More details emerge this week about the Bitfinex/Tether situation, showing why it’s actually a collection of much less well-known companies and people that are at the center of this mystery. One observation: the amounts of money involved here surpass what was at stake in Mt. Gox, and while, yes, other factors are different as well, it is notable that the markets haven’t reacted more negatively. Plus, more details emerge about Facebook’s token, which could take on all kinds of uses. And it seems that I wasn’t the only one trying to compare and contrast Cosmos and Polkadot.
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This Week’s Crypto News…
Facebook’s crypto plans are shaping up, and it’s not hard to see how this could have all sorts of traditional financial services and tech companies and emerging crypto projects pretty nervous. “If it succeeds, the project threatens the card networks’ dominance over global payments. Facebook comes armed with more than 1.5 billion daily users, many of them in developing countries where social-media sites provide the backbone of internet commerce,” writes the WSJ.
After being the subject of rumors for so long, Tether, it turned out, had actually been fully backed, and that’s what enabled it to lend hundreds of millions to Bitfinex. How did Bitfinex/Tether get itself into this mess? Partly negligence — specifically, not signing a contract with Crypto Capital, the company that has lost control of Bitfinex’s funds — and partly lack of transparency toward Tether customers, which is what the New York Attorney General’s office dinged Bitfinex/Tether’s parent company iFinex for.
Listen to this week’s Unconfirmed for the lowdown on the latest developments, check out Bloomberg’s story on Reginald Fowler, and click the link above for a forgiving tweet storm on the subject, plus these tweets here, here and here for less forgiving ones.
The Block’s Ryan Todd based his estimate on Cash’s reported $65.5 million in sales.
Placeholder VC’s Chris Burniske continues his deep analysis on how to value crypto networks, defining new categories and coming up with alternate ways to value them based on the dynamics of the system. This paper should appeal in particular to those who are following the generalized mining/staking trend.
“My hope is that in elucidating these differences in value capture and quantification, cryptofolk stop thinking everything is zero-sum, which should lead to less bickering, more building, and better analysis. We are going to see massive heterogeneity in the types of cryptoassets that are created, with permutations falling across all three superclasses of assets. This is the land of programmable value, after all, and it is going to take share from the entire existing world of value, while also expanding (and maybe even redefining) it.”
Everyone’s been wondering how Cosmos and Polkadot differ, including myself, as I was researching this week’s episode. This is one of the most comprehensive analyses yet. Click here for the tl;dr Twitter version, plus Linda Xie’s take.
Bakkt COO Adam White isn’t the first of my sources to compare security of crypto assets to aerospace engineering and security. In this post, he reveals the firm is applying to be a trust company and thereby become a qualified custodian, outlines its security procedures and announces it has acquired Digital Asset Custody Company (disclosure: a previous sponsor).
Elon Musk tweets “Ethereum,” (though whether or not that was positive for the crypto community is not clear), Vitalik invites him to DevCon V and then Elon asks him what should be developed on Ethereum. #BUIDLERs may take an interest in Vitalik’s answers.
I was 😂 dying 😂 laughing 😂 over this satire, which pokes fun at everyone — Tether for running a fractional reserve, the regulators for going after them for running a fractional reserve when the banking system is even less fully backed, and, of course, Puertopia’s Brock Pierce.