need to be defended. The ultimate goal was to become the largest holder of Bitcoin in the world, explicitly so that the failure of the UST peg would cause catastrophic Bitcoin sales and the failure of UST would become synonymous with the failure of crypto itself.

To raise the funds needed to buy that Bitcoin LFG could have sold LUNA, but selling large quantities of LUNA into the market would interfere with the growth narrative that fueled the whole economy. Instead of selling LUNA directly, LFG converted it into UST and traded that UST for Bitcoin. The bank of Terra had expanded its liabilities (UST) and lowered its collateral (LUNA). They had increased their leverage.

Slowly at first, then suddenly

In theory one reason an investor might hold UST would be to use it in the Terra DeFi ecosystem, but in practice in April ~72% of all UST was locked up in the Anchor protocol. To a first approximation the only thing anyone really wanted to do with UST was use it to earn more UST (and then eventually cash out).

The plan was to grow Terra like a traditional Silicon Valley startup by bootstrapping growth with an unsustainable subsidy but then slowly winding it down as the market matured. At the start of May Terra began reducing the interest rate paid out to Anchor deposits, which caused billions of dollars of UST to begin exiting Terra and putting pressure on the UST peg. At first the price slipped only a few cents below the target, but when it did not recover the market began to panic.

 

 

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At that point massive amounts of UST were sold into the market, perhaps by investors sincerely trying to escape their UST positions at any cost or perhaps by motivated attackers hoping to deliberately destabilize the peg. Either way the result was the same: the price of UST collapsed and the supply of LUNA exploded. The LFG tried to raise outside funds to rescue the peg but it was too late. The confidence that powered the whole system was gone.

Another thing that was gone was the ~$3.5B worth of Bitcoin LFG had raised to defend the UST peg. LFG claims the funds were spent defending the UST peg as intended, but they have not provided any kind of audit or proof. Given the amount of money involved and the lack of transparency people are understandably concerned that some insiders might have been given special opportunity to recover their investment while others were left to burn.

On May 16th Kwon announced a new plan to reboot the Terra blockchain with a forked copy of LUNA distributed to existing LUNA/UST holders and no stablecoin component. The price of both tokens stayed flat. Forking the Terra code is easy enough but recreating the confidence in Terra is not as easy.

 

 

 

 

Aftermath and Opportunity

The immediate destruction of wealth held in LUNA or UST is enormous enough but its only the beginning. Unlike the other ponzis above, the Terra blockchain was home to the third largest DeFi economy (after Ethereum and Solana), with a rich ecosystem of startups and decentralized applications building on top of it. Investment firms held UST and LUNA in their funds, dApps used them as loan collateral, DAOs kept them in their treasuries. The real damage is still unfolding.

Damage has been done as well to the publics understanding of the risks and opportunities of stablecoins and of crypto generally. Many will come away believing not just that Terra is a ponzi but that all stablecoins are or maybe even all cryptocurrencies. Thats an understandable confusion given how complex the actual mechanics of UST and LUNA are.

All of this is going to complicate the regulatory story for stablecoins and DeFi for years to come. Regulators are already using Terra as an argument for greater intervention. The SEC was already investigating Terraform Labs for unrelated securities violations, they will undoubtedly be opening an investigation into UST as well. Do Kwon has been sued for fraud in Korean courts and called to testify by the Korean parliament. More legal action is probably on the way.

 

 

 

 

Bitcoin on the other hand is looking surprisingly resilient. The Bitcoin economy is largely independent from the DeFi economy and sheltered from the contagion of the collapse of UST and LUNA. The price dipped as it weathered ~$3.5B of sustained selling while the Luna Foundation Guards reserve was liquidated but it has largely recovered since and in the process revealed a lot of deep pocketed buyers interested in accumulating at those prices. The collapse of Terra has mostly strengthened the case for owning Bitcoin.

How to spot a ponzi before they spot you

The lesson of Terra should be dont build an algorithmic stablecoin but of course the lesson that many people will actually take away is build your algorithmic stablecoin a little differently so no one recognizes it. Justin Sun of Tron is already building and marketing a Tron-based clone of Terra. As the laundry list of examples in the history section above shows, more attempts to build a financial perpetual motion machine are coming. To invest responsibly in the crypto space you need to learn to be able to identify them before they collapse.

 

 

 

 

The simplest way to spot a ponzi is to remember this simple rule: if you dont know where the yield comes from, you are the yield. Dont be intimidated by complexity you dont need to understand all the mechanics of a system in order to understand who is paying for it. Profit always comes from somewhere. If there isnt an obvious source of incoming revenue, the money is probably coming from incoming investors. Thats a ponzi scheme. Dont buy in even when the price is going up.

Knifefight is the author of the Something Interesting blog

 

 

 

 

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What really goes on at a crypto OTC desk?

Coin Telegraph
What really goes on at a crypto OTC desk?
Coin Telegraph

Over-the-counter, or OTC, trading refers to any trading that is not done via an automated exchange. What exactly is OTC trading? Who does it, and why? To learn more about what an OTC desk is and how these under the radar exchanges operate, Magazine spoke to a few insiders to get the scoop.

The most popular conception of OTC trading revolves around massive off-market deals, like when companies such as MicroStrategy make multimillion-dollar purchases using OTC desks run by the likes of Coinbase or Kraken.

OTC trading is, however, not the exclusive domain of the rich, as it can also refer to peer-to-peer platforms like LocalBitcoins, which has been helping individuals trade BTC both in-person and via bank transfer since 2013. Even some crypto ATMs can be categorized as OTC trading, as these transactions do not always clear on an exchange. In between these two are medium-sized regional OTC desks, which facilitate purchases and sales of crypto by both individuals and companies.

 

 

OTC desks
What really goes on behind the scenes at an OTC desk?

 

 

Going over-the-counter

Why do people seek out OTC deals in the first place when existing exchanges like Binance and Coinbase offer easy fiat on-ramps?

Amin Rad, CEO of Dubai-based OTC broker Crypto Desk, explains that this way of trading offers advantages for some people. He says there are only a few ways of converting fiat currency into cryptocurrency, highlighting three:

1. Credit and debit cards are a popular way for new users to purchase cryptocurrency via an exchange, but they come with high fees of up to 10%. However, many banks and credit card issuers still consider such transactions suspicious, locking or even closing accounts after learning the nature of the transactions. On the exchange side of things, the credit cards of certain countries including Russia, Kazakhstan and Ukraine are automatically rejected. A further limitation is that users cannot sell crypto in this way, only buy it, Rad adds, as it is usually impossible to withdraw money onto a credit card.

2. The second channel is purchasing through bank transfer, he says, which involves sending fiat to an exchanges bank account. Rad considers this problematic because many banks, in some countries more than others, dont want to be associated with cryptocurrency nor have their clients trade it. If you want to do a bank transfer, 99% of the time you will have to lie to the bank because otherwise, they will close the account, he says, with his views likely most applicable to his own region, the United Arab Emirates. [Editors note: Dont lie to your bank lest you end up like Peter McCormack.]

 

 

 

 

Banks that do tolerate transfers to cryptocurrency exchanges may still involve their compliance teams to ask detailed questions regarding the exact destination of funds and the reasoning behind crypto purchases. And when transfers do go through, they can take several days. Someone might try to wire money to an exchange on Monday to buy BTC at $30,000, only to watch it rise to $40,000 before the money arrives on Thursday.

3. OTC is the third method, allowing buyers and sellers to exchange directly or via a trading desk such as the one Rad operates. No credit cards are involved, and banks cannot easily determine that the funds sent to them are destined to be used for cryptocurrency. With immediate confirmations of receipt, there is no need to wait around for days and potentially miss an opportunity.

 

 

Amin Rad
Rad in his Dubai office.

 

 

A big driver of OTC is that it allows a buyer to deal with larger amounts of cryptocurrencies, such as 100 BTC from one seller at one agreed price, as compared with buying over an exchange, explains Jerry Tan, OTC payments manager at Singapore-based exchange XT, which operates an OTC desk.

From the perspective of whales, such as funds that deal in large sums of cryptocurrency, OTC desks are valuable due to their ability to conduct large trades without moving the market against them. This effect is known as slippage and occurs when large-scale buying causes prices to immediately rise before the targeted amount of cryptocurrency has been purchased, while selling causes it to fall before its all sold.

Odds are that a single seller in the order book is not able to transact such a large amount as 100 BTC. Hence, you will need to buy from multiple sellers at higher prices. This is where slippage from your initial desired price occurs.

Despite the many reasons to engage with OTC trading, there are risks, according to Victor Olmo, fund partner at NewTribe Capital. One of the most significant is counterparty risk the possibility of the other partys default before the fulfillment or expiration of a contract, he explains. Scams are another common pitfall, many of which were described in a recent Journeys in Blockchain article profiling Rad and his Crypto Desk OTC exchange.

 

 

Amin Rad
Rad told his story, and gave tips on avoiding crypto scams, in a recent Journeys in Blockchain article.

 

 

Who uses OTC exchanges like Crypto Desk?

Though Rads operations are local to the UAE, he says clients tend to fit into two major categories: Local buyers of cryptocurrency tend to represent traditional finance diversifying into the industry, while expat sellers already hold crypto and need to swap it for local currency in order to purchase real estate, cars and pay their living expenses in the UAE.

These expenses may even include the purchase of real property, in which case it is quite understandable that neither sellers nor buyers want to risk going through a traditional exchange and bank transfers, as banks may block, freeze or question large sums being withdrawn directly from crypto exchanges. Though his daily turnover is in the single-digit millions, it tends to consist of several much smaller OTC deals that are not above the means of fairly normal people many of whom do not want to risk trouble with their banks, which might block transfers between crypto exchanges.

 

 

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Differing regulations

The Dubai-based Crypto Desk is an example of a brokerage with a low regulatory threshold, as clients must only prove their identity and sign a declaration letter saying that they are not involved in terrorism, money laundering or trading with sanctioned countries. Once I obtain this from you, I am safe. Even if the government comes after you later, I can say I did my job. Rad says he is not required to report transactions, no matter their size, but he keeps records indefinitely.

When it comes to other OTC desks, regulations are usually on par with normal exchanges in terms of KYC identity requirements, though they tend to be less policed.

According to Panu Peltola, chief compliance officer of Finland-based LocalBitcoins, most regions in the world are tightening regulations. He cites Asia as having some of the most advanced regulations, followed by North America.

The EU is just planning more comprehensive regulation, he notes regarding proposed rules to flag all transactions over 1,000 euros from unhosted wallets any wallet whose private keys are not held by a centralized company like a crypto exchange or payment provider.

Global policymakers have taken note of the increasing volumes and adoption rates and are currently balancing innovation, growth and risks.

In the United States, all transactions above $10,000 involving cash must be separately reported to the Internal Revenue Service, regardless of whether an individual or financial institution is receiving the cash. This form requires the full personal information of whomever the cash was received from. Though only a minority of OTC deals involve physical cash, this $10,000 line in the sand, similar to the EUs proposed 1,000 euro limit, also marks the maximum limit after which financial institutions across the U.S. must report electronic money transfers. The real values of these sums are notably getting progressively smaller due to compounding inflation.

 

 

When cash changes hands, the IRS wants to know all about it! Source: IRS

 

 

The regulatory landscape in Asia, which has many more countries and lacks supranational centralized decision-making organs like the EU, appears more fragmented and difficult to describe, with each country having its own existing and forthcoming regulatory procedures. Mainland China, a country with strict capital controls, is perhaps the most restrictive, with its ambition to completely ban trading and mining. In October 2021, Cointelegraph spoke with Henri Arslanian, PwC crypto lead and former chairman of the FinTech Association of Hong Kong, regarding a flood of brick-and-mortar OTC shops, many of which are located in touristic areas to cater to visitors from the mainland.

One could assume that if mainland Chinese tourists visit Hong Kong, nothing will stop them from buying crypto at these OTC shops.

But even Hong Kong, a place once considered among the worlds most financially open, is on the cusp of banning the retail trading of cryptocurrency, which would theoretically include OTC, likely sending OTC shops underground.

Singapore recently introduced stricter measures, according to Tan from XT. Companies that wish to operate cryptocurrency trading and OTC services to Singaporeans have to obtain a license from the Payment Services Act, he explains, adding that exchanges without the PSA license are not allowed to offer services to Singaporeans. In addition, all Bitcoin ATMs on the island were ordered to shut down earlier this year.

 

 

 

 

Talking money

So, how do OTC desks make money? With spread, in a way comparable to normal exchanges. While popular exchanges might charge 0.25% on transactions, it is common for OTC desks to take well above 1% in commission. Back in 2017, 2%3% margins were common, Rad says.

Fundamentally, an OTC desk operates either by matching buyers and sellers or by fulfilling orders automatically from its own liquidity pool, with the former carrying less overhead and risks for the exchange and the latter allowing for instant transactions. Thats why clients prefer to deal with me, Rad says regarding his desks advantage in having its own pool of funds that allow for reliable transactions.

 

 

OTC desks
OTC desks provide a way to avoid slippage on exchanges.

 

 

Another differentiator between desks is whether they trade fiat for cryptocurrencies like Bitcoin or Ether or only for stablecoins like USDT or USDC. In recent times, there has been a trend toward stablecoins because they give buyers greater flexibility to exchange into more volatile cryptocurrencies when they see fit. Some exchanges such as Rads Crypto Desk deal exclusively with stablecoins, further reducing the risks of maintaining a liquidity pool.

Rad is confident that the OTC market will flourish, both among retail and institutional clients, due to its more direct, intimate nature when compared with larger exchanges. For many, dealing person-to-person is more comfortable than wiring money to an exchange overseas, especially when it comes to making large, one-off transactions.

Local [OTC] exchanges will control the local markets because they have better knowledge about their own market they have better compliance solutions and better licensing solutions.

 

 

 

 

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6 Questions for Dominik Schiener of the Iota Foundation

Coin Telegraph
6 Questions for Dominik Schiener of the Iota Foundation
6 Questions For...

We ask the buidlers in the blockchain and cryptocurrency sector for their thoughts on the industry… and throw in a few random zingers to keep them on their toes!

 

This week, our 6 Questions go to Dominik Schiener, a co-founder of the Iota Foundation, a nonprofit organization, and the creator of the Tangle, a permissionless, multi-dimensional distributed ledger designed as a foundation of a global protocol for all things connected.

Dominik Schiener is a co-founder and the chairman of the Iota Foundation, one of the largest and greenest cryptocurrency ecosystems in the world. The Iota Foundations mission is to support the research and development of new distributed ledger technologies, including the Iota Tangle. Raised in Italy, Dominik oversees partnerships and the overall realization of the projects vision toward the machine economy. He is a strong advocate for research-based, community-vetted, transparent developments in the cryptocurrency sector.

 

1 If you were investing in startup companies right now, what kind of blockchain-based business opportunity would catch your eye?

Id go all-in on startups focused on the intersection of Web2 and Web3. Were in a transitional period thats going to last for a long time, and embracing this ongoing transition is smart from both a financial and technical point of view. Companies helping the centralized world move into the decentralized one and vice versa are the present and the future. This includes crypto banking, fiat gateways, NFT marketplaces, and so on. The biggest barriers to adoption are user experience, not scaling. Focusing on and investing in UX is the road to mass adoption and to the new world of Web3.

2 Which people do you find most inspiring, most interesting, and most fun in this space?

Im drawn to people who have endured and risen above hardship in their personal and professional lives and have become more capable leaders as a result. Naturally, Im inspired by people like Vitalik Buterin within the crypto space, but I also admire Ray Dalio, whose innovations and thinking transformed traditional finance long before crypto even existed.

3 What is the single most innovative use case for blockchain youve ever seen? It may not be the one likeliest to succeed!

Im increasingly enthusiastic about algorithmic stablecoins. Im fascinated by their mechanics and their possibilities. They are, of course, highly experimental, and some may just fail, causing investors to lose millions. Even so, these stablecoins have enormous potential to onboard retail investors and offer a new way to transact. I believe they are crucial to mainstream adoption, so I certainly hope theyre likely to succeed.

4 Whats the most interesting place youve ever visited, and why?

Im a mountain guy. I grew up in the Alps, so Im probably a little biased. My favorite places are remote areas in the mountains, where youre far from civilization and can really take a moment to step back, reflect, and appreciate the beauty of our world. That kind of tranquility is the best way to take a break from the crypto madness. I love being in a place where the only reminder of the modern world is the occasional airplane overhead. I love Sdtirol [in northern Italy] in particular.

5 Which movie alternate universe would you most like to live in, and why?

Im going to go with Avatar. Its such a stunningly gorgeous and fully realized world. I love the look of that movie and the deep importance it places on the interconnectedness of nature. If Im a nature guy on Earth, I figure Im a nature guy on other planets, too. Living in an alternate reality and becoming part of the Navi tribe sounds like an amazing exploration adventure.

 

6 What should we be teaching our kids?

Financial literacy still isnt the priority it should be within education, and the sooner that changes, the better. I also think there needs to be a bigger emphasis on philosophy and, more specifically, ethics. Science and technology are developing more rapidly than ever before in human history, and we simply cant have a generation that is unable to think critically about the human element of these developments. We know about the dangers of technical advancement without ethical boundaries there are countless dystopian movies about exactly this! and its importance cannot be understated.

 

A wish for the young, ambitious blockchain community:

That we never forget why were here. Its not about getting rich quick. Its about removing centralization and abuses of power to lead billions of people to prosperity and abundance through decentralized technologies.

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6 Questions for Ming Duan of Umee

Coin Telegraph
6 Questions for Ming Duan of Umee
6 Questions For...

We ask the buidlers in the blockchain and cryptocurrency sector for their thoughts on the industry… and throw in a few random zingers to keep them on their toes!

 

This week, our 6 Questions go to Ming Duan, the co-founder and chief operating officer of Umee, a cross-chain DeFi hub that allows decentralized interactions between different blockchains.

Ming Duans knowledge of the crypto and blockchain world goes back to 2014 when she initially learned about the emerging industry through the first-ever blockchain course taught at a business school. Since then, she has developed extensive crypto investment knowledge through hands-on practice. Duan brings unique insight to Umee, having experience as both a crypto investor and builder in the ecosystem. Her goal for Umee is to build a platform where individuals can interact with different tokens and chains all in one place. While propelling Umee forward, Duan leads crypto investments at Argonautic Ventures and Fenbushi Capital. She graduated from Duke University and received her Master of Business Administration degree in 2016.

 

1 What is the main hurdle to mass adoption of blockchain technology?

Simply put, blockchain technology is too hard to use.

When it comes to mass adoption, its really about comparing what blockchain technology can bring to users through existing solutions. The challenge is that, most of the time, our existing solutions work. When wearing my investors hat on a new project, I always like to ask about whether blockchain is really necessary to achieve the goal for the product. From a users perspective, if the target audience is not already in Web3, blockchain is oftentimes not needed because a centralized solution is already faster, cheaper and easier to use.

So, why are we here? Well, its because of the potential that blockchain-based applications can be as fast, cheap and easy to use as existing solutions while creating new solutions: new ways of looking at economic coordination, new ways of looking at finance, from both an open-source as well as open-access perspective. There is also that little extra element of being decentralized. Were getting there.

 

2 From smart contracts to DApps to NFTs to DeFi, we have seen so many of the next killer apps for crypto, but none have really taken off just yet. What will stick?

The idea of a decentralized digital world will stick. Its too early to say what will, or what has already, taken off when it comes to crypto experiments. Crypto follows market cycles, and it takes time for people to understand this new industry. We will be seeing new ideas and new experiments, and a lot of them will fail, but some of them will leave an impression on people that will push it to evolve into something new. This process is completely expected and healthy. Crypto is both a technological and social paradigm shift. We cant get it right in one attempt and we have the luxury of a promising future to make trial and error. The promise of such an uncoordinated and distributed mechanism to run a digital world will stick in individuals heads. It will spur questions designed to challenge the status quo, and attract more talent to join the space and build out this decentralized digital future.

 

3 What are the top five Crypto Twitter feeds you cant do without, and why?

Umee_CrossChain needs no explanation its our bread and butter! I find such joy and excitement when seeing Umees latest updates via our Twitter feed. Plus, just seeing Adora the octopuss smiley face every now and then makes everyone feel happy, right?

Zhu Su is your cheatsheet to being a crypto insider. He helps you zoom out and understand how crypto fits into the broader social and economic picture while paying attention to the macro trends. Oftentimes in the crypto space, we get too deep into the weeds and forget about the bigger picture, but grasping the bigger picture is what sets the foundation for solid long-term success.

Samczsun is the reason why everyone should hold a healthy sense of paranoia when it comes to software security in crypto. His habit of generously sharing security vulnerability and hack reviews is extremely beneficial even to non-technical readers.

If you are looking for an alpha or trying to land on the right side of the bell curve of the crypto crowd, I would recommend following ASvanevik. He is a founder as well as a talented data scientist who has shed much-needed light on the dark forest of blockchain data. Alex has Ieft me with a lasting impression since the very first time we spoke.

Bond_dog_51 is my partner in crypto, so his Twitter feed is an important follow for me. As the chief executive office of Umee, we work side by side to make this platform all it can be. I enjoy following his unique insight on the industry through his feed, and I love reading his retweets.

And a sixth one, just for fun! Weird_AnimaIs is one of the few Twitter accounts I follow that have nothing to do with crypto. It makes me smile and take a moment to appreciate the power of mother nature and how things are all interconnected. Im a big fan of how nature follows the same patterns in an interesting and transcendent way.

 

4 Which two superpowers would you most want to have, and how would you combine them for good or evil?

I would love to have the power to freeze time, like Hermione in Harry Potter! We crypto people always joke about how it already feels like one month is equivalent to years in crypto time with exciting, new things happening every day and so much information to ingest. Im a very slow reader and like to spend time understanding the ins and outs of a topic before moving on to the next. Having 200 tabs open on my browser is inevitable because I dont have enough time to process everything! How about a little one-hour time freeze everyday? Ill be able to save my Chrome from burning down too quickly.

Alternatively, I would also love to have the superpower to clone myself not once, but twice! One of me would attend all the crypto conferences and meetups, while the other keeps track of the latest news and trends in the space. The third Ming would focus solely on shipping and building!

 

5 Whats the thing on your bucket list that is most unlikely to happen?

Im afraid itll be the one where I complete a part-time program at a culinary school. Im a big foodie. I started attempting to cook on the stove when I was six years old and I almost applied to a culinary school for college, but I gave in to my mom and studied finance instead. Reading and practicing different recipes has been one of the most relaxing activities when taking a break from living in the limitless crypto world. Remember Monica from Friends? I imagine myself to be quite like her if I actually accomplished my dream of becoming a chef. Although crypto never disappoints in 2020, I happily indulged in all the food coins out there. Food was actually a large inspiration for Umee, as the word in Japanese means Delicious! Team Umee cant get enough of the food coin degen culture.

 

6 Where do you stand on alien intelligence and the existence of life elsewhere in the universe?

Aliens absolutely exist! What we currently know about the universe is very limited, almost similar to how early we are in crypto adoption. The idea that life, or whatever form of intelligence, exists somewhere out there is really exciting. Though Im a fan of The Three-Body Problem, Id like to think that we should be cautious when reaching out and looking for aliens.

 

A wish for the young, ambitious blockchain community:

I wish and hope to see more women in the crypto world use their voices. There is a diversity problem, but it is important to highlight that women are already in the space and are using their intelligence to propel the crypto industry forward. Lets see them shine!

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Analyst Issues ,000 Bitcoin Price Warning As Crypto Markets Retreat

Analyst Issues $80,000 Bitcoin Price Warning As Crypto Markets Retreat

6 Questions for Dawn Newton of Netki

Coin Telegraph
6 Questions for Dawn Newton of Netki
6 Questions For...

We ask the buidlers in the blockchain and cryptocurrency sector for their thoughts on the industry… and throw in a few random zingers to keep them on their toes!

 

This week, our 6 Questions go to Dawn Newton, co-founder and chief operating officer of Netki a remote digital identity verification technology provider intended to facilitate compliance with KYC/AML regulations.

Dawn Newton is the chief operating officer and co-founder of Netki, the Know Your Customer and Anti-Money Laundering technology provider purpose-built for blockchain. Dawns work is driven by her desire to increase global access to crypto assets in a sustainable, secure and equitable manner. At Netki, Dawn has contributed to the development of OnboardID, which facilitates identity verification and onboarding for custodial wallets, and TransactID, which is the only fully compliant solution to Financial Action Task Force Travel Rule regulations.

With 30 years of experience managing technical teams and growing innovative companies, Dawn has proven to be a premier operations executive at the forefront of emerging technology industries. From the early days of the internet to the booming blockchain industry, Dawns work has had a formative effect on todays leading tech companies.

 

1 If you were investing in startup companies right now, what kind of blockchain-based business opportunity would catch your eye?

For me, I would be looking at applications that impact as broad of a base of people as possible, preferably from an inclusion aspect. Projects that allow new communities to connect, create and earn are ultimately the ones that will have the most impact and, thus, create the most value in the world.

2 What is the single most innovative use case for blockchain youve ever seen? It may not be the one likeliest to succeed!

The most innovative use case to me continues to be the first one people talked about in the early Bitcoin days. Everyone on the planet (who has internet access) has the ability to participate in a global financial system that is owned by no government.

It is an extremely hard endeavor to tackle, and I am proud that Netki was a part of it by onboarding the first nation to the Bitcoin blockchain. Giving 4 million people the ability to transact and receive funds without exorbitant money transmitter fees makes my heart sing!

3 When you tell people youre in the blockchain industry, how do they react?

For non-technical people, their initial reaction used to be: OMG isnt that all scammers? Thank goodness that is happening less and less. I have been working in tech innovation for more than 30 years, and as a result, as interest in crypto has grown, many of my friends and family have come to me for advice or to better understand the ecosystem.

That curiosity dominates most of the conversations that I have today, although I do still run into the occasional person who gets all of their information about crypto from Elizabeth Warren. The conversations with those people definitely take a little more effort to untangle all of the misleading statements theyve been fed. Overall, more and more people are starting to get curious about it, and that is how we change things!

4 Tell us about a hidden talent and give us a link to prove it!

My cooking skills are out of this world (pun intended re: the last question). I graduated from Le Cordon Bleu and trained in Italy, Japan and the United States under several Michelin Star chefs. Wanna take your chocolate chip cookie game to the next level?

5 Close your eyes and think of a happy place. What do you see?

Easy, a beach with black volcanic sand in El Salvador, great waves, great food purchased using Bitcoin, of course and great people.

6 Where do you stand on alien intelligence and the existence of life elsewhere in the universe?

I have no opinion, as I am not an expert in the field, but how amazing would it be to have another life out there and for us to be able to explore that one day in the future!? I grew up watching the original Star Trek series and absolutely loved it. Imagine my surprise years later when I meet the real-life Seven of Nine [from Star Trek: Voyager], Jeri Ryan, while cooking together at a restaurant in LA, and she becomes my best friend. While I wouldnt look forward to an encounter with her as a Borg in real life, I think it would be amazing to be a part of a team whose mission was to seek out new life and new civilizations!

A wish for the young, ambitious blockchain community:

My one wish is WAGMI, and where we wind up will be spectacular!

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Analyst Issues ,000 Bitcoin Price Warning As Crypto Markets Retreat

Analyst Issues $80,000 Bitcoin Price Warning As Crypto Markets Retreat

Ralf Glabischnig on Crypto Valley and the Crypto Oasis

Coin Telegraph
Ralf Glabischnig on Crypto Valley and the Crypto Oasis
Coin Telegraph

Having supported Zugs Crypto Valley in the early days and founded Crypto Oasis in Dubai to serve as blockchain innovations hubs with regulatory certainty, Ralf Glabischnig is practically a node of the blockchain industry.

When Bitcoin companies began pouring into his small town in Switzerland in 2013, Ralf Glabischnig was an IT consultant turned entrepreneur running a coworking space. It helped turn the town into ground zero for some of the earliest crypto companies, the Ethereum Foundation among them.

Today, Glabischnig wears many hats, working across timezones to help build both Switzerland and the United Arab Emirates into regional powerhouses of the blockchain revolution. He holds decentralization dear to his heart of regulations, companies and power which he hopes will create an increasingly heavy counterweight to the powers that be.

 

 

Bitcoin citadels
Ralf Glabischnig works across timezones to transform Switzerland and the UAE into blockchain powerhouses.

 

 

Dubai

In many ways, Glabischnig sees places like Dubai and Zug as the long-foretold Bitcoin citadels of blockchain legend secure cities catering to the nouveau riche of cryptocurrency.

A few spots worldwide will attract the people who can afford it because its safe for their family and those people bring the business.

When it comes to Dubai as an emerging citadel of blockchain innovation, there is every reason to be optimistic. Last year, Glabischnig set a seemingly bold goal to see 1,000 blockchain companies in the UAE by the end of 2022 a 90% increase in one year but he now expects the number to be reached by summer. By comparison, Switzerland had 1,100 companies in 2021, after six years of being known as the Crypto Valley.

Glabischnig first visited Dubai in 1998. He recalls seeing the five- and six-story buildings going up in its internet and Media City district and wondering who would ever use them because no one was here. Hes been coming back annually since the early 2010s, now living between Switzerland and the UAE.

Switzerland has decentralization in its DNA, he says, explaining that tax structures are made locally, and the 26 Cantons administrative districts compete with one another to attract business. The consensus mechanism in Switzerland is very similar to how a decision is made in a blockchain network, he explains.

 

 

The DMCC Crypto Centre sits among the top floors of Almas Tower in Dubais Jumeirah Lakes Towers district, blocks away from journalist Elias Ahonens home. Photo by Elias Ahonen.

 

 

People see an overnight success in Dubai, but even an overnight success needs a few years of preparation, he adds.

Glabischnig, who has three children, explains that Switzerland and the Middle East have something in common security. In Dubai, you see people using their wallet to reserve a table while they go buy coffee you cant do that elsewhere, not even in Switzerland, he says.

 

 

 

 

There is a difference, however, with the inherent safety of Swiss society coming bottom-up from the grassroots level, whereas in the Middle East, it is derived from the top-down via strict laws and advanced surveillance. Integration and bureaucracy, however, can be particularly difficult for foreigners coming to Switzerland, while Dubai accepts all nationalities, and almost anyone can simply pay for a visa, he notes.

Seeing the city as a ripe cradle for innovation, Glabischnig began looking for partners in the Dubai blockchain community in 2016. He envisioned a hub where everyone comes together from the industry and says that Marwan Al Zarouni, now the head of the Dubai Blockchain Center, and Saed Al Darmaki, CEO of Sheesha Finance, were early participants in the local crypto scene.

We want to create a soccer field where the players congregate then we can see which players are good, which to invest in, and which to avoid because they are playing fouls.

Headquartered on one of the highest floors of the Almas Tower, the DMCC Crypto Center plays host to nearly 300 blockchain companies. For Glabischnig, it is the beating heart of the Crypto Oasis.

Glabischnig explains that while the idea of Crypto Valley encompasses both Switzerland and Lichtenstein with Zug as its heart, the Crypto Oasis consists of the entire Middle East, with Dubai at its center. And the very heart is DMCC with over 280 companies, but I believe it will grow out of Dubai and into other countries here like Saudi Arabia and Bahrain, he adds excitedly.

The DMCC, or Dubai Multi Commodities Centre, is a free zone. This means that it exists under special legislation, with companies incorporated there enjoying unique regulations and special treatment, including 0% corporate tax. With crypto as its newest field, the DMCC has a long history as a global hotspot for companies trading gold, coffee and diamonds between the East and the West.

 

 

The DMCC Crypto Center provides many incentives for companies incorporating there. Source: DMCC

 

 

One factor influencing Dubais success in attracting new companies, according to Glabischnig, has been its soft response to the pandemic compared to peers such as Singapore or Hong Kong, which all but shut down for months on end. When you own the infrastructure, like Dubai owns the hotels, the airlines, the shopping malls and so on, then you think twice if you close it down, he spells out.

 

 

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Swiss time

Glabischnig lived in Germany for much of his career, during which he worked as a software consultant with consulting firms such as Accenture. In 2005, he accepted a job in Switzerland in order to gain experience as a project manager, moving to a small town with a beautiful lake called Zug. Glabischnig chose the city which he describes as a tax haven because it was halfway between his head office in Zurich and a major client in Lucerne. With his low salary, the tax rate did not move the dial, however.

In 2013, Bitcoin companies such as Bitcoin Suisse and Monetas began setting up in Zug owing to its regulatory flexibility. Back in the 1970s, Glabischnig explains, Zug started to grow wealthy due to the commodities business initiated by controversial Glencore entrepreneur Marc Rich, who was once indicted by United States authorities for breaking an embargo on Iranian oil. His business brought oil trading and even blood diamonds into the towns economy, he notes, and Zug has been open enough to give them space an openness that extended to Bitcoin, which, in 2013, still held a difficult reputation as a currency of the illegal drug trade.

 

 

A view of Zug. Source: PeakVisor

 

 

A big step in Zug becoming Crypto Valley was the Ethereum Foundation forming in Zug, he reasons, referring to the group headed by Vitalik Buterin, who later received an honorary doctorate from the nearby University of Basel. The idea of organizing the project as a foundation to serve as Ethereums global headquarters came from lawyer Luka Mller, a friend.

Mller had the idea to use the foundation system of Switzerland for blockchain projects, especially for layer-1 projects. I think this is the reason why we see a lot of the layer-1 blockchains set up in Switzerland as foundations, Glabischnig explains, adding that Mller was paid in ETH for the assistance he provided in 2014.

In 2014, Glabischnig and his business partner Marco Bumbacher created the Lakeside Business Center, a coworking space in the center of Zug. As the city gained a reputation as a blockchain hub, people started knocking on the door, asking if there were crypto companies here. Seeing the demand was there, Glabischnig decided to put together Crypto Valley Labs, a dedicated space for the new industry helping blockchain startups incorporate and settle into the Swiss surroundings.

We have not been the early innovators we have been the supporters of the innovators.

Crypto Valley

Before long, he became a founding member of the Crypto Valley Association, a local government initiative to promote the Canton of Zug as a node of the burgeoning global industry and the Swiss Blockchain Federation, which has similar aims for the country at large.

He played a key role in organizing a blockchain competition with a $100,000 prize, each year in a different category like banking, real estate, and insurance with related companies invited to join as sponsors and judges. We learned what the ideas in the blockchain space are through the contest, Glabischnig recounts, explaining that he went on to create CV VC (Crypto Valley Venture Capital) to strategically invest in the industry.

We saw that there is something else to invest in than just equity there are these tokens, and we began investing in small amounts.

In 2017, these contests evolved into Blockchain Summit Crypto Valley, the first of its kind in Switzerland. This being the time of the ICO hype, Glabischnig recalls that not only did participants pay to attend, but companies also paid to exhibit and reserve speaker slots, which did not quite sit right with him. Everyone was paying to be at these events this was a sign of big hype, he reasons.

With hype came opportunity. The years that followed saw him play an increasingly influential role not only in organizing the industry from afar but also in being an entrepreneur. He is a founder and remains on the boards of ProofX, Inapay, GenTwo Digital and Tokengate and serves as a managing partner of Inacta. Glabischnigs workdays span 18 hours, he tells me.

 

 

 

 

The internet era

Though Glabischnig came from what he describes as simple family circumstances in Austria, he was given one luxury: an Amigo 500 computer, about which he had been reading for months to the extent that he knew everything in detail before even opening the box. He put his skills to use in 1993, aged 16, with a business of creating flyers and later websites.

In 1995, he went to technical school to study software development and economics, the former thanks to his passions and experience, and the latter because he wanted to understand how to reach economic success beyond his childhood environment. I needed a keyboard, he notes, due to his bad handwriting. In those days, he describes, the internet was very slow, and one had to dial in using special hardware a modem. Back then, people were still figuring out what the internet could be used for. The first thing we did was download pictures of Samantha Fox, Glabischnig recalls of his early activities online.

I came to the first internet era, and I like to compare this to the blockchain era today.

Glabischnigs career began with a very boring problem the year-2000 problem at various banks and insurance companies, as he recounts his first job as a software developer at a consulting company. This problem, also known as Y2K, came about as the turn of the millennium approached, and computer programs were not configured to count years beyond 1999, leading to fears of a societal meltdown.

 

 

Glabischnig at the DMCC Crypto Center. Photo by Elias Ahonen

 

 

He soon began working on optimizing data transfers between organizations, including with a teledata system by which companies could automatically exchange information with the Swiss government. What interested Glabischnig about B2B data exchange at the turn of the millennium is also what interests me today in the blockchain space over 20 years later. He sees this trend as the Internet of Value. While the Internet of Things involves all types of items connecting to the internet, the Internet of Value means that we are putting every object that has value on the blockchain, he says with confidence. This might well mean a tokenization of everything.

Having moved away from the consulting world, Glabischnig is more fulfilled by what he calls venture building, something hes been able to take part in as part of his venture capital role. In IT consulting, you give advice and get paid, and if the customer isnt doing what you told them to, you dont get to wrestle, he says with a laugh, as he goes on to elaborate:

Im always very open to invite people to work together, and I try to make small organizations because he finds companies of around 20 people to be nimble, effective and a decentralizing counterbalance to the giants of Silicon Valley.

I dont like the centralization of power in Silicon Valley. Thats the reason I dedicate my time to building Crypto Valley and Crypto Oasis to bring some of it back.

 

 

 

 

Read more
Analyst Issues ,000 Bitcoin Price Warning As Crypto Markets Retreat

Analyst Issues $80,000 Bitcoin Price Warning As Crypto Markets Retreat

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