Why the United States Needs Blockchain for Relief Packages


It seems like only yesterday people were tepidly excited about receiving a $1,200 check from the U.S. government to lessen the hardships of stay-at-home orders and pandemic-induced loss of jobs. However, rent is due today. Grocery bills for June have yet to rack up. That $1,200, regardless of how one tried to stretch it, is either running dangerously low if it hasn’t completely evaporated already.

Talks of another (few) rounds of stimulus checks have already been circling political circles, but who’s to say that future economic stimulus packages are going to find their way to the hands of those most in need? 

Over 60 million Americans haven’t seen a dime of CARES money, and nearly 40 million Americans are unemployed. Some economic models forecast American unemployment to be around 15 percent in 2021, and this figure only counts individuals that have actively filed for unemployment.

Brad Robertson, the Founder and CEO of Polyient Labs, a blockchain incubator and Polyient Games, a blockchain gaming ecosystem, argues that blockchain needs to be used to guarantee the delivery of future stimulus cash.

We got the chance to connect with Brad to discuss blockchain for relief packages.


What needs to happen at an institutional level to implement blockchain-based solutions?

There was a massive amount of hype surrounding blockchain in its infancy. The hype-honeymoon is over. Blockchain-solutions must prove themselves. To gain traction at the institutional level, blockchain solutions have to be adaptable, scalable, and interoperable.  

Corporate executives don’t have the time to discuss “which chain is right for our business and our customers.” They are only interested in efficiency and cost-savings.

So, in order to win over institutions, cross-chain functionality will be a requirement.

We’re already seeing this in blockchain gaming: Those games and gaming ecosystems that are gaining momentum are the ones that offer cross-chain functionality. That will be true for institutional implementation as well.

What are the potential downsides of using blockchain to distribute relief money?

The biggest potential downside of using blockchain to distribute COVID-related relief money is the likelihood that the Treasury Department will screw it up.

I’m not being flippant. Traditionally, government agencies have a poor track record when it comes to adopting new technology. We all remember the early days of ObamaCare. More recently, look at the IRS. It set up a website to help people track their CARES relief checks and the site has crashed at least twice.

This doesn’t mean the Treasury Department shouldn’t deploy blockchain to speed up relief payments – it absolutely should. Millions of Americans are waiting for checks that were supposed to be delivered in March. Just know, there will be bumps in the road – just as there are with every new government initiative.  

Why now is the time to deploy blockchain to ensure relief money is delivered more quickly?

The time to deploy blockchain to improve the distribution of relief money was in February– if not before. Before CARES was signed into law.

Some 60 million Americans still haven’t seen a dime of CARES money. Nearly 40 million Americans are unemployed. Lawmakers were proactive in increasing unemployment payments for millions of Americans, but they did nothing to ensure state employment agencies could process the wave of new applications. Most of those agencies still rely on centralized 1980s technology. 

Why is the US so far behind in the adoption of this technology? What is the hesitation, especially when it could ensure people get their relief money more quickly?

The U.S. is behind Canada, China, Switzerland, Malta, etc. because our laws and regulations marginalize blockchain and cryptocurrencies, making it difficult for the technology to gain real traction in the U.S.

Our current regulations reflect a lingering mindset among some lawmakers and policymakers who associate blockchain technology and cryptocurrencies with crime.

It’s not entirely their fault; there’s a lot of misinformation out there, but the research doesn’t support that viewpoint. Criminals are 800 times more likely to use traditional fiat currencies over digital ones when breaking the law.

The good news is that an outdated mindset is slowly crumbling. In 2019, Reps. Warren Davidson (R- OH) and Darren Soto (D-FL) introduced the Token Taxonomy Act and the Digital Taxonomy Acts.

Last February, Sen. Sherrod Brown (D-OH) proposed using digital dollars to distribute COVID relief, and more recently, a bipartisan group of a dozen members of Congress sent a letter to Treasury Secretary Mnuchin asking him to consider blockchain to distribute relief money.

In each case, lawmakers are trying to drag Capitol Hill into the 21st century. My companies, Polyient Labs and Polyient Games, are both headquartered in Arizona and we see Rep David Schweikert (R-AZ) doing it here: helping create a business landscape that welcomes blockchain.

Schweikert, Brown, Davidson, and Soto all have a responsibility to bring jobs back to their districts. They recognize blockchain is a job creator.  

Will the COVID crisis force the US to get up-to-speed when it comes to blockchain and digital currency?

Yes. We’re already seeing signs: Sen. Brown’s call for a digital dollar, the Congressional letter to Mnuchin asking that his department use blockchain for COVID payments.

Lawmakers know traditional payment methods don’t cut it any longer. I mean, the IRS has resorted to sending physical relief checks to citizens – and millions of those checks are lost. The COVID crisis is forcing lawmakers to admit the old methods are broken.

Similarly, industries now have to admit global supply chains are broken. We saw it firsthand in the last few months: critical shortages of medical supplies, food, toilet paper. You name it.

I guarantee you: conversations are taking place in C-suites across the country right now. Executives are saying “we need a decentralized, reliable and transparent method of tracking, tracing and auditing inventory.” That sounds like a recipe for blockchain.  

Thanks, Brad!

This article is Originally posted on CoinCentral.com
Author: Alex Moskov

Michelle Phan: YouTube Star, Beauty Mogul, Bitcoin Bull


There are very few people in the world that can talk about makeup, entrepreneurship, and cryptocurrency like Michelle Phan. 

Michelle has grown a loyal base of supporters, numbering over 8.9 million subscribers on YouTube today, with her makeup tutorial videos that have collectively racked up over a billion views. 

In 2011, Michelle co-founded IPSY, a subscription-based company that delivers monthly boxes of beauty samples to an estimated 1.5 million subscribers per month. The company has raised a total of $103.2 million from high-profile investors such as Sherpa Capital and TPG Growth, valuing the company at $800 million

credit: Luis Trujillo

Along the way, Michelle regularly revisited her relationship with money and wealth as something more intimate than just numbers. She talks about money at a conceptual level, and educates herself on monetary policy and economic theory. She’s also appeared on Bitcoin podcasts, co-hosted an interview with former Presidential candidate Andrew Yang, and interviewed with CoinCentral (hey, that’s us!)

Recently, Michelle joined Pathfinder (Founders Fund’s early-stage investment vehicle), Ashton Kutcher, and Guy Oseary in a nearly over-subscribed $3 million Seed II round for Lolli, a service that allows users to receive rewards in Bitcoin while shopping at one of Lolli’s participating retailers.

A philosophical attraction to decentralization and self-sovereignty connects the dots between her entrepreneurial endeavors, something that may have developed during Michelle’s formative humble experiences as the daughter of Vietnamese immigrants in the United States. 

Before the success and accolades such as a Streamy ICON award and making the Forbes 2015 30 Under 30 list in Art and Style category and Inc’s 30 Under 30 Coolest Entrepreneurs of 2015, before being an “influencer” was a lucrative career, Michelle could be described as the “bashful teenage daughter of impoverished Vietnamese refugees, and sometimes bullied at her high school in Tampa.“

Like many first-generation children of immigrants in the States, Michelle emulated a persistent work ethic in the pursuit of a better life without the benefits of growing up with a family with established professional and social connections. 

She found solace in the day-to-day grind and hustle. From selling candy bars to blogging, Michelle quickly learned the value of a dollar. When she uploaded her first video to YouTube in 2007 at 19 years old, she encountered the powers of the digital economy, even if it was just 25 cents per week from her videos. 

In 2011, one of Michelle’s friends brought his gaming rig over explained his excitement about using it to do a variety of things: gaming, rending images, and mining Bitcoin. 

“This when I first heard about Bitcoin, and I was curious,” reminisces Michelle. “After that, I looked it up online. I saw lots of naysayers, people calling it fools gold. My first impression was that it was a trend.”

Like many Bitcoin advocates that once had a negative first impression, Michellelook backs at her first encounter with Bitcoin with a laugh. 

Michelle kept the Bitcoin idea in her back pocket and focused on building her beauty empire. Fast-forward to late 2015, about the time IPSY its $100 million Series B and Michelle started racking up prestigious awards.

“It was until late 2015 that I was getting serious about building my assets,” says Michelle. “I was interested in building generational wealth. I came from an immigrant family, and I wanted to provide for the next lineage of my family. That’s when I got interested in gold. I watched some videos about how those people who held gold and precious metals in the Depression in the 1930s were able to provide for their family.” 

“I also started watching a lot of conspiracy videos,” Michelle laughs. “I must have thought the world was going to end. I eventually found the “digital gold” of Bitcoin. I thought I should at least diversify, at least have 1% of my holdings in some digital asset.” 

Once the satoshis hit her wallet, however, Michelle was converted into a voracious student of digital assets and a Bitcoin advocate. 

“It’s about having skin in the game,” says Michelle. “When you actually have satoshis, you want to see it grow. You want to understand it better. I decided I wanted to educate myself and learn about the Bitcoin community. I would frequently go on Bitcoin Reddit. I was able to learn a lot.” 

Michelle was brought to revisit her relationship with money in a relatively short time frame– she essentially went from working at her mother’s nail salon to the cover of Forbes in under 10 years. Her goals of financial wealth and taking care of her mother were met, but something was missing. 

In early 2016, Michelle dropped everything and went on a nine-month globetrotting hiatus. Taking a step back away from producing regular YouTube content and running several projects gave Michelle more time to herself, and she spent more time learning about the word and eventually Bitcoin. 

Michelle’s Foray into Cryptocurrency: 

Through her self-education, Michelle has a favorite: Saifedean Ammous’s book The Bitcoin Standard. It was indirectly through Ammous that Michelle connected with her newest investment: Lolli. 

“I messaged Saifedean on Twitter to thank him for writing the book,” Michelle recalls. “Since I followed him, he’s been DMing me new seminars. One day, he recommended I check out Lolli and talk to the Founder Alex Adelman. I knew it was the right company for me to invest in.” 

Michelle looks back at the countless opportunities to invest in and promote a project in the cryptocurrency space but just couldn’t find a fit.

I had met with a lot of people, CEOs of different exchanges,” says Michelle. It didn’t make sense for me to promote them. Yes, they make it easier to buy cryptocurrency, but at the end of the day, it’s another wallet you don’t really have full ownership over– kind of like a bank. When you have Bitcoin, you should be your own bank, I believe that’s kind of the point. I believe in the decentralization of power.” 

Lolli, according to Michelle, made the most sense to her because she can see herself using it, as well as ultimately a base of customers similar to her prior successful entrepreneurial endeavors. 

“I love shopping, and I love getting rewards (like Honey),” says Michelle. “I know a lot of women do as well. I also feel that many of them aren’t comfortable taking that financial risk to buy Bitcoin. It’s foreign to them. Earning rewards is something they’re familiar with. They’re rewarded with satoshis on the side. If you don’t want to stack sats yet, you can still do so at a smaller level.” 

2020 Investment Theory: Educate Yourself, Be the Customer

As an investor and cryptocurrency advocate, Michelle sees the vague and hazy post-pandemic road ahead with an optimistic lens. 

“The pandemic couldn’t have provided a better set up for cryptocurrency,” comments Michelle. “The Fed is printing trillions of dollars, which could lead to rapid inflation. A gallon of milk could cost $12, and people are going to ask what happened to their money. That’s going to drive a lot of interest to Bitcoin.”

Michelle views the fact that hundreds of millions of people around the world at home as an extremely productive and empowering learning opportunity.

“Every person in this world is giving their time for money in one way for another,” says Michelle. “It’s ridiculous most people don’t know about money. People have a lot of time on their hands, and now is a great chance to be exploring this crazy world. Monetary policy is changing all the time, but the Bitcoin protocol is very simple. It follows Austrian economics. The more people learn more about money, the more they can invest their time and energy into something of value.

In order to spot the best opportunities ahead, Michelle advises entrepreneurs to put themselves in the shoes of their consumers.

“The official number of people claiming unemployment is around 30 million and rising,” says Michelle. “That’s only counting people that have applied, not the ones that aren’t able to because the sites are crashing or just haven’t had the chance to. So, there will likely be a lot of people without disposable income.”

“If they cut back on disposable spending items, they may spend more on essentials. Also, people will want to stay at home. I think there’s going to be some sort of trauma with going back out. [Entrepreneurship] is going to be about capitalizing on those transitions. Be the customer yourself and work your way up.” 

Looking Ahead: Final Thoughts with Michelle 

Michelle keeps herself entertained with passion and self-education. 

“I find it very interesting that there are lots of billionaires and immense amounts of wealth moving to Bitcoin,” notes Michelle. “I mean, just this week Paul Tudor Jones said he has almost 2% of his assets in Bitcoin to hedge against risk, and he’s pretty conservative with his investments. If you have big financial titans and thought leaders jumping into Bitcoin, that could be huge. Imagine the impact Buffet saying he’s going to start buying Bitcoin will have on markets. I’m interested to see who starts converting.” 

Michelle and her own make-up brand, EM Cosmetics.

Michelle Phan embodies a bit of the traditional American dream with a dash of modern digital zest. The success story of someone powering up their laptop (or smartphone) and launching a million-dollar company is no longer viewed as a surreal outlier event. Today, it’s commonplace. 

Hundreds of thousands of content creators spanning YouTube, Twitter, Instagram, Facebook, Twitch, and now Tik Tok are earning billions of dollars per year from viewers that would have likely watched a tube TV just a few decades ago. 

Billion-dollar completely remote (decentralized) companies are coming out of the woodwork, attracting top talent that would have likely walked into a JP Morgan or Goldman Sachs a few decades ago. 

Michelle may have evolved well past any of her financial concerns as a teenager, but she’s maintained a strong relationship with money at a philosophical level.

“When you see what’s happening in the world, even at a government level, you see people that are positioned to take their power back,” says Michelle. “Bitcoin is sovereign money made for free people, which sounds a lot like the American ethos to me.” 

This article is Originally posted on CoinCentral.com
Author: Alex Moskov

What is the Bitcoin Halvening and Why It Matters – CoinCentral


The Bitcoin Halvening (or halving) is a significant moment in Bitcoin’s history. Bitcoin’s Halvening is a pre-programmed event that protects Bitcoin from inflation and helps ensure a degree of scarcity for the digital asset. 

Before we get into the thick of the Bitcoin Halvening discussion, let’s take two minutes to go over some quick halvening questions. Then, we can get into the juicy stuff.

What is the Bitcoin Halving? 

The Bitcoin Halving is an event pre-determined by Bitcoin’s programming where mining rewards are cut in half. Basically, the amount of BTC miners can earn as a reward for validating the next Bitcoin block is cut in half. 

In the 2020 halvening, the mining subsidy is going to be split from 12.5 BTC to 6.25 BTC. 

Why is the Bitcoin Halving Important? 

Bitcoin’s many Halving events seek to give the asset an element of “scarcity” to protect its long-term value. Bitcoin would become nearly as scarce as gold. 

This Bitcoin Halving event will cause the asset’s inflation rate to drop to 1.8%, making it lower than the inflation rate of the U.S. Dollar. This is particularly notable in 2020, as the United States has been printing trillions of dollars in economic stimulus packages to tackle the economical chaos caused by the COVID pandemic. 

“The Halving is an important event for Bitcoin, but it’s just one element in the perfect storm that BTC is enjoying at the moment,” comments Alex Mashinsky, CEO of Celsius Network. “Governments around the world are implementing unprecedented fiscal stimulus, which risks causing high inflation across fiat currencies, which reinforces Bitcoin’s value proposition as a deflationary asset. As a result, many first time retail investors are flocking to BTC as a way to protect their wealth.”

Every future Halving will make Bitcoin more scarce. Since we primarily see BTC’s value as a relation to USD, we have two diametrically opposed forces that point to a higher Bitcoin price.

Halving events tend to come with a flood of industry price speculation, which mostly assumes the Halving event will cause a surge in Bitcoin’s price. 

How Many Bitcoin Halvings are there? 

Halvings occur every 210,000 blocks until the block mining subsidy reaches 1 satoshi, the smallest unit of bitcoin (0.00000001 BTC). Once the final Halving event occurs, the next block subsidy drops to zero, and miners will no longer be awarded block mining subsidies but can still collect transaction fees. 

The last Bitcoin halving is expected to be in 2140. Be sure to read our article about it then– don’t forget! 

There are about 18,355,462 BTC in circulation right now. 

Notice the slight curves due to prior bitcoin halvenings

Notice the slight curves due to prior bitcoin halvenings

When is the Bext Bitcoin Halving? 

Bitcoin’s next Halving event is expected to occur in May 2020, with various sources targeting a May 12th to May 16th date range.

Bitcoin Halving Dates History

There have been two Bitcoin Halvings– one in 2012 and one in 2016. 

2012 Halving

The first Halving occurred on November 28th, 2012. The halving block was mined by SlushPool by a miner using a Radeon HD 5800 miner.

The BTC block reward dropped from 50 BTC per block to 25 BTC per block. 

Bitcoin’s Price on 2012 Halving Day: $12.35

Bitcoin’s Price Price 150 Days Later: $127.00

Price gain: 928.34%

2016 Halving

The second Halving happened on July 9th, 2016.

The BTC block reward dropped from 12.5 BTC per block to 12.5 BTC per block. 

Bitcoin’s Price on 2016 Halving Day: $650.63

Bitcoin’s Price 150 Days Later: $758.81  

Price gain: 16%

  • 2009 – Blocks 1-210,000 earned 50 BTC in rewards.
  • 2012 – Blocks 210,001 – 420,000 earned 25 BTC in rewards.
  • 2016 – Blocks 420,001 – 630,000 earned 12.5 BTC in rewards.
  • 2020 – Blocks 630,001 – 740,000 will earn 6.25 BTC in rewards.
  • 2024 – Blocks 740,001 onward will earn 3.125 BTC in rewards.
  • ~2140 – all 21 million bitcoins will have been mined; the reward will be 0.

It’s worth noting that just because the BTC reward is lower doesn’t make mining any less attractive. Bitcoin’s price has increased throughout the years. Earning the block reward in 2016 was worth about $16,250, whereas the new block reward post-Halving 2020 would be worth about $53,125.

Why Halve Bitcoin?

A common question many have is why not keep the bitcoin reward the same throughout its existence? The answer brings us to the concept of scarcity. 

Bitcoin Scarcity: A Delicate Balance

If Bitcoin were to keep the reward consistent at 50 BTC, that would mean only 420,000 blocks would offer the reward until the 21 million BTC cap is hit, which would have happened at some point in 2016. 

This would have been extremely detrimental to Bitcoin’s user adoption since the technology was still relatively new and only a small minority of the population would hold the vast majority of the Bitcoin. 

At first, an early decrease in accessibility might make Bitcoin seem to be more valuable, but ultimately, this would repel many early-stage users. If there are fewer people capable of using it, then the digital asset would essentially be trapped in a gilded cage of low liquidity. 

Following along the trail of events, low liquidity would increase the risk of holding the asset, chipping away at its inherent value. 

The supply and demand among the small group of Bitcoin hoarders would determine the price. 

The price of BTC would be artificially inflated and holding (hoarding BTC) becomes a game of hot potato. Any individual whale with massive holdings could tank the price at any moment, further increasing the volatility risk of the asset. 

One of the core drivers of Bitcoin’s price is user adoption, and by placing such unreasonable hurdles on new users (high volatility and high costs to enter the Bitcoin ecosystem), few newcomers would venture into relatively unfamiliar cryptocurrency territory. 

With so many comparable digital assets such as Litecoin, user adoption would not bode well for Bitcoin.  

One the other side of the scarcity extremities, we could remove the 21 million cap to understand Bitcoin’s mechanics. 

If Bitcoin were to keep the reward at 50 BTC but removed the 21 million cap, there would be a theoretical infinity of BTC available on market over a long enough time frame. This would flood the markets in the long-term creating an essentially worthless digital asset. Each new year would theoretically slightly devalue the asset. If you need any real-world evidence, just take a look at the Venezuela cryptocurrency situation and why so many Venezuelans have embraced Bitcoin.

The 21 million cap and the periodic halvening events help to ensure that Bitcoin offers users the best of both value retention and usability. 

How Will the Halving Affect Bitcoin’s Price?

If you’ve been reading CoinCentral for a while, you’ll know we don’t speculate on asset prices. We’ll leave that to the Twitter day traders that soundlessly delete their tweet predictions when wrong. Trixy hobbitses.

However, there are a few logical arguments that can be made for Bitcoin’s price moving in either direction. Bitcoin’s price did increase after the first two halvings, but it’s hard to tell whether this is merely correlation or causation. 

Will there be a price jump after bitcoin halvening 2020? Only time will tell.

Will there be a price jump after bitcoin halvening 2020? Only time will tell.

That being said, many influential and respectable figures in the space have made price predictions, many of which are predicated on Bitcoin being a scarce asset. 

Billionaire venture capitalist Tim Draper, for example, predicted a $250,000 Bitcoin by 2022. 

Ex-Goldman Sachs hedge-fund manager Raoul Pal, recently claimed Bitcoin’s price could hit $1 million before the next halving event in 2024.

But take any prediction on the Internet with a spoonful of salt. John McAfee, for example, made a lot of noise with a $1,000,000 bitcoin prediction but soon backed out once proven wrong by the test of time.  

In a pure vacuum where only basic market forces and mathematics prevailed, Bitcoin’s price would go up after a halvening because of scarcity, but the reality is far more complicated than that. In lieu of us jumping into a rabbit hole here, feel free to shoot us an email if you’d like us to go into greater detail in another article.

Final Thoughts

Regardless of its impact on price, the Bitcoin halvening is a unique piece of digital asset history. By sheer resilience, Bitcoin has proven countless doubters and antagonists wrong. Each successful milestone of its programming keeps Bitcoin on its path to being a resilient, decentralized, and global means of exchange and store of value. 

In 2016, I didn’t participate in the halving and all things considered, it was a minor event,” comments Catherine Coley, CEO of Binance.US. “The real rally happened 18 months later. On the whole, I’m bullish on Bitcoin long-term, whether not this event changes the prices noticeably or not. With unemployment and stimulus funding flooding our USD system, I think more people are looking for an alternative exposure to a market that’s unrelated to USD.”

The halving doesn’t require much, or any action, on your part. If you hold the digital asset, it’s worth your while to develop a more intimate understanding of how it works. Learning this unlocks the flood gates to better understanding global monetary policy in an increasingly more tech-enabled, a crucial lesson given the current economic conditions. 

To get a better understanding of Bitcoin, read our Bitcoin guide or Bitcoin for dummies guide. 

This article is Originally posted on CoinCentral.com
Author: Alex Moskov

Coronavirus and Bitcoin: Why COVID-19 is Bitcoin’s Biggest Test


Bitcoin and Coronavirus (COVID-19) is economic history in motion: Not only is Bitcoin facing its first genuinely unified and global external threat, but it’s also doing so to the background music if a potentially hyperinflating U.S. Dollar.

Coronavirus and Bitcoin can help us correlate the relationship between the impact of external factors (public fear/panic and global pandemic) and borderless digital currency. 

A bullish sentiment would focus on the possibility of Bitcoin evolving past its speculative phase into a more stable asset as global demand increases, generating an enormous profit for early holders of the currency. 

A bearish sentiment would further cement its argument that Bitcoin offers no actual utility and will always be a highly speculative asset. 

If you’ve been reading CoinCentral for a while, you know we don’t shy away from saying we don’t know what’s going to happen. We’ll even go out on a leg here to say that most sites and personalities that give you thinly veiled opinion-predictions based on “deep technical analysis” don’t either. 

However, we can take a look at what happened and surmise some narrative and review. In this article, we’re going to go over the impact of Coronavirus (COVID 19) on Bitcoin, and what that means for the U.S. Dollar. 

Coronavirus and Bitcoin Price

The two most notable changes in Bitcoin’s price so far are:

  1. A steep 44%+ drop on March 12th, 2020. What caused Bitcoin to drop? Investors most likely panicked watching the Dow Jones drop by a 10%+ in a day. 
  2. From April 1st, 2020 to April 2nd, 2020, Bitcoin’s price jumped up 17%. What caused bitcoin’s price to go up? We’ll get into that soon. 

Let’s start by disqualifying a comparison between Bitcoin’s price and the general stock market. Yes, Bitcoin has generally outperformed the stock market in 2020, but that’s not saying much. The $20 bill in the back pocket of your old jeans has technically outperformed the globally ailing Coronavirus pandemic stock market. 

Bitcoin is prone to the same panic. It dropped about $50B in market cap on March 12th, which seems like a lot if you ignore that the five biggest tech companies (Amazon, Apple, Alphabet, Facebook, and Microsoft) lost a combined $416.63 billion on the same day. Bitcoin is small, but it makes a lot of noise, a factor worth keeping in mind when monitoring drastic price oscillations. 

The thought of Bitcoin being a safe-haven asset is a fever dream built on a few logical arguments:

  1. It’s not connected to any government and it can’t be printed. 
  2. It’s global, digital, and borderless
  3. You can’t catch germs from a Bitcoin. 

However, all theories are dominated by the reality: Bitcoin has still yet to mature past its speculation phase.

Was Bitcoin’s recent price gain a response to the Department of Labor reporting a whopping 6.6 million new unemployment claims? Possibly. If so, this could be a bold indication that people are flocking to Bitcoin in search of stability (ironic for one of the most volatile asset classes, historically). With the United States printing trillions of dollars in aid (money printer go BRRRR) and dealing with the economic repercussions as an afterthought, it makes sense people would seek an alternative means of wealth storage. 


Is Bitcoin security in the time of crisis? Bitcoin plummeting by over 50% in the course of March would suggest otherwise. The global community of investors seems as fearful as ever, and fairly so as we collectively try to deal with this global coronavirus pandemic and national quarantines. 

Was the early April price spike the result of sophisticated and mainstream traders? Likely. A recent survey of traders and investors by popular exchange Kraken placed $22,866 as the bitcoin price target, which would surpass Bitcoin’s previous ATH of around $19.5k.

However, if we look past the blatant speculation that has plagued digital assets for years, we have an extremely important threat to follow: how will U.S. inflation due to its recent and future stimulus package affect Bitcoin and digital assets?

The U.S. Inflation and Bitcoin: 

The U.S. Dollar has witnessed a lot since its creation in 1792: a Civil War, two World Wars, a handful of lethal pandemics. Its seen the rise and fall of superpowers. It’s survived Depressions and thrived in booming economies. 

Despite this or because of it, the Dollar has become the de facto world currency. In 2019, nearly 61% of all known central bank foreign exchange reserves were made up of the U.S. Dollar (the second most popular is the euro with 20%.) 65% of all U.S. Dollars, about $580 billion, are used outside the United States and mostly in former communist countries in the old Soviet Union bloc and Latin America. 

Entertaining the idea of a future where the U.S. government doesn’t dominate the political scene or is forced into a tertiary “ailing empire” role, is far outside the immediate realm of belief for the vast majority of Americans. 

However, it’s more real than ever. Instead of rattling and prophesizing America’s threats like war hawk political talk show pundits, we’ll re-focus on the impact of Coronavirus (COVID 19) on Bitcoin, and what that means for the U.S. Dollar. 

Coronavirus has given hundreds of millions of Americans a small taste of what a catastrophic economy feels like: going to supermarkets and not being able to get what you want, having very limited recreational or nightlife options, and for many, being forced into becoming financially dependant on your government.

It’s hard to imagine George Washington and Alexander Hamilton planned for an America that has $23.5 trillion in national debt and is rapidly printing currency to keep its hundreds of millions of citizens alive at home. 

There are few antagonists of the current U.S. stimulus plan with better solutions. Scold all you want, but there are going to be millions of people relying on government aid to pay for life’s basic necessities like food and water. The general population is less concerned with inflation and more with surviving.

However, that doesn’t eliminate the threat of hyperinflation. One doesn’t need to look far past the Hong Kong riots and Venezuela’s dilapidated economy to understand why Bitcoin is receiving international attention as a viable alternative to native currency. 

In 2017, Chamath Palihapitiya, the Founder of Social Capital and Co-Owner of the Golden State Warriors, once predicted Bitcoin’s price would hit $100,000 in the next three to four years and $1,000,000 in the next twenty.  

“This thing has the potential to be comparable to the value of gold,” sais Palihapitiya. This is a fantastic hedge and store of value against autocratic regimes and banking infrastructure that we know is corrosive to how the world needs to work properly.”

At one point, Palihapitiya owned about 5% of all BTC in circulation, so it’s fair to say its sentiments sway bullish. However, it’s hard to look past the substantial value BTC and other digital assets offer citizens in countries like Venezuela. The once-rich country now has currency hovering around a 10,000,000% inflation rate, which has many citizens turning to BTC as a store of value. 

Coronavirus and Bitcoin: Antifragile or Bust

It’s hard for one to read Nassim Nicholas Taleb’s Antifragile: Things That Gain From Disorder in 2020 and think of Bitcoin. Coronavirus is Bitcoin’s biggest test. Will it bend? Will it break? Will it flourish? Only time will tell, but we do have some sense of direction as new information appears. 

John McAfee, a vocal Bitcoin bull and proponent of digital assets, made an early bold claim in 2017 that BTC would reach $500,000 in 2020. When pressed on the question by Forbes, he not only defended his forecast but doubled down, predicting BTC would see $1,000,000 in 2020. 

His rationale? Scarcity. 

Since BTC is limited to just 21 million coins, it’s only a matter of time until scarcity starts playing a major role in its price fluctuations. There are currently 18,104,700 BTC in circulation, meaning that roughly 86.1% of all BTC has been mined and is in the ecosystem. 

However, according to, McAfee, this scarcity is much more drastic than the numbers let on. 

“Let’s get real, there are only 21 million bitcoins, seven million of which have been lost forever, and then, if Satoshi is dead, add a few more million,” McAfee explains.

Mathematically, Bitcoin’s price can be deduced to simple supply and demand. The scarcity argument would be emboldened by the potential flock of people starting to buy and hold Bitcoin, but it also glosses over a critical detail: we communicate Bitcoin’s price as it relates to the U.S. Dollar. If the very fundamental basis of understanding Bitcoin’s value starts rapidly inflating, McAfee may get his $1M Bitcoin wish soon enough. 

However, if Bitcoin does become the last resort for stability for Western economies, the world is likely going to be in a much more precarious position than it is today. This may be music to the crypto-anarchists in the audience, but such a large fundamental shift could be very dangerous. 

The supremacy of the Dollar has been leveraged as a foreign policy tool, a replacement for boots on the ground. The United States has leaned heavily into this advantage. The unraveling of the complicated web of militaristic and economic relationships created over decades challenges the very status quo of daily existence, which has only been proven to generally improve over the years. 

Understanding what could evolve into the de facto functional currency (or parent of it) can only serve as an advantage in the time to come. At the very least, studying Bitcoin’s response to Coronavirus will help paint a picture of the efficacy and utility of decentralized digital assets. We’ve never seen Bitcoin respond to a truly global macroeconomic event, which makes this an incredibly exciting time to be involved in the cryptocurrency world. 

This article is Originally posted on CoinCentral.com
Author: Alex Moskov

Cryptocurrency Regulation in the Caribbean: Is It the Perfect Sandbox?


How many Caribbean countries do you know off the top of your head? Out of almost 700 Caribbean islands only about 30 are inhabited, each with their own stance on cryptocurrency.

The Caribbean Islands are first and foremost known as tourist destinations, but they have also, over time, picked up a reputation as shady offshore havens. The local regulatory stances on cryptocurrency are slow to evolve but are consistently pointing towards a more transparent future.  

Despite their reputations, efforts are underway to regulate cryptocurrencies in the Bahamas and elsewhere in the Caribbean. A hotbed for fintech, the Caribbean has been revitalized by the growing and largely unregulated Bitcoin market. 

Here is an overview of the Caribbean cryptocurrency industry from Solomon Brown, Head of PR for Freewallet, a cryptocurrency wallet developer

Islands, regulations, and cryptocurrency usage

Cryptocurrency regulations vary from island to island. Caribbean countries have different views of distributed ledger technologies and blockchain. Islands like the Bahamas and Antigua and Barbuda are well on their way to having established cryptocurrency regulations, Haiti’s viewpoint on the matter can be called controversial and Cuba is a bit behind the ball on passing cryptocurrency laws. 

Image via Pixabay

The Bahamas

Legislators in the Bahamas have signaled that they would like to incorporate cryptocurrency into the legal framework of the island’s economy, but with the way things stand now, there’s still a lot of work to do for that to happen. 

Graham Thompson Attorneys, a leading Bahamian law firm, concluded in a whitepaper, titled, ‘’The Bahamas’ place in a Cryptographic World’’: “It is important that the Bahamas seek to not wedge virtual currency business into a legislative framework that doesn’t quite fit but to develop a piece of legislation, either by amendment to the PSA or otherwise, that is virtual currency specific.”

 Indeed, the only official law offering regulatory treatment in the sphere is the old Central Bank of the Bahamas Act that dates back to 2010 when we had hardly heard of legal framework and standards in the digital token sphere

Image via Pixabay


The act defines currency as follows: “8. (1) The currency of The Bahamas shall be the notes and coins issued by the Bank under the provisions of this Act. (2) The unit of the said currency shall be the dollar, which shall be divided into one hundred cents.” It mentions that it is the “Sole right of the Bank to issue notes and coins”. Obviously, as it makes no specifications for digital tokens, it is hardly able to regulate the emerging local cryptosphere. 

Little by little things are beginning to change. On November 7, 2018, the Central Bank of the Bahamas issued a discussion paper on proposed approaches to the regulation of cryptocurrency assets. This paper describes the proposed regulatory posture on cryptocurrency assets and related instruments for supervised financial institutions (SFIs) under the remit of the Central Bank of The Bahamas. 

This includes the application of government-imposed limitations on the range of cryptocurrency payment instruments called the Exchange Control (EC) regime. The planned operations will allow Caribbean countries to better stabilize their economies by constraining in- and out-flows of currency, and subsequently keeping exchange rate volatility at bay. 

In 2019, the Securities Commission of Bahamas (SCB) took cryptocurrency a step further by releasing the draft called “Digital Assets and Registered Exchanges Bill, 2019.” 

The DARE Bill, 2019 regulates the requirements for issuing or selling digital tokens in the country, and how sellers and related firms must conduct their businesses. It also covers the sections that ensure the entrepreneurs comply with anti-money laundering (AML) and counter-financing of terrorism (CFT) laws and protect their clients’ data and assets.

Cuba

In Cuba, cryptocurrency may be the ultimate solution for US economic sanctions-caused problems. Not supported by the government, Bitcoin has been extensively used to top up phones, shop online and send funds after the roll-out of mobile internet in 2018. The founder of the Telegram channel CubaCripto estimates about 10,000 Cubans trade cryptocurrencies. Some use it as a side job, some get remittances from abroad. 

Brazil-registered Fusyona can be called the first cryptocurrency exchange operating in Cuba. It helps with remittances, charging up to a 10% fee and working via larger exchanges. As other platforms hesitate to develop activity in the country, cautious of the US penal fines, Fusyona’s founder is using Bitcoin, saying “for Cubans it is a necessity and can be a solution to their exclusion from the global financial community.” Nevertheless, the exchange is planning to get authorised by the Cuban government. 

Image via Pixabay

Funnily enough, in July 2019 the Cuban government was considering issuing its own cryptocurrency coin, but it decided to hold back on it to avoid money laundering and/or clashing with its communist principles. 

The state’s central bank has been investigating the pros and cons of cryptocurrency and will soon discuss the prospects of using cryptocurrency at a meeting with global financial leaders in Washington. But, in the meantime, there are no administration bills that specifically place cryptocurrency under regulation. 

Haiti

The legal status of cryptocurrency in Haiti is controversial. Cointobuy’s analysis tool has ranked Haiti 208 out of 249 countries in terms of cryptocurrency safety. Obviously, it isn’t secure to invest in ICOs or trade cryptocurrency in this country. Nevertheless, cryptocurrency entrepreneurs of this small island have come up with a number of brilliant ideas. It is safe to say Haiti is enjoying a real blockchain boom led by a number of exciting and meaningful startups that are trying to shape the future of agriculture, production, and other spheres.

For instance, AgriLedger is a project that will enable users to trace the food supply chain and find out how products are grown or transported. The Blockchain Cotton Project (BCP) works in a similar way: it will endorse smallholder cotton farmers that provide cotton for US clothing producers. Farm locations will be tracked by GPS and BCP will also verify whether the cotton is organic or fair-trade and guarantee the farmers a fair price for their cotton. 

Apart from this, Haiti is the homeland of groundbreaking educational projects like Cryptocurrency for Haiti and the Haiti Blockchain Alliance. They help common people get acquainted with the potential of blockchain. The Haitian Central Bank announced at the Haiti Tech Summit in June 2019 that it will be launching its own digital currency.

Dominican Republic

Little is known about the cryptocurrency industry in this region. After the Dominican Republic government banned using any kind of cryptocurrencies in transactions, all the financial institutions in the country cut down on crypto. However, citizens have kept using it at their own risk. 

Barbados

In Barbados, cryptocurrency regulations are still on the fence. The Central Bank of Barbados has expressed a positive attitude towards BTC and is starting to make changes on this front. 

On July 5th, Bitt Digital Inc. became the first blockchain-based company to complete and exit the 8-month-long regulatory sandbox guided by the Central Bank of Barbados and the Financial Services Commission. Governor of the Central Bank of Barbados, Cleviston Haynes, confirmed that the Regulatory Review Panel (RRP) considered the type of business activity trialed by Bitt to be a candidate for regulation under legislation that is currently being drafted. 

In June 2019, the Central Bank of the Republic of Haiti invited Bitt to present the likely benefits of a national blockchain-based digital currency.

Jamaica

Currently, the legal framework in Jamaica does not deal with crypto. Digital currencies are hardly defined or regulated under the Securities Act or the Bank of Jamaica Act. The Banking Services Act deals with e-money which is closer, but still distant from BTC and cryptocurrency. However, recently efforts have been made to rectify the situation and take digital currencies into account.

Jamaica is bigger than most Caribbean countries. Lately, it has economically outperformed many of its neighbors. In 2018, the Jamaica Stock Exchange (JSE) was identified by Bloomberg as the fastest growing exchange in the world. It was the second time the publication had named the JSE the best performing exchange.

In April 2019 the JSE announced that it was going to enable the live trading of security token offerings (STOs) and digital assets with the support of the Canadian FinTech company, Blockstation. The move was aimed at helping businesses raise capital through STOs and establish themselves in the financial community, while also promoting safe digital asset transactions in the market. Presumably, the JSE, the Financial Services Commission and the Bank of Jamaica (BOJ) will shortly issue the regulations and guidelines that will facilitate this new digital trading.

The Organisation of Eastern Caribbean States

This inter-governmental organization aims at promoting economic development along with other legal aspects. Protocol members and Anguilla use the Eastern Carribean Dollar issued by the Eastern Caribbean Central Bank. 

In spite of having no cryptocurrency regulations, these 11 countries have signed up to participate in a pilot program that will test the use of cryptocurrencies alongside the country’s national currency. Only time will tell if the blockchain-based digital version of XCD is OECS’s short cut to a cashless society.

Saint Kitts and Nevis

This OECS member is willing to take part in the Digital Eastern Carribean Dollar ‘test drive’. However, the Saint Kitts and Nevis government is negative about accepting Bitcoins as a payment for the Citizenship by Investment Program (CIP), which has been warmly welcomed in many Caribbean countries. 

Antigua and Barbuda

Unlike their Caribbean counterparts from Saint Kitts and Nevis, government officials from Antigua and Barbuda are drafting laws to regulate Bitcoins. According to local media outlets, Antiguans are interested in using cryptocurrency to pay for public services.

The authorities of the Caribbean jurisdiction are developing a special bill with the aim of securing the status of legal currency for Bitcoin, the circulation of which is allowed in the territory of Antigua and Barbuda.

The decision was made during a meeting of the Cabinet of Ministers with experts from the Antiguan Leisure & Gaming Association, dedicated to best practices in accepting Bitcoins as payment for goods and services. Thus, very soon, Bitcoin could turn into an official means of payment in Antigua and Barbuda.

Interestingly, while enumerating the benefits of Bitcoin, Antiguan officials who promote its legalization in their home country noted that Bitcoin makes it easy to track transactions, which is very important considering how many see the Caribbean country as a “tax harbor. ”

Saint Lucia

In recent consultations with the authorities of Saint Lucia, representatives of the mission of the International Monetary Fund (IMF) said that central banks should not ignore Bitcoin. According to IMF experts, virtual currencies can compete with existing currencies and also challenge monetary policy.

Subsequently, it was reported that the Saint Lucian government was considering Bitcoin’s prospects and was exploring options on how to “make it work.” A corresponding statement was made by the Prime Minister of Saint Lucia, Allen Chastanet.

Caribbean cryptocurrency evolution

The 2018 BIS Annual Economic Report suggested that cryptocurrency is the “new petal in the money flower.” The taxonomy of money can be defined by four properties: the issuer, the form, the degree of accessibility and the payment transfer mechanism. Cryptocurrencies combine three key features:

  1. They are digital. Cryptos aims at providing security and rely on cryptography to prevent hacking and fraudulent transactions. 
  2. They are private, and by design, they have no intrinsic value, unlike commodity money. “Their value derives only from the expectation that they will continue to be accepted by others” – the report states.
  3. They allow for a digital P2P exchange.

The competitive advantage of cryptocurrency is its underlying distributed ledger technology. It enables each user to verify transactions in their copy of the ledger, ensure the accuracy of each transfer and rule out the possibility of double-spending.

Image via Pixabay

What does this mean for the Caribbean islands?  BTC has a number of potential benefits that could let the financial genie out of the bottle. 

For the small Caribbean countries that made a name for themselves as tax havens in a similar way to the Latin American Panama, cryptocurrency offers a way of evolving into the future. After a massive leak of financial files tied to the fourth-biggest offshore law firm in the world, it was hard for Panama to recover from reputational losses. Panama shifted its focus onto cryptocurrency at the official level by working out taxation protocols and supporting blockchain technology. 

The Caribbean seems to be following Panama’s example. The Bahamas are drafting regulations of cryptocurrency assets. The British Virgin Islands are issuing a national cryptocurrency coin. Antigua and Barbuda are offering citizenship for BTC. In other words, a good many Caribbean governments are willing to put themselves on the map in the cryptocurrency space. 

Image via Pixabay

In the opening stages of introducing cryptocurrency into the global economy, it is crucial for blockchain-based projects to keep security issues crystal clear. Gaining user trust is key to the mass adoption of Bitcoin. With operational security in the spotlight, it is important that locals use reputable cryptocurrency services such as top market leaders like Binance, Coinbase, and Bitfinance. As far as safe wallets are concerned, Freewallet is proud to work side by side with these big names to make cryptocurrency more available to a wider audience. It’s been a privilege for us to join our efforts in order to modernize the financial services sector. 

The Caribbean is boldly stepping into the future with cryptocurrency and we are happy to help this process along.

This article is Originally posted on CoinCentral.com
Author: Alex Moskov

Crypto’s New Deal: This DeFi Platform is Putting Unused Tokens Back to Work


Decentralized Finance “DeFi” has experienced tremendous growth in the past few months, and it looks like it’s only going to continue ramping up. According to DeFi Pulse, there is roughly $1.13B locked into DeFi contracts, nearly double the amount at the start of 2020.

The underpinning of DeFi’s recent rise to popularity is the series of unconventional financial tools that are helping democratize the future of global peer-to-peer lending and transactions. 

We connected with the Chintai team, a Cayman-based platform that seeks to enable the leasing of unused utility tokens. If you haven’t heard about utility tokens in a while, you’re not alone. Utility tokens, or tokens that are essentially a promise to access a future product or service, were exceptionally hyped in the 2017 ICO craze, but the ensuing bear markets cooled off the utility market landscape. 

Utility tokens are meant to be used, but most of them are lying dormant. Utility token holders have seen some of their utility token values plummet upwards of 95% and have moved onto focus on other things. 

Chintai wants to let utility token holders get some actual utility out of their tokens. With over 250M in transaction volume, Chintai appears to be offering a significantly attractive value proposition, if not at least demonstrating the DeFi ethos of enabling uncaptured financial opportunity in action. 

We spoke with Ryan Betham, Chintai COO, about DeFi, Chintai’s recent growth, and the utility token landscape. 


Why is DeFi an exciting space right now? 

DeFi pioneers are producing tangible use cases that deliver on the dreams which ignited the cryptocurrency movement in the first place. It’s about giving people control of their money, and democratizing access to opportunity – all while eliminating value extractors. 

So, here we are today with a plethora of DeFi protocols. Many of which are offering decentralized lending. And it’s working, really well. We’re seeing proof that we don’t need 3rd parties to facilitate one of the most basic building blocks of a new economy – borrowing and lending. 

And it’s being done on a global scale, without borders, all executed with code. It’s like watching sprouting seeds for a vision of a new digital economy. How cool is this stuff?!

Can you hypothesize how much more the DeFi space has to grow? 

If you broaden the definition of DeFi to include any financial instrument that relies on smart contracts and distributed ledger technology to function, the sky’s the limit. The total monetary value of the global financial system is somewhere around $300 trillion– with a “T”. Not everything needs to be on blockchain.

 But there’s a good case to be made that we could see a global financial system that is mostly reliant on blockchain tech. It’s simply too efficient and secure compared to the existing infrastructure. Market principles would suggest you either adapt or die.   

Take the $109 trillion bond market as an example. That’s something we’re trying to help fix and blockchain technology is a perfect instrument to bring massive efficiency gains in bond markets. And the great thing is that the solution is disruptive while still being beneficial for big banks, small banks, businesses, and investors simultaneously. Incentives align and everyone wins. 

So once people understand the value proposition, we expect this stuff to catch on like fire. It’ll be one of those leaps in evolution that seems slow in the moment, but fast in retrospect. 

“Utility tokens are meant to be used, but most of these tokens are lying dormant, collecting virtual dust for the investors that purchased them.” How does Chintai aim to address this issue? 

We built the first high-performance, decentralized exchange for lending and borrowing token utility. Not borrowing the currency – borrowing the utility itself. We started with an EOS token leasing market. 

For people that don’t know, EOS tokens give you ownership of network CPU and NET. You can think of CPU and NET as the battery power you need to run an application or transact on the network. Without CPU and NET you can’t use the network.

So people who own the EOS token, but don’t need to use the CPU and NET, can set an interest rate and lend out their resources to someone who needs CPU and NET. 

The borrower pays that interest rate for a fixed period and receives the CPU and NET for their applications or transactions. The cool part is that the borrower doesn’t actually have possession of the tokens because you can delegate CPU and NET while maintaining custody of the token itself. 

The whole process is handled by smart contracts so counterparty risk is virtually non-existent. We saw $250 million in transaction volume within six months, had 33,000 unique accounts using the instrument, and roughly $3 million in interest generated for lenders. 

Now we’re taking that concept and applying it to any utility token and even NFTs, which represent unique or bespoke items. So you know virtual items in games? Swords, skins, characters – whatever. We want to enable leasing of those items too. We’re also launching a handful of new leasing markets in early 2020 and we’ve already seen promising outcomes. It’s hard to not get excited about this stuff. 

What milestones does the non-fungible token (NFT) ecosystem need to hit to reach a point of critical mass? 

Generally speaking, the most important milestone is having developer tools that can enable smooth UX. Let’s take gaming for example. 

It’s an ecosystem that is ripe for disruption, but doesn’t quite have the tools that game devs need to fully utilize the benefits of blockchain tech. 

Gamers are already accustomed to in-game economies. But do you really think they’re going to manage private keys and login to a blockchain account for tokenized virtual assets? Mostly no. So game developers need tools to embed virtual items into games in a way the end-user doesn’t realize they’re using a blockchain at all.

We’ve built instruments for this use case specifically. The same engine that facilitates token leasing can also facilitate transactions for NFTs in games. 

And that engine can be used in the background, using our API, to embed the process of exchanging virtual items directly into games. No friction for the end user, but all the benefits of blockchain for the gaming industry. 

Can you explain how what Chintai is offering is different from competitors? 

We’re kind of like a swiss army knife for DeFi. The reason why we can have such a diverse offering is because of our high-performance on-chain order management system (OMS). This is super FinTech geeky stuff so bear with me. 

OMS’s match orders and execute agreed terms between buyers and sellers – it’s how an order book is populated on say a crypto exchange except those order management systems are offchain so you lose the transparency that comes with an on-chain OMS. 

Our on-chain OMS is agile and highly configurable. It allows us to rapidly build markets for anything from token leasing, to decentralized bonds, NFT trading, and everything in between. 

The other cool aspect of our OMS is that we can white label businesses to take part in any Chintai market by allowing them to curate their own front-end UI, set their own fees, and use our exchange in the background to facilitate order management and execution. 

This allows people to create highly customized portals or UIs for very specific needs. And the liquidity for every market is shared, so you don’t end up with fractionalized markets.

“Decentralized exchanges that lack compliance with global regulators are at risk of being shut down due to lack of consumer protection and anti-money laundering laws.” – What alternative does Chintai offer?

The on-chain OMS I just mentioned is a big part of it. Regulators want transparency. Since our OMS is on-chain they can trace and see token movements. In our case, accounts will link back to a person’s identity using KYC. 

Our users will have their compliance laws encoded into their accounts. And tokenized securities will also have compliance controls coded in as well. So as a user you can only access tokens that are considered legally compliant within the jurisdiction you live.

“Chintai lowers the cost for those who are trying to use the tokens while also providing yield to those who lend them.” – What interest rates does Chintai offer?

Chintai enables markets that have fluctuations like any other market. We’ve seen APR as high as 40%. But usually the APR is more reasonable. Somewhere around 3-10% depending on the market. 

Chintai’s suite of products looks pretty, well, sweet. Which of these is the most popular among your users? Which product do you think is being underutilized and offers a ton of value? 

The token leasing markets are most used. Mostly because they’ve been live the longest and the DEX is awaiting licensure approval from the Monetary Authority of Singapore so it’s not yet live. The most underrated aspect by far is the Chintai Merchant Network, i.e our OMS white labeling service. 

Merchants can set their own fees, build their own custom UI, and Chintai takes care of all order management and execution. It’s extremely powerful. After all, what good would it be if we had all these cool tokens, but couldn’t make a proper market to exchange them within applications or for various use cases? 

Can you walk us through how the most popular one works?

Talk to us. We explore exactly what market you want to make and we customize it for you. Or if we already have a market you want, but think could benefit from a better UI, then we white label you to use our OMS and share liquidity that’s already been established. In either case you need to build your UI and set your own fees. But we take care of the rest.

Why EOS?

Chintai was designed to be a high performance, enterprise-grade, fully on-chain Order Management System (OMS).  This inherently required us utilizing a blockchain that can handle high transaction volume with low cost; this made Etheruem an unsuitable choice in late 2017 when the project launched.

While the Chintai tech stack does utilize eosio, we are deploying on multiple instances including Worbli (for DeFi) and WAX, Ultra (for commercial gaming) – the EOS blockchain itself features as only a small component of the markets and services.  

Additionally, Chintai will shortly be utilizing Liquidapps DAPP Network for horizontal scaling, which includes their LiquidLink service to enable dApps on Ethereum to also leverage Chintai, with the benefits of the on-chain transactional throughput and reflecting back to Ethereum at settlement to minimize gas cost.

From financial service industry discussions to date, indications in terms of preference have been towards leveraging or spinning up an industry/private instance of eosio as the basis for DeFi services, and there is a reluctance to leverage any of the existing public blockchains. 

We will continue to make decisions based on our partner feedback and customer needs in that regard, but feel we have the right tech stack to be able to service and scale while leveraging the efficiency benefits of blockchain.

What does the Chintai Roadmap look like for 2020? 

2020 is a year of accelerated takeoff. Our primary focus is readying our tech and business for the DEX. We’re establishing our business development team in Singapore to enlist a consortium of banks to issue decentralized Bonds and securities and we’re opening a branch in Germany for our technical team.


This includes lining up a few companies that will pilot STO issuances on the regulated DEX. We are also launching a handful of token leasing markets and formalizing partnerships that will integrate our OMS for gaming, tokenized commercial real estate, and FinTech. 

To help power it all we’ve just opened a pre-seed round in early 2020. But what ambitious startup isn’t trying to raise money? So you probably knew that already. 

How can someone get involved with Chintai?

We are probably one of the more transparent and interactive teams. If you ask us what we’re doing at any moment we will tell you as much as we can. 

We’ve really enjoyed building a culture where our followers, users, and supporters can go on the ride with us. The best way to get close to the action is telegram or twitter. Both handles are chintaiEOS.

Twitter: @chintaiEOS
Telegram: https://t.me/ChintaiEOS
Email: [email protected]

This article is Originally posted on CoinCentral.com
Author: Alex Moskov

Lendroid Foundation Founder Vignesh Sundaresan Speaks on His Entrepreneurial Philosophies – CoinCentral


Vignesh Sundaresan is a serial entrepreneur and software architect with over 10 years of experience in product development. He’s the Co-Founder of BitAccess, a YCombinator alumni company that has grown into a large network of Bitcoin ATMs. Sundaresan has also helped fund projects such as Ethereum, Polkadot, Dfinity, Omisego, and Decentraland. 

Sundaresan has his eye on open protocols, back-end programming, and more specifically, facilitating a paradigm shift towards a more decentralized finance world. Recently, he founded and conducted a successful token sale for the Lendroid Foundation, a Singapore-based non-profit organization developing a non-rent seeking open protocol for Decentraland Lending and allied financial applications.

Your Twitter bio is “Software eats everything.” – Can you explain this quote?

This is a paraphrasing of something Marc Andreessen Horowitz said – Software is eating the world. On the surface, this seems like a catchphrase for disintermediation or ‘Uberization’. Of technology making conventional businesses obsolete. 

Uber ate the taxi medallion system, Amazon ate bookstores, DeFi will eat banks, and so on. 

But to me, this represents a very optimistic belief. Software is power, accessible power. If software eats the world, and anyone can access software – anyone can eat the world. That story of truly equal opportunity – that’s what this quote is about. 

How did you get into the cryptocurrency and blockchain world? What was your first experience with digital assets?

I had no crypto, to begin with, and no money to buy crypto. I got on bitcointalk and built an escrow service for people to be able to swap crypto. The transaction fee I earned was my first crypto. 

Could you describe your BitAcces experience?  What was it like setting up 100 Bitcoin ATMs in 18 countries? 

It was a heady, extremely optimistic time for me. There was this naivete that’s rare today, that what we were building would spread all over the world. There was also the gratification that comes from introducing something new to the world. In many of these locations, this was the first bitcoin ATM – Toronto, Montreal, Winnipeg. 

We were the coolest kids in town. I got to travel a lot, meet a lot of crypto OGs. They were the ones who bought ATMs, with the excitement of buying an arcade machine. In fact, that’s how I met Anthony di lorio, the co-founder of Ethereum. He was my first customer. He bought the first ATM in Toronto, around a BTC meetup. 

What were the trials and tribulations you had to overcome? 

BitAccess was a YC Alumnus, it was characterized by fast growth. Beyond a point, the hardest thing was the shift in focus from pure tech to tech that had to orient itself around compliance. Compliance related tools began to eat into more than half our time. 

The other hard part was the culture shock of moving from India to Canada. I was embraced by the crypto community, but I was figuring out entrepreneurship, how the world works…the culture shock never fully wore off until later.     

What’s the next big thing for cryptocurrency?

I believe virtual worlds and NFTs are in a very interesting zone, on the threshold of something incredible. Check out Cryptovoxels. They’re pushing the boundaries of how creatively a human can live. 

In your opinion, what does the cryptocurrency space need to make its next evolution? 

The obvious answer is scaling. The day we figure that out, transaction costs will come down to a few cents and will trigger a profound change across the board. The other change this space needs, now more than ever, are strong stories around the blockchain. 

Stories that hearken back to the optimism of 2014. The past two years have forced much of this community into a shell. There’s a lot of undirected aggression, skepticism. We need to mainstream big stories that bring back the ability to trust one another. 

According to your site, your investment secret is “not invest expecting it to boom, but to invest because you simply love the idea”

What are some companies (or industries) with ideas you love (not limited to cryptocurrency)?

If not crypto, then space exploration. It’s inspiring, another frontier. 

In crypto, I have always loved Decentraland – the core philosophy that your land, once it’s yours, can never be taken away. In an increasingly authoritarian world, this reality is an anchor. A galaxy on Urbit is another example. Digital art – say in makersplace or opensea. The truly original application of AI in Numerai. 

What do you view as the key growing moments for you as an entrepreneur in your life? What key lessons can you dispense for the entrepreneurs in the audience?

Entrepreneurship can work only if two things come together. 

The first is that you need to define your antithesis to an existing thesis. 

And the second is to understand and be at peace with the fact that you will at most achieve synthesis, a sort of a meeting point between the existing thesis and your antithesis. 

There’s a philosophy at the heart of this – an understanding that when you begin with an aspiration to reach somewhere, you recognize the transits in the middle, planned and unplanned, as things that augment your journey, not as burdensome wastes of time. 

This is inspired by the works of Deleuse, a French philosopher. In fact, we have named the current version of our protocol after Deleuze, if anything to remember that how we got here was not in a straight line, and where we go from here won’t be either. 

What are the most important things to follow in the cryptocurrency and blockchain space (ie. DeFi, international regulation, Libra, etc)? Why?

The three major issues that will impact layer 1 of the blockchain – Regulation (know your jurisdiction!), scalability, and governance. Everything that happens in these three arrowheads is relevant, and important. 

In your opinion, who are some of the brightest minds in cryptocurrency today?

Off the cuff, I follow Gavin Wood, Fred Ehrsam. And one off-kilter entry – @CryptoDonAlt. His viewpoint and take on this space is fascinating. 

If there was one single takeaway you can impart on our audience, what advice would you leave them with? 

Well, I can’t give advice, really, but I do have a suggestion – that we practice optimism, to attempt to reach back to the mindset of the crypto world before it became rich. To be more open, to give people a chance, maybe even a second chance. And to not confuse optimism with gullibility. Life is community, a multi-player game. We shouldn’t forget this when we’re playing crypto. 

This article is Originally posted on CoinCentral.com
Author: Alex Moskov

6 Blockchain Startups Taking on the Freelancer Economy


Freelancing is an excellent starting point for the discussion about the impact of technology on the evolution of a highly active and entrepreneurial microcosm within the grand professional workforce.

A decade ago, freelancing was seen as somewhat of an island of misfit toys – people who were otherwise barred from the larger corporate workforce either by job qualifications, geographic location, or discriminations such as tattoo sleeves, or those crazy few that decided to start their own business.

Today, the blossomed freelancing ecosystem has shaken up the traditional professional itinerary.

Instead of working at the local restaurant or bar, college students are opting to monetize their nascent professional skills by programming or writing web content for $20-$45 an hour. It’s no shocker that many in their early 20s are jumping on the digital nomad rocketship and traveling the world and making a full year’s salary at their own pace and hours.

A 2017 study by Upwork and Freelancers Union estimates that 57.3 million Americans (roughly 36% of the U.S. workforce) are freelancing in some capacity, and add $1.4 trillion to the economy every year, a jump of nearly 30% since 2016.

Extrapolating this current growth rate puts the majority of the U.S. into the freelance spectrum by 2027.

Skilled professionals are entering the freelance economy to soften the blows of of post-gentrified San Francisco and New York City rent, if not to at least make a few extra dollars at $65-$150+/hour.

Internet-savvy labor-seekers all over the world is also able to earn a much higher wage in comparison to their native wages. Take this writer’s motherland of Bulgaria, where the monthly minimum wage is about $290 USD (235.20 EUR). A simple web content gig that averages around $15/hour at a typical 8-hour workday puts this employee at 12x the minimum wage line at $3,600/month (2,900 EUR). That’s a lot of shkembe chorba and Kamenitza beer.

63% of freelancers stated they freelance by choice, an 18% jump from 2014 to 2017. Additionally, 63% freelancers noted that they prefer the security of a diversified portfolio of clients rather than a single employer.

Upwork infographic

Image from Upwork

The rise of the freelance economy and the seismic shift of talent gave birth to intermediaries that are able to make an absolute killing connecting freelancers and clients.

Intermediaries such as Upwork, Toptal, and Fiverr act as talent marketplaces, escrow agents to release payment when the freelancers and clients mutually agree on the completion of work, and as a sort of search engine to place the “Top Rated” freelancers at the top of the new job listing suggestions.

Upwork: Target Practice for Blockchain Startups

To put this opportunity in perspective, let’s take a look at Upwork, one of the world’s most popular freelancing platforms.

Upwork home page

Upwork’s home page.

Upwork as we know it today was born in 2015 as a rebranding from the merge of Elance (founded 1999) and Odesk (founded 2003). With an estimated over 9 million registered users (much fewer active) in 180 countries with over $1 billion in annual freelancer billings, Upwork is largely regarded as a pioneer of the freelance economy.

Upwork makes for excellent target practice for blockchain startups because it has been able to accomplish what few freelance platforms have failed to do: create a trusted platform with a bustling ecosystem of active and satisfied users. For every Upwork, there are dozens of terrible and scammy platforms charging higher fees without offering nearly the same experience as Upwork.

Upwork acts as an intermediary and escrow agent and charges freelancers a fee on every transaction (20% up to $500, 10% from $500 to $10,000, 5% $10,000+, and clients a payment processing fee of 2.75%.) Upwork earns an estimated revenue of around $68,826,417 per year, the majority of which comes from these fees.

A single user making $65,000/year from multiple clients on the Upwork is making Upwork anywhere from $3,250 to $13,000 every year with very little upkeep – not too shabby for an algorithm!

Whatever human upkeep required for mediation and customer support happens via chat through Upwork’s support staff, which is most likely a network of inexpensive scripted virtual assistants from around the world.

Thousands of full-time freelancers with active rosters of clients and steady streams of work will happily express gratitude to Upwork for getting them started on their journey. The platform presents utopia for ambitious skilled talent with a penchant for taking full agency of their livelihood, setting their own hours and contract terms, and working wherever they choose – whether that be on a beach in Thailand or the coffee shop down the street from Mom’s house.

Unfortunately, all that glitters is not gold. Thousands of freelancers that put the full weight of their subsistence on the platform have complained of having the floor pulled from underneath them by unfair account freezes, reputation-shattering negative feedback from bad apple clients, as well as notoriously bad customer support.

Even a pleasant experience with Upwork doesn’t guarantee loyalty. Freelancing is not without its expenses. Rent, food, health insurance, co-working spaces, plane tickets, and the vices that come with an essentially self-ostracizing career path add up.

With freelancing also comes the imminent threat of one of your core clients falling through, leaving you staring down mounting fixed expenses and scrambling to make up the difference.

At some point, freelancers need to make the business decision of whether having 10% to 20% of their paychecks going to an intermediary is worth it. That 10% to 20% could be the difference between a new car, a down payment on a home, or health insurance. 

High fees are a huge reason why freelancing platforms like Upwork are seeing an exodus of their otherwise loyal users into off-site agreements where trust is hardly a factor with long-term clients they have become familiar with and from whom they can reliably expect work.

Without a need for Upwork’s core value proposition of trust, freelancers can shift their entire business to Gmail/Skype and Paypal or crypto. Clients also don’t mind using their own preferred methods of communication and saving on the 2.75% payment processing fee.

What attracts millions of freelancers and clients to the platform is the concept of trust and the enforcement of it, a value proposition that has become existentially threatened by a “trustless” blockchain.

While freelancing platforms are already caught in a vice with their user retention dilemma, dozens of blockchain-based competitors offering a smart-contract solution have come out guns-blazing.

The overhanging threat of disruption looms over any intermediary in a post-blockchain world, and the high traffic and easily monetizable freelancing economy is ripe for the taking.

Canya.io is the closest upcoming platform to Upwork. This blockchain-powered marketplace of services raised over $12m AUD in their November 2017 ICO and claims to have over 7600 users and 3,400 service providers.

CanYa's home page.

CanYa’s home page.

CanYa will offer essentially the same services as traditional freelance platforms with fees set around 1% carried out in the native utility token CanYaCoin. The CanYaCoin is used to power the network of transactions as well as incentivizing platform growth and user behavior.

What sets CanYa apart from online freelancer platforms (other than the advantages of blockchain and a decentralized network) is that it also aims to provide in-home services, such as hiring a plumber.

For more information, check out the CanYa website and whitepaper.

Although Steemit isn’t necessarily a platform for freelancers to connect with clients, it leapfrogs past the need for clients by offering content producers a means of monetizing their content.

The typical engagement between web content freelancers and is as follows: 

The traditional content monetization model involves leveraging content for traffic in hopes of generating advertising revenue or affiliate commission. Digital marketing savvy entrepreneurs with an understanding of what sorts of content performs well, how it should be written, how it should be optimized for search engines, etc. hire freelancers to create the content.

Freelancers receive a contract for something like “24 Benefits of CBD Oil to Cure Your Hangovers” and submit the article to the client for approval. If approved, the article goes live, and the clients utilize their skills to drive traffic to the content (or they hire someone that can). Hundreds or thousands of interested users read the article. The site owner gets paid by the advertising revenue from AdWords, a commission from the affiliate links on the site, or other sorts of partnership deals.

Steemit's home page

Steemit’s home page

Steemit essentially cuts out the need for the intermediary client and allows freelancers to post their content on https://steemit.com/, where users will read, comment, and engage with the content.

The content creators are then rewarded in Steem in proportion to the number of people reading and engaging with it based on the amount of “Steem Power Units” of that particular user.

The Steemit platform is architected to generate new units of “Steem” in order to keep the network running so that there will never be a need for third-party advertising or affiliate marketing to keep the lights on.

Ethearnal is a blockchain-based freelance platform that primarily focuses on tokenizing reputation as its main differentiator. It also provides the same money escrow and moderation services.

Ethearnal's homepage

Ethearnal’s homepage

The reputation of freelancers is calculated based on how much ERT they have. Freelancers then “stake” an amount of ERT set by a client in order to enter into the particular smart contract.

Employers must stake ERT to hire freelancers, and moderators must stake ERT to solve disputes.

Whenever a contract finishes without the need of arbitrage, the Ethearnal platform uses $ of the contract to purchase ERT tokens on the open market to reward both the employer and freelancer with 0.5%, allowing them to receive reputation boosting tokens in proportion to the contract value.

To learn more, check out the Ethearnal site and whitepaper.

The Origin Protocol seeks to decentralize the entire sharing economy and has the likes of Uber, Airbnb, Fiverr, and Getaround in its crosshairs. Although the scope of its mission is broader than the laser-focused freelancer model, it plays an arguably larger role in the conspiracy to undermine the entire sharing economy, which is estimated to grow to $335 billion by 2025.

Origin Protocol's home page.

Origin Protocol’s home page.

By using the Origin Protocol, businesses or individuals can conduct their operations on the decentralized web. CanYa, for example, is building their marketplace of services for the gig economy on the Origin Protocol.

Origin Protocol

To learn more, check out the Origin Protocol site and whitepaper.

OpenBazaar is the world’s largest decentralized marketplace and charges no platform fees.

Spun out of the winning idea of a darknet marketplace of a Toronto hackathon in 2014, OpenBazaar was made to be completely peer-to-peer with no central controlling organization.

OpenBazaar's home page.

OpenBazaar’s home page.

The founders then started a company called OB1 with $1 million of venture capital investments from Union Square Ventures and Andreessen Horowitz. OB1 received a second round of investment for $3 million in the fall of 2016.

OpenBazaar functions as a sort of global Craigslist that also allows freelancers to connect with new clients.

Users are able to pay with over 50 cryptocurrencies such as Bitcoin, Ethereum, Litecoin, Zcash, and Fash, and sellers are able to receive payment in Bitcoin, Bitcoin Cash, or Zcash.

To find out more, check out the OpenBazaar site.

Moneo is a blockchain-based freelancer platform that vets and verifies its freelancers with a primary goal of providing an array blockchain experts for hire.

Moneo's home page.

Moneo’s home page.

To learn more, check out the Moneo site and whitepaper.

Blockchain Out the Woodwork

Soon after the popularization of the awareness of blockchain’s potential came a near commoditization of blockchain-based platforms.

Iterations upon iterations on the “blockchain-based smart contract freelance platform” concept started rolling out en masse with names that aren’t necessarily trying to compete in the Creativity Olympics.

Blocklancer is offering a Distributed Autonomous Job Marketplace (DAJ) run on the Ethereum blockchain. This platform aims to be entirely self-regulatory with minimal fees and a decentralized tribunal system to guarantee fair dispute settlements and minimize fraud.

Coinlancer does the same thing and is hardly anything more than a smart contract platform draped with a user-friendly experience.

As is in the traditional Silicon Valley tech entrepreneur world, countless companies will start seeking a product-market fit in a monetizable niche, but this time with blockchain as a competitive advantage over the old guard.

Final Thoughts – Are Blockchain-Based Freelancing Platforms the Future? 

Theoretically, a trustless blockchain appears to hold the keys to freelancer emancipation, or at the very least potentially an impetus to a substantial restructuring of the current king’s ransom high fee structure imposed by intermediaries.

However, the keyword is theoretically.

Platforms like Upwork have spent millions in simplifying the user interface and user experience for all parties, as well as educating the general population on the ease of use and benefit of the freelancer economy.

Sure, a startup can reverse engineer of the UI/UX of the reigning platforms, but the challenge of branding is real.

The lowest hanging fruit for new platforms is users who have the time, flexibility, and patience to test new options, which isn’t necessarily a large demographic.

Blockchain startups certainly have their work cut out for them on the user acquisition front, especially now since Facebook and Google have both taken hard stances against cryptocurrency advertising. And even then, these startups need to jump over the next hurdle of building a two-sided community that competes with the activity of digital metropolises like Upwork.

On the other hand, the incumbent freelance platforms are mired in their own problems. The leading solution to the problem of high fees, blockchain, requires the surrender of the intermediary’s core value proposition and surrender of its main source of revenue.

Should a platform like Upwork pivot to blockchain to reduce fees, they’d be gutting their near (estimated) $70 million in annual revenue. That might make meeting payroll for their 250+ employees a tad difficult.

So, the narratives being to reveal themselves.

Will small, nimble, and adequately funded post-ICO blockchain-based startups be able to successfully onboard massive amounts of freelancers and clients and create a self-sustaining ecosystem or will they prematurely exhaust and doom themselves to a tiny esoteric circle of cryptocurrency aficionados?

Will ailing old-guard platforms be able to stop the drain of their most valuable cash cows talented freelancers, or will they become another set of relics antiquated by the raging tide of technological innovation? 

Only time will tell.

However, one certainty has started to manifest: the booming freelance economy has yet another avenue to exercise optionality when it comes to monetizing experiences, skills, and labor, as well as connecting ambitious talent with potentially civilization-advancing projects.

This article is Originally posted on CoinCentral.com
Author: Alex Moskov

Donald Trump’s Senior Economic Advisor Is Working on a Stablecoin


There’s at least one blockchain bull in Washington D.C. 

Stephen Moore currently serves as Donald Trump’s senior economic adviser. Moore played an instrumental role in the writing and passage of the Tax Cuts and Jobs Act (2017) and briefly entertained a Trump nomination to serve as a governor of the Federal Reserve and help manage the nation’s currency (Moore would withdraw his name from consideration.) 

Moore, a self-ascribed policy geek, counts over 35 years of working in public policy. During this time, Moore was also on the Wall Street Journal editorial board, Fox News Channel, and CNN as a senior economic analyst. 

Worth Magazine ranked Moore as the 32nd most powerful person in global finance. In 2018, Moore met the Founder and CEO of Frax (then Decentral Bank) Sam Kazemian at the SALT conference, a bi-partisan investment conference hosted by Former White House Director of Communications Anthony “The Mooch” Scaramucci. Kazemian is the co-founder of Everipedia, a for-profit Wikipedia “fork” that uses the EOS blockchain and incentivized content creation using a cryptocurrency token called IQ. 

Today, Moore serves as the Chief Economic Advisor of Frax, a decentralized fractional-reserve-based stablecoin. By its nature, Frax will compete with central banks by offering a stable digital alternative. 

We connected with Moore and Kazemian to discuss the future of stablecoins, the current political climate surrounding blockchain and bitcoin, and how the Frax team aims to establish Frax as a widely adopted digital asset.  

What does the role of Chief Economic Officer at a cryptocurrency project look like? 

Moore has spent the bulk of his career advising politicians and rallying stakeholders in advocacy of lower taxes and decreased government spending. As a senior economic advisor to Trump, Moore helped work on overhauling the US tax policy, which was passed into law by Congress in 2017. 

Today, Moore is dedicated some of his schedules to something out of the immediate wheelhouse of most in Washington: advising a blockchain startup on its creation of a stablecoin.

“One of my roles is to make sure Frax grows and grows into billions of dollars but keeps a stable value,” says Moore.

Moore also wants to help Frax escape and better navigate a murky regulatory atmosphere. 

 “Another role is to help the company navigate this undefined regulatory climate,” says Moore. “We don’t know what regulations are coming but we know there are regulations coming.  It’s not much an economist role but I’ve been in Washington for 35 years and I know how these agencies work. Regulatory agencies might try to slam the door shut on a lot of these cryptocurrencies and we want to find a way to prevent these currencies from being shut down.” 

What’s it like being a proponent for blockchain and digital assets in Trump’s administration? 

“Trump administration has had some skepticism,” comments Moore. “Not hostility, but skepticism. We want to work with the administration and ease some of their fears. Stablecoins and blockchain are not something that will blow up the economy. It should be viewed as an asset or a liability.” 

“People inside the Trump administration are intrigued. One role I’ve helped play is to increase the visibility of blockchain and digital assets. They raise objections and complaints, and I try to talk them down from the ledge. I view this as the Internet age where the government can’t stop progress. I think crypto and digital currencies are the next big thing.” 

You can’t stop technology. Let it proliferate, let people use it, and let it become the Wild West. It would be very advisable for the Trump administration to let people work this out and make their own decisions. Regulators are trying to solve yesterday’s problem and far away from the curve of solving where the best things are.”  

“Early adopters will realize its potential. We’re at a stage where 95% of people probably don’t know what it is.”

Will cryptocurrency be a topic for future Presidential elections?

“2020 no,” comments Moore. “2024 yes”

Why does the world need another stablecoin?

Frax differentiates itself from other stablecoins as an algorithmically managed reserve of cryptocurrency and digital bonds.

“We’d like other stablecoins to continue growing so we can use them as collateral to back Frax,” notes Kazemian. “We’re not another Tether or Maker clone that over-collateralized Ether.” 

But why now? Kazemian looks at the industry’s progress in the past few years as extremely productive in setting the foundation for decentralized finance. 

“I don’t think something like Frax would have been possible until the industry grew into what it is today,” says Kazemian. “Money markets like compound.finance have hundreds of millions of loans coming in. People are paying interest on those products. Tether and Dai getting a strong foothold. Tether is the fifth-largest cryptocurrency by market cap. Also, the psyche in the industry has changed that stablecoins are an important part of the ecosystem. We needed the whole atmosphere to change.” 

There is nearly $700 million locked in loans locked in decentralized finance (DeFi) contracts.

“To me, Bitcoin isn’t really a currency; it’s a commodity,” says Moore. “A speculative commodity at that. I’m not saying that to be negative. A currency retains its value over time without going way up and down in value.”

“A recession or a bear market is just a bull market for stability,” says Kazemian. “What happens when prices go down? Everything flees for the dollar. Just by logic, when there’s a bear market on one end, there’s technically a bull market for what the assets are priced in. It just makes sense. We’re seeing the same thing in crypto. Seeing utility coins and shitcoins plummet, and stablecoins like Frax are there to give investors stability and sound value.” 

What are your plans for user adoption? What does the stablecoin need to succeed?

“We view it as a multi-layered approach,” says Kazemian. “In order for Frax to grow, it needs institutional or exchange backing so people can actually use it. The second phase is once people can get access to Frax, we’ll start figuring out how to get out to the general public. We’re looking into more retail-based things like Robinhood or Cashapp and slowly move into the consumer space.” 

What’s in it for you guys?

“With most decentralized coins, there’s a 2 token system,” comments Kazemian. “People who want exposure to growth hold the volatile token. Frax works the same way. Frax shares (FXS), those tokens are hopefully going to be worth a lot. They work in a similar way. The total value of frax shares is the DCF [discounted cash flow] of all fees paid in Frax. Part of the shares has value in the entire system. It’s pretty exciting because it’s like having shares in a decentralized central bank. The original shares generated are distributed to the founding team and investors, partners– similar idea to MakerDao token.” 

Much of Moore’s blockchain support seems to be rooted in his strong Libertarian leanings. 

“I want the government to know as little about me as possible,” says Moore. “I think millions of people are like me around the world. The idea you can have a currency that’s not monitored or controlled by the government is very valuable. You can’t discount the value of a decentralized currency.”

Why peg Frax to the Dollar?

“If the value of the USD changes, we’d have to wonder about how to update the protocol to follow another peg,” says Kazemian. “It’s possible in terms of software. I can’t see a world where the USD doesn’t lose its value.”

“This is a great question,” says Moore. “Is the dollar the best thing to peg this to? There are flaws in many currencies. I lived through the 70s where we saw 15% rates of inflation. What else would you want to peg it to? One idea we thought about was pegging it to the price of gold, but it fluctuates more than the dollar. Many currencies have had much bigger peaks and values over time. It’s the best choice out there. The Dollar is simply the least rotten apple in the bunch” 

The team sees Frax co-existing and even supporting the U.S. Dollar. 

“Frax helps solidify the dollar’s role as the world currency,” comments Moore. “We see Frax as a digital world reserve currency.”

“Since Frax is pegged to the U.S. dollar, it’ll help keep it relevant,” says Kazemian. “You can move the same dollar value using a blockchain infrastructure. We’re not trying to do a weird floating currency like Libra that has a unique exchange rate to the USD. We’re actually excited because it’s a very American project.” 

Hypothetically, can Frax be shut down?

There’s nothing illegal about what we’re doing,” comments Moore. “There would be a lot of problems for the government trying to shut down. It’s a legal product. Government regulators recognize it’s a clear and present danger to their current status. They will try to figure out a way to slow it down. Government regulators, especially when it comes to technology, are always like three chess moves behind the industry.” 

“In a hypothetical world, it’s a decentralized financial product,”  adds Kazemian. If they try to take out Satoshi after they release code, people are already running it.”

In other words, once the cat is out of the bag, you can’t put it back in.

How will governments react to a widely adopted stablecoin?

According to Moore, stablecoins can serve as an important policy function that isn’t recognized by the people in policy powerhouse cities like Washington, Brussels, Tokyo, and so on.

“These cryptocurrencies will have a very disciplining effect on government currencies,” comments Moore. “As Sam was saying, there’s a saying good money drives out bad money. People are going to flow to the currency they trust. People flee to the dollar, which forces other countries to think twice about devaluing their currency.”

The large number of viable substitutes that exist, the less likely governments will be able to manipulate their currencies outside of the best interest of the public.  

“When countries get into a debt crisis, they try to depreciate the debt currency and then try to pay back debtors,” explains Moore. “It’s a way of screwing over the debtors. Now, when you’re going to have currencies like Frax out there, you’re going to see a migration to more transactions being done in Frax instead of itself.” 

The availability of substitutes such as Frax and other stablecoins is going to make it difficult for central bankers to successfully inflate or deflate a country’s currency.

“It’s going to force central bankers that they will have to keep their currencies stable. Markets will instantly punish them for not. Over time, you can see some of these debts paid back in Frax instead of a certain currency.” 

Is stability necessarily always a good thing?

“Stable currency is optimal,” says Moore. “You always want your currency to be level in value. We know from history for hundreds of years, high inflation and high deflation can have negative consequences for an economy. It gets back to Economics 100: why do you have a currency in the first place. If it doesn’t retain its value, people will use other things to trade with.”

Final Thoughts

To learn more about Frax, check out the first version of the whitepaper on Frax.finance. Currently, the team is testing some of the smart contract features on EOS and planning Ethereum integration.

It’s estimated Frax will be available on the market at some point in 2020.

This article is Originally posted on CoinCentral.com
Author: Alex Moskov

How Blockchain Can Eliminate $592M in SNAP Benefit Fraud

The Supplemental Nutrition Assistance Program (SNAP), formerly known as the Food Stamp Program, is the largest program of the US Department of agriculture in terms of the number of recipients and budget. 

Thanks to SNAP, over 40 million (2018) low-income Americans are able to receive financial assistance to buy food, offering an average monthly payout of $125 per qualifying member.

In 2018, SNAP costed US taxpayers over $65 billion. However, a small, but manageable chunk of this massive sum went to fraudulent uses. Orbs, a company that created a hybrid public blockchain designed for large scale consumer applications, recently released a blog post highlighting how SNAP is often abused. 

The SNAP State Activity Report found that roughly $592.7 million in SNAP benefits were “Fraud Dollars”, meaning that they were likely misused, traded for cash, unapproved items such as controlled substances. Other abuses of SNAP even implicate some retailers, who would charge an EBT with a certain amount in exchange for a discounted cash amount, or simply overcharging the EBT to sell unapproved items. 

While the fraud may seem small as a percentage of the total expenditure (about 0.8%), $592.7 million is still a significant amount that could be better utilized to either provide more benefits for qualifying SNAP participants or other public programs. 

Orbs is making the case for blockchain as a seamless solution to eliminate SNAP fraud with a limited overhaul of the massive public platform. 

We connected with Netta Korin, the co-founder Orbs to discuss. 


How does SNAP benefit fraud impact families in need?

Fraud leads to a reduction of the benefits received by qualifying recipients who do not abuse the system. 

Those most affected by fraud include those whose benefits are collected on their behalf, with a majority including children and individuals with disabilities. 

Furthermore, abuses to the system by recipients of service-providers provide individuals lobbying against SNAP and general social benefits with ammunition; which can, in turn, influence the reduction in aid and commitment to families in need. 

Could you explain how SNAP benefit fraud proliferates?

SNAP fraud is typically defined as the exchange of benefits for cash or other ineligible items (trafficking), or purposefully misrepresenting information on your SNAP application with the aim of receiving more benefits.

Although the overall percentage of program participants participating is still relatively low (.9%) – the extent has been on the rise. According to data from the U.S. Department of Agriculture, benefit fraud increased by a staggering 61% in 2016 from $367.1 million in 2012. 

As a result of increased fraud, administrative overhead and costs related to enforcement against fraud have swelled. If these costs were to be minimized, greater benefits for eligible persons would become available. 

How can blockchain slow SNAP benefit fraud, or completely stop it?

SNAP participants already receive their benefits through an electronic benefit transfer (EBT) card, which is de-facto a digital wallet. We suggest migrating the EBT platform to the blockchain, rather than leaving it centralized. 

Notably, this migration would not cause any adverse changes to users’ day-to-day experience. Users would also have the ability to use their EBT cards as Digital IDs provided by the US government, essentially making them dual purpose.  

Our recent blog post highlights how various federal support programs are managed separately. This separation often leads to confusion among applicants who are unaware of their eligibility for support from other programs, as well as an aversion to enrolling due to the barriers involved. 

A Digital ID platform, based on data collected from certain programs, could reduce applicant confusion and frustration by helping them navigate applications and automatically matching them to additional programs where they meet the criteria making the overall process much faster, easier and efficient. 

In short, the migration of the EBT platform to blockchain serves two key benefits:

  • Direct – Being upgraded to a digital ID that acts as a key for additional benefits, rather than “just” a digital wallet for SNAP benefits, will immediately increase the intrinsic value of the EBT card in the eyes of its holder. Subsequently, EBT cardholders will be less likely to “traffic” it for cash, which is one common form of SNAP fraud.
  • Indirect – If participants are eligible for aid from additional welfare programs, they can easily and efficiently apply, cutting bureaucracy to a minimum.

Do you see this being implemented in the reasonable future?

Yes. We see more and more governments, NGOs and enterprises looking into blockchain-based Digital ID solutions. Due to the Hexa Foundation’s focus on blockchain for social impact, I was invited to join the WEF Global Future Council on Humanitarian Systems which met in Dubai in November. 

One of the Council’s goals is to unlock new technological solutions to increase the efficiency of global humanitarian efforts. A significant portion of our discussion involved how to use solutions such as digital identity to enable greater program efficiencies.

While there are certain aspects that require careful attention such as privacy and regulation, etc., the overall trend is clear: Blockchain provides a solid solution for managing one’s ID and these organizations realize that. The migration to a blockchain can also be carried out gradually, allowing agencies to adopt it in small, easily manageable steps

With SNAP, we recommend the first step as transitioning the EBT cards to a blockchain-based platform; then adding on the Digital ID layers later on. The solution we suggest does exactly that. 

What are the major obstacles we need to overcome to see blockchain being utilized in the public sector?

Education of the public sector. There is still deep confusion concerning blockchain, including what it’s good for and what it is not good for so we’ve spent a great deal of time investing in educating both college students and the international community through our membership in the Mousebelt Blockchain Education Alliance and our participation in the United Nations hackathon for social impact where a solution built on Orbs won! 

Most people still tend to confuse blockchain with cryptocurrencies, and are therefore deterred from it. Others try to present as a “fix all” solution. We take a realistic approach – it can make a big difference in tackling certain use cases but it isn’t always the best solution for everything.  

In terms of technology, there is still a way to go, but we already have enough in order to launch and support successful projects for meaningful causes. We’ve had ongoing discussions of this topic which can be found in previous publications of our Foundation, such as the one on blockchain aid for the refugee crisis

We spend a lot of time and effort educating global leaders as to the added value of blockchain technology to enable more trustworthy, efficient and transparent systems as part of our Hexa Foundation.

Lastly, it’s important to note that the public sector is primed for blockchain innovation since in most countries, transparency in the process is already mandated by law. 

What are other simple use case parallels a similar blockchain solution can be used for?

Blockchain can be used to improve transparency and accessibility in a variety of ways. For example, migrating government centralized registries. e.g. car ownership, real estate, trademarks, certifications, to blockchain-based registries. Additionally, public procurement tenders, which would provide transparency into the use of public proceeds, as well as the distribution of humanitarian aid in refugee camps, ensuring it is received by the end-user.

Thank you, Netta!

This article is Originally posted on CoinCentral.com
Author: Alex Moskov