Newsletter May 23 2018
Gemini supports Zcash (May 15th)
Gemini will be the first New York licensed exchange to trade Zcash. Zcash can now be traded for USD, BTC, and ETH. This is a unique story because of Zcash’s privacy features. Zcash offers private and anonymous transactions, which some people think poses a bigger threat to potential regulation. With support from Gemini, Zcash gains technical credibility.
Takeaway: There are four privacy coins in the top 25 cryptocurrencies and out of those four, there are three leaders (Monero, Dash, Zcash) using different types of privacy features (Ring Signatures, Coin Join, and zero-knowledge proofs). With support from Gemini and the Winklevoss twins, Zcash solidifies itself as a top privacy coin. There is an ongoing debate about which privacy coin is best, and judging by market cap sizes, Monero is winning the debate, but Gemini support probably proves that Zcash will remain a contender for one of the best privacy coins.
SEC Releases Fake ICO Howey Coin (May 16th)
The SEC created a website called howewcoins.com to educate investors how easy it easy to launch a fraudulent ICO sale. Howeycoin failed all of BlockWolf’s top 10 tips on how to avoid ICO/Crypto fraud.
Takeaway: Howeycoin made headlines because the SEC went out of its way to educate investors about ICO fraud but their fraudulent ICO was relatively easy to expose. In reality, a more effective fraud or “scamcoin” would have passed at least some of the BlockWolf’s tips on how to spot crypto fraud, but the overall message for Howey coin is to suggest for investors to be careful.
North American Securities Administrators Association Cryptosweep (May 21st)
The North American Securities Administrators Association (NASAA) investigated about 70 ICO related organizations in attempt to crackdown on ICO fraud. The president of NASAA, Joseph Borg, stated that “Not every ICO or cryptocurrency-related investment is fraudulent, but we urge investors to approach any initial coin offering or cryptocurrency-related investment product with extreme caution.” The investigations aim to raise public awareness about the risks associated with ICOs and cryptocurrency-related investments.
Takeaway: After a review from the Wall Street Journal stated that in a review of documents for 1,450 digital coin offerings, 271 had red flags including plagiarism, guaranteed returns, or fake executives, it should not surprise investors that many cryptocurrency related investments are promoting false claims and unrealistic expectations. NASAA will crackdown on some of the ICOs with blatant fraud and will request information from cryptocurrency exchanges to ensure that they are not manipulating markets.
Germany Stock Exchange Will Offer Crypto Trading (May 16th)
A subsidiary of Germany’s second largest stock exchange (Börse Stuttgart) will launch a cryptocurrency trading platform in September. They plan on making it easier to make a trading account so it takes minutes instead of days to register. They will open trading with Bitcoin, Ethereum, Litecoin, and Ripple.
Takeaway: The German exchange will be one of the first traditional stock exchanges to open cryptocurrency trading. This will make it easier for people to buy cryptocurrencies. There are concerns that more trading exposure will lead cryptocurrencies to appreciate in price for the wrong reasons (only for profits, not demand for their technology), but more public awareness about cryptocurrencies will lead to more adoption and faster technical evolution.
Verge Mining Attack (May 22nd)
Verge (XVG) had another mining exploit, where a miner was able to mine 35 million verge ($1.4M) in a couple hours. This is Verge’s second exploit since April. To simplify the mining exploit, the miner was able to lower the mining difficult so that they could mine new Verge coins much quicker than normal.
Takeaway: Verge’s frequent exploits prove that its code is not as secure as some other prominent cryptocurrencies. Without a secure mining or a mechanism that secures a coin’s supply, the coin is worth much less. For instance, one of Bitcoin’s main features is that it has a fixed supply of 21 million and we roughly know how quickly the rest of the 3-4 billion bitcoins will be mined. That does not seem to be the case with Verge, which devalues its currency.