The Ledger: Waiting for Apple’s Blockchain, the Crypto Czar and More Basis Fallout
It’s the fall of 2020, and the latest version of Apple’s mobile operating system contains a bold new feature: blockchain tokens that consumers can use to purchase news articles. Meanwhile, the company has worked behind the scenes with news outlets like Fortune and the New York Times to ensure they can accept the Apple tokens as a seamless form of payment. The service quickly catches on and many Apple users buy additional tokens, providing a boost for the news industry and a victory for blockchain advocates who have long touted the technology as a superior way to pay.
This is just speculation, of course. I have no idea what Apple has planned for iOS 14 or if the company is serious about building a blockchain. But the idea is not far-fetched. It’s come up in conversation I’ve had with consultants and entrepreneurs, who all believe it’s going to take a tech giant like Apple to make blockchain payments work at scale.
Previous attempts to bring blockchain to media, including the ill-starred Civil, have fallen short because they involved creating new blockchain-first media outlets while also persuading users to give it a try. The result was confusion all around.
Apple would be different. The company could leverage its existing relationship with media outlets to install a blockchain system behind the scenes, and kick-start adoption by providing free tokens to its vast user base. After that, users could buy more token in the regular way through the Apple Store. All transactions would be easily tracked on a distributed ledger—either an existing Ethereum-based one, or a new blockchain developed by Apple.
The economic details of the arrangement would have to be worked out, of course. For instance, would Apple agree to subsidize the initial batch of tokens? Would publishers be able to redeem them for cash with Apple at full or partial value? Would the tokens trade on third party crypto exchanges?
Presuming these details could be worked out, the benefits would be significant for both sides. It would save everyone transaction costs by cutting out the credit card companies, and also create a more streamlined payment experience for consumers. And for news publishers, it would solve the decades old problem of micropayments—ie how to charge users a small amount for a single article. Apple, meanwhile, would reap considerable goodwill by helping the struggling news industry.
Once again, this is just speculation—or maybe wishful thinking on the part of this journalist. But if it’s not Apple, it feels like another tech company will jump on the opportunity to make blockchain payments a reality. Facebook, which has been building up its blockchain team like crazy, is another leading candidate, though it would have to overcome trust issues given how the company has burned media outlets in the past. Meanwhile, Microsoft has been quietly working on a blockchain solution to manage intellectual property on its gaming console. It’s not hard to imagine the company extending this to a broader consumer payment system.
The bottom line is a blockchain-based payment method for media seems too promising an opportunity to pass up. And though I try not to make predictions (year-end or otherwise), I’m predicting we’ll see Apple, Google or another tech giant offer a crypto-based payment solution by the end of 2020.
The Ledger team will return with more news in the new year. Jen, Robert and I wish all of you a safe and happy holiday season.
The Latest from the SEC’s Crypto Czar
Last Thursday, the crypto czar—aka Valerie Sczczepanik—spoke to the Wall Street Blockchain Alliance at the offices of Signum Global Advisors in New York. I left with two takeaways. First, Sczczepanik is an incredibly insightful regulator, who is passionate about crypto and believes it has a bright future notwithstanding the SEC’s current wave of enforcement actions. Second, for all the talk of a “crypto winter,” the blockchain world is still pulsing with vibrancy and optimism. This was clear from watching the packed room of investors, lawyers and entrepreneurs who packed the room and stayed past 8pm to talk crytpo.
|Jeff John Roberts|
THE LEDGER’S LATEST
To the Moon… Fidelity backs crypto lending startup. Galaxy EOS Fund puts $30 million in “banking with a conscience” startup. “What is bitcoin?” is most searched term in Google Trends. Yes, Bitcoin is truly decentralized. Circle CEO says BTC and ETH are oversold, predicts prices will rise.
…Rekt. Bitcoin as one generation’s lesson in bubbles. Mike Novogratz, down $136 million, says he’s “the ugly face of crypto.” More crypto layoffs. Bitcoin Cash “hash war” hangover. John McAfee as psycho spokesman for the crypto bubble. Bitcoin’s all-time high one-year ago today.
BALANCING THE LEDGER
What the heck happened at Basis, the $133 million stablecoin project that closed abruptly this month? Balancing the Ledger put the question to Salil Deshpande of Bain Capital Ventures, which led the investment in this “purely decentralized non-collatorized algorithmic” affair.
Help wanted. LinkedIn published a “2018 Emerging Jobs” report, and guess which profession was first on the list? Blockchain developer. It far outstripped number two (Machine Learning Engineer) and three (Application Sales Executive) on the list in terms of growth rate. Some related tibdits:
Rate of growth for “blockchain developer”: 33x
Top skills for the job: Solidity, Blockchain, Ethereum, Cryptocurrency, Node.js
MEMES AND MUMBLES
Memes to ease the pain. The crypto crowd loved sharing memes in the boom times and, it turns out, the same is true during a bear market. Vice talked to Reddit mods and others to show how memes have been a source of humor and a coping mechanism of sorts during a 90% downturn.
The piece, appropriately, includes some bear market memes, describing them as “surprisingly decent.”
FOMO NO MO’
Don’t miss out: In an impressive piece of investigative reporting, The Block exposed how a $31 million ICO project to create “the Bloomberg terminal of crypto” appears to have been a colossal scam perpetrated by a professional criminal using a false identity. Meanwhile, no shortage of high profile investors lent their credibility to the ill-fated “Blockchain Terminal.”
At the heart of the venture is a man once jailed for running one of the most notable financial frauds in Canadian history: Boaz Manor. Working under the pseudonym Shaun MacDonald, Manor tricked BCT employees, investors, and potential customers and, in the process, created the definitive grift of this nascent crypto tech bubble. […]
Like all good blockchain companies, BCT needed a token…
The main point, he said, was to get the hedge fund managers to buy up the tokens which would increase the value for the original token holders.