The Ledger: Bitcoin Meets NYSE, CryptoKitties’ Future, Bitmain’s $1B Profit, a McDonald’s Stablecoin?
Happy weekend all,
This week marked the CryptoKitties’ eight-month anniversary—roughly the amount of time it takes for a kitten to age into a cat. I had the chance to speak to Roham Gharegozlou, whose company, Axiom Zen, created the phenomenon of digital kittens on a blockchain last fall. (Gharegozlou was also included on The Ledger’s new 40 under 40 list.)
While there has been some recent handwringing over the fate of the cute crypto collectibles amid the overall bear market in cryptocurrencies—CryptoKitties’ transaction volume has plummeted to less than a tenth of what it was in December—Gharegozlou says the numbers don’t tell the entire story.
“What we’ve been trying to do is keep out the speculators,” Gharegozlou says. “People are crazy about the cats. People get cat tattoos, they make their own wood carvings and sell them on Reddit….We want to focus on that community, and the few people that are actually playing, rather than speculating.”
He envisions a future golden era of blockchain-based gaming, in which something like a CryptoKitty serves not just as an intangible collector’s item, but as a pass that unlocks all sorts of fun experiences—including those in the real world. Like a Comic-Con for crypto? I joked. Yes, Gharegozlou answered—and a whole lot more.
Of course, it’s hard to quantify that type of IRL activity in blockchain transaction statistics.
“We don’t pay a lot of attention to the top line metrics, because at the end of the day it’s tiny right now, and it’s going to stay tiny as we solve the other problems,” he says. “We need to figure out what is special about blockchain gaming, other than speculation and making money.”
Expect more news from CryptoKitties not too long from now.
THE LEDGER’S LATEST
The Future of Blockchain, According to the CEO of the World’s Biggest Crypto Company by Jeff John Roberts
Why I Left a World-Class Hedge Fund for Crypto Investing by Travis Kling
Coinbase Customers Can Now Buy Bitcoin With British Pounds by Jeff John Roberts
Binance Acquires Trust Wallet in Push to Expand Crypto Services by Jeff John Roberts
Scoop: Bitcoin Mining Company Bitmain Hit $1.1 Billion in Profits in Q1 2018 by Polina Marinova
To the moon… Citibank may start offering crypto products for consumers. Malta and Bermuda become crypto hubs. Trump gives fintech a thumbs up. Crypto hedge fund startup scores funding from Marc Andreessen and Chris Dixon. You can buy this cannabis stock with Bitcoin and Ethereum. NFL players will soon be able to get paid in crypto. Crypto miners are powering themselves—literally.
.…Rekt: Goldman Sachs thinks cryptocurrencies are doomed to continue losing value. SEC crypto czar wants crypto companies to be more compliant. ICO charged with fraud pens a cautionary tale about its SEC dealings. Hardly anyone is actually paying with Bitcoin. Economist is skeptical about crypto. People expect the four pending Bitcoin ETFs to be rejected too. Crypto brokers are under SEC scrutiny. A college student stole more than $5 million in cryptocurrency.
BALANCING THE LEDGER
This week The Ledger team sat down with Marco Santori, president and chief legal officer for Blockchain, the Bitcoin wallet company. Watch the episode to see Santori discuss his expectations for the future of cryptocurrency regulation, the questions around whether XRP is a security, how Bitcoin investors can protect themselves from hackers, and more.
Trillion dollar cryptocurrency? Apple, maker of the iPhone and the MacBook, this week became the first U.S. company to reach a market valuation of $1 trillion. The historic milestone inspired speculation that the cryptocurrency market could follow suit. Here’s a quick comparison of market caps for perspective:
Apple: $1.01 trillion
Amazon: $879.5 billion
Alphabet: $852.5 billion
Cryptocurrency (total): $253.7 billion
Bitcoin: $121 billion
Goldman Sachs: $88.9 billion
MEMES AND MUMBLES
Burger-backed ICO? McDonald’s celebrated the 50th anniversary of the Big Mac this week by giving out what it called the “first fully food-backed global currency.” If that made you think the home of the Chicken McNuggets was launching a crypto token, you’re not the only one to think so—the words sounded straight out of an initial coin offering white paper. Many fast food fans were disappointed to learn that the MacCoin does not actually come with a side of blockchain.
One thing the MacCoin does have going for it: You can use it to buy a Big Mac—which is more than can be said of Bitcoin.
FOMO NO MO’
Don’t miss out: Veteran Fortune finance writer Shawn Tully got an exclusive, in-depth look at Bakkt, the new Bitcoin company started by Intercontinental Exchange, the owner of the New York Stock Exchange. Bakkt’s ambitions run the gamut from cryptocurrency trading to partnerships with Starbucks to allow you to buy lattes with Bitcoin. But all of this raises questions about the implications of one of Wall Street’s most centralized institutions—indeed, the company behind America’s biggest stock market—seeking to dominate the world of decentralized blockchain technology. As Tully writes, ICE’s “plan for bringing crypto to the masses runs contrary to what Bitcoin supporters typically champion. The purists favor Bitcoin’s ‘distributed’ architecture, and adamantly oppose putting a big exchange at the center of both the Bitcoin investment and payments systems.” Here’s ICE’s response:
At the interview in the Bond Room, featuring walls festooned with framed bond certificates chronicling the great railroad and infrastructure financings that built America, [ICE CEO Jeff] Sprecher drew a parallel between the exchange famously born in 1792 under the buttonwood tree and the technology that could transform the way consumers and companies buy just about everything. “Bitcoin can’t survive as a rogue idea,” he says. “To evolve, the cryptocurrencies need to run on established infrastructure. They need the trust and rules that have been built into our financial system for many years. They need the kind of trust that the Big Board represents.”
Wall Street seems to be adopting a strategy to counter concerns that blockchain will put it out of business: If you can’t beat ’em, join ’em. Only time will tell how this works out.