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Token Daily Newsletter #19


TWEET OF THE DAY


"Cryptography is a tool; it can be used to hide secrets via encryption but it can also be used to track data via public keys & digital signatures. It should come as no shock that government adoption of blockchain technology will be to take advantage of the latter" - Jameson Lopp 

 
  

IN BITCOIN

⚡️ SparkSwap’s Early Adopter Referral Program

Want free Sats? SparkSwap’s new referral program has you covered. SparkSwap Desktop is a desktop application that lets you buy Bitcoin with USD directly into your Lightning wallet. The transactions are non-custodial (done via LN Atomic Swaps, instantly). This is a new feature that brings liquidity to LN and also allows you to get free Bitcoin for setting it up. You can claim your free BTC here.

 

⚡️ Bakkt Options on Futures and Consumer App

Days after announcing Bitcoin delivered options (set to come out in December) and simultaneously setting a trading record for Bitcoin contracts, Bakkt revealed their new consumer app which is set to launch in 2020.

CPO Mike Blandina wrote that he wants consumers to be able to make purchases with digital assets from merchants. In the first half of next year, they will be testing the app launch with Starbucks, their first partner. The partnership with Starbucks comes as no surprise - Starbucks is the second most used mobile payments app in the States. Behind Apple Pay (which only recently took the throne), Starbucks tops both Google Pay and Samsung Pay. 


      

IN ETHEREUM

🔹  ETH =  Hard Uncensorable Money

When Vitalik Buterin asked the Ethereum community whether having another DAO-style intervention (if needed) is alright, the answer was a resounding "No." In truth, the poll was largely unnecessary - last year the community voiced strong opposition to retrieving lost funds in the parity-bug incident. 


🔹  A Research Study about the Next Wave of DeFi Users

The Gossamer team published an interesting consumer study about DeFi. The study focuses on casual crypto users who have some exposure to cryptocurrencies but have never used a DeFi product before. Among the interesting findings of the study: casual crypto users worry about the lack of a "trusted" entity in DeFi. The lack of accountability/insurance and the fear of getting hacked constituted the main concerns of the next "potential" DeFi users. 


🔹  ConsenSys Unveils Ethereum Based Satellite Tracker

ConsenSys recently announced TruSat - an application which runs on the Ethereum network and tracks satellites. The purpose of tracking the satellites is to keep a record of where these satellites are in a “globally-trusted” manner. This will better assess the potential of collisions, as the number of satellites in orbit is increasing. TruSat highlights space debris as a problem, and aims to use open source space sustainability as a solution.
 
      
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OTHER COINS

💰  Canaan IPO Filling

Canaan Creative Inc., one of the largest mining chip makers, has recently filed with the SEC for a $400M IPO. So far, none of the largest revenue-generating crypto businesses, e.g., exchanges and mining chip manufacturers, have gone public. If the Canaan IPO succeeds, it will be a strong signal of the Bitcoin industry's maturity. However, going public is not an easy feat. Canaan has tried to IPO twice in China and Hong Kong and failed both times. Bitmain's effort to IPO last year met the same fate (though that apparently hasn't deterred them from trying again in the US this year with Deutsche Bank). 

 
      
READ OF THE DAY


Nonce Analysis Of Major PoW Networks

Antoine Le Calvez of Coinmetrics wrote an in-depth analysis of the hashing patterns of PoW networks. The analysis focuses on the "nonce" values. A nonce is a "random" value added to the contents of a block, e.g., transactions, timestamp,.. etc,  before hashing in the hope that the resulting hash will be small enough to be accepted by the network as a valid block. The analysis shows that the nonce values are not completely random. Some patterns can be observed in all PoW networks especially with the introduction of ASICs. We recommend you read the original analysis but here's an example of the nonce distribution for BTC which demonstrates that some nonces have lower probability than others.



 

      

THOUGHT OF THE DAY

Are Exchanges Open Finance?

In this recent blog post, Kyle Samani, Multicoin's managing partner, argues like centralized exchanges such as Binance, Bitfinex, and other non-US exchanges can be considered a form of Open Finance.  The essay includes some good arguments including:

1. These centralized exchanges act as capital aggregators who enable financial services for users outside the developed world. 
2.  The exchanges are pushing into a more decentralized area by offering non-custodial wallets and building DEXs in parallel to the centralized exchange

However, the article misses the core idea of "Open Finance" which is simply being open. Even with increased financial offerings, if a system cannot be used by any user it's not open. Centralized exchanges are companies that have to comply with regulations in every jurisdiction they operate in. These compliance requirements place them in direct conflict of being open.  

Whereas any user in the world can start earning interest immediately on Compound or exchange their assets using Uniswap, they cannot do that with services such as Binance Chain which geo-blocks users from more than 25 countries. Moreover, as we discuss in our previous article about Binance Chain, it is not clear how decentralized the Chain or the DEX really is.

It may be possible to argue that decentralization is a spectrum and the openness can come at a later stage when companies decentralize and convert into DAOs. However, this transition, according to regulators, won't change the legal requirements of the company/DAO to KYC users and censor specific users - which jeopardizes any attempt at complete openness.


 
 
      

Disclosure: Token Daily Capital and/or its partners may have exposure to some of the cryptocurrencies mentioned in this newsletter.

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