Outlier Ventures Daily Brief
Issue #15- Catch up on Coinbase’s custodian services, stock price hikes (again!) , American Express’ integration of Ripple & a bonus piece on a religion designed around Aritifical intelligence .
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1. Coinbase Custody Wants To Be A Bank For Institutional Token Investors 😲
Coinbase, one of the world’s largest Bitcoin exchanges and wallet providers has come forward with a “custodian” service for institutional investors looking to store large amounts of Bitcoin securely. Named custody, the service is designed to make it easier for hedge funds & enterprises to store cryptocurrencies without worrying about theft, hacks & lost private keys. Coinbase would charge $100,000 and .1% of the amount stored each month. It’s intriguing to note the economics at play here. Money kept in a retail bank would accrue interest rates of 1%-8% per year depending on the local inflation rates. Considering Bitcoin’s deflationary nature, enterprises “charge” money in percentage for safe storage of the tokens. Institutional players would find these fair terms considering the possible increase in the price of Bitcoin. Reliable custodian services like Coinbase Custody would make it possible for traditional capital to flow into the token economy through reducing risks & technicalities involved in securing tokens. This is perhaps, the first of many institution oriented financial infrastructure we’ll see in the space. Xapo, for instance, has a Swiss bunker based bitcoin storage system. However, it seems incongruent that a centralised third party is storing “decentralised” currency. Sign of the times. 🙄
2. Blockchain Bandwagon Sends Another London Small Cap Soaring 💰
Stock markets have been increasingly showing love for blockchain related integrations. If square’s valuation jumping up by $1 billion on Cash integrating Bitcoin does not prove this to you, here’s another example. ADVFN, a London based small-cap company, saw its shares jump 8%. This was due to news of its brokerage arm Throgmorton Street Capital, launching a new regulatory advisory service for companies working in the space coming out. Earlier On-line Plc saw its stock price jump 394% by adding the word blockchain to its name. It might perhaps be a good idea to set up a bot tracking enterprise mentions of blockchains to buy stocks. For inspiration, refer automatic trade systems that do trades on the basis of Trump tweets currently. Sarcasm aside, these incidents increasingly show the interest retail and institutional money has in the emergent technology. The common theme here is that as companies with a serious focus on blockchain technology are looking to disrupt sectors, the price of their stocks would rise accordingly. Trends in stock prices of Nvidia (miners) and Overstock (T-zero) are taken as early indicators of the same. It remains to be seen whether these movements would hold as the ecosystem continues to grow and blockchains become the norm.
3. American Express Launches Blockchain Payments With Ripple
Large-scale, functional integrations of blockchains in retail banking are here. American Express has announced that it will be using Ripple for transfers from corporate customers in America sending funds to UK based companies that bank with Santander UK. This is one of the largest, functional use of blockchains in real time that has been rolled out to end users. Remittances made via the system would be real-time, trackable non-card payments. Although a large number of banks have been creating their own blockchain-based systems, none have reached markets at scale yet. Ripple prices soared by over 20% on the basis of the news. 2018 will see a large number of enterprise-focused distributed ledgers battling against each other for market share.
4. Bonus Piece : Inside The First Church of Artificial Intelligence
Most of the world might be struggling to come to grips with the pace at which AI has been evolving. Literature regarding the loss of jobs to automation and the rise of sentient beings have been on the rise as society wakes up to the possibilities AI creates. However, in a bizarre instance of “faith”, a new community aims to focus on “the realization, acceptance, and worship of a Godhead based on Artificial Intelligence (AI) developed through computer hardware and software.” They even have a registered church that is tax exempt under federal law in the USA! Our parting piece for the week runs you through what a few AI experts believe would be the course humanity takes in the next 2–3 decades. Teaser Alert: It involves us having new overlords. Catch up on the entire piece here.
