Outlier Ventures
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Outlier Ventures

Outlier Ventures Daily Brief

Issue #11 — Bitcoin in Zimbabwe, how deflationary economics left the Mt Gox CEO a rich man, an Indian attempt at blockchains and how Blockchains today look alot like the Web in the late 90s

We’ve been sending out daily newsletters to our partners & portfolio companies for a little over a week. Seeing the demand for daily bite sized morsels on the key happenings in the token economy, we couldn’t let our Medium audience miss out. So…

Each day, we’ll be bringing you the most important stories from the world of blockchains, the crypto economy, and Convergence. Sign up here to get your morning briefing! 🚀

1. Zimbabwe Embraces Bitcoin To Escape Inflation

One could look at Bitcoin’s 20% dip over the weekend and wonder if token would ever be a store of value anywhere in the world. Observing what’s going on in Zimbabwe however proves the contrary. Citizens have been subject to an inflation rate of up to 50% a month recently under Robert Mugabe’s presidency. They have been paying hefty premiums to hold their savings in a stable accepted currency. In January 2009 Zimbabwe adopted the US dollar as a standard currency; wiping out individually-held savings. Bitcoin seems attractive to locals due to their acceptance as an international currency and (relatively!) stable nature. As infighting and forks continue to plague the token economy, incidents like these testify the need for solutions (eg: stable tokens, verifiable identity, immutable record storage) in developing economies. Catch up more on how blockchains open a whole new world to individuals in Africa from this piece by Bloomberg.

2. Deflationary Economics & Japanese Laws Leave Mark Karpeles A Rich Man 💰

Remember Mt Gox? It was one of the world’s largest cryptocurrency exchange up until early 2014 when it got “hacked” and left a 460 million dollar hole in its user’s pockets. The exchange’s CEO has since long been embroiled in settlement claims, some of which accuse him of embezzlement. In a weird twist of fate (and deflationary economics 😶), Mark Karpeles might walk away with close to a billion dollars in profit. According to article 124 of the Japan’s bankruptcy code, the liabilities were registered at market values when the proceedings were opened. The price of each Bitcoin has since risen from $500 to over $6,200 at the time of writing. Considering that the exchange holds over 200,000 bitcoins valued at close to $1.3 billion, the company would be in ownership of the money left after the settlements. Since Mark owns 88% of the holding company that registered Mt Gox, he might just end up with the bulk of the money that’s left. Not 100% sure what lessons are to be learned here tbh. 💸

#Throwback to 2014 when it all blew up

3. India To Deploy Its Own Blockchains?

India might soon be following Russia’s footsteps in deploying its own state-backed blockchains for handling administrative functions. The system is said to be aimed at reducing fraud, enforcing contracts and boosting agriculture. The blockchain solution would also be used for storing soil quality & land-related records. (Obviously not actually on a blockchain) It would then be scaled towards identity and loans for SMEs. No official announcements have been made to date; and considering the larger ecosystem, a blockchain implementation might not solve systemic problems. For instance, the regional identity solution titled “Aadhar” has not yet attained massive adoption in light of security concerns. In addition, rampant corruption and difficulty of doing business in the nation might curb the pace of independent blockchain related innovation in the region. Technology doesn't solve political problems.

1.3 Billion people could possibly be “Blockchained” (Image Source)

4. Thoughts on ICOs by Jason Goldberg

Jason Goldberg, CEO of Simple Token, recently published a piece reflecting his thoughts on ICOs. The veteran entrepreneur runs you through comparisons with bubbles in the late 90’s and explains where blockchains as a sector lie in the larger spectrum of things. With due weight given to the risks involved at the beginning of the piece, Jason does a great job at identifying the broader tectonic shifts in the industry and the scope for growth. He ends with a note on areas that need increased focus if we are to create a stronger and more resilient token economy. This is something we are thinking about deeply at Outlier with our work on modelling token economics with Imperial College London. Catch up on Jason’s piece here.

And you’re all done for today. Join us tomorrow to keep on top of the news. Follow us OutlierVentures.io and on Twitter.

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