UNSTOPPABLE SYSTEMS

There are few unique things about distributed ledgers. Often described simply as a distributed database - a solution to Byzantine fault tolerance - with bitcoin the first, there are now many more superior solutions [like Dusk]. But another way of looking at them, is that DLTs effectively enshrine a set of rules, and enforce those rules without the need for an intermediary.

What’s interesting about DLTs, is that, they are, at least theoretically, unstoppable. The rules, the model - the system you design - is unstoppable. That doesn’t mean it will start, it means simply that it is unstoppable. You’ve distributed them potentially across millions of hardware devices around the world and the system can run with practically any minimum subset of these. Shut down a country, a continent. Shut down the internet. It won’t matter. These systems will not stop.

Bitcoin and other cryptocurrencies’ resistance to censorship is often touted. And it is worth noting that Bitcoin has been completely infallible - it has literally never failed - to do as it was designed. Whether it was designed well, or not, is moot.

Meanwhile, FAMGA’s (Facebook, Apple, Microsoft, Google, Amazon) grip on the world’s infrastructure - both now and future - only tightens. Total worldwide market cap attributable to tech only increases. The tools they have built are powerful beyond their admittance - powerful enough to swing elections, countries, continents and history.

But they can be stopped. FAMGA could be broken up. Regulation can be enforced. FAMGA’s stranglehold on our future can be released.

But if they were built on unstoppable systems, they could not.

The only question is, will the unstoppable system be infallibly good?

// MUST READS

• In this interview, Professor Cong of the University of Chicago gives an overview of the benefits and current limitations of blockchain for business applications.
• Malta's prime minister stated in U.N. speech that "Blockchain makes cryptocurrencies the inevitable future of money”
• The Myth of The Infrastructure Phase - an interesting analysis on why apps come first - not the infrastructure

// DISASTER OF THE WEEK

In a now famous tweet, Russian crypto-exchange Yobit announced that it would start a “pump” by randomly buying up one of the digital assets listed on the platform. This dubious practice comes at a time of increasing scrutiny and regulation for digital asset exchanges (see the report by the New York Attorney General on the topic). It may also be an indication that smaller exchanges, struggling with the recent drop in volumes, are resorting to desperate marketing tactics to drive up business.

// TRACTION

• Based on the analysis by BAML, the entire total addressable market for blockchain will eventually hit $7 billion, though the analysts did not "attempt to put a time stamp" on it, as the technology is not yet widely adopted.
• The World Investment Forum, hosted by the United Nations Conference on Trade and Development, will hold its first session on Blockchains for Sustainable Development on October 24th.
• Bill Clinton was one of the main speakers at the Ripple’s Swell conference in San Francisco on the 1st of October. Former U.S. president noted that “over-regulation could kill blockchain’s golden goose”.
• Japan will this month become the first major economy to launch a domestic payments system based on blockchain technology when three Japanese banks start offering customers free real-time money transfers via a new mobile app MoneyTap.
• Air France-KLM signs up blockchain partnership to cut costs for flyers and increase profits for suppliers by cutting out middlemen.
• Mastercard has been awarded a patent for a method to partition a blockchain, making it capable of storing multiple transaction types and formats. The patent filing was published by the U.S. Patent and Trademark Office (USPTO) on Oct. 9.
• Forbes partners with blockchain-based journalism platform Civil to publish content.

// ROAD TO REGULATION

Former UBS bankers have raised £80m to set up a regulated “crypto investment bank” in Switzerland. SEBA Crypto AG proposes to offer similar types of broking and wealth management services as banks offer customers with traditional fiat currencies such as custody, trading and investment management for crypto assets as well as accounts and corporate finance advice for cryptocurrency companies. Finally, a bank willing to provide bank accounts to the sector!

The Financial Times argues that crypto exchanges must face up to responsibilities as they mature and questions whether the sector will ever provide the operational resilience that complex markets and financial systems require.

In really interesting news for the space (see our previous article on the application of crowdfunding rules to the DLT space here), Circle Internet Financial Ltd., one of the most valuable U.S. cryptocurrency marketplaces, agreed to acquire SeedInvest, the US crowdfunding platform. If approved by regulators, the acquisition could help Circle do what SeedInvest does for equities, but this time for crypto assets. We strongly believe in the potential of tokenised securities (and are supporting Dusk Network in its quest to be the number one protocol in this space) so are excited to see more and more smart money support this trend.

The Financial Stability Board, an organisation founded by the G7 finance ministers and central bank governors, issued a report on crypto-assets which concluded that crypto-assets do not pose a material risk to financial global stability at this time but they do raise several broader policy issues, and vigilant monitoring is needed in light of the speed of market developments.

// PROJECTS

• ErisX a new crypto exchange is being backed by TD Ameritrade, CBOE, Digital Currency Group & Pantera Capital. The new venture would support trading of cryptocurrencies as well as derivatives tied to digital assets for both institutions and individuals. The platform aims to offer a wide range of physically delivered futures for bitcoin, bitcoin cash, ethereum and litecoin.
• Skale Labs a project working to help solve scalability for applications on Ethereum, has raised $10 million in a fundraising round lead by Multicoin Capital. The fundraising round included a number of prominent crypto funds including Galaxy Digital, Boost.VC, Neo Global Capital and many others. Skale aims to launch the first implementation of the Ethereum Virtual Machine on a Plasma chain, providing developers with a layer-2 platform to execute smart contracts on.

// EVENTS

Block Hedge 5th Business Edition - Zug, Switzerland - Oct 12 - 12, 2018

10th FinTech Future Convention 2018 - Shanghai, China - Oct 14 - 16, 2018

EWPN Amsterdam 2018 - Amsterdam, The Netherlands - Oct 15 - 16, 2018

CESC 2018 - Berkeley, CA, USA - Oct 15 - 16, 2018

Supply Chain Finance Forum - London, UK - Oct 17 - 17, 2018

Blockchain Innovation Summit San Francisco - San Francisco, USA - Oct 18 - 18, 2018

Blockchain Bitcoin Super Conference - Waterloo, ON, Canada - Oct 20 - 20, 2018

The London CryptoCurrency Show - London, UK - Oct 20 - 20, 2018

Money20/20 USA - Las Vegas, USA - Oct 21 - 24, 2018

// CRYPTO CHALLENGE FORUM - JOIN US THERE!

Crypto Challenge Forum, one of the world's major industry events, is taking place on the 28-30th October at the iconic Central Hall Westminster. It will connect global thought leaders, policy makers, investors and startups from across the world for a 3 day top-content event. Come and meet The Reserve team and see our CEO on stage alongside some of the world's most authoritative speakers in the space.

The Forum's three tracks will cover: Blockchain and Sustainable Development, the Future of Digital Investment and Regulatory Framework of the Crypto. Expect global announcements to be made by attending governments, a exclusive networking opportunity at the Investors' Hub, an ICO contest with 100K prize pool and a black tie Halloween Gala & Awards Giving Ceremony to top things off. Secure your tickets here.

// OUR MEETUPS

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