BUILDING ON BITCOIN

We visit portugal to explore the secretive

world of the blockchain creators

THE PLOT(S) TO
STABILISE VENEZUELA
Learn about the people trying to
save a country with cryptocurrency

10 TO WATCH
Discover the projects that are shining a torch of
innovation into the darkness of stagnation

AUGUST 2018
ISSUE 10

US$10

P R O J E
BITMOB C T
ON A CRUS
ILE
MEET JEN HI
LL - THE WO
MAN WHO’S
ADE TO BRIN TAKING TO
G BITCOIN THE ROAD
TO THE MAS
SES
 on P.64

FEATURE

Project Bitmobile
Jen Hill is touring North America and engaging
with the public directly to educate, learn and
connect with coiners and no-coiners. Make sure
to follow her journey!
 FEATURE

on P.74
The Plot to Stabilize Venezuela
Could Bitcoin be an answer for nations with
hyperinflationary economies? James McGirk
takes a forensic look at the situation in Venezuela
and the role cryptocurrencies might play

MORE ON FEATURE

P.84
Will we know it when it
happens?
Ronan takes a look at the state of
mass adoption. Are we on the brink
of sudden revolution or will
tokens slowly trickle into our lives?
Launch 8-13
All the latest news and top stories in the
fast-moving world of cryptcurrency.

Opinion

KNOWLEDGE-BASED INVESTOR 19-21

ACCREDITATION
Could crypto benefit from investor
accreditation?

THE CREATIVE SCIENCE OF 22-24

BLOCKCHAIN
The power of Art and Science

IT’S SINK OR SWIM FOR 25-27

GOVERNMENT REGULATION
The two approaches to one problem

DECENTRALIZATION SHIFTS POWER 28-30

TO THE USER
Learning from history

FROM DARKWEB SCANNER TO 31-32

NON-PROFIT DIRECTOR
An interview with Sarah Jamie Lewis

ABOVE P. 58 IRIS ASKS: AMBER BRANDNER

RIGHT P. 25 SWITZERLAND’S REGULATION

10 to Watch 45-56 Learn
10 unique projects that are changing
the face of the industry ZERO KNOWLEDGE PROTOCOLS: 35-36
STARKS VS SNARKS
Discover the technical side of blockchain
Coin Event Calendar 99
PERHAPS TRADING ISN’T SO SIMPLE 37
AFTER ALL
Decentraladies Philosophies on the markets
IRIS ASKS: AMBER BRANDNER 58 FIAT: LATIN FOR ‘LET IT BE DONE’ 38-40
Fiona explores the concept of money
HOW TO JOIN THE CRYPTO 61 MAJOR REVERSALS AND THEIR 41-43
COMMUNITY ASPECTS
Desiree’s Crypto Culture
Tutor teaches us how to read charts

FEATURE
on P.91

Building on Blockchain
Hear from some of the most interesting minds
developing on blockchain technology today
with this conference coverage from Lisbon..
CHIEF EDITOR V @GameOfCryptos ALWAYS FORWARDS
HEAD OF BUSINESS DEVELOPMENT It’s clear to see that 21CRYPTOS was founded on the
Ananke @AnankeStudio premise of giving a monthly rundown of the top 21
cryptocurrencies. From our humble beginnings as a much
PRODUCTION MANAGER Íris @n00bqu33n needed magazine for traders nearly a year ago, we’ve
grown and matured into something quite different now.
ART DIRECTOR Tiff @tiffchau
We’re no longer just a magazine to give traders the
latest tips and tricks - I sincerely hope we can say we’re
COPY EDITOR Colleen @CryptoNoobGirl
something far more - we’re a platform that reflects the
COMMUNICATIONS OFFICER very best of what makes our industry a great one. We

Hazuki @CryptoHazuki make it our duty to showcase the human side of crypto -
not the dry, clinical facts and figures - but the parts that
shine light on the people behind the tech, the people
bringing that tech to the world, and the people who
THIS MONTH’S CONTRIBUTORS (in alphabetical order) choose to use it. We’re all part of the same ship sailing
forwards into the morning sun we call mass adoption
Beastlorion @Beastlyorion - and being a diary and a companion for our shared
journey is the true vision our team wants to express.
Carl Gunaratnam @EricCointona
With this in mind, it’s time to say goodbye to our staple
CryptoTutor @CryptoTutor ‘Top 21’ feature, and to welcome something much
more relevant to the culture. This issue we welcome our
Elise Hamdon @elisehamdon
new core feature, ‘10 To Watch’, a featurette made up
D. Dickerson @dickerson_des of 10 articles following the 10 most interesting projects
making waves at the moment. These projects may be
Fiona Cochrane @fi_writing doing something different in the space - they could
be revolutionising a sector, bringing a new tech to the
Gavin P. @GasTrading
masses, helping stabilise a nation, or helping to change
James McGirk @jamesmcgirk how we approach our daily lives. Ultimately, knowledge
is dependent on context - and can only be useful if
Jen Hill @crypto_sister the context applies to the person assimilating that
knowledge, so it’s our desire to provide something that’s
Kirk Dunkley @Bitcoin_Gallery
as useful for you as it can be.
Matt Breen @MattoshiN
It’s also at this time that we can reveal that in the near
Nathaniel Whittemore @NLW future we’ll be rebranding the whole company - a new
name and a new core mission - to more accurately
Sydney Lai @SydneyLai reflect what we’re all about. So watch this space for
more. If there’s anything you’d like to see from us as
we grow and develop, we’re here to listen, and will
endeavour to create a platform that has something for
everyone. Get in touch and have your say. We’re all on
the same ship, and all our voices matter. That’s what it
truly means to Decentralize.

–
21CRYPTOS MAGAZINE
V, CHIEF EDITOR
@21Cryptos

DISCLAIMER
GENERAL
We retain full copyright and ownership of this magazine and all the content within. We retain full • Never EVER trade more than you can afford to lose.

rights to public distribution. Any unauthorised public distribution will be (and is) followed up with • ALWAYS trade safely after extensive research.
the relevant companies and authorities and legal entities.
• Do NOT follow pump and dump schemes, they damage our community in a massive way.

CONTENT
This magazine is a collection of resources and opinions, it is not direct financial advice. We’re
not responsible for the accuracy or validity of the information the pros choose to provide to
us. The opinions of our content providers are not necessarily our opinions. We aim to provide
unbiased information with no ulterior motives as a service to the crypto community. Our primary
source of income comes from magazine sales, we do not want to influence the market in any
way to our own or others’ benefit.
YOU
Please do you own research in addition to reading the content provided within. We’re not
saying this to cover our backs, we’re saying it because we want to create better traders who
don’t lose their money.
• REMEMBER that Crypto trading has elements of a gambling nature - so ensure you avoid
addiction, or any behaviours that damage your lifestyle. Life and people and experiences are
far more important than money. Always remember that.
W E S TA N D AG A I N S T D E C E P T I V E C O N T E N T
21Cryptos Magazine Ltd and our writers are aware of our responsibility to provide unbiased
information. We are absolutely against pump and dump schemes and deceptive paid shilling.
All content provided by our pros, and our own native editorials, are all our own free thoughts
and opinions, and are not the result of any paid deal with any company, group, or individual.
Any external sponsored editorials we may have in the future will clearly state their nature. Should
any of the team act against this, we will cease any cooperation we have with that individual
and they will no longer provide content for the magazine.
 AU G U S T 2 0 1 8
Launch
All the latest news
and top stories in the
fast-moving world of
cryptocurrency.
Binance partnership aims
to create first regulated
decentralized global
stock exchange
T he partnership’s pilot project, including the
public offering of tokenized equity on Neufund’s
primary market, will commence later in 2018.
Importantly, Binance and other crypto exchanges could
then provide the platform for secondary trading of these
assets pending regulatory and listing approvals – adding
much needed liquidity to the market.
The partnership could make Berlin-based Neufund the
first end-to-end primary issuance platform for security
or equity tokens – a market which CapLinked CEO Eric
M. Jackson has predicted will reach $1trillion by 2020.
Neufund’s primary market Equity Token Offering (ETO)
platform has already been chosen by seven companies
(Founders Bank, Brille24, Uniti, MySwooop, Next Big Thing,
Blockstate and Emflux Motors) to be their ETO host.
Zoe Adamovicz, CEO and Co-founder at Neufund hopes
the new project will “ensure high liquidity to equity tokens
issued on Neufund. It is the first time in history, that security
tokens can be offered and traded in a legally binding
way. The upcoming pilot project will allow us to test the
market’s reaction and realize the overall project idea in
an environment with minimized risk.” she said.
Binance’s involvement will see them begin development
on an exchange ready for security and equity tokens,
“We are glad to partner with Neufund over the pioneering
idea to create a complete ecosystem for issuing and
trading securities on Blockchain. Today’s announce-
ment marks a new chapter for Binance’s development,
with the goal to tokenize traditional financial assets,”
Chanpeng Zhao, CEO of Binance, commented.
This new project brings Malta’s self-proclaimed vision
of becoming “The Blockchain Island” a step closer. On
July 4th Silvio Schembri the Parliamentary Secretary
By
Carl Gunaratnam
@EricCointona
A regulated and decentralized global stock
exchange for tokenized securities and
crypto-assets is set to become a reality
thanks to a partnership between crypto
exchange Binance, securities tokenization
and issuance platform Neufund, and Malta
Stock Exchange subsidiary MSX.
for Financial Services, Digital Economy,
and Innovation of Malta, announced the
creation of Distributed Ledger Technology
(DLT) Regulation. The Maltese Parliament
passed a trio of bills into law; Malta Digital
Innovation Authority Act, Virtual Financial
Asset Act, and the Innovative Technolog-
ical Arrangement and Services Act and
doing so became “the first world jurisdic-
tion to provide legal certainty to this space”
claimed Schembri on Twitter. Binance
already announced earlier in the year
that it would be moving its HQ to Malta.
They are also providing financial support
to the Malta Stock Exchange’s recently
announced start-up accelerator platform
aimed at focusing on DLT and technology
driven initiatives.
In April, Neufund announced that it would
participate in Malta’s own blockchain
ecosystem, “to expedite blockchain
adoption in the banking industry and
support the progression of crypto-friendly
initiatives”. This included establishing a
strong presence in the country, sending
over teams of experienced blockchain and
reg tech experts.
Mr Joseph Portelli, Chairman of the Malta
Stock Exchange commented: “We are
delighted to welcome Neufund as our key
partner in building a Blockchain-based
exchange that is fully integrated with estab-
lished financial markets. With the upcoming
pilot project we become a worldwide
pioneer in digital finance.”
 Launch AU G U S T 2 0 1 8 9

THE BLOCKCHAIN IN YOUR POCKET

After years of Apple and Samsung supremacy, a new smartphone battle is

set to rage with blockchain technology taking centre stage. Later this year
HTC and Sirin Labs will go head-to-head when they launch blockchain
powered smart phones aimed at the mass-market. HTC’s offering, EXODUS,
is set for release some time in Q3 and claims to be the ‘first cold wallet
phone with key recovery”.

H
TC’s vision is to “expand the blockchain
ecosystem by creating the world’s first phone
dedicated to decentralized applications and
security”. Having already shipped 100million smart
phones since they entered the market in 2008, HTC
certainly have the pedigree and experience to bring
blockchain devices to a mainstream audience.
Sensibly, HTC is targeting interoperability between
blockchains to enable the EXODUS to have the widest
possible user and developer base. How this desire
to be the “Switzerland of protocols” manifests in the
final technical solution remains to be seen.
EXODUS “will provide a trusted hardware stack with
APIs that connect to wallets” suggesting the cold
storage it offers will be universal. Mobile DApps will
be offered which make use of HTI’s trusted and
user-friendly UI. HTI also promise that “every phone
will be a node”. If EXODUS turns out to be a best-seller
therefore, it is hoped that that the number of nodes
on the Bitcoin and Ethereum networks will double, if
not triple.
If EXODUS arrives in Q3 as scheduled, then it will be
swiftly followed by Sirin Labs offering, FINNEY, which
is set for release in November. FINNEY has a target
price of $999 and a down payment can be made with
SIRIN Labs native token SRN to secure a handset at a
10% discount. Running on its own fee-less blockchain,
FINNEY will be supported by SIRIN Labs’ operating
system – SIRIN OS. Like EXODUS, FINNEY also has a
built-in cold storage wallet for “major cryptocurren-
cies and tokens” – the keys to which are recoverable
using a 24 word phrase and SIRIN’s restore wizard -
much like the process for restoring your private keys
on a Ledger or Trezor wallet.
The wallet will be protected by SIRIN’s proprietary
‘Blockshield’ incorporating built-in features such as
a ‘safe screen’ that is not linked to SIRIN OS so users
can monitor and verify transactions safely, IP address
hiding, MAC address randomization, and a physical
security switch.
SIRIN also plans to launch their own Cyber Protec-
tion Suite to protect FINNEY from “network attacks,
host-based attacks, physical attacks, and unsafe
definitions in the device’s settings”. Key to this will
be an ‘Intrusion Prevention System’ (IPS) which uses
machine learning to identify and act swiftly against
malicious attacks. Also, a Digital Signature Identity
stored on the blockchain will be used to authenti-
cate users, devices and accessories. FINNEY will offer
a fully decentralized app store, and SIRIN will share a
software development kit to help encourage DApp
development.
In what could be the answer to many frustrated smart-
phone user’s prayers, FINNEY will have a 30 minute
fast-charge feature. Also, FINNEY holders will be able
to share battery power and other services with fellow
FINNEY users through a secured P2P resource sharing
system and be rewarded in SRN tokens.
 Launch AU G U S T 2 0 1 8
T he idea that trading volumes presented by
exchanges and recorded on data tracking
website CoinMarketCap (CMC), may be
misrepresentative of genuine trading figures
has gathered pace in recent months. In a blog
released earlier this month (July 19th) CoinMar-
ketCap said they were aware of three particular
practices that contribute to these “concerns”
and laid out a range of new upcoming features
to address them.
Firstly some exchanges are using transaction mining
models whereby exchange coins are mined in the
transaction process and used to refund exchange
fees to traders. This can lead to an increase in the
use of trading bots, programmed to make small
trades back and forth in order to mine more coins.
Secondly, exchanges using heavy exchange
discounts to attract users may also be skewing
volume figures but the data is difficult to ration-
alize because not all customers are subject to the
same fees.
Finally, CMC also acknowledged that some projects
are also conducting ‘wash trading’ to inflate their
own volumes on various exchanges. In their blog,
CMC suggests that it is not in a position to dictate
to exchanges what to allow, and what not to – so
instead; “In an open ecosystem like the one we
are in, we believe that the best policy —  t hat we
follow closely —  is to over-provide on data and
let users make their own informed choices about
what to do with that data”.
U K TA RG E T S L AW R E F O R M I N R E S P O N S E T O G R O W I N G
P O P U L A R I T Y O F S M A RT C O N T R A C T S
T he UK Law Commission has conducted
initial research as part of a project which will
ensure that the UK’s courts are able to adapt to the
growing adoption of blockchain smart contracts.
In its Annual Report released on July 19th the
Commission, whose role is to promote the reform
of UK law, acknowledged that; “the use of smart
contracts to execute legal contracts is expected to
increase efficiency in business transactions and it
is suggested that the use of blockchain technology
will increase trust and certainty”.
10
CoinMarketCap
adds new
features to
tackle “fake
volume”
concerns
As such, CMC recently removed minimum volume
requirements from their listing criteria, to lower the
significance of volume to interested exchanges,
and instead focused on “researching new coins
and exchanges to ensure that they are real
projects, backed by real teams, and are not fraud-
ulent”. In addition, new filters are to be added to
allow users to compare exchanges based on a
range of alternative criteria including transaction
mining support.
New timeframes will also be introduced so users
can view volume over 7 or 30 days so a more
measured assessment of ‘regular’ volume can be
made. It is hoped that by arming users with more
data, and more sophisticated ways of navigating
it, the impact of so-called “fake volumes” can be
mitigated.
Rather than cracking down on or dismissing smart
contracts, it appears that the Commission’s project
will focus on reforms that can dovetail with the
growing use of this new technology, as it brings
immutability and trustless efficiencies to business
transactions. “It is important to ensure that English
courts and law remain a competitive choice for
business. Therefore, there is a compelling case for
a Law Commission scoping study to review the
current English legal framework as it applies to smart
contracts”. They say. Work on the project proper is
set to commence later this summer.
 Launch AU G U S T 2 0 1 8 11

MASTERCARD PATENT BRINGS FAST CRYPTO CREDIT

CARD PAYMENTS A STEP CLOSER
Mastercard has filed a patent with the US Patent and Trademark Office (USPTO) that could allow
consumers to make fast, protected cryptocurrency payments through their credit cards.

T he patent, for managing fractional reserves

of blockchain currency and the “linkage of
blockchain-based assets to fiat currency
accounts” involves the storing of fiat in a central
account and a “blockchain currency” in a second
account which would be linked by a single profile
with an account identifier and an address.

Offering a revealing glimpse at what Mastercard

perceive the benefits of blockchain currencies
to be, the patent states that “in recent times
[such] currencies have seen increased usage
over traditional fiat currencies by customers who
value anonymity and security”. Expanding further,
Mastercard say “a transaction that is posted to
a blockchain may not require any information to perform fast cryptocurrency payments using
regarding the sender or recipient of the currency, the traditional payment networks and payment
and thus may enable the payer and payee of a systems technologies already set up for fiat trans-
transaction to retain anonymity. Such an aspect of actions. As well as fast transactions, merchants
blockchain transactions may be highly desirable and consumers alike would also benefit from the
for consumers that wish to maintain their privacy, complex calculations, risk assessments, and fraud
and may help reduce the likelihood of fraud due algorithm applications these systems are set up to
to theft of their information”. perform.

The system described in their patent aims to harness
these benefits whilst also eliminating the current
drawbacks merchants face when accepting
crypto payments such as the time it takes for a
transaction to be completed and the fact that
the “inability for the payee to identify the payer
may prohibit the payee from utilizing various risk
or fraud detection methods”. Whilst the techno-
logical specifics of any solution are a long way
from being finalised, the basic principle hints at
a system that gives credit card holders the ability
“Using this existing infrastructure in combination
with blockchain currencies may provide consumers
and merchants the benefits of the decentral-
ized blockchain while still maintaining security of
account information and provide a strong defence
against fraud and theft” the patent states.
This is just the latest in a line of blockchain-based
patents Mastercard has secured, including last
month’s issuance regarding a system for anony-
mous blockchain transactions.
 Launch
BLOCKCHAIN TO BE DISCUSSED
BY NEW UNITED NATIONS PANEL
T he 20-strong panel of experts from a cross-sec-
tion of technical backgrounds and disciplines
“is expected to identify policy, research and infor-
mation gaps, and make proposals to strengthen
international cooperation in the digital space”.
They will meet in September 2018 and January 2019,
and will report on their findings within a nine-month
period.
Confirming blockchain’s place in the discussions,
Executive Director and co-chair, Ambassador
Amandeep Gill said; “You cannot look at ‘web 3.0’
without looking at blockchain or without looking at
PETER GABRIEL
TA K E S S L E D G E H A M M E R T O E X I S T I N G
F O O D T R AC E A B I L I T Y S Y S T E M S W I T H
B L O C K C H A I N S TA RT- U P
Former Genesis rocker Peter Gabriel, together with
Working Capital Fund, Digital Currency Group,
Merian Ventures and Plug and Play has invested in
blockchain start-up Provenance. The UK-based outfit
offers a blockchain platform that improves transpar-
ency for consumers by tracing the origins and histo-
ries of products. Provenance hope to use the funds
to embed their solution within over 1000 food and
drinks businesses by 2025.
Gabriel commented: “We need to be able to trust
the source and distribution chain, particularly when
it comes to guaranteeing that things are produced
ethically and in an ecologically sound way. I am
convinced that the service Provenance provides,
using their blockchain data system, is going to find
a big role going forward and will be of great use to
the consumer and provide a level playing field for
smaller, independent producers on which to compete
with the big players”.
AU G U S T 2 0 1 8 12
A high-level panel on Digital Cooperation has
been launched by United Nations (UN) Secre-
tary-General António Guterres, with blockchain
is set to feature strongly on the agenda.
AI (Artificial Intelligence),” he said. “So, our hope is
that through this discussion of these various digital
domains, the business models, the opportunities
and the risks and the unintended consequences in
terms of human rights, in terms of privacy, in terms
of subversion of democracy, we are able to come
out with some common principles...of strengthening
cooperation across borders.”
The panel also includes Cathy Mulligan, a Visiting
Research Fellow from the UK’s Imperial College
Centre for Cryptocurrency.
J P M O RG A N F I L E S PA T E N T
FOR ‘ICOS IN DISGUISE’
Financial Services giant JPMor-
gan Chase has filed a patent
for managing “asset or obliga-
tion-backed virtual receipts on
a distributed system” – a move
that could see them offering
tokenized Initial Public Offer-
ings (IPOs). JPMorgan’s patent
would allow customers to turn
their stock market assets or bonds
into ‘virtual receipts’ - described in the patent as
“asset or obligation-backed electronic tokens”. The
issuance of these ‘virtual receipts’ would be written
to a distributed ledger, which the patent confirms
would be “Blockchain-based”.
The implication therefore is that companies would
be able to use JPMorgan’s system to initiate block-
chain-based tokenized IPOs, much like the Initial
Coin Offerings (ICOs) we know today. It is antici-
pated that the asset or obligation backed tokens would
be treated as securities and in some cases would be
redeemable for the underlying asset or tradable on a
secondary market. The use of the term “obligation
backed” within the patent is also an interesting inclu-
sion as it hints at a possible plan to use blockchain
technology for debt settlement.
 Launch AU G U S T 2 0 1 8 13

T he U.S. Securities and Exchange Commis-

sion (SEC) was hit by a tidal wave of
positive sentiment after inviting comments
on Chicago Board Operations Exchange’s
(Cboe) proposal to open a Bitcoin Exchange-
traded Fund (ETF). While all previous attempts
in the U.S to start a Bitcoin ETF have failed –
including one by the Winklevoss twins last year
– there is hope that Cboe’s proposal to offer
a fund based on shares issued by the VanEck
SolidX Bitcoin Trust may just succeed. Indeed,
the Cboe’s proposal attracted significantly
more comments (210) than any previous appli-
cation, of which only 6 appear to be negative.
One of those commenting in favour, was Alistair
Milne, CIO of one of the first crypto hedge
funds- the Altana Digital Currency Fund. He
said: “Assuming an ETF was indeed allowed, it
would likely attract significant trading volume
(e.g. the Swedish Bitcoin ETN on Nasdaq often
achieved top volume traded on that exchange
in a day) ... again making it harder for the
market to be manipulated elsewhere, and
encouraging more trading in the US vs other
countries”.
S T E V E B A N N O N C RY P T O
R U M O U R S A R E N ’ T “ FA K E N E W S ”
U.S. President Donald
Trump’s former
adviser Steve Bannon
has revealed plans
to launch his own
cryptocurrency.
SEC swamped by
deluge of positive
comments on Bitcoin
ETF application
Why an ETF matters
The introduction of an ETF would open doors
to Bitcoin investment for entirely new market
segment. Large institutional buyers who were
put off by the idea of having to purchase, and
safely store their own coins would be able to
buy shares in a fund that tracked the price of
Bitcoin instead.
With a lack of liquidity in the market an ETF
would also offer greater flexibility to large scale
investors who wouldn’t have to worry about
finding a buyer at short notice, or suffering
slippage when trying to sell large amounts on
an exchange.
The ETF would also have to back any shares
sold with reserves of actual Bitcoin, thus poten-
tially creating a demand that could positively
impact the price of BTC. The price of Gold for
example, quadrupled in the 10 years following
the introduction of the first ETF in 2003. There is
currently no date set for the SEC’s decision to
be made public, but with their stated minimum
turnaround being “Within 45 days of the date
of publication of this notice in the Federal
Register” (July 2nd) it is possible an answer will
be published by August 16th.

Bannon spoke to
CNBC at the Delivering Alpha conference
in New York and hinted that he is working on
“a utility token for the populist movement.” A
Bitcoin owner himself, Bannon said the token
would “have to be quality” after saying that “90%
of ICO’s have been a disaster”. Back in February
Independent ICO trackers Token Data found that
the percentage of 2017’s ICOs that have failed,
or “semi-failed” stood at 59%. So while not quite
“fake news,” Bannon’s estimation may be slightly
overcooked.
 SPONSORED

DATA-SECURE KYC APPLICATION

BLOCKPASS
LISTS ON FOUR
CRYPTO EXCHANGES

Blockchain in 2018 is about so much more than just

cryptocurrencies, and today, with the smart contract
concept well proven and Dapps being developed
Blockpass is that can do just about anything, blockchain has
a user-centric become big business.

identity application Not coincidentally, an entire crypto financial industry

that streamlines has arisen. Indeed, it seems to be every week that
KYC and AML a new cryptocurrency exchange is being launched
or that a new crypto debit card is being released. It
compliance
has become common practice for start-ups to seek
for regulated initial investment by selling cryptographic tokens
industries. The during ICOs, and thousands of business now exist to
company’s PASS serve that growing market. For blockchain businesses,
token will be listed compliance has never been more important.

on four exchanges At the core of this compliance is adherence to Know

by the end of July. Your Customer (KYC) and Anti-Money Laundering (AML)
regulations. In order to comply with these regulations,
regulated service providers and ICO projects must
collect proof of their customers’ identities in the form
of personal identity documents (PIDs). This process - as
we all know from experience - is tedious, expensive,
and inefficient for everyone involved. Additionally,
it demands a great deal of trust, as companies are
getting access to some of the most personal details
about their customers.

21 CRYPTOS
Blockpass (https://blockpass.org) is a new
application that finally makes data security and
KYC compliance compatible. Blockpass does
this by giving users full control over their data,
eliminating the need to trust third parties with
personal data.
With Blockpass, users are able to submit their
personal identity documents once - and only
once - in order to create a reusable digital
identity that can be used to access registered
services. No traceable record of this personal
data is stored anywhere on Blockpass servers.
Instead, a root hash of a merkle tree stored on
an Ethereum child chain is used as a means of
identity authentication. Users have full-control
over their data, and are able to delete this hash
at any time.
Blockpass is specially designed to be easily
integrated into other compliance platforms.
Already, the company has partnered with Holdex
to create an integrated, fully compliant, ICO
platform. An ever-improving project, Blockpass
has made a major investment to launch the
Blockpass Identity Lab at Edinburgh Napier
University, which will research decentralized ways
of establishing, verifying, and authenticating
identity. Together with its partners, Blockpass is
well on its way to making the Internet of Everything
and Web 3.0 a compliant reality.
BLOCKPASS
BLOCKPASS IS BUILT FOR
BLOCKCHAIN
BUSINESS
One clear advantage of Blockpass for blockchain
businesses is, quite simply, that it is a blockchain
business itself. With Blockpass, ICO projects and crypto
financial service providers no longer have to depend
on centralized solutions for compliance. Blockpass
leverages cryptographic proofing mechanisms to
work within the confines of regulation - not against it.
Currently, internet-based industries are centralized.
Think Amazon, Uber, Airbnb. When you purchase
goods or a service using one of these sites, you are
actually putting a third party between yourself and
the actual provider of the product or service. Through
their social login services, Google and Facebook are
effectively taking over online identities of millions of
users.
Bitcoin, as it was first proposed in 2009, started to chip
away at this centralization. As the first mainstream
cryptocurrency, it proved that cryptographic proof
can effectively eliminate the third party in payments.
But just because a payment can be proven to have
occurred, it does not disqualify businesses from
compliance requirements. Particularly in the trading
of securities, companies are often required to show
who made the payment, and who received it.
For too long, blockchain businesses were forced to use
centralized solutions to establish who it is they were
working with. Blockpass is the first KYC application to
actually operate in a decentralized manner. Now, it
is possible for blockchain business to be carried out
without having to sacrifice the real advantages of
blockchain.
15
BUILD YOUR
BLOCKPASS
IDENTITY TODAY!
If you are interested in trying out a new -
decentralized - way of accessing regulated
services, then the Blockpass app is for you.
You can create your Blockpass identity in
just a few minutes and then (if you want)
participate in a token sale!

HOW IT WORKS

Step 1

Download the Blockpass Mobile

Application from the App or Play
Store.

Step 2

Enter personal details and submit your

documents:
■ ■ Name
■ ■ Date of Birth
■ ■ Address
■ ■ Phone Number
■ ■ Passport Scan
■ ■ Proof of Address Scan

Step 3:

Take a selfie holding your passport.

Step 4

Select to send your information to a

verifier.

Step 5

Accept or decline your verification

certificate.

Remember: Blockpass is a user-centric

identity application. Only you decide
what happens with your data.

Whenever you are ready to connect to a

Blockpass integrated service, just scan the
QR code on their website and get on with
business!

Businesses can quickly integrate Blockpass

into their existing platform infrastructure via
the publicly available API on the Blockpass
Github.

SPONSORED
Adam Vaziri, Blockpass CEO
BLOCKPASS
BLOCKPASS’ TOKEN
DISTRIBUTION EVENT HAS BEEN
A GREAT SUCCESS
SO FAR
Recently, the Blockpass Foundation issued the PASS
token, the world’s first KYC token. PASS tokens are
of the ERC20 standard, and can be carried by any
compatible wallet. As a KYC token, however, PASS
tokens require that the holder of the token goes through
a simple whitelisting procedure in the Blockpass app
in order to transfer the token on to a purchaser.
PASS tokens are being sold to interested
investors through a number of official token
resellers. Official PASS token distributors include
Blockrise (https://tokensale.blockrise.com),
Insignal Services (https://insignalservices.co.uk), and
Corematrix (https://blockpass.corematrix.co.uk).
PASS tokens will
officially be listed
on a growing list of
exchanges starting in
the last two weeks of
July. These exchanges
include Lykke, HitBTC,
Gatecoin and
Cryptopia.
ANNOUNCING A
FULL-SERVICE
PLATFORM
FOR COMPLIANT ICOS
To address the real compliance need that is felt by
blockchain businesses seeking funding through ICOs
or other kinds of token sales, Blockpass has partnered
with Holdex (https://holdex.io) to build an integrated
platform for compliant ICOs and token resellers.
The integrated platform is a fully white label solution.
ICO projects that use this platform will be able to
onboard investors and sell and distribute tokens all
under their own branding. The platform is designed
to streamline the process of investment for investors
and the businesses themselves. Token smart contract
development, investor checkout, a multi-currency
wallet, and KYC whitelisting are built into the platform.
17
 SPONSORED

DEVELOPING
ZERO KNOWLEDGE
PROOFS
Blockpass is built using the most advanced data
security for consumer identity that currently exists,
and bases everything on a user-centric architecture.
The next step, however is self-sovereignty - which
hasn’t technically been achieved yet.

To this end, Blockpass has, together with Edinburgh

Napier University in Scotland, launched the
Blockpass Identity Lab. Gradually, techniques will
be found to bring control back to the user. Findings
in the lab will gradually contribute to developments
in the Blockpass platform.

Currently, the goal is to develop truly trustless

interactions between consumers and service
providers with zero-knowledge proofs. In theory,
it will one day be possible to onboard with a
regulated service, for example a bank, without
revealing your personal data to the service. The
AI will be able to recognize your identity in all
further interactions based on things like face scans
and other biometrics, making the process fully
convenient and data safe.
THE NEXT STEP
Cogito ergo sum - I think therefore I am;
as humans will need to be the ultimate
owners of each part of the IoT, it was logical
for Blockpass to begin identification with
the human element. Already though,
Blockpass is working on new identity
protocols.

Soon, Blockpass will be releasing a

protocol that establishes the identity of
companies. This is absolutely essential
for transparency in business and to allow
companies to establish themselves in a
blockchain world.

Over time, identity protocols will be

created that will give real identities to
various types of objects (KYO) and devices
(KYD). This has the potential to transform
the way ownership is perceived and
regulated. Later, interactions between
these identities will be defined and
secured, and the Internet of Everything
will finally become a reality.
 OPINION
KNOWLEDGE-BASED
INVESTOR
ACCREDITATION
BY NATHANIEL WHITTEMORE
With the rise of retail cryptocurrency
investment, knowledge-based investor
accreditation is an idea whose time has
come. At stake is whether crypto will
ultimately be a force that democratizes
risk capital, or simply another way for the
already wealthy to pull further ahead.
Investor accreditation is a theme that runs hot in
crypto circles. Accreditation refers to the rules
that govern who is allowed to invest in certain
types of high risk ventures such as technology
startups.
In the US, investor accreditation is based on
existing financial status. Specifically, you can
become accredited by making $200,000 or more
per year as an individual or $300,000 as a couple
for the previous 2 years or by having over $1m
in net assets.
The principle of using wealth as an investor protec-
tion measure is presumably based either on the
idea that 1) their financial standing indicates
that they are more sophisticated investors who
understand the risks involved with startups; or 2)
that because they have more dry powder to play
with, the risk of catastrophic failure is lowered.
Of course, it doesn’t take much to punch holes
in either argument. Once an investor is qualified
as accredited, there are no rules about what
percentage of their net worth they can spend
on any single investment, so there is still a risk of
total failure. When it comes to the supposition
that moderate wealth equals technical sophis-
tication, history is littered with examples that
prove otherwise.
DECENTRALIZATION SHIFTS POWER TO THE USER
While there has been moderate loosening of
the rules that govern startup investment over
the past decade (in particular, rules in the JOBS
Act that made equity crowdfunding somewhat
more viable), the vast majority of opportunity to
deploy risk capital has remained with those who
were already well off.
And this is the source of the consternation. To
many, accredited investor rules feel like an insti-
tutionalization of the rich getting richer. Ethereum
creator Vitalik Buterin has called the rules a form
of enshrined plutocracy. Morgan Creek Capital
investor Anthony “Pomp” Pompliano recently
said in a conversation with Crypto Bobby that
accredited investors rules run counter to the
American Dream.
In this context, part of what has made cryptocur-
rency so revolutionary is that, for the first time,
unaccredited retail investors were able to partic-
ipate in the extremely early stages of risk capital
for the technology du jour. There were no rules
about who could or couldn’t buy Bitcoin, and
Ethereum’s smart contracts made it feasible for
projects to raise enormous amounts of capital
through massive, distributed, global token sales.
In this way, the crypto space has undeniably
had a democratizing effect on technology risk
capital. It is almost surely the case that more
19
 Once an investor is qualified as accredited,
there are no rules about what percentage
of their net worth they can spend on any
single investment, so there is still a risk of
total failure.
people have bought tokens in early stage
projects in the last year than have, in the last
decade, made formal angel investments in
startups.
At the same time, democratization isn’t just
about who gets to participate but how power is
distributed. In this, crypto’s record is more mixed.
First, the increased inflow of capital has
brought with it more regulatory scrutiny. In
particular, as US-based projects have gotten
more nervous that they’re going to be targeted
by the SEC for running unlicensed securities
offerings, they’ve fallen back to using exemp-
tions that allow them to work with accredited
investors. In so doing, this has closed off small
retail investors’ ability to get financial exposure
to some of the most exciting projects - at least
until they’re live and listed on exchanges, at
which point the price is almost certainly higher
than what the accredited paid.
Which brings up the second, and even more
important point. Even if and when retail inves-
tors are able to participate in ICOs, they are still,
in the vast majority of cases, the business model
for the bigger investors, rather than a true peer.
Tokenization has created a totally new phenom-
enon of capital liquidity. Funds and large
individual investors or whales who once had to
keep their money locked up for the long term in
projects they believe in can now change their
positions and rebal-
ance almost at will.
Even when tokens To many, accredited investor rules
have lockup periods,
they are months or
feel like an institutionalization of the
rich getting richer.
21 CRYPTOS
a year rather than the effective decade plus
lockups of VC.
In the context of crypto projects, this liquidity has
created a new “greater fools” business model.
In short, token projects raise a small-to-medium
sized advisory or private sale rounds - primarily or
exclusively to funds, whales and other accredited
investors - who get steep discounts of 30%-70%
(or more) off what the token price will be at ICO.
As soon as whatever de minimis lockup period
they had to agree to is over, they can liquidate
those holdings by selling all or enough of their
position to make back their principle.
When there is a constant new influx of inves-
tors, this ‘S**tcoin Waterfall’ (as investor Meltem
Demirors dubbed it) works just fine for everyone.
But, inevitably, the party stops and someone is
left holding the bag. “Tokens are a new medium
for selling ideas,” Demirors wrote. “99.9% of
tokens won’t hold any value long term. Their
initial investors and evangelists will have long
exited by the time they turn to zero. This is a
game to find the buyer of last resort. Make sure
it’s not you.”
From this angle, crypto not only hasn’t democra-
tized risk capital but has given accredited inves-
tors a new pool of money to pass risk on to and
capitalize from. In the same interview mentioned
above, Buterin flagged this exact downside of
accredited investor rules, saying that they “can
make things actually worse because they mean
regular people can only buy in at higher prices
and thus more easily become victims.”
So, is the answer to force crypto into some sort
of regulatory environment where only accred-
 When there is a constant new influx of
investors, this ‘S**tcoin Waterfall’ (as
ited investors
investor Meltem Demirors dubbed it) works
can partici- just fine for everyone.
pate? While
that would cut
off the S**tcoin
Waterfall, it
would still primarily punish the retail investors.
It would also be enormously hard to enforce
given the proliferation of exchanges, including
a growing number of hard-to-shut-down decen-
tralized exchanges.
An alternative that is picking up momentum is
to expand the idea of accreditation to include
knowledge- or experienced-based criteria. July
alone has seen the idea rear its head in two
separate high level policy contexts.
As part of their newly launched FinTech Innova-
tion Initiative, the US Chamber of Commerce
explicitly recommended that the SEC expanded
the accredited definition: “…we urge the SEC to
expand the definition of accredited investor to
include those with experience or educational
backgrounds that demonstrate subject matter
expertise to broaden smaller-dollar, main street
investments.”
As the Chamber of Commerce was publishing
their suggestions, the so-called Jobs Act 3.0 was
unveiled in the US Senate. The bill is actually
an aggregation of 32 individual bills, including
H.R. 1585 - Fair Investment Opportunities for
Professional Experts Act. The bill makes a new
qualification for accreditation more explicit,
offering accreditation to: “any natural person
the Commission determines, by regulation, to
have demonstrable education or job experi-
ence to qualify such person as having profes-
DECENTRALIZATION SHIFTS POWER TO THE USER
sional knowledge of a subject related to a
particular investment, and whose education
or job experience is verified by the Financial
Industry Regulatory Authority or an equivalent
self-regulatory organization.”
In short, the bill is recommending that there be
a new standard for professional knowledge or
experience created by a body like FINRA. The
details would be worked out later, but if this
passed, it would mark a monumental shift.
Whether it is this bill or something else that
ultimately sways the tide, the rise of crypto-
currencies are putting significant strain on our
definitions of accredited investors. Regulators
have an obligation to protect retail investors,
however with the speed of technology evolu-
tion, it may be the case that the best way they
can do that isn’t to ban them but to create
legitimate paths for participation.
@NLW
helps blockchain compa-
nies and crypto funds
communicate. He previ-
ously founded a global
program center at North-
western University,
helped launch Change.
org, was a VC focused on
EdTech and helped F500s
with their innovation
strategies.
He lives in the Hudson
Valley with his unfathom-
ably rad wife Jessie.
21
 OPINION
T HE CREATIVE
SCIENCE OF
BLOCKCHAIN
THE HUMAN CONDITION

At the core of our being, we

are compelled to explore and
understand our environment.
We are universally drawn
toward the phenomena in
our world that mystify our
imaginations and drive our
inquisitions. Through exper-
imentation and creation, we
attempt to build models of our
world using both rational and
creative modes of thought.
There are two different thought processes to solving
problems in our world: convergent and divergent thinking.

Art making is the result of explorations
surrounding fundamentals and principles of
design, critical thinking, materials and processes,
concurrently with the study of important artistic
movements in classic and modern history. It is
a visceral response to social change, paradigm
shifts, politics, and the ebb and flow of major
cultural change.
Often times these processes begin before we
are even able to walk or verbally articulate our
thoughts. A child begins experiencing the world
almost all at once; hearing, seeing, tasting,
smelling new things, experimenting with
the tactility of the surroundings, constantly
bombarded with new perceptual puzzles to
solve. This process is ongoing and exponential.
As we develop and mature, our mental faculties
become capable of processing more elaborate
questions about our environment. Just as it is in human
nature to be curious about our external environment, we
often project our curiosity inward, and question how our
minds interpret and process the external world.
Children begin to understand parallel relationships
between conceptual ideas, and are able to think in
incredibly innovative ways. When children are taught in
ways that require parallel relationships to be identified,
they are inherently learning to think in very abstract
and divergent ways. If students are challenged to solve
problems by looking for these parallel relationships, great
problem solving ability becomes tacit. It is divergent
problem solving that is at the core of design thinking,
and context specific problem solving; that is coming up
with tailored solutions to problems rather than developing
blanket solutions based on generalizations.
Educational institutions provide students with a variety
of strategies to engage with and respond to problems.
While convergent problem solving methodologies
work, I believe that divergent creative strategies are
more conducive to responding to a larger variety
of problems. The artistic method is divergent and
context specific; it is an intuitive reaction to everyday
material. The study and practice of fine arts develops
the conceptual framework for this type of open-ended
problem solving capacity, and is fundamental in the
development of creative thinking.
S C I E N C E V S A RT ?
There is a tendency in popular culture to generalize
the function of the brain into left and right parts - that
is, the left performing all creative thinking, and the
right being responsible for rational thought. Creative
endeavours involve making new ideas while thinking
intuitively, while rational occupations involve reduc-
ing the unknown to fragments of simplified data so as
to categorize and understand various relationships at
play. One mode of thought attempts to build subjec-
tive models of phenomena, while the other attempts
to deconstruct phenomena using pure objectivity.
Such a divide arises in discourse surrounding fine art
and science, generally the two are considered to be
quite polar. The relationship between art and science,
being taken for granted, was preyed upon from the
outside until a complete divorce was accomplished.
The artist is known as an erratic being, reacting to
the environment in spontaneous outbursts of emotion,
flinging paint haphazardly onto canvasses. The scien-
T H E A RT I S T I C M E T H O D I S
D I V E RG E N T A N D C O N T E X T
SPECIFIC; IT IS AN INTUITIVE
R E A C T I O N T O E V E RY DAY
MATERIAL.
tist, on the other hand, is seen as cool, calculated
and methodical, reacting to the environment in an
objective and meticulous manner with no margins for
human error or spontaneity.
Contrary to what popular opinion might suggest,
the artist must often proceed in a rational manner
in order to understand their own conceptual drive
to develop sustainable creative methodologies. The
scientist similarly, may allow his or her mind to operate
beyond the confines of method so as to remain open
to new interpretations of data. As recently as the
19th century, it was common knowledge that our
best thinkers in science were also artists, and that
artists were also largely interested in the scientific
discoveries of their time. It was not even considered
necessary to mention the artist-scientist as a novelty,
as it was a given that both realms were needed for a
human being to have a balanced ability to rationalize
and create.
A prime example of the interpenetration of
rational and intuitive modes of thought is
Albert Einstein. Einstein believed insight did
not come from logic or mathematics, but that
insight comes, as it does for artists, from inspi-
ration and intuition. Einstein believed that all
great achievements of science must start from
intuitive knowledge “...intuition and inspira-
tion....” and regarded imagination to be more
important than knowledge. He believed that
this was why at times he felt certain about his
ideas while not knowing why.
Einstein was a keen and talented musician, and
was known not only for his scientific discov-
eries, but also his ability to play violin and
piano. He believed that his discoveries were
the result of musical perception. For Einstein,
music was not just a hobby, but the driving
force behind this intuition. His thoughts were
directed by music in new and creative ways.
Einstein attributes his greatest discovery, the
theory of relativity, to musical perception. He
never thought in logical symbols or mathemati-
cal equations, but in images, feelings, and even
musical architectures. According to Arthur
J. Miller, he preferred the highly structured,
deterministic music of Mozart, and imagined
Mozart plucking melodies out of the air as if
they were ever present in the universe. Einstein
thought of himself as working like Mozart,
not merely spinning scientific theories but
responding to nature, in tune with
the cosmos. Whenever he felt that
he had come to the end of the
road or into a difficult situation
in his work, he would take refuge
in music, and that would usually
resolve all his difficulties. Accord-
ing to Einstein’s sister Maja, after
playing piano he would get up
saying, “There, now I’ve got it”.
This difference in thinking is what
enabled Einstein to make break-
throughs in science by seeing the
world through the eyes of a creator.
BLOCKCHAIN AND
C RY P T O C U R R E N C Y
- T H E U LT I M AT E C O N V E RG E N C E
Our creative insights can be verified by scientific
method, while creativity fuels science. The scien-
tific method is how we “do” science, and although
the scientific method requires findings to be empiri-
cally objectified, it is the artistic method that leads to
new insights and is the very essence of this “doing”.
According to astronaut, doctor, art collector, and
dancer Dr. Mae Jemison, “science or art is a ridic-
ulous choice”; our mission, says Dr. Jemison, is to
“reconcile and reintegrate science and the arts”. Both
the arts and the sciences are not merely connected
but manifestations of the same thing, “the arts and
sciences are avatars of human creativity — [they] are
our attempt as humans to build an understanding of
the world around us, and our attempt to influence
things (things in the universe internal to ourselves
and the universe external to ourselves)” (TED: Ideas
Worth Spreading, 2009).
Cryptocurrency is a radical example of this reconcil-
iation. Existing at the forefront of technological and
social revolution, the developers must simultaneously
respond to context specific problems surrounding
access to and distribution of value, oppressive govern-
ments, and centralized institutions. The conceptual
framework of decentralization is one that was devel-
oped out of divergent thinking, and is now being tested
and developed using the scientific method. Defining
cryptocurrency developers as either artists or scien-
tists is simply incorrect; they are in fact the creators
of an entire frontier born of imagination and rational
thought.
Kirk Dunkley @Bitcoin_Gallery
Fine artist, crypto currency
advocate, and founder of
BitcoinGallery.art. Guided by
passion and motivated by
time: I live life on my own terms
for the people I love.
 OPINION

IT’S
SINK OR SWIM
FOR GOVERNMENT
REGULATION
Swimming in
uncharted territory
can be intimidating.
What lurks below the
surface is unknown
and can, in fact, be
downright dangerous.

Nonetheless, some daredevils rush that some may later

up to the edge and dive right in, damn the point to and say,
consequences. You know the ones. Others “They don’t know
take a more cautious approach and wade in what they don’t
slowly. These are the so-called level-headed know.” Spectators
types. What remains after these two groups are the group
of first-movers have entered the water is a that pontificates,
collection of spectators. They wait on the reiterates… but
sidelines and learn from the experience of never demonstrates.
others. Yes, admittedly some will eventually
test the water but most will resign themselves
to watching and ultimately walk away.
Spectators oftentimes think they are being
the smartest among the lot when in fact they
miss out the most. This becomes the group

IT’S SINK OR SWIM FOR GOVERNMENT REGULATION 25

 OPINION

Governments are behaving a lot like

these swimmers with regard to crypto regula-
tion. As a collective they are all rushing up
to the edge of the daunting waters, consid-
ering the overwhelming implications and
trying to decide if self-preservation demands
embracing crypto to some extent or rejecting it
Watching a swimmer from the sidelines,
entirely. There are the daredevils in any arena and
it all looks so easy. Fluid motions gloss over the
this one is no exception, with countries like China
challenges that may come with staying afloat and
and Switzerland blazing a trail. While these two are
moving forward. Take for instance the obligatory
diametrically opposed with regard to approach
political battles that are fought internally among
and opinion, each is diving in headlong. China,
government agencies. While some countries make
of course, is choosing to employ tight regulation
this look easy when viewed from a distance, up
for purposes aimed at choking-out or, at the very
close it’s surely a messy business of competing
least, exacting suffocating control over exchanges
agendas. Traditionalists fight hard for the status
and ICOs in order to carry on a long-held tradi-
quo while those who take a longer view see the
tion of taking the very same tack when it comes
untapped potential – a new way forward.
to free market activity. Switzerland follows suit
with their own traditions proudly held high as well
by embracing light regulation
as a vehicle for expansion.
The Swiss strategy has already
proven to be quite successful
in many regards including the
notable development of their
“Crypto Valley” as it has come
to be known; this is a collec-
tion of crypto companies that
have established themselves
in (or moved to) Zug. But the
Swiss are not alone in their
quest to become a front-
runner in this race. Malta’s
Prime Minister, Muscat, is
out in front actively courting
new companies, eager to
become known as the “Block-
chain Island” of the world
by providing the certainty
that some-but-not-too-much
regulation provides. Among
countries like these which are
eager to plant their flag, the
competition is heating up.

Zürich, Switzerland.
Switzerland is regulating
crypto lightly, even devel-
oping its own “Crypto Valley”.

21 CRYPTOS

This internal struggle is more visible in
places like Taiwan, for example, which seems to
pair money laundering with crypto in public state-
ments; their anxiety is palpable. They also face a
unique juggling act of sorts whereby self-interest
must be balanced with what also looms large
and too-close – China. As always, that sover-
eignty struggle rages on and is no less raw when
it comes to this topic. China seems to become
increasingly agitated as Taiwan indicates they
will release some regulatory guidance in the Fall
instead of the outright ban that China would
prefer. The internal debate seems to rage within
as regulatory commissions are established but
seemingly fail to reach consensus.
But then there are the countries trying to
wade in, albeit cautiously, however with more
enthusiasm than skepticism. Take Australia for
example, with a smaller market than some but still
in the Top 20, which initially voiced concerns about
crypto use cases but after some time reversed
that decision and even went on to legalize it as
tender. Some argue that Australia watched their
daredevil neighbor to the north, Japan, which
legalized crypto straight away, while Australia’s
policy reversal came nearly a full calendar year
later. Why didn’t Australia fast-track the legali-
zation of crypto? Because that is what countries
who “wade in” do – they watch others and then
make informed decisions. It’s level-headed in
approach, but allows first movers like Japan
complete advantage. However, this is not a
concern for countries like Australia that fall
into the category. And you have to hand it
to this group, which is perhaps the largest of
the three, because at least they are willing
to do – something. It may be late or a bit
clunky at first but at least they are trying to
sort through the issues and develop regula-
tory guidance of some kind. When you
juxtapose them to the final group, these
countries seem like outright innovators.
Ponte Estaiada, Brazil.
The Brazilian Central Bank has announced
that it will not regulate cryptocurrencies,
placing the development of crypto in the
country at a crossroads.
The no-action-just-words group
of spectators brings up the rear and
quite simply does nothing or, worse yet,
purposely avoids regulation of any kind. Brazil
is a case in point where the Central Bank Presi-
dent, Goldfajn, indicated that his country would
not be regulating cryptocurrencies. Opting out of
substance he instead issued a generalized warning
shot over the bow about the volatile nature of
crypto as seemingly sufficient. And, of course,
there are a myriad of other countries further down
the clarity scale, some simply choosing not to
address the topic at all.
It is much too early to know which of
these groups history will judge most favorably.
Is diving in with daredevil-like fervor ideal or is
the utter silence of a spectator best? Perhaps
something in between seems most reasonable,
right? Well, it depends entirely on a country’s
economic and political agenda, both present
and future – and to a great extent its bent for
innovation. These grayscale considerations
muddy the waters in many countries for the
time being. However, what we do know for sure
is that regulation leads to clarity. It allows both
individuals and organizations to invest long-term.
Regulation in many respects is a gateway to the
future of – everything. It may be the most salient
determining factor in the outcome of the crypto
race that is already in-progress, which means
it’s sink or swim for governments when it comes
to crypto regulation. History will judge which
approach proved to be the best.
Elise Hamdon,
Ph.D.
@EliseHamdon
I work on purpose,
for change. Looking
to make a leap into
Crypto Compli-
ance. Open to other
promising opportu-
nities, as well. @me
if you think I’d be
a good fit for your
team.
 OPINION

DECENTRALIZATION
SHIFTS POWER TO
THE USER
BY SYDNEY LAI

We all remember last year’s excitement when the numbers in the crypto market kept climb-
ing, and many of us found ourselves suddenly wealthy. Through all that excitement we forgot
about the years that came before, in particular, the crash of Mt. Gox and the subsequent
quieting of the crypto industry. The crash of this legendary exchange was preceded by the
implosion of the American economy in the form of the Great Recession and the subprime
mortgage crisis of the late 2000s.

W
hen banks began issuing high-risk typically describes the unbanked, those who do not
mortgages to consumers with poor credit use any banking services as well as the underbanked,
scores, borrowers were unable to make those 67 million Americans who may not optimize
payments, mortgages went into default, and the on all of their banking services because they do not
market opened to investment firms who turned these financially qualify to do so.
mortgage loans into investable securities and new
products. However, this story was different because This inability to access basic banking needs seems
these borrowers should have never been given loans like a simple push that the big banks have forgotten.
as these were consumers with poor credit. Banks gave They realize that it is not profitable for banks to spend
mortgage offers to consumers who typically would the budget and provide banking solutions for those
have never been able to qualify due to their weak credit who do not financially qualify. Banks have costly
history. There was even a push for the “NINJA loan: overheads such as their staff, real estate and compli-
no income, no job, no asset – no problem”. However ance reviews to cover. Only consumers who deposit
as it came time to pay the mortgages, the adjustable profitable amounts make it worth the effort. Pure
rates skyrocketed and many borrowers were unable online banking solutions are also unwilling to provide
to pay. Remember, options for the unbanked because how do you trust
these borrowers were someone who does
atypical consumers in not have a history with
the financial markets. money? This catch 22 is
solved with a guarantor
The borrowers that
“BANKS GAVE MORTGAGE who can vouch for you,
ended up in an inability
to pay were those OFFERS TO CONSUMERS however, guarantors are
who historically had a usually your closest family
poor credit score and
WHO TYPICALLY WOULD unit but as mentioned
access to finances. As HAVE NEVER BEEN ABLE before, being not “rich”,
wealth is generational, is typically generational.
so is passing along the TO QUALIFY DUE TO THEIR
It sounds like a crack in
knowledge of financial WEAK CREDIT HISTORY” the social system, but
education. This popula-
a Turkey-based startup
tion we talk about

21 CRYPTOS
called Colendi is creating a global financial
passport with a blockchain-based credit score
evaluation. A global financial passport is needed
because the unbanked are not only in America,
but 38.5% of the global population does not have a
bank account. Often we think the case is because
of poverty, as the percentage of the unbanked
are relatively high in low-income countries at 71%.
A more relatable perspective is the case of your
colleague who switched offices and immigrated
to America to start a new adult life. So while he is
from Sweden, 35 and a homeowner, he comes to
America as a financial baby with no translatable
credit score. As an immigrant who just switched
corporate offices to New York City, he barely
qualifies for a bank account, has limited options
to apply for a credit card, he becomes unbanked
or underbanked and cannot participate as a
consumer in our financial marketplace.
and users, and distributes its designed credibility
scoring algorithms to each node to identify and
evaluate a person in all specific nodes privately.
This approach consolidates the evaluation results
of segregated and private data segments through
its decentralized intelligence. The credibility
score is clearly stated for each user rather than
only considering the consumer’s financial history
as is the current traditional approach. Like the
banking system today, this new credit assessment
system is its own platfor m and ecosystem and in
this example becomes your ColendiID. Your user
activity and merchant loyalty are drained through
both a Credit Decision Engine and Fraud Engine
to produce your unique identity and score.
As smaller agile companies race along to find
solutions, why have banks like Wells Fargo missed
market opportunities like this? One could say that
Wells Fargo leads the way in providing services

C
redibility thus becomes banking to the underbanked by approving home loans
oriented, your legitimacy is needed by those who would not have traditionally quali-
for participating in the daily economy. fied. The bank led the charge on providing these
Difficulties that spring up for the unbanked but financial products by participating in FHA loan
educated and employed includes an inability to programs, telling the federal government that
buy a car and get to work. Inability to rent the new its loans were reliable enough to qualify for
apartment to the new city the Swede just moved FHA insurance. Wells Fargo continues to hit the
to. Most of these economic activities occur and a bad press page as internal teams opened fake
ranking mechanism such as a FICO score alters the accounts to meet aggressive sales goals, which is
way players in the marketplace can participate. ironic because you may as well use those empty
Colendi introduces a new method to evaluate a accounts for the unbanked. Banks do learn the
proof of creditworthiness, where the FICO score error of their ways, but the attempt for redemption
from the 1950s is as outdated as texting your friend is an uphill battle. In the pursuit of brand recovery
on a Nokia brick. or brand building, the industry adopts emerging
technology to showcase growth or relevance.
Credit bureaus formulated a credit assessment
where the power is held in the firm, rather than Time and execution will show who was putting
the credit score up smoke and
holder himself. This mirrors. The finan-
monopoly and cial industry sees
dominance diminish enterprises taking
the opportunity for
“DIFFICULTIES THAT calculated risks to
fairness in credit SPRING UP FOR THE adopting block-
repair or building as chain. JPMorgan
the cycle of paying UNBANKED BUT EDUCATED Chase incubated the
down debt is really
AND EMPLOYED INCLUDES Quorum project as
the repayment of the an enterprise-ready
interest itself. To shift AN INABILITY TO BUY A CAR distributed smart
this control of power, contract platform.
Colendi creates a
AND GET TO WORK” American Express
decentralized credi- deployed Hyper-
bility network on ledger for its rewards
the blockchain with loyalty program.
all industry stake- Common financial
holders, participants, services like ATMs

DECENTRALIZATION SHIFTS POWER TO THE USER 29

 could utilize FOAM.
space’s proof of
location. ATM’s and
credit card transac-
tions require location
data. Loose ATM’s you
find at convenience
stores are smashed and
dragged away but can
be recovered with their
built-in GPS tracking.
The entire global finan-
cial system depends
on GPS. The New York
Stock Exchange uses
GPS to time automated
computer trades. Yet
the system is suscep-
tible to fraud and
cyberattack.
“influencers” that dare
not defy the aspira-
tions that they work so
hard to achieve. If the
upwardly mobile were
“HOW DID SOCIETY ALLOW the MBAs and lead
TRADITIONAL FINANCIAL engineers, what is the
incentive in the market-
INSTITUTIONS TO IMPACT
place for them to fight
MARKETS? IS OUR FRUSTRATION against what they are
SHOWCASED WITH THE RISE striving to financially
OF ALTERNATIVE FINANCIAL become? If we view
CONSUMER PRODUCTS LIKE the Occupy Wall Street
movement as a form
ROBINHOOD AND SIMPLE
of marketplace design,
BANK?” you have several
players in this multi-
sided marketplace. The
incentive mechanism
for blue-collar workers

R
eflecting on fraud and corruption, how did
society allow traditional financial institu-
tions to impact markets? Is our frustration
showcased with the rise of alternative financial
consumer products like Robinhood and Simple
Bank? This is not the platform to blame banks but
rather to understand our behaviors as a society.
Did we forget that Bitcoin was a previous align-
ment to the ethos of Occupy Wall Street? The
(working class), white-collar employees and the
1% are misaligned. We take this trend of market
incentive misalignment and we apply this back to
enterprise and consumer engagements and we
see the discontent of us as buyers in the market-
place. The mortgage crisis was misaligned incen-
tives with home loan borrowers wanting to fulfill a
dream and banks wanting to fulfill profit, not their
customers actually getting a home.

Libertarian drive to cryptocurrency is the idea
that we create our own riches and no bureau-
cracy should regulate us from doing so. As the
big banks have failed us during the recession, we
had failed ourselves in advocating for a more
balanced distribution of income. As access to
the internet and information has become more
ubiquitous, could our access to cryptocurrency
give us the financial access that the 99% have
been advocating for? Many would say that the
99% still don’t know of the blockchain bubble and
those Bitcoin Millionaires are still of the upwardly
mobile or what sociologists deem as the ingroups.
This still draws us back to why the Occupy Movement
failed. As we know today, movements do not
catch-on unless influencers are involved. You can
be a musician and fans can advocate for you,
however, you will be unlikely to hit the mainstream
attention until an influencer like Beyonce has given
you a shout-out. So then why did influencers not
speak up, especially where a movement required
momentum from a whole class of people that were
affected? The 99% is too general, and while they
are not the 1%, it is the upwardly mobile or the
W
here blockchain projects with a
tokenized model are moving towards
today is creating solutions where the
power is stripped from a centralized entity and the
incentive model goes in favor of the consumers
themselves. This new movement is no longer the
campouts of the Occupy Movement, rather the
rejection of equity investments from funds and
asking for a democratized contribution to support
initiatives built for the people by the people.
While we may not have forgotten how lucrative
the crypto market was in 2017, we should also
remember the financial state that came before
it, where the imbalance of power allowed entities
to rate your identity, and how emerging solutions
give that control of identity and destination back
into the hands of the consumers. As enterprises
eventually no longer control the consumers, we
see them changing their own incentive models.
The control shifts towards influencers and the
people who become even louder than monopoly
entities themselves. The success or failure of
marketplaces will ultimately rely on the incentives
of those in power.

21 CRYPTOS
 B S C A N N E R
FROM D A R K W E
T D I R E C T O R
O N - P R O F I
T O N BY MATT BREEN

OPINION
We spoke with Sarah Jamie Lewis, an anonymity and
privacy researcher best known for her work in building
privacy-enhancing tools, and her role as Executive
Director at non-profit Open Privacy.

who develops and distributes the protocol/code

has a lot of power in the system, and whether this
O U T E L L U S is done by a team, a foundation or a committee–
S , C O U L D Y
R E A D E R
FOR OUR ? that power is very real, and very centralized –
R E S E A R C H
Y O U R O W N even if there is some community involvement. The
B O U T
A BIT A P R O T O C O L ?
H E F A T T E S T one practical mechanism to combat this is the
WH O H A S T
threat of a hardfork, where part of the community
rejects the changes – but this is a nuclear option.
I am a privacy and anonymity researcher, my main I’d like to see more research into decentralizing
focus is understanding how privacy systems fail in this layer through diverse node implementations
practice with an aim to building better systems. I and flexible protocols.
am probably best known for running OnionScan, a
The other layer prone to centralization is the
dark web scanning project that found and devel-
economic/safety layer - we see mining central-
oped practical deanonymization vectors in dark
ization in most PoW-based currencies, and PoS
web sites.
inherently gives those with a stake in the system
I am now Executive Director at the Open Privacy more power in the system.
Research Society, a non-profit dedicated to
conducting research and building next genera-
tion privacy tools aimed at protecting marginal-
H E E N E R G Y
ized communities. T H I N K T
DO YOU W IS A N I S S U E ?
T I O N O F P O
CON S U M P

t h e m o s t
d a s o n e of
n t l y r a n k e h t o y o u r
u w e r e r e ce h a i n ( m u c
Yo n i n b l o c kc h a i n
w o m e b l o c k c
influential a t d o y ou t h i n k o f
n t e n t ) . W h
dis c o o l e ?
g y a s a w h
te c h n o l o

Yes, PoW energy consumption is a huge issue - I think

I like blockchains, I think they are a clever solution
to a very difficult problem. As someone who is very
pro-decentralization however I think blockchains
are ugly, the economic incentives involved in
current schemes drive centralization at a number
of layers - the obvious one is the political layer,
its relative impact on the environment compared
to other sectors of the economy is overstated, but
yes, the growing energy consumption is a clear
indicator that we need better solutions.
Unfortunately, PoS systems are still relatively
unproven, and, in my opinion, trade the energy

FROM DARKWEB SCANNER TO NON-PROFIT DIRECTOR 31

“CWTCH WILL PROVIDE A
PLATFORM FOR ANONYMOUS,
ASYNCHRONOUS GROUP
MESSAGING - A PLATFORM THAT
Privacy and cryptocurrencies is an interesting
I HOPE WILL BE THE BASIS OF A topic because of the contention between public
WHOLE NEW GENERATION OF accountability and privacy, zero knowledge
proofs are definitely a big part of a solution here,
ANONYMOUS APPLICATIONS,” but as we have seen from some recent papers,
the anonymity set of privacy-focused cryptocur-
rencies is often small, and can often be made
smaller through understanding how people use the
system in practice – a big part of future research
is going to have to focus on how to expand that
anonymity set and preventing unsuspecting users
from doing dangerous/privacy-harming actions.

consumption issues of PoW with more power

centralization issues, as highlighted in my previous
answer. PoW presents a concrete economic
N I S G O I N G
solution, albeit one based on competition and
L O C K C H A I
O U T H I N K B R E T H E R E
heavy resource utilization - it’s not a panacea, DO Y U P T I O N ? A
H E A D D I S R S W E
TO S P E A R N OL O G I E
but it arguably presents a much clearer path for
S T IN G T E C H
I N T E R E
power distribution than any PoS scheme. MORE K I N G A T?
U L D B E LO O
SH O
I’m not sure what the ultimate solution is, or if
there is one at all - Its worth remembering that
energy consumption by itself isn’t a bad thing, My main technological focus is onion services
it’s only bad when we view it through the lens of (anonymous systems), I think that they offer us
a reliance on fossil fuels and an inequitable distri- new ways to build decentralized systems, and
bution of energy sources. The path forward might am currently exploring how we can do that
be a concerted effort to switch mining over to through a project called Cwtch funded by
green sources (along with the rest of the world, if Open Privacy. Cwtch will provide a platform
we have any hope). for anonymous, asynchronous group messaging
- a platform that I hope will be the basis
of a whole new generation of anonymous
applications, with very likely some interaction
with cryptocurrencies.
l s t a n c e on
o u r g e n e ra t e d o r
Wh a t ’ s y a c y- o r i e n
n c i e s ( p r i v Outside of my projects, I’m excited to see if
y p t o c u r r e e p r i v a c y
cr w d o y o u s e Coda can deliver on their whitepaper– using
w i s e ) ? H o
other s in t e r t w i n i n g ?
c k c h a i n zk-SNARKs as a way to efficiently verify parts of
and blo blockchains is a really interesting approach, and
I’m excited to see how they present and solve
I think that there are a lot of different interesting some of the problems with rolling that out.
approaches being tried, I also think there are
Sarah can be found on Twitter here
many different scams/misguided approaches
(@SarahJamieLewis).
being tried right now – I tweet about those ones
more than I probably should. I think way too
many cryptocurrencies ignore basic economic/
computational security concerns and that it
is hard to differentiate those that ignore them
because they don’t know any better, and those
that ignore them because they are trying to
scam people.

21 CRYPTOS
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‘Currency has three functions: a medium
of exchange, a unit of account, and a
store of value.’
Fiona Cochrane, FIAT: LATIN FOR “LET IT BE DONE”. P.38
 LEARN
ZERO KNOWLEDGE PROTOCOLS
STARKS VS. SNARKS
WHAT ARE ZERO KNOWLEDGE
PROOFS?
Before we begin to break down the technical aspects
of the protocols, it is important to understand the
underlying technology behind a zero knowledge
proof (ZKP).
ZKPs originate from a cryptographic
method called interactive proofs (a
system where a prover can exchange
messages with the verifier to convince
them that some statement ‘x’ is true,
which allows two parties (the prover
and verifier) to share secrets – with a
high degree of probability and without
actually having to reveal any informa-
tion about proving the statement.
The term “zero knowledge” comes
from the fact that no information is
shared regarding the secret, but the
second party (the verifier) is convinced
that the first party (the prover) knows
the secret. Three properties that every
zero-knowledge protocol must satisfy
are: completeness - convince the
verifier of the truth with a high degree
of probability, soundness - can only
convince the verifier of the truth if they
are telling the truth, and zero-knowl-
edgeness – the verifier doesn’t learn
anything about the solution/secret.
Let’s quickly illustrate a couple very
basic implementations for zero knowl-
edge proofs.
ZERO KNOWLEDGE PROTOCOLS– STARKS VS. SNARKS
First example, there are 2 people (Person A and Person
B) and they are trying to determine if they have the
same amount of money in their wallet.
If we assume they can either have $10, $20, $30 or $40
in their wallets then Person A will have 4 lock boxes
that are each labelled accordingly.
Person A will be the only person with the key to
every lock box and will throw out every key except
for the lock box that is labelled with the amount of
money he has – for this example let’s say $40. Person
B then takes a piece of paper and writes a ‘+’ sign on
it, then slips the piece of paper into the lock box that
corresponds to the amount of money they have in their
wallet – let’s say $30. When person A returns to the
box and unlocks his box with the only remaining key
he will discover that Person B does not have the same
amount of money as he does. Person A knows they
have a different amount of money, but no way to tell
how much more they have.
In essence, both people in this example can only
surmise evidence from the statement being proven.
Person B cannot know how much money Person A has
(and vice versa) because the statement being proven
was if they had the same amount of money. However,
this example assumes reasonable and fair actors with
no incentive to lie throughout the protocol.
35
Now let’s go through one more example that
fulfils the 3 characteristics of a sound zero
knowledge proof protocol discussed above.
One of the most popular examples begins
outside a circular cave with a locked door at
the back. The ‘Prover’ is trying to convince
the ‘Verifier’ that they know the code to the
door to get to the other side of the cave.
The prover goes into the cave and stands
at the back; the verifier then goes into the
entrance and shouts a direction (A or B) for
the prover to walk out. This protocol will
be repeated ‘X’ number of times, each time
making the likelihood of the prover to be
a malicious actor more unlikely. There are
a couple scenarios that could occur: if the
prover is lying and does not know the combi-
nation to the door then there is an extremely
high probability (exponentially increasing
with each trial) that the verifier would call a
direction the prover did not enter in the cave
(the verifier would see this), if the prover
does know the code then they will be able
to exit the cave the right direction 100% of
the time.
This covers every property for a sound ZKP
protocol because a malicious actor cannot
convince the verifier successfully after ‘X’
number of trials, the verifier will be convinced
after ‘X’ number of protocol completions
and the code to the door (or the secret) is
not revealed.
WHY ARE THEY IMPORTANT?
On public blockchains, such as Bitcoin or
Ethereum, it is well known that every single
transaction is recorded into the public ledger
that can be accessed by anyone. This ledger
contains information about both the sender
& receiver, the quantity of the asset and the
specific digital asset. However, this is not
an ideal solution for every blockchain use
case. The first iteration of ZKPs was called
zk-SNARKs that made the proofs usable on the
blockchain by reducing the size of the proof
and the amount of computational energy
needed to verify the proofs. The protocol
allows for complete privacy on the ledger
including the quantity, asset type and infor-
mation about the sender and receiver. The
rest of the chain only recognizes that a valid
transaction took place.
21 CRYPTOS
WHERE HAS THIS FORM OF
CRYPTOGRAPHY BEEN IMPLEMENTED?
The most popular implementation is Zcash, which
was the first cryptocurrency that baked this form of
cryptography (zk-SNARKs – Succinct Non-Interactive
Argument of Knowledge) into its protocol layer. The
main problem with the protocol for Zcash is how the
chain was created. There is no way to audit the supply
to determine if the chain/security has been compro-
mised at any point. This would occur if the master keys
were not destroyed after the creation ‘ceremony’ and
they were in fact compromised. To combat this, the
Zcash foundation has been releasing annual audits
to prove that the supply is what they claim it to be,
but unless you trust the creators/investors then there
is no way to prove these claims with 100% reliability. A
co-author of the Zcash whitepaper has also said that
the trusted setup can be compromised efficiently by
quantum algorithms, meaning that in the currency’s
current state it is not “future-proof.”
It is important to note the massive incentive that a
person or entity would have by compromising the
master keys – they would have the ability to print
infinite amounts of the currency and slowly sell them
off without people knowing.
A more recent implementation of zero knowledge proofs
comes from a company called Starkware that recently
popped up claiming investment from the likes of: Vitalik
Buterin, Polychain, Bitmain, Zcash co. and Pantera
to name a small number of investors. The founders of
Starkware plan on implementing the second iteration
of SNARKs, called zk-STARKs (Scalable and Transparent
Argument of Knowledge) and claim that it is the more
trustless and secure than SNARKs. While it also does not
require the “trusted setup,” it promises to be cheaper,
faster, more scalable and post quantum secure when
compared to the current iteration of zero knowledge
proof protocol. Many researchers/developers from the
Zcash project are currently working to develop and
implement the STARKs solution, giving the project a ton
of credibility.
Zero knowledge proofs are an important form of
cryptography that top researchers and developers are
using to create a private, scalable and secure block-
chain protocol. The upcoming developments for the
second iteration of ZKPs (zk-STARKs) are exciting, and
now you have a basic low-level understanding of how
they work.
Gavin P @GasTrading
is the Head of Research at AXI Ventures where he specializes
in digital asset research including: tokenomics, blockchain
technology and economic/game-theoretic incentivization.
 LEARN

PERHAPS TRADING
ISN’T SO SIMPLE Maximizing the
Probability Of
Success and
AFTER ALL Profitability
by Beastlorion @Beastlyorion

At first glance, outsiders might say our they’ve cracked the code to understanding the market
and can make any trade succeed. They are so focused on
job as traders is a simple one. We
maximizing profitability that they miss the other important
choose to buy when we think an components of a successful strategy. They’re concerned
asset is going to increase in value that they are not positioned to make more money than
and we sell when we think it is possible anywhere else. They’d be willing to take big
losses if it means that one day they can hit the motherload.
will decrease.
This leads them to over-risk and exposes them to heavy
losses. Maybe at first, they succeed, but over time they
are doomed to their risk and probability of failure.
If we are looking at fundamentals we might
investigate a project’s deadlines, its team, and
The process of becoming overconfident and
its vision. If we are looking at the technical side
taking your first losses is an important lesson. It is
of things the focus would be on the price action.
more of a rite of passage than a barrier to entry.
Is its value increasing steadily over time? Is the
The part that separates the winners from the losers
price stabilizing and reversing momentum after
is the humility to reflect on what went wrong and the
a large fall? In hindsight, everything seems so
determination to change it and try again. The best
simple. We should have bought here, we should
traders reassess their strategy after a loss and adjust it
have sold there. So why is it that we fail so
before their next trade. Eventually, they begin to see that
often? How is it that so many fail so drastically
the preservation of wealth and risk management are more
that they choose to throw in the towel or even
important than profitability. They might make 100x returns,
manage to run completely out of funds, effec-
but if they lose it all on the next five trades then what’s
tively washing themselves out of the market?
the point? It would be better to make a few percent at
Maybe trading isn’t so simple after all. Perhaps
a time and steadily increase their portfolio balance than
there is more to it than meets the eye.
endure large fluctuations. For many, it’s a difficult battle
to overcome their emotions while trading. One of the key
Choosing when to buy and sell might be the
parts to being able to do this is separating yourself from
final decision that we make, but that’s just
the money you are risking. When you stop caring emotion-
the tip of the iceberg. Each decision isn’t as
ally about how much you make or lose, you open up your
simple as just choosing to buy or sell. It’s about
decisions to rational thought, which allows you to evolve
maximizing the probability of success and profit-
your strategy.
ability, while minimizing risk, not only on each
individual trade but in our entire portfolio at any
This stage of exposing weakness and adapting your strategy
given time. With more focus on risk manage-
is a long one. Eventually, I hope that maybe I will be able
ment, we can ensure within reasonable doubt
to graduate from this stage myself. I think though, that I’m
that we will never be wiped out of the market
addicted to the process of self-improvement. Becoming
and never suffer unsustainable losses. To make
better at what we do and improving who we are as persons
matters worse, we’re all human and subject
until we are where we want to be is just how we evolve
to emotions that keep us from making rational
in life. The thing that drew me to trading in the first place
decisions while trading. This is especially notice-
wasn’t necessarily the money but rather the challenge of
able in newcomers to the market.
beating the odds and the direct reward for succeeding. In
that way, it’s addicting for the same reason that gambling
Inexperienced traders tend to latch onto their
is addicting. At least in trading, we can have an edge
first feeling of success and run with it. They make
against our opponents.
one good trade and all of a sudden feel as if

PERHAPS TRADING ISN’T SO SIMPLE AFTER ALL 37

 LEARN

FIAT:
LATIN FOR “LET IT BE DONE”

A system of trust has

always been essential for
a community to accept a
currency; money only holds
its value today because
a trusted third party – a
government - declares that
it is valuable.

IT IS ONLY SUPPLY AND DEMAND

THAT GIVES IT ANY VALUE.

If the trusted third party fails, when that trust is broken,

we see financial catastrophe. When the institution of
money crumbles, where do the people turn? If there
is no longer any trust, can there be any acceptance
of a currency?
We use money every day and we think we know
what it is. We believe that every note in our wallet is
secure and valuable. But every US Dollar in circula-
tion is only backed by the “full faith and credit of the
United States” and has no fundamental value at all.
The words on British banknotes: “I promise to pay the
bearer on demand the sum of…” dates from when
those notes once represented deposits of gold. In the
past, you could exchange banknotes for the equiva-
lent value in gold at the Bank of England, but this has
not been possible since the early 1930s.
It is shocking to realise that more people than you’d
imagine are oblivious to the fact that their cash is not
backed by gold or silver (known as commodity money),
but is instead, fiat money, which is not backed by any
physical commodity at all. Fiat money is defined as
“legal tender, especially paper currency, authorized
by a government but not based on or convertible
into gold or silver”.
Fiat is Latin for “let it be done” – essentially
this implies that people have no choice but to
accept that their government has authoriza-
tion to literally print money.
CURRENCY (MONEY THAT IS
IN CIRCULATION) HAS THREE
FUNCTIONS:
a medium of exchange, a unit of account
and a store of value.
No currency is perfect in all three of these
areas. Currency has passed through many
stages in its evolution. It started with bartering,
shifting to primitive money then to commodity
money and finally, where we are today with
fiat money.
The medium of exchange is the ease with
which a currency can be exchanged for
products and services. If money is transport-
able, durable, divisible, fungible and unable
to be counterfeited, it is considered a good

21 CRYPTOS
 medium of exchange. The unit of account is the
unit of measurement for how things are valued and
compared. The store of value is any wealth that can be
stored and its value maintained without depreciation.

It would be naïve to believe that our fiat currency

Cash is, in fact, backed by fiat money, which is not
will never fail. Because it is not linked to a physical
backed by any physical commodity at all.
commodity it risks becoming valueless due to hyper-
inflation (rapidly out of control inflation). There have
been more than 20 hyperinflations in the last 100 years.
Most people know about Zimbabwe, Venezuela,
and The Weimar Republic, but other countries have
also suffered. Hungary is considered to have had the
worst period of hyperinflation in history. In 1945, due
to war and reparations, prices doubled every fifteen
hours. Even ancient Rome struggled with hyperinfla-
tion which arguably led to its collapse. Commodity
money is not without its problems. Using this standard
causes the supply of money to be fixed over time
and countries are unable to use monetary policy to
stimulate the economy if needed. They are unable to
put money in or take it out of the economy because
their supply of money is limited by the gold in their
vaults.

As a response to the Great Depression, the United

States federal government stopped allowing citizens
to exchange currency for government gold in 1933.
Roosevelt, echoing the British dropping of the gold
standard in 1931, ordered all gold coins and certif-
icates in denominations of more than $100 to be
turned in for other money. It required everyone in
the country to deliver all their gold coin, gold bullion
and gold certificates to the Federal Reserve for the
set price of $20.67 per ounce. In 1934, the govern-
ment increased the price of gold to $35 per ounce.

In 1944 at The Bretton Woods Conference in the USA,

44 of the world’s major economies met in an attempt
to regulate financial flows and ensure stability. The
“Central bankers must be fully
proposal was that the USD would remain redeem-
accountable to the public for able for gold at $35 per ounce and ratifying countries
their decisions, but both theory would peg their currencies to the USD – an implicit
gold standard. The International Money Fund was set
and experience strongly support
up at the same time to act as a bridge for temporary
the proposition that insulating imbalances of payment. The plan ran into difficul-
monetary policy from short-term ties in 1971 when the United States, under President
political pressures helps foster Nixon, abandoned the agreement and gold could
no longer be exchanged at a fixed rate with USD. He
desirable macroeconomic outcomes declared that this was to be a temporary measure
and financial stability.” meant to stabilize the currency, not devalue it.
Ben Bernanke

FIAT: LATIN FOR “LET IT BE DONE” 39

 “I HAVE DIRECTED
SECRETARY CONNALLY TO
SUSPEND TEMPORARILY THE
CONVERTIBILITY OF THE DOLLAR
INTO GOLD OR OTHER RESERVE”
SAID NIXON.
This is known as the Nixon shock and was the
end of metal-backed sovereign currencies,
heralding the move from commodity money to
fiat. There are no countries in the world today
that use the gold standard although there are
still many who keep significant gold reserves.
BITCOIN OFFERS A “TRUSTLESS”
SYSTEM THANKS TO
CRYPTOGRAPHY.
We can cut out the third party in our transactions,
giving us absolute control over our own money. We
need not rely on the intentions of any one person
or institution, but instead put our trust in computer
algorithms. It certainly appears that people who live
in countries that have suffered a financial crisis are
more willing to trust computers and mathematics over
governments and banks. They, more than any others,
are aware that the trust they had in their banking
systems and governments was destroyed. And they
know it could happen again.
Bitcoin is similar to gold in the way that both need
to be mined, digitally in Bitcoin’s case, physically
excavated out of the earth in the case of gold. Both
also have a finite supply. Bitcoin has a fixed supply of
21 million coins, and this amount is regulated by the
Bitcoin protocol itself. Once the final Bitcoin has been
mined, no more will be issued, its limited supply will
add to its value. To date, 17 million have been mined
and the last one will be produced in approximately
2140. Last year, Thompsons Reuters GFMS estimated
that 171 300 tonnes of gold have already been mined
and another 52 000 tonnes are still underground. This
is disputed by several analysts with some thinking the
numbers too low and others thinking the numbers are
too high. It appears that gold is not likely to run out
soon, but there is still only a fixed amount.
Under the gold standard, the money supply was
less likely to be influenced by the whims of politi-
cians and governments, but with fiat, central banks
have the power to increase or decrease the money
supply. With fiat money, an unlimited supply of paper
money can be printed to pay off debts. This leads
to a cynical public who fear that shifting political
impulses are behind all financial decisions. Transpar-
ency and accountability are essential to ease the
fears of society.
21 CRYPTOS
LEARN
“Central bankers must be fully accountable
to the public for their decisions, but both
theory and experience strongly support the
proposition that insulating monetary policy
from short-term political pressures helps foster
desirable macroeconomic outcomes and
financial stability,” said Ben Bernanke, who
served two terms as Chairman of the Federal
Bank in the USA. Fine words indeed, however,
this accountability is yet to be seen.
FIAT CURRENCY IS CENTRALLY
CONTROLLED WHEREAS
BITCOIN IS DECENTRALIZED
AND DISTRIBUTION IS
NOT DETERMINED BY ANY
CENTRALIZED AUTHORITY.
The transparent “monetary” policy of Bitcoin
is available for anyone to validate and scruti-
nize because of the open source code,
unlike central banks. It is consumer driven
with multiple points of supply and delivery.
Because of this, Bitcoin is less prone to being
tampered with and there is no central point
of failure. Bitcoin works well as a medium of
exchange, but at present, it is too volatile to
be a viable unit of account or store of value.
Bitcoin certainly offers an alternative to a
people’s relationship with its government
and its own money. Nonetheless, there are
questions. Is it a fiat currency used only
by agreement and acceptance or is it a
commodity backed currency through the use
of the applications that the Bitcoin network
permits? Only time will tell.
Fiona Cochrane
has worked as
a journalist in
South Africa and
London, and is a
published author.
She spent years
throwing herself
out of aircraft for
fun, but now it’s
Bitcoin that gets
her adrenaline
pumping.
 LEARN

LET’S GET TECHNICAL

CryptoTutor teaches us how to improve our
cryptocurrency trading in this recurring series.

MAJOR REVERSALS
AND THEIR ASPECTS
A true market reversal is what those
trading cryptocurrencies have been
eagerly looking for since December
2017. Although there were some minor
reversals which were short-lived, the
reversal that will hold for the longer
term (major reversal) is the one that’s
the mostly sought.

In this article, I will explain

important aspects to
study when trying to
determine the strength
of a reversal. This article
does not include an answer
to the question of whether
the current cryptocurrency
market conditions mark a true
reversal, but rather it is mainly
focused on the theoretical
aspects of market reversals. One
should keep in mind that not only
new traders, but even experienced
traders get tricked when trying to
determine the size of a reversal. The
market does not forget certain resist-
ance and support levels (from the prior
large trend), which in turn might and
probably will prove to be significant in
 the current trend. Even though minor reversals might feel tricky and demoti-
vating for traders, several minor reversals might sign for an incoming
major reversal. In the next paragraphs, I will explain important aspects
of true market reversals.

Chart formations have proven to be severely important in

market reversals. My prior articles for 21CRYPTOS include
several chart formation explanations, and all prove to be
very significant tools for a trader. A higher timeframe
chart (for example the Daily) includes several chart
formations: from broadening wedges to Head and
Shoulder patterns, from double tops to pennants.
Richard W. Schabacker, considered by many to
be an important source regarding classical chart
patterns, has stated the following about determining
chart patterns what I find very worthwhile sharing:

Richard
‘The science of chart reading is not as easy as
W. Schabacker
the mere memorizing of certain patterns and
pictures and recalling what they generally forecast.
Any general stock chart is a combination of countless different
patterns and its accurate analysis depends upon constant
study, long experience and knowledge of all the fine points, both
technical and fundamental, and, above all, the ability to weigh
opposing indications against each other, to appraise the entire
picture in the light of its most minute and composite details as well
as in the recognition of any certain and memorized formula.’

What’s important from this quote specifically is mentions is the possibility of opposing signs and
that Schabacker states that only memorizing chart the ability to reflect upon this and make proper
formations and their (expected) forecasts is not decisions. The only way to understand many of
sufficient to read charts. Experience plays a major the fundamentals just described is by trading
role, especially in cryptocurrency markets where there the markets with the mind of self-educating
exist certain correlations between certain markets and daring to ask those who have experience
which might not be obvious for a new trader. Knowing in these markets.
the fundamentals behind the markets that are being
traded is a decisive factor for the success rate of a A very important aspect of a major reversal is
new trader. More specifically, many new traders in
VOLUME.
cryptocurrency markets have joined those markets
around December 2017 / January 2018. The buy button
Volume simply shows the activity of trading,
may have been the first button most pushed, and
hence its significance. An increased rate of
for many, this probably has been a lesson that (day)
trading activity (i.e. volume) during a reversal is
trading and investing in extremely volatile markets
an indication that the reversal might be a major
isn’t easy and may not be suited for everyone. Those
one. In figure 1 is an example of the BTCUSD
who managed to stick to the market have had plenty
chart using the Weekly timeframe (1-week
of time to learn about the fundamentals of these
candles and volume bars). In the volume bar
markets. Examples of vital fundamentals are high
section, I have used a Moving Average based
volume markets (exchanges), which tokens/coins to
on the volume bars (input of the MA is a length
trade and not to trade (because of shortcomings like
of 5). Here we can see two tops, based on the
lack of development, which would mark an increased
trading history of Bitfinex BTCUSD. Both peaks
rate of risk), correlations between certain tokens/
in trading activity mark important reversals for
coins and Bitcoin itself. Another point Schabacker
BTCUSD (and the whole altcoin market as well).

21 CRYPTOS
 Example
of volume
significance
for trading
activity peaks
at bottoms and
tops. example
(created on
TradingView)

https://www.tradingview.com/x/YB7FHl8W/

Volume has been decreasing since the top of
December 2017, which basically means that
less and less BTC is being traded on Bitfinex
BTCUSD. Although, it is possible that due to
the increase of cryptocurrency exchanges
traders (especially ‘whales’) have moved
to other exchanges. Other exchanges’
trading volume might show a different result
regarding volume peaks.
price. Counter-trading the public’s sentiment has
proven to be (at least for me) profitable, at signifi-
cant moments for BTCUSD. We all can remember how
BTC was being portrayed in the newspapers when
it broke the 10,000 USD mark. The sentiment in the
market during these kind of moments is very important
to consider for traders, as the overly bullish sentiment
by the public might be an indication of the market
being too overheated.

The reason why volume increases on Determining the size of a reversal isn’t easy as
‘bottoms’ is because of increasing buying reversals don’t happen often, so experiencing one
power at a certain price level. While capitu- and learning from it is not something all traders are
lating people sell at or close to the bottom, able to do. Sticking to the market (this does not mean
new buyers buy the sell orders of capitula- ‘staying invested all the time’) and studying impor-
tors, hence the increase of trading activity. tant aspects like volume and sentiment will help a
trader understand the market cycles and where in
Another main aspect to study when deter- the market cycle they currently are.
mining the size of a reversal is an emotional
aspect, namely the opinion of the ‘public’ or
outsiders (those who are not invested in the
market). Especially with cryptocurrencies,
emotions of people during certain signifi-
cant events do play a major role in the senti-
ment of the market. Major news headlines
often portray a certain image of the crypto- Any questions or comments
currency markets, which sometimes do and regarding this article?
sometimes don’t have a bullish impact on Send me a tweet (@CryptoTutor)
the prices. Some experienced traders have and I will try to reply.
gone through several market cycles, and
can recall the sentiment belonging to the
periods that have been significant for the

MAJOR REVERSALS AND THEIR ASPECTS 43

1 CRYPTOS 21 CRYPTOS 21 CRYPTOS 21 CRYPTOS 21 CRYPTOS 21 CRYPTOS 21 CRYP

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21CRYPTOS MAGAZINE
10
TO

10 unique projects
WATCH
that are changing the face
of the industry

Our new flagship feature to replace the top 21. We’ve gathered
Written by Carl Gunaratnam,

up the most promising projects around and taken a deep dive

into what they’re all about. Learn more in the editor’s note at
the beginning of this magazine.

Researched and compiled by 21CRYPTOS

@EricCointona
1 BrickEX
NO. 1 _ 10 TO WATCH

BrickEX aims to disrupt the real estate

investment market,

providing an opportunity for individuals to

invest regardless of their financial capacity,
geographical location, or market connec-
tions, whilst simultaneously solving the
liquidity issues that plague real estate
owners.

Investing in real estate can bring great

rewards, but until now the best opportu-
nities have remained out of the reach of
millions of potential investors because they
didn’t have access to the huge amounts of
capital required or the contacts that could
facilitate their investment.

On the flip-side, this of course provided real

estate owners with a liquidity problem. How
could they monetise their asset effectively
with such a limited number of credible
investors available?

ENTER BRICKEX.
Think of BrickEX as a ‘Binance for real estate’.
It will essentially be a global exchange
which allows real estate providers (either
established real estate funds, tokenized
funds, crowd funding portals or private
real estate owners) to sell all or part of their
assets to regular investors.

Because BrickEX tokenizes real estate assets
through its Decentralized Asset Gateway
(DAG), individuals and institutional investors
alike will be able to obtain fractional owner-
ship of investment properties – thus lowering
the investment threshold for investors, while
providing a whole new liquidity source for real
estate providers.
Furthermore, even fractional owners will
benefit from rental income thanks to BrickEX’s
DID (Decentralized Income Distribution)
component, which will allocate funds to
investors based on the amount of a particular
real estate asset they own at the time of
distribution.
BrickEX will run on the Ethereum blockchain
and its ERC20 ‘Brick’ utility token, according to
their whitepaper, will “facilitate key functions
like clearing, settlement and asset allocation”.
Investors will be protected as all real estate
providers, their properties, underlying
contracts and leases, and their offering to
the Investor are put through a detailed due
diligence process by BrickEX. Providers will
also have to pass KYC and AML checks prior
to listing any properties.
Furthermore, because investments are formal-
ised and recorded automatically via smart
contracts on the blockchain, the usual pain
and expense of dealing with bank trans-
fers, notaries and solicitors/attorneys will be
avoided.
The BrickEX private sale was due to conclude
by the end of July followed by a pre-sale and
then a public token sale.
10 TO WATCH
WHAT SETS BRICKEX APART
FROM THE COMPETITION?
BrickEX is an exchange, so in the same way UBER
doesn’t actually own any cars, they rely on third
party providers (traditional real estate funds,
online crowdfunding portals, etc.) to provide and
manage properties. It is precisely these partner-
ships which BrickEX hopes will drive the success
of their exchange platform, providing a compet-
itive advantage.
BrickEX say they intend to launch the platform
initially in North America, Germany, The Nether-
lands, Spain, Hong Kong and Singapore with
partners initially offering a total of at least $50m
in real estate, globally. The Beta platform is set
to launch in February 2019.
HUGE MARKET POTENTIAL
While Binance is targeting a Crypto market currently
sitting at $250bn, the BrickEX exchange will be targeting
a real estate market estimated at $217trillion.
It has been reported recently that Paris Hilton’s father
was to sell one of his historic mansions via a block-
chain auction for up to $38m.
EXPERIENCED TEAM
The founders of BrickEX already have experience in
this arena having created Brickfund.com - a business
aimed at facilitating fractional ownership of real estate-
in 2015. BrickEX will develop this original concept
adding all the benefits of blockchain technology as
well as the liquidity of cryptocurrencies.
47
BotChain
2
If you remember the disastrous 16-hour release
Waltonchain
NO. 3 _ 10 TO WATCH

There is no shortage of projects in the Crypto

of Microsoft’s artificial intelligence chatter bot,
Tay, who was shut down after sending a series
of offensive tweets in 2016, you will already be
aware of what can happen when ‘good’ AI bots
go ‘bad’.
space currently promising to “integrate blockchain
technology into the business world” or some varia-
tion thereof. The ‘how’ and the ‘why’ of this lofty
ambition however is often where the waters get
muddied.

With AI adoption growing throughout the Not so with Waltonchain.

business world, AI tech providers Talla became
concerned about users’ vulnerability to malfunc-

3
tioning bots as well as spammers, scammers and
hackers that could take advantage of this new,
relatively un-secured technology.

So they came up with BotChain, a “decentral-

ized bot registration, identification, collabora-
tion, and audit platform” built on Ethereum.

According to their whitepaper, BotChain aims

to provide the infrastructure needed to allow
users to “verify bot identity, audit interactions,
and control the boundaries of bot autonomy”
so that Tay-style malfunctions don’t damage
early adopters of AI technology. BotChain will
also encourage AI development through an
ecosystem in which developers and software
companies can share their own innovations and
learn from those of others.

Blockchain technology allows bot actions to be

recorded, visible and audited to ensure mistakes
are not happening. The ‘activity trail’ will be
crucial in finding resolutions to ‘bad behaviour’
and allow users to identify where re-learning
needs to take place.

Amongst other uses, BotChain’s ERC20 token

‘BotCoin’ will be used to facilitate transactions
on its network, and reward BotChain nodes for
providing related services and members of the
BotChain Core system for providing governance
actions.

BotChain’s Pre-Sale closes on August 17th.

 The core solution
offered by the
China-based outfit
combines RFID
tracking technology
with the immutable, trusted decentralisation capabil-
ities of the blockchain to create real efficiencies in
business supply chains.
Waltonchain call this digitisation of physical assets
(a company’s products, for example) on the block-
chain the Value Internet of Things (VIOT).
By the time you pick a pair of jeans from a rack in
a store, a hugely complicated system has already
been at play to order the raw materials, manufac-
ture and transport that pair to the store. In an
advanced supply chain system, when you purchase
the jeans, data is also fed back into the system to
register demand and update the supply levels.
However all of these existing systems are central-
ized. And centralization means man-power costs,
security vulnerabilities, trust issues, and mistakes.
Items get lost along the way, counterfeits are made
and sold, and all of these costs businesses a huge
chunk of their revenue every year.
Waltonchain’s solution however, uses RFID chips
embedded within physical assets to upload all
manner of useful data to the blockchain. Once
there, it can never be tampered with, or lost and is
instantly available to all who need it.
Our favourite pair of jeans and the materials used
to make it will therefore be completely traceable,
verified as genuine and its sales data incorruptibly
fed back into the manufacturer’s supply chain.
Waltonchain’s ecosystem runs on a highly scalable
parent-child chain system and its potential benefits
apply to far more than just clothing stores. As well as
FashionET, designed with China’s leading high-end
clothing brand, Kaltendin for the traceability and
anti-counterfeit protection of fashion items, child
chains so far also include Freyrchain, which provides
complete traceability of antiques and WTC-Food, a
food traceability system verifying and ensuring that
food safety standards are applied to products.
10 TO WATCH
MAKING UNMANNED STORES
A REALITY
In Xiamen, China, Waltonchain is piloting
an Unmanned Clothing Retail Store Solution
through its subsidiary Xiamen IOT Technology.
The store solution combines RFID, block-
chain and facial recognition technology
to provide a seamless shopping experi-
ence without the need for any human staff.
Self-service settlement, smart displays,
fitting rooms, conveyors and information
terminals allow for stock to be replenished,
product quality to be checked and promo-
tional pricing to be offered automatically.
The solution also allows valuable data to
be constantly uploaded to the block-
chain - maximizing the efficiency of the
store and its supply chain. For example, as
well as recording transactions, the system
also records the number of times an item
is picked from the display rack. This “grab
rate” is an incredibly valuable piece of data
for retailers in assessing the attractiveness
to buyers of particular products.
SOMETHING’S BREWING
Earlier this year Waltonchain’s IOT
Technology subsidiary signed a
strategic partnership with Ishijah
Trading – the No.1 coffee brand in the
Civil Aviation Administration of China
(CAAC). The partnership included an
agreement to purchase an intelligent
food and beverage management
system.
A pilot store featuring this system,
including a smart billing feature that
automatically uploads customer
behaviour data to the blockchain, is
due to open this summer.
49
 Lunyr
NO. 5 _ 10 TO WATCH

DAV
In a world where projects with little
more than a whitepaper to their
name raise billions of dollars through
ICO’s, it’s always exciting to see a
live, functional blockchain product
Drones. Astronauts.
thriving in the real world.

Autonomous selfie-sending boats.

Lunyr, built on the Ethereum block-
chain, is an online decentralised
DO WE HAVE YOUR ATTENTION?
Encyclopaedia where contributors
and peer-reviewers are rewarded in Meet DAV. As founder Noam Copel puts it,
tokens for their contributions to the DAV is an “open transportation protocol”.
site. The decentralised transportation network
that they aim to create will include “anyone
Currently operating a live open Beta
involved in moving people and objects from
platform, Lunyr offers over $200,000 in
place to place”.
rewards for writing, editing, and peer
reviewing information, motivating In today’s world DAV has set its sights on
users to produce and maintain high creating a decentralised ride-hailing app –
quality, accurate content. blockchain’s very own ‘UBER’ but without the
middleman. In addition, similar technology
Development on Lunyr is seemingly
will be applied to a decentralized manned
continuous with recent upgrades
delivery service.
including a facility for contributors
to add citations to evidence their DAV also hopes to make city travel more
articles, a predictive search feature convenient by allowing users to locate and
and an Android mobile app (iOS communicate with their nearest vehicle
version coming soon). charging stations. Indeed, they hope to
encourage adoption of new transport
Like Wikipedia, Lunyr is free for users
technologies by allowing charging station
but it funds itself by offering adver-
manufacturers, for example, to incentivize
tising which can be purchased using
homeowners to buy and place charging
its ERC20 LUN tokens. As it is truly
equipment in their driveways with DAV tokens
decentralized, there is no ‘one point
which would pay for their network usage.
of failure’ and content cannot be
The homeowner could then monetize their
corrupted or censored by a ‘middle
charging station by offering it to network
man’.
users, driving adoption and network growth.
Lunyr’s long-term vision extends
DAV is convinced however, that the future
beyond maintaining a basic online
of transport is autonomous. Whether it
encyclopaedia though, as they
be autonomous drone deliveries, carriers
intend to develop a knowledge-base
(boats, lorries and such) or ride-hailing
API which will enable developers to
services, DAV believes the future is driver-
create decentralized applications
less, and decentralised.
in next generation technologies like
Virtual Reality, Artificial intelligence DAV aims to facilitate adoption of the

4
and Augmented Reality. Autonomous transportation economy by
connecting users (people who wish to go,
or send something somewhere) with those
offering autonomous transportation services,
e.g. autonomous taxis or drones. You could
be forgiven for thinking your involvement
in this new economy would probably be
limited to the role of a ‘user’ – after all, who
NO. 4 _ 10 TO WATCH

21 CRYPTOS
can afford a Lambo and an autonomous car to taxi
people round in? Actually, DAV aims to allow individ-
uals, even with just one compatible drone, to offer
their services on its network. So you could be sat at
home with your feet up while your drone is out earning
money for you making Amazon deliveries.
WHEN MOON?
5
If you’re looking for a blockchain project
likely to ‘moon’ any time soon you could do
worse than to hitch your wagon to a project
that has not one, but two former Space
Shuttle astronauts on board!

DAVs aviation advisor is none other than

George D. Zamka, a former NASA astronaut
FINDING N3M0 and Space Shuttle pilot/commander.

DAV has collaborated with the California Maritime

Intriguingly, DAV also has an Aerospace
University to build a completely autonomous boat
Advisor - Dr. Scott Horowitz, another former
- n3m0 (pronounced “Nemo”). n3m0 undertakes
NASA astronaut and Space Shuttle pilot/
photography missions for students in return for DAV
commander. Now, it’s perfectly plausible
tokens. No need to worry about ‘poor students’
that Horowitz is on board to offer his experi-
though as they can earn DAV tokens back from n3m0
ence working with drones, (which he currently
by allowing the boat to use their charging services.
does as president of Doc’s Aerospace LLC)
but if it’s ok with you, we’ll just surmise that
DAV must also be secretly working on a
driverless Space Shuttle-hailing app, and
leave it at that.
Top of page: Noam, CEO of DAV (left) with one of
their astronaut advisors

10 TO WATCH 51
Votem
Pete Martin was asked to
6
Votem was born back in 2014 when now CEO

“come up with an idea that would positively

impact a billion people.”

He unconsciously jotted “mobile voting” down

on a piece of paper and the rest, as they say,
is history.

Only 61.4% of eligible voters participated in the 2016

US Presidential election while allegations of ‘vote
rigging’ seem to surface after every significant ballot

7
across the globe.

Votem aims to disrupt that current system, and has

made it their mission to have 1 billion people around
the world voting on their mobile devices through
Votem’s solution by 2025, either in Government or
private elections.

The immutability, transparency and ‘trustless’

elements of Blockchain technology makes it a
perfect match for Votem’s ambitions.

Indeed, when Votem ran a global challenge in 2015

to find a mass hack-proof voting system, a block-

Decentraland
chain solution was chosen out of 110 submissions
from 32 countries to build their system on.

It allows for end-to-end verification with votes verified

independently by the blockchain network as well as
the voter themselves, while the immutable nature
of blockchain technology means votes cannot be
tampered with.
As well as mobile voting being far easier, faster
and more accessible to voters than having to be
physically present at the ballot box, or posting a
paper vote, Votem’s mobile solution also solves all
the problems associated with absentee or remote
voting such as wasted or lost voting cards.
Waking up to a sea of red on your Blockfolio most mornings
just isn’t fun. Have you ever just wanted to escape to a
virtual world where you can experience or build whatever
you like, in 3D? Well Decentraland may just be the place for
you.
Built on the Ethereum blockchain, Decentraland is a virtual
reality world in which users can visit, buy ‘land’ on and
‘virtually’ experience anything from live music concerts to
casinos and games.

The land available to buy in Decentraland is parcelled in sizes

of 10m x 10m, or 33ft x 33ft and represented by non-fungible
‘LAND’ tokens maintained in an Ethereum smart contract.
Like CryptoKitties or CryptoPunks, because ‘LAND’ is non-fun-
gible each parcel is unique and can’t be replicated.

‘LAND’ is purchased using Decentraland’s MANA tokens,

which can also be used by users to exchange goods and
services within the Decentraland landscape.

21 CRYPTOS
NO. 7 _ 10 TO WATCH
As the name suggests, Decentraland is decentralised,
so landowners have full control over what they build
in the environment, from artwork and visual scenes,
to specific applications such as virtual theme parks,
shopping centres or games. Any revenue generated
(in MANA tokens) goes straight to the land-owner
and because it is built on the ERC721 standard (for
non-fungible assets), the land itself can be traded
with other users on Decentraland’s Marketplace.
Decentraland is not available to visit yet, as it’s still in
development. But it is anticipated that once live, you
will be able to immerse yourself in this brave, new
decentralised world via your mobile device, desktop
browser, or through a VR headset.
SHARED INTEREST DISTRICTS
Parts of Decentraland are divided into ‘districts’ for
land owners with shared themes and interests. The
original list of planned districts is available to view on
the Decentraland GitHub.
Advertising opportunities such as virtual billboards
will be available to purchase in Decentraland and
districts formed out of mutual interest also make great
advertising opportunities for companies looking to
target specific market segments.
VIRTUAL VOTING
The Decentraland team recently launched a
new voting dApp ‘Agora’ which allows anyone
who has contributed to a district to vote on
district-specific issues.
Voting is weighted according to the amount
of land voters hold. So if you have more land
in a district you will have more influence over
how it develops.
Eventually, Decentraland will use Agora to
poll community members on wider issues, and
these polls will be weighted according to how
much MANA a voter holds in their wallet.
10 TO WATCH
NO. 8 _ 10 TO WATCH
CampusCoin
Fast, easy, trustless transactions between students
and businesses using mobile apps. Funds held
securely in wallets and accessible via cryptocur-
rency ATMs. Secure peer-to-peer funds transfers.
Complete traceability of transactions through
public ledgers…
Apart from being extremely convenient for
students, colleges, local businesses and parents
alike, perhaps more importantly CampusCoin
represents a real live testcase of a future most of
us are hoping for – one in which cryptocurrency
achieves mass adoption.
CampusCoin immediately nails the wider signifi-
cance of their project in the very first page of their
whitepaper: “Specifically targeting students will
allow for the education of the ones who will be
most greatly affected by the growing transition
from fiat currency to digital currency.”
If CampusCoin is successful in cultivating a series
of school environments where students, colleges,
parents and business become accustomed to
carrying out their daily business using cryptocur-
rency, global mass adoption of crypto will come
sooner than we think.
And looking at the fundamental features of
CampusCoin’s offering, there’s no reason why
they shouldn’t be successful.
CampusCoin’s App will allow parents to buy
CampusCoin, instantly and cheaply send it to
their child and track where and how the money
is being spent thanks to the secure public
sub-ledger system.
Schools will be able to use their own private
sub-ledgers to assess student expenditure data
while the CampusCoin App’s proof-of-loca-
tion feature will be able to track student’s class
attendance. Students can be incentivised to
achieve good attendance records through
CampusCoin rewards.
53
Shops, restaurants and bars are incentivised to
accept CampusCoin too as they will be able to
access useful sales data from the blockchain
and reduce their exposure to employee theft
and robbery as there is no cash to steal and all
transactions are traceable.

The CampusCoin App is set to be released

8
sometime in Q3, 2018.

REDUCING DEBT THROUGH

MICROLOANS
CampusCoin plans to tackle the problem of
rising student debt by giving students access to
micro-loans with “extremely low interest rates.”
Through the CampusCoins reward system, the
students could then reduce this interest rate
further by performing well in school. Their white-
paper states; “a student who receives a 4.0
(grade) in the year that they receive a loan
from CampusCoin may have a 0% interest rate”.

DRIVING ADOPTION THROUGH

AMBASSADORS
CampusCoin aims to drive adoption of its
solution through an ambassadorial programme
in which students are rewarded for promoting
CampusCoin at their schools.

Rewards can be gained for anything from

encouraging fellow students to download the
App or join the community Discord server to
educating and securing local business adoption
of CampusCoin.

MULTI-CURRENCY ATMS
By the end of 2020 CampusCoin aims to install a
suite of ATMs at schools and universities in which
the project has been successfully adopted,
that will allow quick conversion between Fiat
currencies and CampusCoin.

It is anticipated that the machines will allow

conversion to and from multiple Fiat curren-
cies to allow international students to use their
native currencies.
ECOMI
ECOMI is creating an ecosystem that will allow you
to collect, protect, and pay with digital assets.

The CryptoKitties craze demonstrated that there

clearly is a market for digital collectable owner- David Yu, CEO of ECOMI
ship and trading and ECOMI seeks to service that
demand through ECOMI Collect.

The ECOMI Collect App allows you to buy and

trade licensed digital branded collectables with
OMI tokens. These collectables will initially come
from a range of categories including television
series, movies, animation, gaming, evergreen
characters and digital art and can be brought
to life through Augmented Reality features built GOVERNMENT LEVEL WALLET
into the app. SECURITY
Users will be able to swap collectables amongst The ECOMI hardware wallet claims to be the first
themselves and store them securely offline on the of its kind to be offline, wireless and credit card
ECOMI hardware wallet. sized.

9
As well as ECOMI digital collectables, the hardware
wallet will support Bitcoin, Ethereum, Ripple,
Litecoin and Bitcoin Cash on launch, with EOS,
USDT and ERC20 support to follow soon after.

The Secure Wallet is CC EAL5+ Certified, the highest

security standard for government-level deploy-
ments, and is available for free with a minimum
$500 investment in ECOMI’s crowd sale.

In addition to the Secure Wallet, ECOMI plans to

launch a range of supporting technology including
the ECOMI vault – a place to store digital files
such as passwords and photos securely behind
your private keys, which will also be accessible
through the Secure Wallet.

Intriguingly, ECOMI also plans to launch an ECOMI

One card which purports to have all the benefits of
the Secure wallet, but also allows you to manage,
exchange and spend your Crypto and FIAT just as
you would with a regular payment card.

Services within the ECOMI ecosystem can either

be paid for in OMI tokens, or you can access the
same services by staking a required number of
tokens in order to assist the smooth running of the
network.

10 TO WATCH 55
 rains in Japan. Binance donated $1,000,000 to
the fund themselves and CEO Changpeng Zhao
NO. 10 _ 10 TO WATCH (A.K.A “CZ”) also used his high profile and global
reach to call for further donations from “crypto
friends and partners” – even hinting that donations
would be counted towards future listing fees.

Binance recorded Q1 profits of $200m – even more

Binance Coin
than global financial institution Deutsche Bank –
but with quarterly BNB coin burns, and the promise
of a future decentralized exchange launch, it’s

(BNB) hard to see Binance’s impressive performance

halting any time soon.

It’s hard to spend any amount of time in the crypto

space without hearing the name Binance mentioned,
and yet when it comes to one of crypto’s busiest BINANCE BACKS WORLD’S
exchanges, it seems there’s always something new
FIRST DECENTRALIZED
to talk about.
BANK
After last month’s news that Binance was to continue
According to Bloomberg, Binance has
its global expansion by launching its first Fiat-to-
acquired a 5% stake in what could be the
Crypto exchange in Uganda, the exchange opened
World’s first decentralised bank, in Malta.
a disaster relief fund for those affected by heavy

The “Founders Bank” would be decen-

tralized and community owned by block-

10
chain-based token holders.

Binance already has a foothold in Malta,

having confirmed back in March that it
would be relocating its headquarters there
due to the crypto-friendly political climate
in the country.

“FUNDS ARE SAFU”

While leaving your funds on an exchange – or
anywhere where you don’t own the private
keys – is never recommended, Binance’s and in
particular CZ’s communication and reaction to
security issues has up to now been almost faultless.

After an ‘irregular trading’ incident saw a Syscoin

worth around $0.22 purchased for 96BTC, Binance
sprang into action, protecting funds by halting
trading and withdrawals for all users, rolling back
the offending trades and offering temporary
zero-fee trading to those negatively affected by
the SYS price action.

CZ also, quite brilliantly, spun a “Funds are SAFU”

meme into a new Secure Asset Fund for Users
(SAFU) whereby 10% of all future trading fees will
be stored in a cold wallet and used for compen-
sation in extreme circumstances where security
breaches affect users’ funds.
DECENTRA
LADIES
 Decentraladies
1. ÍRIS ASKS!
AMBER BRANDNER
Amber Brandner is a lead facilitator and
organizer with absoluteSUM and Cofounder
with Trippin Inc.
Amber understands the importance of
building a strong community when investing in
the new economy. Her work lies in exploring
common narratives and shared goals whilst
building conversations which bridge individual
understanding into meaningful action. In the
last decade, Amber has worked with brands
and organizations such as TEDx, National
Science Foundation, KPBS, Overnight, and
World Economic Forum Global Shapers.
21 CRYPTOS
(Íris) Naturally, we shall
start from the beginning
so our readers can be
introduced to your work.
Before blockchain, what
kind of technologies did
you work with?
(Amber) With each new
technology or medium
developed we have the
opportunity to redefine
our collective narrative
and explore how we relate
to one another, to create
the future we would like to
exist within, and to build
worlds that support an
improved reality.

My early work in film production involved
everything from creative conception to
editing. It was out of sheer necessity I
learned some simple web dev and design.
Eventually, my work in storytelling and
community development led me to working
with a number of startups in the sharing
economy space as well as a network of social
impact organizations.
As cofounder of Trippin, a tool for sharing
knowledge within trusted networks around
the globe, we are building with React Native
and looking at blockchain as a solution for
some of the permissions and democratic
processes within the community.
AbsoluteSUM seeks to help multiple sectors
for the good of people and the planet.
What are some of the other projects you’ve
worked on recently?
AbsoluteSUM introduces
emerging technologies such
as blockchain, through
collaborative problem solving
where together we identify shared
values and a collective mission. “AbsoluteSUM embodies
We recently launched the San much of how we would
Diego Livewell Blockchain
like to be in the world by
Incubator which has been
encouraging thoughtful
running for two months. We are
conversations...”
gearing up to host a hackathon
focused on Sustainable
Development Goals at the Voice
of Blockchain Conference being
held in Chicago at Navy Pier this
August. AbsoluteSUM is now in
pre-production for several locations around
the globe.
How has blockchain helped develop this
project, and what difference is it making?
The introduction of blockchain has opened
new possibilities in collaborative processes.
AbsoluteSUM embodies much of how we
would like to be in the world by encouraging
thoughtful conversations about what can
be done and should be done with this
technology.
DECENTRALADIES - ÍRIS ASKS!
Decentraladies
1. ÍRIS ASKS! AMBER BRADNER
What are some of the most exciting
companies you’ve been working with, and
what are you working on?
I’ve been most excited about The Live Well
Challenge in San Diego. We started with a
forum discussion and expo to educate the
community of San Diego about blockchain
technology and further develop the
ecosystem. We then facilitated a hackathon
where teams were guided through problem
identification and ideation while considering
the UN Sustainable Development Goals and
the role blockchain can play
in the development of both
local and global solutions.
The Live Well incubator is
in collaboration with UC San
Diego and XYOnetwork,
and is supported by BC4G,
Nanome.ai and ICTE.io.
The incubator provides
mentorship, physical space,
educational resources and
access to a network of support
to help teams develop open
source solutions for global
issues presenting as local
challenges. Throughout the
summer and fall teams are working on
solutions for urgent problems including Clean
Energy distribution, News Authentication
and meeting BASIC human needs. This
work has been so fulfilling and there is a
clear need for more.
How do workshops and hackathons
by AbsoluteSUM help new companies
strengthen their business model?
Rapid iteration and innovation, and inclusion
of diverse mindsets help to build perspective
and thus a richer product or more complete
solution.
59
 Decentraladies

What do you As an entrepreneur, what

think is the best are some of the hardest
approach for lessons you’ve learned
including women through experience?
in blockchain and
tech? Being very clear about
your values and mission,
Inclusion takes and committing yourself
effort. We have to YOUR path gives you
to make the permission to say “no” to
effort to invite everything that is not in
more capable 100% alignment with your
leadership. I hear life mission.
“We tried to get
more women Lastly, do you have advice
but …” or “We for aspiring entrepreneurs
just hired the who seek to work in
best candidate blockchain technology to
from those that change our world for the
applied” or “We better?
don’t know any
Start with having
women for this
conversations with the
panel/talk.” Well, luckily there are people
people and organizations
and organizations that have made it their
you respect, be willing to
job to engage the excluded and invest in
learn and experiment, and
their success. Inviting these individuals and
most importantly - seek
organizations makes inclusion easy.
understanding before you
“Diversity of seek to provide answers.
The binary language and “othering” we see
perspectives across every tech sector and throughout the Oh, and please join us at
builds better world does not serve our collective success. absolutesum.co.

solutions, When we seperate the conversation of

equality and inclusion into a bucket, rather
period. If
than integrate it into the fabric of Who We
blockchain Are, we perpetuate exclusion.
is the ‘next
Why is it important to include more women
internet’ in the blockchain space?
and we are
not ALL Diversity of perspectives builds better
solutions, period. If blockchain is the “next
engaged, internet” and we are not ALL engaged, we
we ALL miss ALL miss out. In order to evolve, to survive,
out.” we must do the work of dismantling the
gender roles and stereotypes we have allowed, ÍRIS. S
throughout history, to dictate how we work @n00bqu33n
together and value one-another.
Found the leprechaun of
magic internet money in 2016.
Part hodler, part wannabe
trader. Nothing a good FA
can’t heal.

21 CRYPTOS
 Decentraladies

HOW TO JOIN THE 2. DESIREE’S CRYPTO CULTURE

CRYPTO COMMUNITY

People frequently ask,

“HOW DO I GET
INVOLVED IN THE
CRYPTO COMMUNITY?”
when they buy their first Bitcoin
or want to learn more about
cryptocurrency. However, figuring out
where to go for helpful information
devoid of scams is more difficult than
most anticipate, and it is only getting
harder as the industry expands. It’s
extremely easy for new entrants in
the space to get sucked into Telegram
pump and dump groups and come
out with significantly less funds and
nothing gained other than a lesson
learned through mistakes.

This article will outline a few suggestions for finding

communities that align with your experience level and
interests, but will avoid specific recommendations, as
you should do your own due diligence to avoid fraud
and bad actors.

Before jumping in, it’s a good idea to reflect a bit on

your experience level and knowledge of the history of
the space. Did your recently just buy your first Bitcoin
or other crypto token? Have you been passively aware
of the major happenings - hacks, policy changes,
controversies - over the past year or more? Under-
standing your level of “noobness” should be a good
indicator of your risk appetite. The less you know,
the more cautious you should be when taking advice
and engaging in different communities.

DECENTRALADIES - DESIREE’S CRYPTO CULTURE 61


Crypto Twitter
Recently knighted with the acronym “CT”, this
is a Twitter community dedicated to all things
cryptocurrency, regardless of which factions you
align with. While there is a wealth of quality content,
separating the signal from the noise is a bit difficult as
you will encounter s**tposting and even more scams,
bots, and outright fraud. Proceed with caution, but
CT is the best place to engage with big players in the
space, get questions answered, and begin building
your own personal brand.
“OG” Communities
While Bitcoin and cryptocurrency devoted sub-Reddits
devolved in the recent past with constant infighting
and bots, the community is self-policing and the
quality is slowly improving. Other OG communities
with higher quality content include bitcointalk.org
and some internet relay chat (IRC) channels. Keep in
mind, these barebone platforms tend to attract more
technical communities, so they may not be the ideal
starting point if this is your first foray into crypto.
Traditional Outlets
More traditional outlets such as CNBC, Forbes, and
Bloomberg claim to report on cryptocurrency, but
frequently fail to cover the true pulse of events. Many
entities entirely devoted to reporting and covering
cryptocurrency have popped up over the past few
years and cover the industry much more accurately -
21Cryptos is a great place to get started every month
(and be sure to catch up on all the past issues too)!
Many leaders in the space take to Medium to post
their thoughts and theories, but beware, fraudulent
companies use this platform as a means of advertising
and sucking in new victims as well.
Social Platforms
Past issues of 21 Cryptos covering crypto culture
have described Telegram, Discord, Slack, and similar
platforms in depth. Telegram, Discord, and Signal
ecospheres are saturated with scams, pump and dump
groups, and general low quality content. There are
some groups that have maintained legitimacy, but
they are few and far between, and you often have
to be invited to join these. It is best to take great
caution when entering here. Slack, however, can be
great for finding developer communities and learning
more about products you are interested in or actively
invested.
21 CRYPTOS
Decentraladies
“HOW DO I GET INVOLVED IN
THE CRYPTO COMMUNITY?”
In-Person Meetups
The craziest way to get involved in the crypto
community is in-person! While it is important
to consider your physical security when
engaging in such crypto activities, looking for
sponsored group meetups are a great way to
develop relationships and begin establishing
yourself throughout the community. The group
setting also provides some level of communal
security. Conducting a basic Google search,
such as “crypto + meetup + location”, is a great
way to find local groups that are tailored to
your knowledge level and interests. Other
great in-person events include conferences
(see June 2018 issue of 21Cryptos for advice
on cryptocurrency conferences).
While taking some level of precaution before
jumping into the crypto community is wise,
the best way to start is to create a Twitter
account and start following respected individ-
uals in this space. Comment on tweets, ask
questions, engage in respectful discourse, and
take advantage of the free crypto learning
available to you, as afforded by the internet
and others in the industry. It is never too late
to join this community to learn, to engage,
and eventually give back.
DESIREE
@dickerson_des
Came for the doge, stayed for the
sh*tposts. Professionally serving as
Blockchain and Digital Currency
fellow at Women for Women Inter-
national, exploring how distrib-
uted ledger technology can
empower women in post-con-
flict, marginalized countries.
1 CRYPTOS 21 CRYPTOS 21 CRYPTOS 21 CRYPTOS 21 CRYPTOS 21 CRYPTOS 21 CRYP

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21CRYPTOS MAGAZINE
 FEATURE

Project
Bitmobile
THE REVOLUTION WILL
BE ENCODED AND
ENCRYPTED by Jen Hill

What
d o e s
a Class
A Diesel, a
woman, and
some young girls
have to do with
crypto or revolution?
Mass adoption is necessary
to transform decentralized,
peer-to-peer, tokenized projects
into reality. If you are into the
notion of cryptocurrencies being used
in place of paper money, we need more
people in our sandbox.

On the right: Jen Hill with Sniya and Kamryn from the ‘C-Block’
program, a course about blockchain technology for 6th and 7th
grade girls. (Shirts provided by crypto clothing maker and camp
sponsor Uptown Robot)
All Photos by
Omer Katzir

21 CRYPTOS
 Jen Hill
has a background in
non-profit management,
International Affairs, and
summer camps (especially
the kind for nerds). New
to the world of crypto,
her goal is to contribute
to the field of blockchain
technology by informing,
inspiring, and empowering
those typically marginal-
ized in tech spaces.

PROJECT BITMOBILE 65
Additionally, inclusion of individuals
typically marginalized from technology
and finance (women and especially women
of color) provides dual opportunities.
Critical adoption inherently requires
“the masses”, and if it goes beyond
a buzzword, decentralization
allowing for peer to peer
everything has the
potential to bring
about an era of
equality.
We are at an opportune time for the advancement of
social equality. The playing field is a faceless emerging
technology and we have a chance to re-envision
how things go, to reset structures, and maybe flip
some tables. That being said, a social revolution is
not an inevitable outcome of the mass adoption of
crypto or of moving all the things on to blockchains.
It will require intentionality. This is where the Bitmobile
comes in.
Project Bitmobile is a six month tour across North
America providing responsible introductions to
cryptocurrencies, digital assets, and blockchain
technology while collecting data. What does that look
like on the ground? A thirty seven foot 2000 Fleetwood
Discovery parked outside of small town squares, Times
Square, or the White House. Outside the motorhome,
21 CRYPTOS
Bottom of page: new friends in coding and
cryptography at the first C-Block, in partnership with
Blackspace.
some signage and inside a GPU miner
donated by the MiningStore. Then there’s
me, luring people with schwag and
Desmo and Techno, two sweet pitbulls,
inviting them to be interviewed or to
take surveys on Ipads. Meanwhile my
partner in life, Omer Katzir, documents
the whole operation with his Sony
Alpha A6500. “Tell me about Bitcoin”
interviews will be recorded. These
conversations are edited and featured
on Bitmobile’s YouTube channel and on
BitcoinMagazine.com.
The strategy is to meet people exactly
where they are. Both physically in
their neighborhoods and in relation
to their experience with the
intersecting fields of finance,
“Putting women coders and
decentralization, currency, professionals in front of girls at
and technology. To give them
an introduction to crypto or, if this age also has a lasting impact.
already informed, to provide
them with the opportunity to
That is why our programs hire
chat. We will ask targeted female instructors and bring female
questions to discover what
the builders, doers, writers, developers to speak to the girls.”
and crypto traders need to
be responsible for in order to
achieve mass adoption. We are curious to
know, “Do you feel as though you have
access to financial services that meet
your needs like loans, money transfers,
savings, payments, and investment?” In
some cities, I will host “Up-Scale” meetups
targeting women who are curious about
the space. Meetups will provide women
with information and community. Each of
these activities will function to generate
attention, interest, information, and
content that can be shared. I will seek to
highlight the possibilities of crypto in easily
accessible formats.
Other cities will host our “C-Block” programs.
In places like St. Paul, Minnesota and Austin
Texas we will utilize local teachers and
classrooms. C-Block is a course designed
as a week-long day camp, after-school
program, or weekend workshop that
will provide 6th and 7th grade girls with
hands-on lessons in coding, cryptography,
and blockchain technology. Why 6th and
7th grade girls? Engendered stereotypes
begin at an early age and despite the fact
that blockchain technology and crypto’s
underpinning of code allow for anonymity,
barriers to getting behind coding still exist.
An important study looked at the decline
in females participating in technology
fields from 37% in 1990 to 25% in 2014.
McCreedy and Dierking explained in their
book, Cascading Influences: Long-term
Impacts of Informal STEM Experiences for
Girls, that “female students with positive
attitudes toward math and science at age
PROJECT BITMOBILE
10 lose their interest and self-confidence by age 14”.
STEM interventions at the age of eleven or twelve can
solidify their interest and add some staying power to
their confidence.
Putting women coders and professionals in front of
girls at this age also has a lasting impact. That is why
our programs hire female instructors and bring female
developers to speak to the girls. Getting a full picture and
highlighting women in this space is challenging. I spoke
with a female developer who regretted showing her face
on her company’s team page. She has received a swarm
of comments and emails about her looks. Sometimes
the comments are threatening. This is just one example
why females would choose to remain anonymous and
why more women become discouraged to participate
in fields where they don’t see themselves represented. I
can’t say that young girls are wrong to be dissuaded, I
just plan on providing them the tools to gain the courage
to pursue any field that intrigues them.
Having worked in the world of youth educational summer
programs for the past fifteen years, I have witnessed
the transformational power of these experiences. From
Marine Biology programs in the French West Indies to
summer courses in Neuroscience at a boarding high
school in the States, I have designed, and evaluated
the effectiveness of, short term hands-on programs in
specialized learning around STEM. I am a firm believer
of in the value of these programs, not only for the
participants and their own futures, but for their families
and communities.
The first C-Block took place in Durham, North Carolina
during the third week of July in partnership with Blackspace.
Blackspace is an actual room that offers black and
brown youth “a breathing space to manifest
their dreams by any medium necessary”. The
directors of Blackspace take a conscious look
at everything and provide extraordinary
intentionality in their community
programming. Often called Woke
Shops, Blackspace provides beat
making, puppetry, poetry and
coding programs for youth.
67
Pierce Freelon is the the Founder of Blackspace and
brings with him a family legacy of community action
and artistic expression.

Twelve girls gathered each day from 9am to 3pm,

huddled in the cozy Blackspace hub or in the donated
meeting space above, aptly named “The Rabbit Hole”.
In the mornings they learned Ruby on Rails and some
Javascript from Ashley Ellis, an Application Engineer at
GitHub. In the afternoons, it was encrypted messages
using emojis, and creating encoded blocks with a
specialized program designed by Nesha Brently and
Khari Baker, two developers who are involved with various
blockchain and crypto projects from Auger to OmiseGo.
Brently and Baker started their own company Kankayo
to develop a curriculum designed to introduce youth
to the myriad of concepts and tools used in blockchain
and to develop and test out new projects. Part of this
curriculum will make up future C-Block programs.

There was also downtime, ice cream time, a trip to a

virtual reality arcade, and some good ol’ Simon Says.
There were also opportunities for connection. Girls shared
their struggles. When comparing
the lived experience of these young
girls to the ones I worked with in the
sailing camps, or the STEM school
academic programs, both of which
cost upwards of $2,000 a week, I
found notable differences. This
Top: Jen Hill passing out laptops
and USB drives on Day 1, provided
through a donation through the EPA’s
E-Cycling program. Each student was
able to keep their laptop beyond the
program. For some, that was the only
computer in their household
Bottom right: NPR Education Feature
Reporter Lisa Philip joined us for the
morning

21 CRYPTOS
 specific cohort demonstrated a higher level
of maturity, thoughtfulness, and creativity and
also a higher degree of sh*t they’ve had to deal
with. Shit like not having a computer at home or a
consistent mode of transportation. Several of the young
girls have the de-facto responsibility of babysitting their
younger siblings, even the girls with brothers around
their same age or older than them. To say that there
are not differences in the amount and types of barriers
to participate in technology is to ignore these specific
challenges faced by some and not others at a very early
age. The less you have to deal with in life the more room
you have to play video games (an important precursor
to computer programming), ponder, focus, and ticker.
By developing programming to specifically reach these
communities, we directly impact the number of possible
contributors to this space. Diversity has proven to bolster
efficiency and provide better responsiveness to problem
solving. Those marginalized, when able to participate,
provide unique contributions that have historically led
to major advancements and efficiencies. Ada Lovelace
is known as the first computer programmer. A woman of
great privilege. The daughter of Lord Byron, she was a
Countess who kicked it with folks like Charles Dickens
and the British mathematician, Charles Babbage, known
as the “father of computers”. Lovelace published the
first algorithm to be implemented by a machine. She
was extraordinarily lucky and well positioned to be able
to study as a woman in the early 1800s let alone be
published. Today, we have the opportunity to position
girls and women to contribute their brain power without
having to come from royalty, and when we seize that
opportunity we make room for contributions that can
move this technology forward by leaps and bounds.
Before camp started, the girls were asked to respond
to a survey. The question; “What
do you know about blockchain
technology? If you haven’t heard
of it, what do you think it is?” Not
one of the twelve girls spanning
the ages of eleven to thirteen had
heard of blockchain. Responses
included, “If you do one thing,
everything else moves”, “I think
it’s websites”, and “A technology
that blocks sites.” Indeed, many
of the pedestrians I ask to “Tell
me about Bitcoin” haven’t heard
of blockchain. Educating these
young girls about a technology
that may be relatively obscure
to the average person but that
that is being quickly utilized by
companies from Goldman Sachs to
IBM to Fidelity provides some equity
in an unbalanced society. After
PROJECT BITMOBILE
the program, they considered blockchain
a technology that could alter the way they
interact with each other.
The ability to leverage our activities to gain
media attention is a large part of the strategy.
These projects matter and deserve press. Think
legitimacy and mass adoption. The tour, the
interviews, the meetups and the camps make
for easy press releases and have already
earned major attention. Lisa Philip, Feature
Reporter for WUNC, the NPR radio station
serving the largest cities in North Carolina, was
keenly interested in the topic of blockchain.
Michael Tiemann, Founder of Red Hat heard
of what we were up to during the week and
bused us to their headquarters in Raleigh for
a private tour. Tiemann shared inspirational
stories with the girls about how his open
source idea became a billion dollar company.
He confessed that in the beginning no one
thought his idea was a good one. He took
that to mean he would have no competition.
There is no way for us to know exactly how
this attention will impact the girls. What we do
know is that interest and press like this indicates
that the world is warming up to blockchain
and crypto.
Instructor and GitHub
employee Ashley Ellis talks
the girls through Sonic Pi
beatmaking
“the world
is warming
up to
blockchain
and crypto.”
71
 Top: Nesha Brently,
co-founder of Kankayo
designed and developed
blockchain lessons for
young adults
Bottom: Khari Baker of
Kankayo supported partner
Nesha Brently in teaching
lesson in cryptography
and blockchain

21 CRYPTOS
Was Satoshi a revolutionary?
Back to the bigger picture. Bitcoin is just a code: a
software. Blockchain is just a digital spreadsheet. But
when we provide education and experience in these
fields, we are giving girls tools for the future. If all of this
is nothing truly novel and just some code, then what’s
the big deal? Why is everyone so inspired in this space
to quit their 9 to 5 jobs and create something new?
What is at the core of crypto that inspires altruism?
Why should I, the crypto trader, care?
Arguably, based on the chat boards and
emails from Satoshi, the intention and
potential of Bitcoin was not to be just some
neato software code or some obscure virtual
money that can only be used in dark places. It is the
possibility of the underpinned technology that makes
it one of the revolution’s most powerful weapons. “It’s
very attractive to the libertarian viewpoint if we can
explain it properly. I’m better with code than with words
though.” – Satoshi Nakamoto.
And because it’s all about the Benjamins (or Satoshis in
this case) even those who are not in it for the revolution,
will benefit as the technology behind the currencies is
put into practice. It is a potentially win win situation for
most everyone, except for those few who are currently
reaping the benefits of absolute control over currency
value. Inclusion and diversity will bolster the ecosystem
in a real way and in truth be a key force in adoption
and, while we are talking about it, revolution. (Hint: if
you don’t care already, this is why you should.)
The ripple effect of decentralization of money greatly
impacts any person or institution operating as a “trusted
third party” aka middle men. Peer to peer banking,
financing, exchange and the maintenance of owns
on data, as well as the being in the position to profit
from it, inherently provides more power to individuals.
This might be the foundation of an ecosystem that is
inspiring so many to quit their day jobs and strike out on
their own. In response to one chat board discussion on
political power, someone touted at Satoshi, “You will not
find a solution to political problems in cryptography.”
Satoshi responded, “Yes, but we can win a major
battle in the arms race and gain a new territory of
freedom for several years. Governments are good at
cutting off the heads of centrally controlled networks
like Napster, but pure P2P [peer to peer] networks like
Gnutella and Tor seem to be holding their own.” A
subversive idealist using code as a weapon, it seems
that Satoshi was interested in the types of disruptions
that function to subvert the current power structure
through decentralization. Satoshi was represented
as someone who was interested in carving out some
space for “us” versus “them”.
PROJECT BITMOBILE
“We all have the
chance to shape
the ways in which
this foundational
technology is used by
society at large.”
A revolution is not guaranteed. Big mining
companies can gain control and become the
new Federal Reserve so to speak. Government
regulations could end up restraining the
possibilities for individual liberty. The masses
could remain apathetic and appeased by
expanded options to consume. How do I
see it? Crypto and blockchain provide the
extraordinary opportunity for disruption, rather
than the inevitability of altruism. Lots of OG
traders will tell you - find and then do what
you are good at. We all have the chance to
shape the ways in which this foundational
technology is used by society at large. The
way I have chosen to participate is dictated
by my experience and skills; summer camps,
logistics, networking, and communications.
When you participate and contribute like this
you are essentially building an ecosystem that
could provide freedom from wage slavery
and grave inequality.
We have a unique opportunity and
responsibility today, at the precipice of an
emerging technology, that holds the potential
to transfer power and wealth to individuals: to
ensure that the direction of this ecosystem is
not transformed into a different version of the
same thing. Satoshi may have been intent on
disrupting the current imbalance of power.
Just as some participants and builders in this
space may be, but we must not be blinded
to the avenues for co-opting and corruption
or resigned in thinking adoption is enough.
With the first camp behind us, and the
Bitmobile ready to roll, we will see how this one
revolutionary act takes shape when the rubber
meets the road. Next up, St. Paul, Minnesota
C-Block and crypto adventures from Burning
Man. Follow along with our journey.
73
 FEATURE

The Plot(s) to Stabilize Venezuela

(and To p p l e a Regime or Two…)
by James McGirk

“WASN’T BITCOIN

SUPPOSED TO PREVENT

THIS VERY PROBLEM?”

Jonathan Wheeler, the lead of blockchain research at Goldman Sachs,

was sitting beside pharmaceutical executive Morgan Crena in the
front row of a Yahoo! Finance conference about crypto. He was aghast
at what was then a 5000 percent annual inflation rate in Venezuela.

Petare, the biggest

slum in Venezuela.
Caracas, Venezuela
 “No one is addressing this,” said Wheeler.
“Here is an unprecedented opportunity for us
entrepreneurs to do something about it!”
Crena was skeptical. “Bitcoin wouldn’t make
sense there as a currency if people couldn’t
pay its high transaction fees or deal with its
processing time,” to which he offered me an
arsenal of data and information in reply.
Wheeler described the Lightning Network
(which directly addresses the transaction fee
and processing time issues according to Crena).
He also had an audacious idea: What if every
bitcoiner donated one percent of their holdings
for a mission of airdropping bitcoin onto the
people of Venezuela to replace their hyperin-
flationary currency with a disinflationary one?
He was very passionate says Crena.
“It’s not going to be an airdrop,” he said.
Our readers mostly live in countries with advanced
monetary policies; meaning they don’t often notice
how their money works because they can count on
a certain level of competency and professionalism.
We may grumble about the odds being fractionally
tilted in favor of the banksters who whisper in the
ears of policy makers, but there are reserve banks and
currency boards, exchequers and armies of forensic
accountants and predatory litigators capable of scrub-
bing any infection before it goes too septic. So aside
from lancing an occasional credit bubble, it doesn’t
matter that our money is organized from the top down.
The system works. But when it does not work, where
it tilts too far and comes undone, the consequences
are fatal.
Venezuela is locked in an economic death spiral.
Between November and December 2016, they began
the 57th verified episode of hyperinflation, joining
grim, portentous historical moments like Weimar
Republic Germany, Robert Mugabwe’s Zimbabwe

“No, this
will be a
bombing of
Bitcoin!”

Protestor in
Caracas, Venezuela

McGirk is the
author of A
Grand Theory of
Everything and
American Outlaws.
His bylines have
appeared in TIME,
WIRED, This Land
Press, and the
Paris Review daily.
For more informa-
tion please visit:
jamesmcgirk.com

THE PLOT(S) TO STABILIZE VENEZUELA 75

and France during the throes of Revolution. “Today, I
measure Venezuela’s annual inflation rate at 35,088%,”
says Prof. Steve H. Hanke, who is a professor of applied
economics at Johns Hopkins University and who also
directs the Troubled Currencies Project at the CATO
Institute.
Hanke measures the black market exchange rates and
Purchasing Power Parity (the price of every day goods)
to determine the real rate of inflation. Prices in Venezuela
are essentially doubling every week. Not only does this
mean the consumers are forced to spend money the
instant they earn it—picture the wheelbarrows of Weimar
Republic Reichsmarks or Zimbabwe’s 100 trillion dollar
notes—an extreme nuisance, but the real damage is far
more insidious; the price of goods shoots up as the value
of the currency goes down, eradicating savings accounts
and paralyzing financial activity as lending becomes
unpredictable and investment unprofitable. Anyone
capable of extracting capital from the economy will do
so. Without investment, production grinds to a halt.
Companies cut jobs, and consumption falls faster
and faster as the spending fizzles away.
At this point governments often fix prices of
essential goods, helping in the short-term but
skewing demand and creating massive short-
ages, further damaging the economy. As infla-
tion gnaws at the economy, states can succumb
to a degenerate spending cycle, where, having
exhausted their credit and still owing enormous
interest payments, they’ll print more money than
there’s a demand for in their economies, further
debasing their own currencies and accelerating
the death cycle.
It took Napoleon himself to root out the last
decaying vestiges of the Ancien regime, introduce
the Franc in 1803, and to finally bring stability
to France’s tempestuous monetary system. “The
inglorious sphere of hyperinflation is a world
of economic chaos, of wrenching poverty, and
death,” writes Hanke. “Its purveyors should be
incarcerated and the keys thrown away.”

Now a group of cryptocurrency enthusiasts are

proposing a gentler approach to the Venezuelan
crisis. Among the most appealing qualities of
Bitcoin is that it is decentralized, and thus poten-
tially immune to government intervention.

What would
happen if you
simply replaced
the Venezuelan
Bolivar with
something
more stable?
Imagine if it took root. As Jonathan Wheeler,
co-founder of the Pale Blue Foundation put it: “It
would be like witnessing the first atomic bomb go
off: The world would suddenly realize that Bitcoin
isn’t theory anymore… it’s practice, and it’s real.”

21 CRYPTOS
Venezuela
ought to
be rich.
They’re sitting on a literal ocean
of petroleum. The United States
Energy Information Admin-
istration pegged Venezuela’s
2017 proven reserves (recov-
erable petroleum) at 300.878
billion barrels, the largest in the
world; Saudi Arabia, with the
world’s second largest, has ‘only’
266.455 billion (Canada comes
in third with 169 billion from
its recently unlocked saturated
mineral sands, while Iran and
Iraq have the world’s fourth and
fifth largest reserves).

As recently as 2001 Venezuela

was the richest country in Latin
America.

What happened was a combination of what’s known on grown-up pants for the first time,” said Gallego.
as the “Dutch Disease,” which is essentially when “Political leaders felt they had to nationalize to prove
a country gets spoiled by too much easy money by they were a sovereign country.”
exporting a natural resource and strangles its other
High prices spurred fuel economy standards in the
industries, and bad government. They’ve suffered
West, and the discovery of new fields beyond OPEC
from eighteen years of socialist rule—beginning with
(particularly in the North Sea, Brazil and Alaska). As
President Hugo Chavez who ruled from 1999 until
the new sources came online there was a glut of oil
his death from cancer in 2013 and President Nicolás
and by the early 1980s prices plunged. Venezuela’s
Maduro after that. And just like Cuba or the Soviet
government borrowed heavily in the 1970s was deeply
Union, price controls, nationalized industries stifling
in debt and forced to restructure its economy, which
competition and encouraging sinecure, and massive
meant deep spending cuts, including an end to subsi-
inefficiency have all bled the economy dry. But
dized gasoline for its citizens, and other perks. The
according to Raul Gallegos, author of Crude Nation:
economy contracted. Inflation gnawed away savings
How Oil Riches Ruined Venezuela (2016), the real
accounts. The simmering resentment boiled over in
damage began long before.
1989 with a series of bloody riots called the Caracazo:
“Oil has always meant too much spending,” said Galle- Hundreds were killed.
gos in a speech to the CATO Institute. In the 1970s—
“It was a hangover from the party of the 1970s,” says
after the formation of the Organization of Petroleum
Gallego.
Exporting Countries (OPEC) and the deliberate
manipulation of crude oil prices—“there were torrents During a banking crisis of the 1990s, subsequent
of dollars coming in… Concordes touching down governments hesitated to enact the same kind of
in Caracas.” In 1976 they nationalized the state oil punishing reforms it took to stabilize the economy
company. “To them it was like an adolescent putting in the 1980s, lest they trigger another Caracazo.

Inflation and corruption eroded what was
left of the economy. By 1998, when Hugo
Chavez was elected, the average salary was
a third of its 1978 peak and the economy
had shrunk to the size it was in 1963.
“Chavez arrived in 1998,” says Gallegos.
“Between then and 2017 production [at
the state-run oil company PDVSA, which
accounts for 95 percent of Venezuela’s
exports] decreased from 3.2 million barrels
per day to 1.9 million barrels per day;
and there has been a massive increase in
employees.”
As the information technology revolution
took hold elsewhere in the world, and
demand in places like India and China
skyrocketed, the price of oil boomed again,
soaring to $140 a barrel in 2008, making
lavish spending possible once more and
masking many of the terrible economic
decisions being made by the Chavez regime.
It wouldn’t last long.
21 CRYPTOS
Venezuela is
rich in natural
resources. Seen
in Isla Margarita,
Venezuela.
“Unbeknownst to most people, oil producers were exper-
imenting with a marriage between two established oil
drilling technologies -- horizontal drilling and hydraulic
fracturing,” writes energy analyst Robert Rapier in Forbes.
Vast quantities of American and Canadian oil that were
trapped in oil sands were suddenly profitable. Then the
global recession hit. Oil prices plunged to around $39 and
OPEC wasn’t capable restricting supply the way it once
could. Plus Venezuelan oil is heavy and loaded with sulfur
(“sour” in the oil industry argot) and costly to refine, costing
$27.62 to produce a single barrel in 2016 according to the
Wall Street Journal (lighter, sweeter Saudi Arabian by
contrast costs a mere $8.98 to produce; while British oil,
which is mostly under the North Sea is the most costly in
world at $44.33).
In February 2016, when prices dipped to $27 a barrel, it
was actually unprofitable for Venezuela to sell oil. Today,
prices are hovering between $60 and $70.
Plunging oil prices have pushed the Venezuelan economy
into crisis. Ninety percent of the population now lives
in poverty (from 55 percent in 1998). There are periodic
outbursts of violence and food shortages, which the
government uses strategically to maintain order. Center
for Strategic and International Studies associate fellow
Moises Rendon describes the politicization of the local
food distribution system called the Local Committees
for Supply and Production (CLAPs): “While 83 percent
pro-Maduro voters say that CLAP is their main source of
food, only 14 percent of independents say the same.”
Similar controls are in place to prevent ordinary Venezue-
lans from extracting money from the economy or convert-
ing it into a harder (more stable) currency.
Venezuela’s annual inflation rate is now completely out of
control. The state is teetering and lashing out and could
easily explode into a civil war, sparking a refugee crisis
that would dwarf the Syrian one.
Could what economists refer
to as “helicopter payments” of
cryptocurrency really stabilize
what must be the world’s
most dysfunctional economy?

CSIS’s Moises Rendon sees promise in the Pale Blue
Foundation’s plan to airdrop Bitcoin. “It’s a good
idea,” he says.
“They’re thinking out of the box, and the Venezuelan
crisis needs this type of initiative given how repres-
sive the Maduro regime is. [Maduro is] rejecting aid,
and they’ve implemented strict currency controls, so
it’s very difficult for anyone to import aid or send
it from abroad. Given how the regime keeps trying
to block attempts at aid this may be one of the only
alternatives left.”
Airdropping $300mm alone (their first proposal)
probably won’t upend the Maduro regime or “create
an economy on the side,” as Rendon puts it, but will
“create some much needed room for people to have
access to money.”
He sees a few potential hiccups. “The U.S. Treas-
ury has sanctioned Venezuelan individuals and the
PDVSA nation oil company, and the sanctions are
extended to anyone providing economic support or
doing business with them. The Treasury hasn’t really
defined what happens if the [Bitcoin] ends up in the
hands of officials. How you identify who receives
them is a very complex issue, and probably my main
concern with the project.”
Should the project take hold and create a stable,
decentralized shadow economy based on Bitcoin, the
Maduro Regime would likely see the effort as a major
threat.
Cúcuta has deep meaning in revolutionary history.
Outnumbered two-to-one, this was where the great
liberator Simón Bolívar mustered his troops against
Spanish Royalists holding the city, prevailed, and
began a campaign that eventually led to a lasting
independent Venezuelan Republic, and the independ-
ence of Colombia, Panama, Ecuador, Peru, and
Bolivia. Today Bolivar might be Latin America’s
most celebrated hero. There is a decent chance David
Hay, a young Australian entrepreneur, might one day
become the cryptocurrency equivalent.
Hay’s parents and sister lived in Venezuela, running
a successful air-conditioning repair business until
the fluctuating currency and price controls ruined it.
In 2014 they experimented with Bitcoin as a way to
transfer their remaining savings into a more stable
currency, since the socialist regime had blocked all
other avenues of extracting money from the economy.
Their Bitcoin gains insulated them from the dissolving
economy, and convinced Hay of the transformative
power of cryptocurrency.
Since then he’s moved to Medellin, Colombia and has
been fundraising crypto in an attempt to establish a
cryptocurrency exchange and educational center in
Cúcuta. Anyone in the city would be able to take a
quiz and receive the equivalent of two weeks salary
worth of cryptocurrency. He’s raised and distributed
a substantial amount thus far, particularly from the
Dash and Nano (formerly RaiBlocks) communities.
The next step is a $2mm blitz.
The hope is that if enough cryptocurrency were sluic-
ing around the city’s economy it would spark a criti-

“We’re talking about one of the most corrupt govern-

ments in the world,” says Rendon. “They’re literally
paying people to keep them happy. The way the
regime has come into power is through controlling
the economy. If they start losing power structures,
they’ll start losing the tools they use to control
people.”

International military intervention in Venezuela

probably won’t happen, says Rendon. “We want
them to come up with their own solutions and the
only way the international community can help is
by helping the people on the ground.” He suggests
looking at using cryptocurrency as a way to help
refugee populations.

According to the United Nations nearly 600,000

Venezuelans have already fled to Colombia. A young
Australian entrepreneur named David Hay had also
noticed and moved to Colombia with a plan to coax
Cúcuta, an impoverished border city inundated with
Venezuelan refugees, into adopting cryptocurrency.

THE PLOT(S) TO STABILIZE VENEZUELA 79

cal mass of adoption, which would spread—ideally
into Venezuela and stabilize the economy. Hay
Any effort that has
as ultimate goal to
focused on schools as distribution centers (and
is also working on a plan to distribute low-cost
Android computers to encourage adoption too).

help people here in

A fingerprint reader would prevent fraud.

“Problem with that is that people are gonna start

cutting off hands,” says Jonathan Kohn, who grew
up in Venezuela and helps run Cripto Conserje, a
cryptocurrency that started attempting a different Venezuela is welcome.
strategy in Cúcuta.

“The fact is that when you’re up the wall you’re liable to do

that kind of sh*t. You have one man loaded with money, and
it’s all in a centralized location and it’s gonna be a target.
People are desperate.”

Kohn has spent his career looking at ways to connect cryptocur-

rency with the real world. Early on he noticed that something
tangible, a silver coin with a unique QR code stamped on it,
made crypto far easier for civilians to understand. He later
worked for an oil company, looking at ways crypto investors
The use of
could hedge their brand new assets with old fashioned black
gold. His solution to kick-starting crypto adoption in Cúcuta is
cryptocurrencies
extremely low tech. Distribute 300,000 paper wallets—wallets
printed to look like traditional bank notes—to people who’ve to safely transfer
successfully completed a quiz, and then airdrop them currency.

“The scale is so small,” Kohn says, “that even if some guy with
donations can
a gun comes up, it’s only five bucks, and so even if a baddie
gets a little he still has to go through the process, and we get make humanitarian
one more adopter.”

Kohn heard Hay speak in New York and reached out, offer-
assistance more
ing to help with on the ground logistics in Cúcuta. Colom-
bia has a banking cartel and
common and reach
strict regulations to navigate.
The two men eventually had those in need faster.
a philosophical disagreement.
To Kohn (and his partners)
donations weren’t enough, a
lasting solution would have to
be self-sustaining and profit
motivated. Hay fiercely
resisted the “s-word.” They
went their separate ways but
remain amicable.
JOSE at @EatBCH which
Kohn is about to conduct his has arranged some
first alpha test. “One of the events within Venezuela
biggest benefits of this project
will be generating information.
There are hardly any econo-
mists looking at crypto-cur-
rency today. At least we’ll get
a feed of information.”

21 CRYPTOS
According to Stephen Hanke, there are two ways that a Protest site
engulfed
country can staunch runaway inflation. They can install
in flames
“a currency board system in which its local currency in Caracas,
becomes a clone of a reliable anchor currency.” Alter- Venezuela
natively, “a country can abandon its local currency
and adopt a reliable foreign currency (read: it can
“dollarize”).”

Cryptocurrency could be thought of as an attempt to

‘dollarize’ the world. Bitcoin is decentralized or, as
Jimmy Song, whose blockchain programming inten-
sive inspired Jonathan Wheeler, explains, “it does
not have a single point of failure or a choke point.
Every other coin has a founder or a company that
created their coin and they have the most influence
over the coin.”

Unlike a centralized currency - like the Venezue-

lan government’s own desperate attempt to create
a cryptocurrency called the Petro, which was alleg-
edly backed by its own oil reserves, and essen-
tially destroyed after the U.S. Treasury banned
U.S. citizens from using it - there can be no sudden
changes to the economic “rules” governing its behav-
ior (unlike Ethereum, the second-largest currency,
which controversially reverted a $150mm hack from
a Decentralized Autonomous Organization). There
are no known agendas guiding it from behind the
scenes; nor, unlike government-issued fiat, any
“central banks slowly degrading [its] store of value
utility.”

Too many of the world’s ills today are the result

of terrible economic policy. Blockchain technol-
ogies have the terrifying and thrilling potential to
change this. The future is rushing up on us. Nearly
all banking jobs will soon be automated as intercon-
nected, trustless electronic accounting systems and
exchanges take hold; insurance, real estate and the
law cut to shreds by bureaucracies that are intercon-
nected, trustless, and self-optimizing; even creative
jobs are being replaced by algorithmic optimization.

Bitcoin—or another truly decentralized, infla-

tion-proof store of value—might be the world’s only
chance to prevent all but a tiny sliver of the elite
being left out of the future. If nothing else it might
help choke off the kind of government incompetence
that strangles countries like Venezuela.

“I feel that meeting Jonathan and learning about

his project was no mistake,” says Morgan Crena of
meeting Wheeler and finding out about his Pale Blue
Foundation idea. “If you want to have a large positive
impact on the world, you have to apply your talents to
solving big problems.” It remains to be seen whether
enough Bitcoin can be deployed for a shadow-econ-
omy to take root—but it’s worth a shot.
Interview with
Morgan Crena I’d love to get some backstory about how you
guys met, and what inspired you to focus on
Venezuela...

(Crena) We had front row seats next to each

other at the ‘Yahoo! Finance All Markets Summit:
Crypto’ in February of this year, and we instantly
hit it off. Jonathan was working at Goldman Sachs
as a VP and Lead of Blockchain Research within
Goldman’s Investment Management Division. I
was working as a BD exec in pharma, but was
looking to move into crypto-finance after recently
completing my MBA at Washington Univer-
sity in St. Louis. Jonathan had just come off of
Jimmy Song’s Programming Blockchain Inten-
sive Seminar and showed me what he learned on
the hyperinflation in Venezuela. At that time, it
was at 5000%; today it’s at about 46,000%. With
emphatic disbelief, he asked, “Wasn’t bitcoin
supposed to prevent this very problem? No one is
addressing this; here is an unprecedented oppor-
tunity for us entrepreneurs to do something about
it!” I countered that bitcoin wouldn’t make sense
there as a currency if people couldn’t pay its high
transaction fees or deal with its processing time,
to which he offered an arsenal of data and infor-
mation in reply. That included the promise of
the Lightning Network (which directly addresses
these two issues), the scalable linear growth of
Bitcoin’s data-directory blockchain size, and his
big idea of asking bitcoiners themselves for 1% of
their bitcoin holdings as a donation to a mission of
airdropping bitcoin onto the people of Venezuela
to replace their hyperinflationary currency with
a disinflationary one. He was very passionate,
saying “It’s not going to be an airdrop, no, this
will be a bombing of bitcoin!”

As an ethicist and social worker, I offered a moder-

ated approach, pointing out that there are compli-
cated socio-economic and geopolitical risks, and
other considerations to take into account, not just
technological ones. With enthusiasm and confi-
dence, he told me, “We can do this,” informing me
of certain bitcoiners who already said they would
donate 1% of their holdings to the idea. I liked
the concept, as well as Jonathan’s intelligence
and resolve, so I offered my services part-time.
So about me: I started experimenting with block-
chain applications for pharma back in 2016, and led
a team of developers to create a groundbreaking
and award-winning, working provenance POC for
the pharmaceutical supply chain. While that was fasci-
nating, I had a stronger desire to move into finance and
the cryptoasset space. I feel that meeting Jonathan
and learning about his project was no mistake. If you
want to have a large positive impact on the world, you
have to apply your talents to solving big problems.
Shortly after our initial encounter, we both left our
jobs and decided to work on this calling full-time.
Did you meet refugees or did this seem like the most
effective place for this kind of intervention? Did you
glean any interesting lessons from looking at the Dash
and BCH donations to Venezuela?
As we met with Venezuelans abroad and within the
country, we quickly learned how dire and complex the
situation on the ground is. Hearing their stories and
personal details of what is happening in their country,
saddened and emboldened us. It’s an honor to work with
and on the behalf of such amazing people. Over time,
we learned of similar initiatives, such as the Dash project
in Cucuta, the eatBCH project, and other airdrops of
various cryptos. My personal favorite is the side-project
from the Dash community, called Cripto Conserje, which
is educating people on how to use cryptocurrencies and
distributing paper wallets. We meet with large blockchain
companies and other start-ups in the space regularly to
see how we can collaborate. Some hold potential as viable
partners, while others not. The UN has a Blockchain
For Impact initiative, Coinbase wants to send donations
via their GiveCrypto program, Zcash wants to create a
wallet and do something similar to Pale Blue, as are other
privacy coin projects. All of these programs are incred-
ibly valuable and potentially impactful like ours. These
efforts must continue. We must have an all-hands-on-
deck attitude towards solving this critical humanitarian
crisis, where people have minimal access to food and
medicine. Every little bit counts. No matter how small,
if it can generate a viable token economy, as we’ve seen
in other countries, then why not? Our work is cut out for
us with regards to addressing the infrastructure, which
includes not just education on how to protect this new
type of asset, but also merchant adoption, reliable inter-
net access, electricity usage, as well as the technologi-
cal hurdles that still face our nascent industry, such as
dark actors in the space that may attempt to block our
humanitarian efforts. There are regulatory issues and
economic sanctions against individuals that need to be
considered as well, such as dark actors in the space that
may attempt to use new tech for criminal activity or block
our humanitarian efforts. Yet, here we stand, together,
as brave new crypto-world warriors.
While we have entertained the idea of creating a
crypto-agnostic mobile app, that idea is currently on the
side-burner so that we can focus our efforts. The Pale
Blue Foundation serves to empower those suffering from
monetary oppression. Pale Blue’s mission statement is:
THE PLOT(S) TO STABILIZE VENEZUELA
“Uniting our world by
empowering individual
sovereignty.”
Bitcoin has the greatest intellectual capital, with
engineers rigorously testing its protocol, and
Jonathan is committed to developing a solution that
will be scalable and deliverable to tens of millions
with real-world utility and long-term value, making
bitcoin the most viable option. However, we at Pale
Blue feel an urgency to respond, and would like
to deliver something as soon as we can, so we are
working hard on that endeavor as well, which may
or may not include bitcoin. Also, Venezuela is only
the beginning. World history shows us that monetary
crises befall almost all nation states at some point or
another, and we believe that decentralized, peer-to-
peer, exchange of value via digital assets like crypto-
currencies will help prevent those type of crises. We
cannot stress how dire the economic situation is in
Venezuela. It is the reason why we do what we do.
What do you imagine as the best possible five year/
ten year outcome?
Nobel Prize winning economist Milton Friedman
demonstrated how an economy can recover from
utter defeat and devastation to becoming one of the
strongest economies in the world, simply by intro-
ducing a sound store of value and economic freedom
to a market. He spoke of post-WWII Germany, and
its then “new” currency, the Deutsche Mark. After
Germany was defeated in 1945, strict economic
controls were implemented, including wage and price
controls. Money lost its value, and people reverted
to primitive barter, just like what is now happening
in Venezuela. In 1948, Ludwig Erhard, the German
director of economics, simultaneously introduced a
new currency and abolished almost all controls on
prices and wages. Within days, shops were full of
goods, and within months, the German economy
was operating at full capacity. In little more than a
decade, it became the strongest economy in Europe.
While it may not happen overnight, and we recognize
Venezuela presents its own challenges and circum-
stances, this kind of turn around could certainly
happen. By introducing a sound, disinflationary
currency such as bitcoin, it could serve to promote
free markets and economic freedom. This is not only
our hope for Venezuela, but for other economies
suffering from monetary oppression as well.
83
W I L L W E K N O W
I T W H E N I T
H A P P E N S ?

• FEATURE •

By Ronan

Co-founder and head

of development for
21cryptos.
 W H E N B L O C K C H A I N
E N T E R S T H E
M A I N S T R E A M
Cryptocurrencies had their first time in the
mainstream spotlight in the early part of this
year. They dazzled the public with a host of
newly minted millionaires and were mocked
with comparisons to tulip mania. The headlines,
both positive and negative, have helped give
us the first vital step towards mainstream
adoption: awareness. With this awareness
there has been a significant increase in the
number of traders and projects launching
over the last six months, yet despite this
the industry is still in its infancy, and
the number people actively using tokens
is minimal. So will cryptocurrency and
blockchain technology go mainstream?
And if it does, what form will that adoption
take? More importantly - will we know it
when it happens?
Before moving on to more complex topics it’s
worth covering some well trodden ground - which
is ease-of-use. For mass adoption to occur, the
difficulties of handling tokens has to be one of
the first obstacles the industry has to overcome.
The journey for new users often starts by trying to
find a trustworthy fiat exchange. Now, there is a
lot of praise for blockchain’s ‘trustless’ nature,
Y E T T R U S T I S I N S H O R T
S U P P L Y
when it comes to services. There are emerging
behemoths such as Coinbase, which are slowly
becoming the pillars of the industry. However, trust
takes time to build and propagate and crypto is
somewhat of a young, black sheep industry. It can
be daunting for new users to even know where to
start.
Many services also suffer from major instability.
Many websites and apps presented users with
half-baked UIs that require a moderate level of
knowledge: wallet addresses, block times, confir-
mations, etc. There have been great improvements
in recent times, and equally catastrophic failures.
Hacks, scams, and human error have meant
millions lost - the stories of which are devoured
by the current ‘clickbait’ media, further fuelling
distrust.
Once you make it through KYC, giving away your sensitive
data, the problem of trust repeats itself when choosing
an asset wallet. There are many options: official coin
wallets, ERC20 specialists, Shapeshift enabled, graphical,
technical, hardware, hot, cold. It then becomes impor-
tant to safely store recovery phrases or private keys, lest
your funds be locked away forever, left mockingly immor-
talised on the chain. There are few systems in place to
recover lost coins, although many large exchanges have
compensated users after major hacks. This has been a
tirade of examples, and as we are currently not at a state
of mass adoption, and the present audience is niche, it is
assumed you are well versed in the above processes.
Many of these processes are not too dissimilar to the
current banking system - they also use KYC, and in fact
you cannot open most bank accounts in the UK without
having to attend in person. They also have authenti-
cator devices for online banking, 2FA 1.0, passwords and
secret questions. In addition, there are account numbers
of various sizes and purposes similar to wallet addresses.
If mass adoption is where cryptocurrencies are heading,
then it’s not enough to only match the competitor, there
has to be an improvement. We have the opportunity to
There are tangible projects currently
working on bringing crypto to our
physical wallet.
21 CRYPTOS
make money and financial services smarter
and more international. Public and private
blockchains already have great features, such
as immutability, digital scarcity, censorship
resistance. The last beneficial ingredient for
the user to promote mass adoption would be
to make crypto easy to use.
This is not simply a wish list - there are tangible
projects working on usability, with the goal of
going mainstream. One set of services that
have potential are ‘digital banking alterna-
tives’ such as Revolut. These services work
similar to a traditional bank, yet with all the
functionality of a modern app. One of the
most exciting features is that users can easily
have multiple currency accounts working
concurrently - major fiat currencies alongside
crypto. Revolut can hold Bitcoin, Litecoin and
Ethereum. Moreover, cryptocurrencies can be
purchased through the app, so getting hold of
tokens is as easy as buying Candy Crush Gold.
The idea of building cryptocurrencies into the
current new wave of financial services could be
a gateway to the mainstream, from digital
G E T T I N G
H O L D O F
T O E K N S
A S E A S I L Y
A S B U Y I N G
C A N D Y
C RU S H
G O L D
banking alternatives like PayPal to mobile financial services -
which are increasingly popular in Sub-Saharan Africa and South
Asia.

Simple integration into current applications is useful, but it

doesn’t solve some of the fundamental difficulties with handling
tokens. One of the most promising blockchain projects which
is attempting to solve some of these functionality problems, is
Coinweb (www.coinweb.io). This is one of a few companies, such
as Ethereum Naming Service (www.ens.domains), that are imple-
menting a promising naming system for wallet addresses - along-
side a ‘hyper-layer’ and easy token issuing. Their system uses an
email style address to replace a hash address for a coin wallet.
In simple terms, an organisation can register a domain, such as
‘@21cryptos’, and they are then able to issue users with a name,
‘Ananke@21cryptos’. This would then serve as the wallet address
for multiple tokens, and would provide a personal, memorable
and far easier system. Payments could be made across the globe
as easily as sending an email, but with all the added benefits
that come with using a cryptocurrency.

Developments such as these are leapfrogging what the banks are

currently offering in terms of service. Especially with regards to
international transactions, as people are connecting more and
more from around the world, aided by cheap travel and social
media. It may be that solutions such as these are the beginnings
of user friendly crypto. There are of course wider problems when
it comes to adoption, but removing the initial barriers is key.

R E V O L U T I O N
O R H I D I N G I N
P L A I N S I G H T ?
There is a blockchain project for almost every industry - from
gambling to healthcare. There are over 1600 tokens listed on
CoinMarketCap. All these projects share a spiritual ancestor,
Bitcoin, but how many of them share Bitcoin’s implied philosophy?
Bitcoin has locked into the Genesis block a link to a Times article
from 2009 with the headline, ‘Chancellor on brink of second
bailout for banks’. It is not explicitly known what this message
from Satoshi Nakamoto meant, however it would appear to
be a condemnation of banks and governments following the
financial crash in 2008. It has served, in part, as a rallying cry
for anarcho-libertarianism and anti-banking sentiments ever
since. Bitcoin itself is perfectly suited to disrupting traditional
banking: it is decentralised, immutable, and independent of
government. Could it be that for better or worse the ideolog-
ical weight of the first popular blockchain will play a part in
its mass adoption?

WILL WE KNOW IT WHEN IT HAPPENS? 87

It would appear so far that adoption has had little to do
with the ideologies of cryptocurrencies, and a lot to do
with fundraising and speculation. However, if you consider
that Bitcoin was birthed in the wake of the financial crash,
perhaps significant adoption in this regard is reactionary?
It would certainly fit that a radical shift in society, such
as a global movement away from fiat currency, would
require a revolutionary force. Many major ideological
and political changes throughout history have been the
result of sudden and fierce revolution, from the fall of
kings to the rise of communism. Revolutions are very often
defined by the population rising up against autocracy or
plutocracy. It certainly could be argued that we live in
a plutocracy, or at least a perceived one. The wealthy
1% are able to influence governance by leveraging the
economy, key infrastructure and media. This has created
tension between the public and the institutions. Studies
such as the Edelman trust barometer (2017), which tracks
global trust for business, media, government and NGOs,
suggest that all four institutions are either neutrally trusted
or distrusted by the public, which is a decrease since 2012.

2 0 0 8
2 0 1 8
However, history has also taught us that revolution
requires something to light the touch paper. Even with
a lack of trust and polarised politics, the scale of what
would be required for mass adoption of decentralised
currencies might be significant. Would it take another
crash at the level of 2008, or far worse? Could it be the
rising threat of mass unemployment due to AI, automated
manufacturing and transport?

Whatever the cause, if we saw a sudden shift away from

the traditional financial system, the fall out could be
catastrophic. Despite inequality, our western economies
are usually stable enough to serve the general public -
even for the poorest citizens. Private and public services
continue to run in the face of changing political and
economic pressures. Yet could we guarantee our institu-
tions would survive a sudden shift to cryptocurrencies?
Would funding to critical services be possible without
considered planning? These are important problems to
resolve, yet the rewards of a more equal society are
certainly worth fighting for.

As much as Bitcoin is politically inspired, it has also

undoubtedly inspired a revolution in technology. It may
be that the instigator for mass adoption is through appli-
cation instead of protest. The previous topic was focused
primarily on pure cryptocurrencies, rather than utility
tokens. What utility tokens bring to the table is offering
improved services, which is a key part of bringing on
new users. An example of a token ecosystem that may
enjoy mass adoption is from the energy sector.

21 CRYPTOS
 E N E R G Y
There has been a huge boom in distributed energy
resources (DERs), from sources such as solar photo-
voltaic (PV) panels, which are becoming more cost
effective each year. In Australia they predict over 40%
of energy production will be from DERs by 2027. These
new systems are very localised and it is often the case
that feeding excess energy back into the national grid
is inefficient, so there is a need to create local grids
where prosumers can sell excess energy to the commu-
nity and businesses in a direct and decentralised way,
and consumers gain more control over their supply. This
is where blockchain companies such as LO3 or Power
Ledger get involved - they are creating a token market-
place for this energy and installing smart metering and
grid technology. The tokens can be used to buy and sell
energy in real time, using blockchain’s trustless recon-
ciliation to ensure accurate trades and low transaction
fees. It can either be used with legacy systems or be the
backbone of a modernised small network. This is a case
were a blockchain solution is meeting the needs of a
changing industry in a purely practical sense.

These projects are truly inspiring, and the tokens may

develop a positive association with being local, selective
and with a focus on renewables. Yet, In this situation, there
is no real significance given to the tokens. Consumers
may as well be paying in fiat. Handling home utilities is
far from recreational - it will most likely be that the users
have no real knowledge of the underlying blockchain
technology. This is a trend that may develop across
other token ecosystems. Projects entering into industries
such as energy and advertising may eventually see the
most tokens changing hands on their platforms, with
users less explicitly involved in the blockchain process
- similar to existing loyalty schemes. They work predomi-
nantly in a closed ecosystem, and their adoption would
be based on providing a better service than compet-
Redistribution itors using the technology. With this, there is also the
of wealth: Man
added benefit of being influenced by the wider context
in Seattle earlier
of cryptocurrencies.
this year (2018)
taking part in the
This is just the beginning of adoption, and only now are
fight between
some of the most creative token projects coming to
taxing the city’s
light. With the culture of investment and open-sourcing
largest private
employer– - developments are coming on fast, and with catchy
Amazon, or not. and marketable names to boot. The lightning network,
atomics swaps, and more - new blockchains and
consensus mechanisms are being worked on to speed
up transaction times, lower energy costs and improve
decentralisation. With this blooming, there is the oppor-
tunity to honour what Satoshi may have been trying to
create - a redistribution of wealth and power for the
betterment of everyone in society.

WILL WE KNOW IT WHEN IT HAPPENS? 89

 By 2027, 40% of Australia’s energy will be produced by distributed resources,
such as solar energy systems supported by blockchain technology.

21 CRYPTOS
BUILDING ON
BITCOIN
Many are quick to point
out that hype in the
blockchain space closely
mirrors that seen during the
dotcom bubble. It’s hard
to disagree with this when
you consider the obscene
amounts of money raised in
order to fund the building
of decentralised networks
for projects that really don’t
need decentralisation. The
‘blockchain not bitcoin’
mentality is one that has
captivated entrepreneurs,
developers and entire
industries around the globe –
the ‘blockchain conference’
is an entire phenomenon
in itself, where attendees
pay thousands of dollars
to listen to self-proclaimed
experts discuss how slow
and inefficient databases
are going to take over the
world.

by Matt Breen

A recent law graduate and

crypto journalist whose work
has been featured in Crypto
Insider, Cryptoslate and Bitcoin
Magazine. Where crypto-
currencies are concerned,
he aligns with the Bitcoin
maximalist school of thought.
mdbr.ch - @MattoshiN
It’s hard to bundle Building on Bitcoin in with the
likes of these.

Taking place on the third and fourth of July in Lisbon,

BoB promised high-quality technical discussions, with
dreaded talk of ICOs nowhere to be heard. And
it certainly delivered. The successor to last year’s
Breaking Bitcoin (which took place in Paris and
revolved around the security of the network and
possible attack vectors), it focused on enhancements
to the protocol, and the building of apps on top of it.

I’d be lying if I said I understood all of the concepts

being presented – I dabble in developing on top of
the Lightning Network, but I’m largely in the dark when
it comes to understanding some (virtually all) of the
nuances of the base layer. That said, solutions running
adjacent to the main chain seemed to be a focal
point – after almost a decade of
hearing about sidechains, it was
exciting to see Blockstream’s
Liquid being presented (a feder-
ated sidechain that would
allow for exchanges operating
the network to transfer Bitcoin
in a more private and rapid
manner). I don’t feel qualified to
speak about the Single-use Seal
proposal by Peter Todd (other
than to say that it’s a mechanism
for preventing double-spends) or
Jonas Nick’s Blind Signatures in
Scriptless Scripts (which outlined
a concept for blind Schnorr signa-
tures) – I had them explained to
me in lay terms later on.
are now getting close to representing short-term de

G iacomo Zucco’s new unveiling

open-source RGB Project was also met with
of

great enthusiasm. One thing to note about the vast

the
majority of attendees (certainly with the ones I met):
they have little time for tokenisation, ICOs or any other
blockchain-related projects that do not enrich or
expand upon the Bitcoin network. It’s perhaps unsur-
prising, in light of this, that Zucco’s announcement of
a new protocol was well-received by all present.
“What the RGB protocol does is basically to allow
you to issue, store and transfer generic digital
assets, leveraging many parts of Bitcoin in order to
maximize standardness and interoperability, while
minimizing typical drawbacks of past Bitcoin-based
experiments, especially in the fields of privacy and
scalability,” Zucco told 21CRYPTOS. “Alternatives are
utterly unscalable, un-private, and/or too distant
from what I think will be the de facto global open
standard in the future: Bitcoin. While I acknowledge,
of course, the fact that ERC20 and its descendants
facto standards for digital assets, I think that they
are a very BAD standard, most likely not sustainable
for the future and certainly not scalable beyond the
current speculation-only phase.”
Another hugely valuable mechanism was discussed
at length during the conference: CoinJoin. CoinJoin
was initially put forward by Greg Maxwell in 2013 as a
method to resolve one of the greatest challenges to
Bitcoin’s long-term viability – fungibility, or the idea
that one bitcoin is worth another. It’s a common
misconception that the network is anonymous, when it
is better described as pseudonymous. The immutable
and public nature of transactions has made it so that
analysis can be conducted on the chain to trace
funds and potentially deanonymise users linked to
certain addresses.
“If you are running a business, you don’t want your
competitors to see all your financial activity, nor do
you want as an employer or employee for others to

21 CRYPTOS

be able to see what
salary was paid,” Adam
Gibson, one of the devs
behind JoinMarket,
told 21CRYPTOS. “These
are privacy issues, but
they’re intimately tied
to fungibility, because
if each coin has no
information attached
to it, it leaks no private
information,”
“Fungibility also relates to law enforcement and crime
though, since if a coin/UTXO can be traced (let’s say,
three transactions back) and unambiguously seen to
have come from a criminal’s transaction, it might get
blocked by third parties (like exchanges) who are
under heavy pressure to prevent money laundering
by the authorities in their jurisdiction.”
C oinJoin’s concept is fairly simple to grasp:
if individuals wish to obfuscate the trail, they
should act in tandem with other parties in order to
make a single joint transaction, in such a way that
inputs and outputs are grouped together so that
they cannot be attributed to specific individuals. It
has seen a number of iterations, from Dark Wallet (by
Cody Wilson and Amir Taaki) to JoinMarket (created
by Chris Belcher).
BUILDING ON BITCOIN
Kevin Loaec
Last year we hosted Breaking Bitcoin, because we
were tired of the “scaling” debate and wanted to show
that before scaling, we have much more important
work to do. It was extremely well received, everybody
learned something new and we had a strong demand
for hosting a Breaking 2 ASAP. Instead, we went for
“Building”, because that’s another of the important
topics in our view: how do we help each other to
build on Bitcoin? There is a need for “middleware”,
tools, and second layers if we want to make it usable
without compromising on the base layer.
Lightning being a very hot topic at the moment, it
totally made sense to host Building on Bitcoin, but
the programme committee wanted to be broad and
not just follow the LN hype. From wallets to UX,
privacy to sidechains, there is a lot of really interesting
stuff happening in the Bitcoin sphere. We believe it’s
refreshing for everybody working so hard on Bitcoin
to have a good technical showcase of the progress we
are making.
Next year we will host Breaking again, with of course
a lot of discussions around the security assumptions
around 2nd layers that we didn’t really have last year.
We really want people to have this opportunity to see
what progress Bitcoin gets. The uniqueness of BoB
and Breaking are the focus on applied work, not just
theory or hype.
“CoinJoin can be thought of as ‘fusing’ two people’s
coins – like melting them together in such a way
that there’s no way to distinguish ‘this part is Alice’s,
this part is Bob’s’,” said Gibson. “It’s very useful in
regaining fungibility, but there’s a lot of complexity
to getting software to do it well, amongst a group of
*anonymous* and untrusting entities. So, in Joinmarket,
people connect to a rendezvous IRC server over Tor,
pass messages with E2E encryption, build a CoinJoin
transaction and then all sign it.”
Adam Ficsor (@nopara73) took to the stage to speak
about Bitcoin anonymity. He detailed his experience
being held at the American border last year for
12+ hours when he revealed to the TSA that he was
heading to the Scaling Bitcoin conference, and how
it prompted him to rewrite most of the project he was
93
working on at the time (HiddenWallet). Wanting to stay
on the right side of the law in light of the tools he was
building, Ficsor went on to team up with lawyers, with
whom he formed the company zkSNACKs, focused
on digital financial privacy.

On behalf of zkSNACKs, Ficsor announced the

rebranded and improved version of HiddenWallet:
Wasabi Wallet, the beta of which will be released
on the first of August (the anniversary of Bitcoin’s
user-activated soft fork) and the 1.0 release shortly
thereafter on the October ten-year anniversary of
the Bitcoin whitepaper.

Wasabi Wallet claims to be the only existing light wallet

that is impervious to network analysis, with the Tor
network integrated. It employs a technique
called Chaumian CoinJoin, which uses an
anonymity set of 100 participants. Whilst
the mechanism itself is the fastest mixing
technique known (taking only seconds), the
process may be significantly longer upon
the wallet’s release due to a lack of liquidity.
Unfortunately, I didn’t get to see the wallet
in action, although a friend of mine that
had attended the Chainhack hackathon
prior to the conference was able to demo
it, and was very impressed with the GUI.

O ther highlights included a talk by Giulia

Fanti on reducing deanonymisation vectors
in the Bitcoin network with the Dandelion protocol,
Nicolas Dorier’s rundown of how BTCPay could lead
to widespread adoption of Lightning Network nodes,
and a panel revolving around Lightning applications,
featuring Blockstream’s Christian Decker, Ledger CTO
Nicolas Bacca and LightningK0ala, creator of the
legendary Satoshi’s Place. The organisers made the
brilliant decision of having a live version of the site
displayed in the background (prompting attendees
to bombard the LN-based drawing board with various
memes and phallic imagery).

The conference was, however, just part of the reason

why I chose to go to Lisbon. Since being involved in
the space, I’ve interacted with a number of people
from around the world, and made some good friends
– I’m sure that many can relate with not having many
acquaintances in their daily lives interested in crypto-
currency (my friends still see a weekly £20+ in the
slot machine as a better investment technique than
dollar-cost averaging £10 in Bitcoin a month). For
me, the conference was a chance to catch up with
some of the individuals I’d made contact with over
the past couple of years. I actually stayed with the
team that I began my writing in cryptocurrency with
– slightly surreal, as although we’d been speaking on
a weekly basis for the better part of a year, this would
be the first time we’d met in person.
It’s not quite every mother’s
dream to have their son disap-
pear off to a foreign country to
hang out with people they’ve
met online, but congregating in
a city with hundreds of Bitcoiners
was certainly an experience – I
got to meet a number of promi-
nent Twitter figures in the flesh,
as well as lawyers, designers
and programmers working on
various projects.
D r Wassim Alsindi
Parallel Industries and
myself have been working on a
of
project exploring the low-tech
applications of Bitcoin in
areas stricken with poverty or
conflict, so the trip was also very
enriching in that regard – we
had the pleasure of meeting
Rodolfo Novak, creator of the
OpenDime and the soon-to-
be-released ColdCard (two
barebones hardware solutions
for the concealment, transfer
and storage of Bitcoin). We
were fortunate enough to be
able to demo the latter, and
Novak kindly provided us with a
few OpenDimes for our ongoing
research. On top of this, I also
Adam Gibson
Fungibility is a key property
of money, although I don’t
believe, as some do, that it’s
binary (consider that cash notes
have serial numbers, this acts
against fungibility, also political
effects e.g. Greek Euro notes
were at one time distrusted
in Germany, also invisible
markings are sometimes used
to catch thieves).
Perfect fungibility (each unit
being absolutely indistin-
guishable) is very difficult to
achieve; zero knowledge proof
techniques may eventually
make it practical but it’s a long
bumped into the legendary Adam Back
(albeit later in the evening, while I was under
the influence), and got some pointers on
people to speak with about setting up Block-
stream satellite nodes. I’ve long been a fan
of the minimalist BitBox hardware wallet by
Swiss-based SHIFT Cryptosecurity (it’s my
go-to recommendation for newcomers), so
I thoroughly enjoyed speaking to some of
their team members, too.
The evenings were reserved for less-than-sen-
sible amounts of alcohol consumption – I
don’t think I’ll forget doing copious amounts
of shots with cryptocurrency devs anytime
soon (or the ensuing hangovers). It was
bizarre being surrounded by like-minded
individuals, considering that my drinking
buddies at home have grown exhausted
of my tirades on the inevitable arrival of
hyperbitcoinisation.
I’ve been to a handful of predominantly
blockchain-centric conferences, but
Building on Bitcoin blew these out of the
water, both in terms of the quality of the
presentations, and the atmosphere beyond.
The dedication to improving on the Bitcoin
protocol was simply incredible. To all those
that believe Bitcoin is dead/outdated/
broken, I challenge you to attend next
year’s conference.
way off from being easy to achieve without
significant tradeoffs.
For example in privacy coins like Monero
and Zcash you have the problem that you
accumulate state, because you can’t discard
coins which are spent if you don’t know
which ones are spent.
There can also be tradeoffs with speed of
computation and verification (i.e. they can
both be high, or one can be high while the
other is low), and sometimes the size of the
proof is an issue.
For example in Confidential Transactions, in
its originally proposed form, each output of a
Bitcoin transaction would need to use about
2.5kB of data just to store the proof that the
amount is in range (CT basically blinds the
output amounts, but those amounts must
Adam Gibson (cont.)
be positive otherwise money could be
created out of nothing).
If you are running a business you don’t
want your competitors to see all your
financial activity, nor do you want as an
employer or employee for others to be
able to see what salary was paid. These
are privacy issues but they’re intimately
tied to fungibility because if each coin
has no information attached to it, it leaks
no private information – like banknotes
(except all the caveats I mentioned
above).
Fungibility also relates to law enforce-
ment and crime though, since if a coin/
utxo can be traced (let’s say, three trans-
actions back) and unambiguously seen
to have come from a criminal’s transac-
tion, it might get blocked by third parties
(like exchanges) who are under heavy
pressure to prevent money laundering
by the authorities in their jurisdiction.
So this creates a big friction and people
start to wonder if the coins they’re given
are “clean”. Believe it or not, this is just
an introduction .. to CoinJoin :)
So Bitcoin is not fungible in common,
casual usage, but it’s more important to
first understand in what way it *is* fungi-
ble - and it’s a very fundamental way.
Because individual satoshis don’t exist,
they can’t be watermarked or serial-num-
bered, so if your transaction has more
than 1 input and more than 1 output
there is no actual mapping between the
inputs and the outputs. Coins in input 1
didn’t specifically go to output 1, nor to
output 2 - no such assignment is possi-
ble. This means that it is possible - and
in CoinJoin, it happens - for 2+ people to
create a transaction together so that, for
at least some of the outputs, it’s literally
impossible to distinguish which of the 2+
people was the payer (from the inputs).
To make it literally impossible you need
to have the output sizes be equal (you
can also do it where the output sizes
are not equal, but then it’s *sometimes*
possible for an analyst to pick out which
output corresponds to one input, roughly
21 CRYPTOS
speaking). CoinJoin can be thought of as “fusing” two people’s
coins - like melting them together in such a way that there’s no
way to distinguish “this part is Alice’s, this part is Bob’s”
But “two people” there - usually we do CoinJoin with a lot more
- anything from 2 to 100+, in Joinmarket it’s generally around
5 per transaction. CoinJoin is the “canonical” way of exploit-
ing Bitcoin’s “intrinsic fungibility” I described above, but don’t
forget that there are other ways to make blockchain analysis
fail.
So a quick word about blockchain analysis. Essentially, people
who (for whatever reason, usually stated as crime prevention)
want to find out the path of ownership of coins (and thus break
fungibility) have a number of weapons at their disposal: timing
correlation (when transactions happen), amount correlation (the
payment’s exact amount tells them something), and they can also
use metadata like people’s IDs on exchanges, or p2p network
traffic. But the most important
one is probably “wallet clustering”.
Here they assume that all the inputs
to a transaction belong to the same
owner (and that’s true for all trans-
actions, except CoinJoin). Wallet
clustering is used “iteratively” to
build up a set of utxos/coins and
assign them all to one owner.
So because CoinJoin breaks this,
it’s very useful in regaining fungi-
bility, but there’s a lot of complex-
ity to getting software to do it well,
amongst a group of *anonymous*
and untrusting entities. In Joinmar-
ket people connect to a rendezvous
IRC server over Tor, pass messages
with E2E encryption, build a
CoinJoin transaction and then all
sign it. This way, none of them has
to trust each other (because they
only sign a transaction that pays
them the right amount), and none
of them even know the others.
To make this work without DOS
attacks killing it is not trivial. I’ll
finally add that Joinmarket’s extra
feature is that some people wait,
and get paid to wait, while others
pay a little, and get to coordinate
the coinjoin themselves, specifying
the amount, and get the liquidity
immediately. So a market mecha-
nism is used to make it easier
to coordinate. There are other
approaches/models (see ZeroLink
for example).
 Giacomo Zucco

Second question. Because alterna-

tives are utterly unscalable, un-pri-
vate, and/or too distant from what I
think will be the de facto global open
standard in the future: Bitcoin. While
I acknowledge, of course, the fact that
ERC20 and its descendants are now
getting close to representing short-
term de-facto standards for digital
assets (and this ALONE is, as I said
in Lisbon during my presentation, a
reasonable enough argument to use
them instead of something else), I
think that they are a very BAD stand-
ard, most likely not sustainable for
the future and certainly not scalable
beyond the current speculation-only
phase. First of all, Ethereum itself
is a collection of very bad ideas, a
Bitcoin clone built in a way to be
strictly less scalable, less secure,
less sustainable, less private and less
censorship resistant than Bitcoin.

BUILDING ON BITCOIN 97
Giacomo Zucco (cont.)
It’s already borderline impossible to independently
validate Ethereum, and we have witnessed already
huge manipulations of the “unstoppable applica-
tion” in order to bail-out some insiders. If you have
something which is so centralized, there is no point
(except for short term scammy marketing, which will
not work anymore in the long run anyway) to keep
all that inefficient “decentralization circus” running.
The way in which the Ethereum marketing (which in
that project replaces science & engineering almost
entirely) is “addressing” these problems is just creating
and spreading new sci-fi buzzwords, trying to bury the
signal of the current failure under the noise of unreal-
istic promises and to raise up the hype always more
and more. I think that standardness is a great point,
but the future standard imo will not be Ethereum, it
will be Bitcoin. Also, the specific way the ERC stand-
ards are implemented is trivially easy to censor and
to de-anonymize. Finally, Ethereum-based standards
for assets share with Bitcoin’s “meta-protocols”, like
Counterparty and Omny, exactly all the same short-
comings (except one: the availability of a pseudo-
”SPV” model, since Ethereum miners are supposed to
21 CRYPTOS
validate asset-related rules, unlike Bitcoin miners).
To name a few: the existence of an economically
redundant “scamcoin” which creates very bad
incentives, the fundamental conflict of interest
between validating nodes (who want to preserve
bandwidth & space) and asset issuers (who want
to parasite scarce resources of the network for
free, putting as much data as they can inside an
immutable blockchain), a very small anonymity
set for assets on top of a public, easy to trace/
cluster/taint/analyse blockchain. With Liquid
it’s a whole different story, actually. Liquid IS
indeed a scalable solution, being based on the
Strong Federation model (I would say it’s techni-
cally MORE scalable than RGB could hope to
be, even considering LN). Also, the Confiden-
tial Asset feature eliminates most of the privacy
problems (in a deeper/stronger way than the
RGB client-side-validation model does in itself...
even if nothing prevents us in applying Confi-
dential Assets to RGB eventually...it’s just a lot
of work). Also, no scam-coin involved: except
for issued assets, Liquid only deals with bitcoins
coming from and going to the main chain. The
trade-off that you pay in order to gain all this, is
censorship resistance. While very difficult, it’s
very POSSIBLE to censor the Liquid federation.
It’s also very possible that Liquid federates could
themselves “censor” some advanced features like
CA, in order to decrease their regulatory risk. I
would say that Liquid, in general, is a technically
superior technology, but it’s socially less scalable,
harder to bootstrap and difficult to keep running
for decades in a completely permissionless context.
Strictly speaking, if you CAN issue/transact
assets on Liquid CA, you should probably go for
that. But in the middle-long run, chances are you
will NOT be allowed to do that. RGB is a project
aimed at being permissionless and unstoppable
since day 1. I see the two approaches as comple-
mentary, actually. In Lisbon we also discussed
with the Blockstream guys how we could achieve
(eventually, in the future...no rush) full “atomic”
interoperability between RGB assets and Liquid
CA assets.
 Crypto Event Calendar
AUGUST COIN EVENT MEET UP

VeChain (VEN) Thor Cardano (ADA)

Action (ACT) Airdrop 1
Airdrop Roadmap Update WED

Icon (ICX) / Nucleus

3
FRI
Vision (NCASH) at IBC
The Abyss Conference in Hyder-
(ABYSS) at abad, India 4
SAT
ChinaJoy
in
Shanghai, 5
SUN
China

6
MON

Hydro (HYDRO) NYC Day Meetup in 7

New York City, USA TUE

BitTube (TUBE) iOS Native 8

Wallet Integration WED

Aion (AION) Token 11

Release #9 SAT

Cappasity (CAPP) Bonus Airdrop (3% 12

total wallet balance) SUN

Crown (CRW) Revaloot BitBay (BAY) Dynamic 13

Airdrop Peg Whitepaper MON

Cardano (ADA) / BitcoinCash (BCH) / Polymath Apex (CPX)

First Wallet
Hexx (HXX)
Exchange Open 15
(POLY) / Zap (ZAP) / Aion (AION) / Factom (FCT) / Beta Launch WED
XTRADE (XTRD) / Salt (SALT) / 0x (ZRX) / Ethereum
(ETH) / Storj (STORJ) / Etherparty (FUEL) / at Block- 16
chain Futurist Conference in Toronto, Canada THU

Bytecoin (BCN) Public 17

Testnet Release FRI

NXT (NXT) / Ardor (ARDR) / Ignis (IGNIS) Hackathon in 24

Krems University, Austria FRI

Magnet (MAG) Reward 25

Halving SAT

High Performance Blockchain (HPB) 28

Mainnet Release 1.1 TUE

BitBay (BAY) Program- 30

ming Smart Contracts FRI

Obyssey (OCN) ODC Pundi X (NPXS) Monthly

SyncFab (MFG)
Unsold Token Burn
Bytecoin
(BCN) 31
Airdrop Airdrop Snapshot Phase 3 Hardfork SAT
 Crypto Event Calendar

COIN EVENT MEET UP

AUGUST
UNDATED EVENTS
Siacoin (SC) Microchain Based Code WePower (WPR) Estonian Tokenization

CPChain (CPC) Mastermode Details SONM (SNM) Core Laas Live Net

Interstellar Holdings (HOLD) Exchange Release NAGA (NGC) Exchange Launch

Bitcoin Zero (BZX) Fork and Distribution (1:1) IoTeX (IOTX) Testnet Beta Launch

Waves (WAVES) Summer Road Show Moscow in

WAX (WAX) Settlement Contract
Russia

ClearPoll (POLL) Official Launch VeChain (VEN) Ledger Integration

Ethereum Classic (ETC) JIT Compilatiom Graft (GRFT) Supernode Alpha Release

Ethbits (ETBS) Trade Exchange Release Cardano (ADA) 1.3 Release

Bluzelle (BLZ) Kepler Phase Integration