CryptoAM: 3LAUchain, Privacy Coin Concerns, and Smart Beetles

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Ledger Capital

6 min readJun 22, 2018

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It’s not looking pretty out there. Bear markets are stressful, and the best thing to do during these times is relax and appreciate what you already have. Go outside, smell some flowers, hug your loved ones, pack your bags and move to a low cost of living country, never to come back.

3 things you need to know:

One: 3LAU is launching the first blockchain powered music festival. Justin Blau, superstar EDM DJ (and Wash U Alum!), is leading efforts to organize “Our Music Festival” in San Francisco on October 20. Attendees will be able to use the ERC-20 OMF token to purchase amenities, tickets, and upgrades. The OMF company will accept the OMF token for future concerts and festivals. The idea is that using blockchain will help cut out intermediary fees and prevent ticket scalping.

Cool: The festival itself will feature educational booths to teach attendees about blockchain technology.
Thoughts: Multiple ICOs have already launched with the aim of solving issues like ticket scalping, but OMF has a definite advantage in that it’s being started by an insider, an actual artist, that will use the product. As OMF is not doing a token sale, users will not have to worry about any securities regulations.
Read more…

Two: Secret Service Official asks congress to consider regulating privacy coins. This was in a testimony in front of congress about the, “U.S. Secret Service’s actions in response to the increasing illicit activities involving digital currencies.”

“We should … consider additional legislative or regulatory actions to address potential challenges related to anonymity-enhanced cryptocurrencies.” — Deputy Assistant Director Robert Novy
Robert’s Colleague added, “Some newer cryptocurrencies have features that make the tracing of them quite complicated. These new anonymity-enhanced cryptocurrencies are clearly ripe for illicit use in an effort to subvert legitimate law enforcement inquiries. Although it is more difficult to trace the movement of illicit proceeds using these newer anonymity-enhanced cryptocurrencies, it is not impossible.”
Note: He says that it’s not impossible. I suspect that agencies such as the NSA have a much greater ability to trace privacy coins than the general public suspects.
Response: Zcash creator Zooko made a good point, the amount of cryptocurrencies used for illicit transactions likely pales in comparison to the amount US dollars used for illicit transactions.
U.S. Secret Service official asks Congress to ban user-protecting cryptocurrencies like Zcash, because user-exposing cryptocurrencies like Bitcoin have been used in $1bn, $1.5bn, $4bn worth of crime. 🤔
Read more…

Three: Volkswagen to use IOTA as early as next year. With the emergence of smart cars, there needs to be a secure protocol to transfer IoT data. VW first plans to use IOTA’s Tangle to transfer OTA software updates.

Possibilities: In the future it is theorized that smart electric cars will be able to communicate with smart connected roads and charging stations to automatically divert power in the grid to areas where more cars need charge. It will also allow for power to be topped off without the driver needing to get out of their car to pay for the electricity used. This is the machine-to-machine economy.
IOTooSoon?: IOTA has a grand vision of the IoT future, but how soon can it be realized? For IOTA, it’s not simply a matter of developing the protocol, the protocol needs to be implemented into infrastructure that mostly hasn’t even been built yet.
Read more…

Also in the news:

What I’m reading today:

Protocol Incentives and the ZRX Token

What’s known: The vast majority of tokens are the market are useless. The truth of the matter is that most tokens are just fundraising tools, and have no fundamental value. If they are used transactionally on a blockchain platform with no incentive for holding, it is likely not a good investment.

It’s a useful thought exercise to take your favorite blockchain project, and dive deep into what actually makes the token useful. Once you’ve written out why the team thinks its useful, ask yourself how to improve it.

This article does exactly that, with a focus on the ZRX token and the ways it can be improved. They propose assigning value to to ZRX token through token burns and rebates for market makers, which is a relatively common approach for token value. Both of those proposals decrease “velocity” which is an issue for most tokens.

Velocity is just how quickly tokens move through the system. Take for example a system where tokens are needed to access a specific platform. In this two sided system, users of that platform need to buy the token in order to use the platform, and would be selling the token to the people building or maintaining the system.

In a system with no incentive for holding, the builders if the system would be likely to sell to directly to USD, reducing their risk. This means that the token is merely being used as a medium of exchange and likely will not accrue in value (buy pressure = sell pressure). You need to introduce incentives for the builders to hold the token. In a video streaming site for example, you could have a function where the more tokens content producers hold the more likely the algorithms are to show their content. This introduces incentive to hold the token.

Sorry for the tangent about velocity — but go read the article! It’s good.

Around the corner:

VeChain mainnet launching by June 30th
Fusion mainnet launching by June 30th
The Augur mainnet is launching on July 9

Tell us what we should add!

Market Outlook:

It’s not looking pretty out there before. If you read CryptoAM consistently, you know I’m a huge adherent to support and resistance levels for BTC. Well, we destroyed some support levels that we’ve talked about before. The 20D EMA got taken down, and so did the 6.6k level (in a very strong fashion). One those two broke, the waterfall started.

Since the last support was 6.2k, I expected a massive bounce when we hit that level again. Unfortunately, it looks like buyers are exhausted and instead we have found a equilibrium around 6.15k. I’m looking to previous support of 5.9k to hold and if that doesn’t, we’re looking at another 5%+ leg down.

The longer we trade at this level the more likely we are to continue the downtrend. Personally, I started scooping up some alts yesterday, which turned out to be a mistake. I ate the loss and consolidated them into BNB/BTC/USDT once we broke down past 6.6k, and I’m slowly reducing exposure to the markets.

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