The much-anticipated Bitcoin halving event just occurred. Yet, its true impact is often misunderstood

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On May 11, 2020 the reward for miners who add transactions to the Bitcoin blockchain and help secure the network decreased from 12.5 to 6.25 Bitcoins.

Some view the reduction in the number of new Bitcoins minted roughly every 10 minutes as a way to strengthen the biggest cryptocurrency’s long-term prospects.

They claim that as a result of the supply squeeze, and assuming demand holds steady (or better yet, grows), the price of Bitcoin should go higher. Plain economics 101, demand/supply rules.


From concept to go-to-market, the firm’s highly-anticipated roll-out of Bitcoin futures was full of false assumptions and misguided decisions

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It was supposed to be the biggest Bitcoin event of the year.

Bakkt was touted by its creators as a game-changer for the crypto industry. Its much-hyped, eagerly anticipated launch of physically-settled Bitcoin futures contracts was described as a revolutionary product offering.

Advocates believed Bakkt would help unlock massive new demand for Bitcoin. They argued that major institutional investors, who were previously sitting on the sidelines, would enter the market and confidently trade Bitcoin.

After almost a year of delays, on September 23 the wait ended. Bakkt finally went live.

And then, welp, reality sank in.

Oops.

Measly 105 futures contracts settled on Bakkt’s first day of operation, with only 72 Bitcoins trading hands. This resulted in about $710K in overall volume. By the end of the first week, Bakkt’s BTC futures volume remained remarkably low, hitting less than $6 million during that period. …


THE HARD, SOUND MONEY REVOLUTION CONTINUES APACE

Away from the noise, this month the largest cryptocurrency quietly hit important new security milestones that you should pay close attention to

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In considering Bitcoin’s progress, often people attach great importance to recent price movements. However, this is fundamentally wrong.

You see, price isn’t an indicator of network development or future growth prospects.

To fully appreciate where we are on the adoption curve and what’s next, it’s better to assess the overall health of Bitcoin’s blockchain and the progress being made in the context of the protocol’s overarching goal.

Bitcoin is a decentralized payment network and new kind of money. …


Plus, Capital One’s surprise initial response to data breach and the need for decentralized blockchain systems to protect sensitive info

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Circle is moving the majority of its exchange operations offshore; time for new sensible U.S. regulation for crypto

On Tuesday the U.S. Senate Banking, Housing and Urban Affairs Committee held a hearing on regulation of cryptocurrency and blockchain technology. My sense watching that hearing was that some members of the committee realize the concept of banning bitcoin makes no sense. Blocking innovation and technological progress is never a good idea.

As Congressman Patrick McHenry put it a couple of weeks ago at a different hearing Congress held on Facebook’s Libra project, “the world that Satoshi Nakamoto, author of the Bitcoin whitepaper envisioned, and others are building, is an unstoppable force.”

Plus, it’s important to highlight that from a legal perspective banning Bitcoin isn’t really a feasible option. Bitcoin is code, code is speech and speech is protected, at least in the U.S. …


And two additional things to pay attention to following recent developments in the crypto market

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1. Binance just moved $1.2 billion at an overall cost of $0.015


When I left my job at Facebook to start a blockchain-focused VC fund some of my friends thought I was crazy. What a difference a year makes.

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Last year when I left my job at Facebook to start a blockchain-focused VC fund some of my friends thought I was crazy.

“You’re leaving a senior role here to start a fund focused on blockchain technology?! Don’t you know there’s no real use case for blockchain? Are you not aware that crypto is only good for criminal activity? Haven’t you heard of the latest scams?”

Fair to say, some of my friends were surprised by my decision.

This prompted me to write a blog post to share the reasoning for my decision. I explained that this isn’t about Facebook (which is an amazing company to work for) but rather about my conviction that blockchain technology is going to introduce a level of innovation at a scale that we’ve never seen before. The world was about to change in fundamental ways and I wanted to be fully involved, helping to fund and support some of the most disruptive blockchain startups.

What a difference a year makes.

This week Facebook announced they are going all-in on blockchain with the upcoming launch of their Libra network. In recent months I’ve stayed quite while rumors continued to swirl about Facebook’s ambitious crypto plans. …


A year ago, Bitcoin hit it’s all-time-high price point and the ICO madness began. Today, the media headlines focus on Bitcoin’s price decline, declaring “the end of crypto.” Now, more than ever before, it’s important to stress that this is just the beginning

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Photo by Matt Noble on Unsplash

Similar to how the dot com bubble burst signaled the start of the internet era, we’re now once again on the cusp of new disruptive innovation. The best teams are heads-down, using this period to build much-needed components of the web 3.0 infrastructure.

When looking at the data, it’s also clear that the fundamentals of the decentralized economy are only getting stronger. The following are a few examples.

Ethereum unique addresses grew by more than 50x over the past 2 years, up from less than 1 million to 50 million now.


Tether’s ongoing challenges, broken pegs and new stablecoin launches mean the landscape has changed over the past few months.

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Takeaway #1: increased competition will help drive overall crypto adoption

Many predictions were made at the end of last year, at the height of the ICO craze, about what 2018 will bring.

As the current year draws to a close, it’s clear that one of the biggest stories has been the significant funding and subsequent proliferation of various stablecoins. With more than 50 announced projects (and more coming soon), the stablecoin war is well and truly underway.

To encourage new users to use crypto, it’s essential to reduce friction with existing systems and ways of doing things. …


Time to bust the myth: crypto teams should pursue a hybrid model and NOT define decentralization as their primary goal

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The blockchain entrepreneur I recently talked with over the phone was excited, speaking energetically about what set his product apart from the rest and boasting how company culture was perfectly aligned with the essence of what crypto is about.

“Our company is totally decentralized — each of us are based in a different location and we believe in community driven decisions,” he declared.

This sentence got me thinking: I’ve heard it many times before. Crypto entrepreneurs often try to outdo each other by how decentralized their company is. …


THE DEFINITIVE ANSWER TO A CRYPTO SKEPTIC

Krugman, who was so publicly wrong before, is now taking on crypto — and he’s once again on the wrong side of history. Here’s why

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When I read Paul Krugman’s column in the New York Times explaining why he’s a crypto skeptic, I couldn’t help but think about his article from 1998.

“By 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine,” the economist and Nobel laureate declared.

Now, Krugman, who told Business Insider in 2013 that he “doesn’t claim any special expertise in technology,” is taking on crypto — and he’s once again on the wrong side of history.

Blockchain is going to change the world. The impact of this breakthrough technology on society is going to be profound. That realization is what made me leave my job driving product strategy and global go-to-market at Facebook to start an investment firm focused on blockchain technology and crypto assets. …

About

Tomer Federman

Entrepreneur & early-stage investor · Previously at Facebook, SAP, multiple startups · Stanford MBA · Host, The Blockchain VC podcast · www.tomerfederman.com

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