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BUYING AND SELLING, BUT NOT SPENDING. In 2013, San Francisco-based cryptocurrency company Ripple began releasing its coin, named XRP. Today, XRP is the third most popular cryptocurrency in terms of market capitalization (an asset’s share of the total crypto market), lagging only behind only bitcoin and ether.

But Ripple has a problem, according to a report by The New York Times: While people will trade XRP, they won’t use it.I SEE XRP ALL AROUND ME. By use, we mean do anything other than buying or selling as speculative investments.

Since you can’t exactly use crypto at your neighborhood grocery store quite yet, Ripple is primarily focused on getting people to use their XRP to conduct international money transfers.

If I have US$2,000 that I want to send to my friend in London, I would convert my dollars to XRP, send it to my friend in the UK, who would then convert it to Euros (or whatever currency they want). Ripple has already partnered with banks and other financial institutions to make this happen.


One way to get people to use a currency? Make sure they have a lot of it. And Ripple is making sure people have a lot of XRP by giving it away. In March, Ripple donated $29 million worth of XRP to a charity to buy classroom supplies for U.S. schools.

During an appearance on Ellen in May, actor/Ripple investor Ashton Kutcher presented $4 million worth of XRP to The Ellen DeGeneres Wildlife Fund on behalf of Ripple.Ripple isn’t just donating XRP to charities, though. It’s also rewarding people who use XRP.

In October 2017, the company put $300 million in XRP into the RippleNet Accelerator Program, a program designed to reward financial institutions that use XRP.  Then, in May, Ripple created Xpring, an initiative that helps fund the development of XRP-focused start-ups.FLUSH WITH XRP. Ripple can play such a big role in how people use XRP (and how much there is) because of how the coin is generated.

While the number of bitcoin transactions determines the number of bitcoins in the world (more transactions = more mining = more bitcoins), all the XRP in the world was simply created in 2013. At that time, Ripple generated 100 billion XRP, keeping 80 percent for itself.

This has led to allegations that the company can and has artificially influenced the XRP market, but it also means Ripple has plenty of XRP to throw around.Now, no one can say for sure whether Ripple’s many initiatives will actually help XRP move from a speculative investment to a often-used asset.

But given the bad publicity Ripple has recently faced — including criticism in a U.K. court and a class-action lawsuit in the U.S.— giving millions to charity should help the company improve its public image if nothing else.

READ MORE: Here’s Some Cryptocurrency. Now Please Use It. [The New York Times]

Mike Butcher, an editor-at-large of TechCrunch is a pioneer of the tech and journalism industries. He has also started covering the crypto industry and blockchain technology, as — in his words — “that is effectively going to be a new way to the future.

”He first heard about crypto back in 2011 and it was ‘Bitcoin that got [him] interested’ in the space.’“I think it is sort of a general theme — decentralization. It is really fascinating, you know.

We had Google, Apple, Facebook, Twitter, Amazon, effectively build centralized networks for the last 25 years of development of the internet and what we are doing now is we are looking for [the] decentralized players of the future.

I mean, the fascinating ideas: for instance, you can create the decentralized Uber, which will be an incredible kind of move. And the exciting thing about it is how we will have brand new actors. There is more collaboration between all of these projects than in previous systems, so that is why it is so amazing.

”Catherine Ross: Does the crypto space really resemble the beginning of the tech market? There’s been a lot of comparison to the ‘dotcom’ bubble.’

Mike Butcher: Yeah, it is very similar to previous bubbles in many ways. What is different about this one is the amount of money that is in the space.

Previously, in sort of mid-nineties [sic], in order to be able to work in the internet space, you had to raise proper, real money. And that was a different kind of era. But now, the money is effectively built into the bubble. And so that is why it is so fascinating and potentially dangerous for some people, given that there is such a lack of sophistication amongst people who want to be involved in this space — whether or not the’re investors or the people who want to be involved in the ICOs.

CR: Do you think the crypto industry is similar to the derivatives market?

MB: Well, there are some parallels out there.

CR: And do you think [crypto] will have the same fate?

MB: Well, I mean if you look at what is going to happen in the next year or so, crypto assets will probably eventually be regulated, like other kinds of assets — to some extent — depending on what they are. You’ve got some big players like Goldman Sachs becoming involved, launching their own [cryptocurrency] trading desk*.

So, that is clearly going to happen, and you have got some sovereign funds becoming involved as well. I think that there's the legitimacy coming, it is not there quite yet in some places. But it makes a lot of sense, if you think about it. You know, even [science fiction] writers have been talking about the idea of having global currencies, which are not the fiat currencies.

We already have credit in things like Star Trek and Star Wars. So it is clearly the idea that the time has come.



Mike Butcher at BlockShow, Berlin 2018In his speech at BlockShow in Berlin entitled ‘Disinformation Can Kill Crypto,’ Mike stressed the importance of creating the ‘trust’ toward the industry or “the public will return to centralized systems.

”CR: You talked about the danger of disinformation in the space, mentioning that it’s very important to build content platforms that people can trust. How do we achieve that?

MB: Well, I mean the way that the traditional financial media operates is that there is a separation of powers: between journalists who write content, news and advertising and commercial people. And they don’t talk to each other, right?

CR: Right!

MB: So, in fact, they are not allowed to talk to each other. And if they do talk to each other, that is a conflict of interests. The people who advertise on the website go through the commercial people by advertising, and they speak to the clients. When you write the content, you should not be talking to those people. You should be actually writing about what is going on, and then you are paid by the media organization.

That is how journalism has evolved over the last two hundred years or so, roughly. And if the media outlet is abiding by those rules, the separation of powers between the advertising and editorials, and if journalists are not being paid to write about the companies, and if they are being paid generally as a salary to write about what the news is, then that is ok. But if there is any change in that, if journalists are being paid to write specific stories, then that is not allowed, that is wrong.

CR: That is not journalism.

MB: That is not journalism! And right, so, don’t read those guys! So, just don’t read them. I’ve been shown [that] you guys are abiding by those rules. And so the market is always in the crypto moving [sic] every day, it is kind of [a] pretty crazy world out there. And it is up to those journalists that bad actors don’t get any promotion. And, like I said, there is independence out there.

One part of the problem, of course, is that journalists are not just a part of the media space anymore, you have all these Telegram groups, you have got all these WhatsApp groups, you have got online boards, or whatever it is, messaging services. That is where a lot of the problems develop.

But I do think that the part of my talk [at Blockshow] was that if we do not pay attention to this, then decentralization and the blockchain technology will not be trusted. It won’t ever go mainstream because it will not be trusted by anybody.

And so it is everybody’s job in the industry to promote good media, media that actually has the separation of powers in between advertising and editorial and that is independent. It is our job to do that and de-emphasize and detune the bad actors in the space.

CR: So what you mean is that you can read medium and any other blog articles, but you need to be very cautious about making an investment decision.

MB: Absolutely! I mean that is always out there, isn’t it? Checks and balances, always do your research. Even the most sophisticated investors today find it difficult to understand what is going on. And many of them are extremely cautious. Actually, they operate much more [cautiously] than the average person.

So, and I think what’s going to happen is that, if more problems continue to happen, then regulators will come in, then there actually will be some heavy-handing regulation and some of the more innovating aspects of what has happened in the last few years might be stamped on, you know, it might change. So, it is up to the industry to get its own house in order.



Mike Butcher at BlockShow, Berlin 2018

CR: You have obviously visited a lot of events and have met a lot of people from the [crypto] industry. Is the crypto community somehow different from others?

MB: It depends. I mean, if you take blockchain projects, they remind me of early internet space with developers coming up with the fascinating new ideas, and you have got that sort of people much more involved in the crypto [industry]. As a currency side of things, it is sort of different from the traditional services. It’s a startup space where you have got, you know, the entrepreneur and the venture capitalist. But the two are merging. If you think about six months ago or a year ago, the ICO space took place really quickly.

CR: Indeed.

MB: Everyone was actually quite blindsided by how quickly it took off. Now what’s going on with private sales, private ICOs is that you have got more traditional investors becoming involved at the earliest phases of an ICO and a private sale. And actually sometimes even [a] public ICO is being cancelled. Or the public sale is changed in sort of different order, sort of [a] 50/50 relationship later on with the public sale.

If you want to build something, and if you want to be an entrepreneur, you don't just make money from the ICO, [...] you go build it.

MB: What you do is you bring another partner to help you build it. People who have networks and relationships you don't have as an entrepreneur. And it does require professional investors, because they have the contacts, they have the know how, the knowledge. They have the partnership relationships and they have the experience about how to scale the company. All the staff [are] familiar with the start up space. So the worlds are gradually starting to merge.

CR: You’ve visited quite a lot crypto events recently. What is the best way to benefit from one?

MB: It is always the same — as at any conference. Just learn how to network, learn how to introduce yourself well. I mean, the best way to do these things is just to introduce yourself, but talk about the issues [that], you know, display your knowledge. As soon as somebody starts pitching you, well, it is kind of discouraging. I think it is more interesting to have a conversation first. Show up how clever you are first.

CR: Great advice. Thank you, Mike! And thanks for being here with us!

MB: My pleasure!

https://cointelegraph.com/news/mike-butcher-of-techcrunch-it-is-up-to-the-industry-to-get-its-own-ho...

Gary Gensler, now a lecturer at MIT, says some popular cryptocurrencies should be regulated as securities.

• by Mike Orcutt
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  More than 100 cryptocurrency exchanges and over 1,000 initial coin offerings are operating outside US laws meant to protect investors from fraud, says Gary Gensler, who chaired the Commodity Futures Trading Commission from 2009 to 2014. This must end before some of the most promising financial applications of blockchains can be realized, Gensler—now a lecturer at MIT and senior advisor to MIT’s Digital Currency Initiative—told the audience today at MIT Technology Review’s Business of Blockchain conference.

Even popular cryptocurrencies XRP and Ether might be securities and thus subject to relatively strict regulation, he said.
More than $10 billion has been raised via ICOs, a blockchain-based fund-raising method. But a significant fraction of these are fraudulent, and many were launched in a way that is not compliant with US securities laws established in the 1930s.

To reach its full potential “blockchain technology will need to come within the public policy framework,” Gensler said. “We’re not in very good shape right now.”Blockchain technology has a chance to lower costs, lower risks, and remove unnecessary middlemen in the global financial system, said Gensler, but “the question is: how do we move forward?

” First, what’s needed is a lot more clarity in the marketplace, he said. Regulators across the globe are scrambling to make sense of ICOs, trying to determine whether they are traditional investments like stocks and bonds—or something else that shouldn’t be subject to securities rules.

In fact, in many cases the answer is that they are both, said Gensler. If investors are buying tokens with the expectation that they will appreciate in value based on the efforts of others, that matches the traditional legal definition of a security, he said.

Related Story



What the Hell Is an Initial Coin Offering?

The ICO boom looks a lot like a bubble, but at its heart is a genuine innovation.That could spell trouble ahead for Ripple's crypto-token, called XRP. That’s because the company has so much control over XRP’s monetary policy, and because many XRP holders are hoping the token will increase in value thanks to the efforts of the company’s developers, he said.

Ethereum, the second most popular cryptocurrency network after Bitcoin, may also be a security, said Gensler, since its token was first sold in 2014, before the network actually launched. (Bitcoin, he said, does not have the features of a security.)

There are now a number of open questions for the SEC, said Gensler. Is it possible to design a so-called “utility token” that is solely about consumption, as opposed to investment? If developers sell tokens before a network launches, as a security, can it “evolve” into something other than a security after the network launches?

Cryptocurrency challenges the traditional definition of a security, and some rules may have to be “tailored” in some way, he said—“but I don’t think it means that we just exempt the whole field and say good luck to investors.”

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Tagged
Ethereum, Ripple, Business of Blockchain 2018, blockchain, regulation,cryptocurrency






Mike Orcutt Associate EditorI’m an associate editor at MIT Technology Review, focusing on the world of cryptocurrencies and blockchains. My reporting, which includes a twice-weekly, blockchain-focused email newsletter, Chain Letter… More

From zero to cryptocurrency billionaire, Changpeng Zhao has vaulted from obscurity to the cover of Forbes magazine in just 8 months.The founder of Binance, who goes by the name of CZ, has steered his company to a $200 million profit in its second quarter of existence and built a personal fortune of nearly $2 billion.

"If you had asked me a month ago when we would hit the number one spot, I might have answered six to nine months. If you had asked me about unicorn status, I might have thought the same period. This growth has surprised even me," CZ had told news website Medium early this year.

Binance can process a blazing 1.4 million transactions a second and on a peak day this year, processed 3.5 billion new orders, cancels, and trades.The 41-year-old Chinese-Canadian coder, who wears a black hoodie, like some cross between Mark Zuckerberg and Steve Jobs, owns a large chunk of the company.

But before fame and fortune turned in his favor, CZ flipped burgers at McDonald's and worked overnight shifts at a gas station in Vancouver to cover the household expenses.Educated at McGill University in Canada, his first summer job was with a trading exchange in Tokyo.

After he finished college, CZ was offered work by the same company in Toyko and spent the next four years there before moving to New York.Then, in 2013, Zhao learned about Bitcoin from a venture capitalist with whom he played poker. His interest steered him to dig deeper into the cryptocurrency space and by the end of last year, he had decided to make his move.

Despite all the regulatory headwinds surrounding digital currencies globally, CZ told Bloomberg earlier this year that he's as optimistic as he's ever been about cryptocurrencies.

"I'm convinced 100 percent that crypto is the future," said Zhao, who is the single largest shareholder in Binance and makes all the company's key decisions. "I just know it will happen."

https://www.ibtimes.co.in/meet-cryptocurrency-billionaire-who-built-no-1-exchange-8-months-765297

BY STAN SCHROEDER


In the past month, two major online advertising platforms — Google AdWords and Facebook — have announced a full-on ban of cryptocurrency-related ads, and rumors say Twitter will follow their lead. Few will mourn the barrage of ads for shady ICOs (initial coin offerings) that promise 10x returns.

But the cryptocurrency space is a booming new economy, and such an all-encompassing ban is sure to hurt some legitimate crypto businesses. 

SEE ALSO: This space heater mines bitcoin while keeping your house warmBlockchain might just be the next big thing in finance, and blockchain-based Uber  and Airbnb are already being envisioned. 


In fact, you'd be hard-pressed to find an industry that a blockchain-based startup isn't threatening to disrupt. Surely, not all of these businesses are scams. So why ban them all from advertising on the internet's major platforms?Trevor Gerszt, CEO of cryptocurrency IRA company CoinIRA isn't afraid of the bans, though he doesn't exactly welcome them, either.

"It is frustrating that companies like Coin IRA who offer legitimate investment products and have done everything we have to do to be in compliance are punished along with nebulous ICO schemes," he told Mashable via e-mail. 

Ultimately, however, the "ad bans won’t affect larger, more established, and more reputable cryptocurrency businesses as much as they will affect smaller businesses who are looking to use advertising to gain greater name recognition," he claims. 

That's the trick: For a cryptocurrency startup, the ad ban means it may be harder to get funded via an ICO. And for strictly crypto-related businesses, such as crypto exchanges and wallets, the ad bans are bad news. But blockchain-based startups will be able to advertise their products on Google and Facebook, as long as they don't mention the crypto aspects of it, such as ICOs, tokens, wallets and such. 

I've contacted Google, Facebook, and Twitter regarding the crypto ad ban. "Our new policy applies to the advertisement of cryptocurrencies and related content (including but not limited to initial coin offerings, cryptocurrency exchanges, cryptocurrency wallets, and cryptocurrency trading advice)," a Google spokesperson told me.

"This will include ads for aggregators and affiliates for cryptocurrencies," but the policy "will not apply to other blockchain technologies that are unrelated to cryptocurrencies and ICOs," he said, while noting that the ads also must adhere to Google's other policies. 

Facebook hasn't responded at the time of publish, and Twitter, which hasn't publicly announced any ban yet, had no comment. Interestingly enough, several crypto-related companies I've contacted said they actually welcome the ad ban. Darren Marble, the CEO of fintech marketing firm CrowdfundX, which is marketing the widely publicized KodakCoin, is one of them. 

"The only people who are disappointed in Twitter’s purported ban of crypto ads are the scammers and con artists"

“The only people who are disappointed in Twitter’s purported ban of crypto ads are the scammers and con artists. The big money raised in ICOs is relationship-based, and the most legitimate issuers are well connected to active crypto and blockchain funds. I think the ban on crypto advertising is actually positive change for the industry, and will help clean up a lot of the garbage," Marble told me via e-mail. 

Nicolas Van Hoorder, CEO and co-founder of cryptocurrency tracking app Delta, isn't particularly worried, either. "Twitter, Facebook and Google want a better ad experience for their users, and the cryptocurrency community wants legitimacy as a financial market.

Their restrictions are part of a gradual process to filter out illicit activities from genuine companies with innovative products," he told me via e-mail.  The market will eventually stabilize and "misleading activities" will be weeded out, he claims. Meanwhile, "the focus for companies going through ICOs should be on building great products and showing evidence of their value.

Then platforms should gladly allow advertising for these products, whether it's crypto or not," he says. In a way, it's no wonder that legitimate, blockchain-based startups aren't afraid of the ad ban. Many of them have to actively fend off investors; some, like Theta and Gems have recently cancelled ICOs, largely due to raising too much money in private pre-sales. 

While some startups that don't have access to Silicon Valley's VC wealth will undoubtedly be hurt by the inability to advertise their token sales, it appears that overall, the blockchain space is so hot right now that even a wide-ranging ad ban won't kill or even hurt it — perhaps only slow it down a little. 

Disclosure: The author of this text owns, or has recently owned, a number of cryptocurrencies, including BTC and ETH. WATCH: 'Uber' co-founder Garrett Camp is creating a new cryptocurrency