Daily Bit #182: Just Keep Building

Daily Bit

Published in

The Daily Bit

5 min readSep 20, 2018

Industry Updates

Following their 20 state expansion in the U.S., OKCoin listed five new tokens — ADA, XLM ZEC, XRP, and ZRX.
Brian Books, previously General Counsel @ Fannie Mae, joinedCoinbase as their new Chief Legal Officer.
Debunking reports from NY’s AG, Coinbase says they do not engage in proprietary trading.
Singapore’s central bank has yet to identify tokens that, under their legal framework, should be classified as securities.

Top Story

Just Keep Building

“You may say I’m a dreamer
But I’m not the only one” — John Lennon
— Changpeng Zhao, Binance CEO

Why are we plugging unconfirmed quotes of quotes as our headline opener for yet another issue? It’s simple, really — CZ is a man of ambition. Tales of Binance’s humble beginnings, from a $15 million ICO to the Top Chef of all crypto exchanges, have been making their rounds throughout Consensus Singapore as the conference rolls on.

What’s next? World domination. Granted, CZ’s playbook is moderately altered from the likes of Napoleon, Caesar, etc. — but the idea here is crypto everywhere. The goal is to launch five to ten fiat-to-crypto exchanges, roughly two per continent.

For context, Binance doesn’t offer fiat-to-crypto (F2C) trading
Available trading pairs are only quoted in Binance Coin (BNB), Ethereum (ETH), Bitcoin (BTC), and Tether (USDT). Pivoting to C2C from F2C could be considered a major pivot.

CZ’s response: “Fiat is still where all the money is in… And we’ve got to open that gate.”

He’s not wrong. As far as marketplace growth goes, it’s not coming from people who already trade on exchanges.

And sheesh, if anything — there’s a net outflow
Traders and gamblers send funds to siloed (as in not linked to bank accounts) exchanges to try to flip a profit while the platform itself rakes in withdrawal fees and trading fees. For a most spectacular read on the matter, check out The Dark Underbelly of Cryptocurrency Markets by Nic Carter.

What’ll take time: Working with regulators. That’s exactly why Binance has yet to break into US markets. So as a workaround, CZ is starting with smaller fish. From his experience, regulators in smaller countries are more willing to have conversations. The approach calls to Ari Paul’s post on table selection — position yourself in areas where you can win.

P.S. — Binance just launched Binance Info. Overall it’s a rather comprehensive dashboard for 1,405 tokens and counting.

Just remember… stay woke with ratings reports. Many will gladly give projects higher ratings for a price. Hopefully Binance is woke on that as well.

Other News

Trust in Crypto Trust Funds

Simple update, neat update: there’s a platform called Open Savings Institutethat allows users to tuck away Bitcoin or Bitcoin Cash into a time-locked address, effectively creating a digital currency trust fund.

So if you want to set aside funds for your [future] kid’s 18th birthday, crypto trusts could be an option. Besides, the Motley Fool pegs standard trust fund costs at several hundred dollars… this getup is free.

Per a team member, OSI was made “to offer anyone in the world a secure, time locked and trustless savings account”. That’ll vibe with the open source community, but if we’re getting picky (we are) — the project isn’t 100% “trustless”. You still gotta trust that the underlying code is rock solid.

Down the road: There’s a lot of optionality for secure, time-locked accounts. A few potential applications come to mind:

Scholarship funds
Welfare checks
Disaster relief
Treasury management

Days Without an Incident: 0

There’s been another hack, folks. The victim was Japanese exchange Zaif, which detected a server error on September 17th, only to realize the following day that funds were stolen.

Here’s how the ~$59.7 million in losses breaks down:

4.5 billion yen (hot wallets)
2.2 billion yen (company assets)

The upside? Most funds are likely safu. A deal was struck with Japanese investment firm FISCO to cover ~$44 million of the liquidated funds in exchange for a majority stake in Zaif. It’s also reported that Tech Bureau Inc (Zaif’s operator) will dismiss at least half of their directors and auditing staff as part of the terms.

The problem? Zaif’s security systems took four days to sniff out the problem. That’s a major concern for Japan’s regulatory watchdogs as they (presumably) work overtime to boost security. Besides, this isn’t the first time Zaif slipped up — a mid-February system glitch allowed users to purchase BTC free of charge. One even tried selling $20 trillion Bitcoin… bold strategy, Cotton.

Tech Bureau, A History:

Launched Zaif (the exchange) in March 2015 after raising $835k from Japanese venture firm NTVP.
Launched Zaif (a bitcoin wallet) in July 2014, gaining 2,000 users in the first 24 hours.

Legends Only at Poloniex Exchange

Poloniex recently announced that they are delisting eight tokens from their exchange on September 25th. Per @anondran, that raises the platform’s delisted tally in 2018 up to 18 as opposed to listing only 6 new coins.

The Departed:

BitcoinDark (BTCD)
Bytom (BTM)
Einsteinium (EMC2)
GridCoin (GRC)
NeosCoin (NEOS)
PotCoin (POT)
VeriCoin (VRC)
Bitcoin Plus (XBC)

If none of these ring a bell, here’s a gentle reminder: trading sh-tcoins is riskyAF.

On a more serious note: It’s a clear signal that Poloniex is sticking to the standards outlined in The Circle Asset Framework, which provides a rough designation of what coins will be supported by the platform.

General criteria: Fundamentals; technology; team; business model; market dynamics.

Remember, Poloniex was acquired by Circle in February for $400 million. And Goldman Sachs took part in Circle’s $50 million Series C that closed on May 28, 2015. Maintaining a Gold(man) standard for Poloniex now will expectedly uphold the platform’s reputation through the years.