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SO, IMAGINE THERE’S this place. You hang out there all the time. Your friends and family are there. It’s got neighborhoods, both big and small. There are businesses there, you get most of your mail there in the form of digital messages.

It’s not perfect: Sometimes there’s crime, or that one neighbor who keeps pushing the conspiracy theories about vaccines or politics. You feel like the security teams are getting a little better at handling those kinds of disruptions, and after all, every place has potholes, right?

Or maybe you’re just getting used to it. But lately it seems like if people step too far out of line, they just sort of … disappear.

Molly Wood (@mollywood) is an Ideas contributor at WIRED and the host and senior editor of Marketplace Tech, a daily national radio broadcast covering the business of technology. She has covered the tech industry at CNET, The New York Times, and in various print, television, digital, and audio formats for nearly 20 years. (Ouch.)

And as the place has gotten bigger, it’s matured. Now you can move yourself into more of a gated community to avoid the bad neighborhoods and the undesirable encounters. And that’s nice, because every day it seems like there’s a new infrastructure project designed to get more people into the place.

You know the leadership of the place isn’t perfect, and it’s not like you trust everything they’re doing, but you’re comfortable here, and so you stay. And you have to admit, the shopping has gotten a lot better.

So many more stores and places to visit, it’s almost like you never have to go anywhere else. And the best part is that the place finally got its own money! Talk about a milestone. It’s like your little digital home is finally turning into its own … country.

Yes, you guessed it, I’m talking about Facebook. And what I’m guessing is that this is exactly what Facebook wants to be. Not a company, a country.

And while Facebook’s ambitions appear unsubtle (at least to me), the biggest tech companies are all building more and more advanced and immersive ecosystems.

So maybe it’s time to start asking: What is the functional difference between a company and a country?

It’s not a crazy question: We’re already at a point where huge multinational tech monopsonies have so much power over the global economy that central bankers and regulators are starting to wonder if they even have the tools to set economic policy, like they used to in the old days.

And the reason these big tech companies are different from other giant multinational corporations like Exxon Mobile or ConAgra or even, strangely, Microsoft is that their ambition really is to own all your interactions, not just your driving or your eating or your typing.

Amazon’s algorithms are setting prices for the rest of the world and there’s no business it doesn’t want to be in. Apple is less interested in being a big messy country that’s open to everyone, but would be happy to build an increasingly elite country club on the hill.

Much like the NSA, Google would prefer that you forget they exist while they’re watching every single thing you do.

Oh, and these companies happen to boast user populations larger than any single country, not to mention the fact that they have annual revenues far exceeding many countries’ GDP dreams.

And now they want to create their own money.Facebook’s proposal for Libra, a cryptocurrency backed by a basket of real currencies, and controlled by an independent body of partners based in Switzerland, might seem a step or two removed from being under Facebook’s control. But the power of Libra doesn’t lie in control as much as it lies in adoption.

Libra is meant to become the in-house currency for Facebook, Instagram, and WhatsApp’s combined 2.7 billion users. If that happens, it’ll create, almost overnight, a borderless collection of millions, maybe hundreds of millions, maybe even a billion or more people using the same platform to communicate, the same tools to shop and view ads and play games, and the same monetary system.

It’s a network effect with the potential to remake global currency and financial systems.

And whether Libra is controlled by a neutral Switzerland-based consortium or not, if its primary adoption happens on Facebook, it’ll only centralize power with Facebook.

Now, yes, there’s a big “if” at the center of all of this speculation about Facebook’s metanational ambitions. That’s “if” Libra will get off the ground at all.

Facebook could screw it up and fail to get enough partners on board to actually launch the thing. (There are 27 impressive names on board already, but 100 is the goal.) And because of the company’s many, many missteps over the years, Libra is already freaking people out—from actual lawmakers to central bankers. It’s going to be a fight.

But never say never, because you can’t think the Facebook team didn’t anticipate some static, here. The company doesn’t usually back down from an unpopular decision—it just apologizes later!

So let’s imagine that Libra does get off the ground. What’s its biggest competition? Hint: it’s not Bitcoin. Let’s start with the dollar—arguably the most powerful currency in the world. About 350 million people use the dollar around the world.

That’s a little under 13 percent of Facebook’s claimed 2.7 billion users (across all three platforms), so even accounting for duplicates, fake accounts, and rounding errors, Libra could be used by more people—if not actual amount spent—than the dollar, and without a whole lot of sweat from Facebook.Not buying it? Here’s an example of anemic adoption on Facebook.

The company introduced Stories on Facebook in January 2017, and the feature was derided as a direct Snapchat ripoff that was so poorly implemented and confusing as to be laughable. By fall of 2018, over 300 million people were using Stories. Boom.

Dollar.The likelihood of Libra’s adoption is even higher because the company’s fastest growth is international, and Libra is likely to be the most useful in countries where the local currency is hyperinflated or banking is unreliable.

Think of the 170 million Facebook users in Africa, many of whom already bank and transact on mobile phones. It’s an easy sell.


And if Libra starts big, the network effects of the Facebook platform will ensure that it just keeps getting bigger.

Then what?

Over time, it’ll end up being easier to pay for things with Libra than with any other method. It might become trivially easy to exchange Libra for other currencies, if people even need to. It’ll remove barriers to sending remittances to other countries or international payments of almost any type.

Facebook will profit handsomely, of course, as will its big corporate partner-investors, like Visa, Mastercard, PayPal, Spotify, and Uber. They’ll end up in the unexpected position of being corporate central bankers, of a sort.

And most significantly, the bulk of Libra users will be in what is essentially a closed network under the complete control of one CEO-slash-“emperor for life.

”At that point, there’s every possibility that Google or Amazon or even Apple will decide they need competing currencies for their private ecosystems (all three have rolled out some kind of payment options, if not their own fiat currencies, and there’s been speculation for at least a year that Amazon could launch a cryptocurrency).

Who needs the libra?

You can see why bankers and government officials have the big-time jitters. These are government-level ambitions, by any measure.

Because although it may seem naive to ask if a company can really be as powerful as a country (the primary difference being, you know, the guns), in the case of Facebook, you have to admit, becoming a borderless pseudo-state seems to be the goal.

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Facebook co-founder Chris Hughes is already raising the specter of Libra destabilizing weak government currencies, and rendering central bankers helpless to set their own monetary policy in some of those countries. And he’s a guy who understands Mark Zuckerberg’s ambitions better than most.

Zuckerberg is famously enamored of Augustus Caesar, and over the years, his vision of what he’d like to accomplish has clearly grown from chick-hunting the college population to creating a service and a “community” that has no boundary, no limiting factors, and hardly any oversight.

So let’s recap: Facebook has a massive stateless citizenry; a small, hand-picked ruling body; rapidly expanding infrastructure; and now, adoption willing, a unified currency.

Also, if you really wanted to create your own borderless country, wouldn’t you eventually incorporate virtual reality, so people could literally live their lives inside your digital ecosystem, even if only via headset?

We keep forgetting that Facebook owns Oculus, don’t we?Introducing Libra right now shows us incontrovertibly that Zuckerberg’s ambitions have not even remotely dimmed.

This guy is still right on plan for global domination. The only thing that’s missing is space—thank god for us that he shows no interest in the burgeoning tech bro space race.

Or maybe he’s already done a bit of inter-metanational diplomacy, and he and Jeff Bezos worked out a deal. Zuckerberg gets the Earth, and Bezos gets the moon.

The digital token known as Tron tumbled as much as 21 per cent after cryptocurrency entrepreneur Justin Sun postponed his charity lunch meeting with billionaire Warren Buffett citing a bout of kidney stones.

The announcement kicked off a frenzy of speculation on Twitter and in Chinese social media, which claimed that Sun has been denied an exit visa from China, and that the 29-year-old is the subject of investigations for everything from illegal fundraising to money laundering.

“He is in San Francisco in his condo recovering from kidney stones,” Cliff Edwards, a spokesman for Sun, said in a phone interview Tuesday with Bloomberg News. Buffett and Sun agreed to reschedule, according to a tweet Monday from his Tron Foundation. The lunch had been set for Thursday in San Francisco.

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Sun bid a record US$4.57 million this year to win the chance to dine with Buffett as part of his annual charity lunch auction.

Sun, who launched Tronix in 2017, said in June that he was hoping to educate Buffett, a self-professed cryptocurrency critic, on the benefits of crypto and the underlying technology, blockchain.

The postponement came only hours after Sun tweeted invitations to other crypto boosters. Sun denied media reports that he was involved in illegal fundraising and money laundering, according to China’s state-run Global Times.

Blockchain has been the subject of widespread interest and experimentation in government in recent years. The breadth of potential uses parallels the breadth of government missions and functions, writes Rick Holgate.

No other sector has such a broad and diverse portfolio of services. Accordingly, blockchain-enabled opportunities in government have seemed boundless. But that boundless enthusiasm has shown signs of subsiding, replaced with a greater sense of realism informed by experience.



Rick HolgateThis cooling reflects a more reasoned and rational approach to blockchain in government. The wave of executive leadership directed exploration, out of fascination or fear of missing out, has ebbed, replaced with more deliberate and informed experimentation.

Government departments should focus on practical uses of blockchain with discipline, pragmatism and awareness of risks. Address the desired business outcome rather than the technology.Initiatives with promise

There are four blockchain initiative types that have managed to gain traction and survive beyond initial experimentation.

Record keeping – Many governments have announced an intent to store and manage government records on blockchain. Record keeping uses are seen as valuable for their ability to deliver promised transparency and immutability, and as a means to restore or rebuild trust among constituents.

Efficiency plays – Initiatives are predicated on the idea that decentralised, multi-party transactions can be streamlined through the use of blockchain to facilitate resolution of transactions. Interest is generally motivated by a desire to decrease friction in inherently disconnected processes, interactions or transactions.

Digital asset markets – These are effectively ecosystems of participation that enable disintermediated trading of purely digital assets or digital representations of physical assets. 

Interest is motivated by governments acting as the market infrastructure provider for industries, especially in regulated areas such as insurance, mining and utilities.

They also act as a service provider in collaboration with both private and public sector partners.

Blockchain disruptors – Interest in creating a new blockchain-based business model is somewhat intuitive: an opportunity to disintermediate services; shift more responsibility and control outside of centralised authority; deliver ecosystem-enabled services in a more assured manner; and streamline services on a global scale.

In general, they fall into two broad categories: global aspirations such as The United Nation’s ID2020 Alliance digital identity system, and voting.

The most promising and mature uses for government revolve around efficiencies and record keeping, provided that they are predicated on services that are ecosystem-delivered, as opposed to centralised.

Digital asset markets also hold promise, but scalability and adoption remain obstacles.More ambitious uses — many around global interoperability, such as the United Nation’s ID2020 — have the potential to disrupt and disintermediate government services.

But most remain visionary ambitions, contingent on development of consortia and data standards. Getting startedIf you’re looking to deploy blockchain, the following four steps will get you started:

Evaluate options for storing data or recordsFor government records with retention requirements, a storage strategy is essential to enable expiration – deletion, erasure – of records.

Evaluate blockchain as an option for storing data or records where the current controls to ensure immutability and manage access are expensive. Explore data storage options for record keeping uses, particularly for those with retention policies, privacy implications or large data volumes.

Factor in scalability, security and true decentralisationEfficiency-based initiatives have shown substantial promise, but also some potential pitfalls or shortfalls. Make sure you have planned for and factored in scalability, security and true decentralisation when aiming for efficiency gains through blockchain.

Evaluate different participation optionsCreation of digital asset markets only succeeds if they are thought through beyond the pilot stage. Evaluate different participation options in the context of digital asset markets. For example, consider what models, incentives and populations to target and plan for to achieve viability.

Apply realismApply realism when assessing the potential disruptive effects of individual blockchain uses. Is blockchain truly needed? Have all the non-blockchain issues been anticipated and addressed, such as governance, data standards and the relationship of physical things with their digital representation?

Has the design accommodated the scale of the intended implementation?*Rick Holgate is a senior executive partner at Gartner. He supports government CIOs on digital government, cloud, blockchain, mobility, digital workplace, information security, IT procurement, shared services and legacy system modernisation.

Comment below to have your say on this story.If you have a news story or tip-off, get in touch at [email protected].  Sign up to the Government News newsletter.

The U.S. Securities and Exchange Commission has issued a no-action letter to Pocketful of Quarters (PoQ), a gaming startup looking to issue tokens on the ethereum blockchain.

PoQ may legally sell its Quarters tokens to consumers without registering them as securities, the SEC Division of Corporation Finance wrote in its second no-action letter to a company seeking to launch a token sale.

(The first was granted in April to TurnKey Jet, a business-travel startup.)Quarters are built according to the ERC-20 standard – the first such token to receive U.S. regulatory approval.

In the July 25 letter, Jonathan Ingram, chief legal officer for the SEC’s FinHub wing, wrote:

“Based on the facts presented, the Division will not recommend enforcement action to the Commission if, in reliance on your opinion as counsel that the Quarters are not securities, PoQ offers and sells the Quarters without registration under Section 5 of the Securities Act and does not register Quarters as a class of equity securities under Section 12(g) of the Exchange Act.”

“The thing that’s notable here, this is the first ERC-20 public blockchain token [approved for a sale],” said Lewis Cohen of DLX Law, which worked with PoQ to secure the letter.

The token is a stablecoin, with PoQ setting the price of the Quarters as the only seller, PoQ CEO George Weiksner said.

This is part of the company’s compliance requirement with the SEC. (A smart contract prevents tokens from being sent to unapproved accounts, thereby restricting secondary trading.)

PoQ also raised money through a registered securities sale using an investment token, which will remain separate from the Quarters sale.The two-token system is meant to ensure that users conduct transactions with Quarters, rather than hold them in the hopes of securing a return, Weiksner explained.He said he hopes Quarters will improve the gaming experience for players who are tired of spending large sums for different platforms, adding:

“It’s a way to make games better.”

“The most important thing for teenage boys is playing video games and this might be the first financial product that they have and it’ll be a crypto wallet,” said Michael Weiksner, the company’s principal (and George’s father).PoQ is working with Apple and Google to sell Quarters tokens in the App and Google Play stores, respectively, the elder Weiksner said.

Launch conditions

The no-action letter requires a PoQ to follow a number of commitments, including ensuring that players can’t sell, buy or exchange tokens with each other. Rather, only developer or “influencer” accounts will be able to transact with players.

“Players can never buy or sell or exchange to anyone except for approved developers, and that’s a key component of our … [compliance] strategy,” Michael Weiksner said.“Accounts are born as regular accounts but they’re restricted, so they can’t exchange,” he said. “The default accounts are restricted and only approved accounts can accept Quarters.

”At present, only PoQ can approve accounts, and there are no concrete plans to grant other entities the ability to do so, he said. PoQ is still looking into whether that’s possible.

Developers and influencers will have to pass know-your-customer (KYC) and anti-money laundering (AML) processes before they can get an approved account.According to the letter, Pocketful of Quarters has fully developed its platform and can go live before any tokens are sold.

Moreover, the Quarters tokens “will be immediately usable for their intended purpose” with PoQ’s gaming platform when the sale begins, and “only developers and influences with approved accounts will be capable of exchanging Quarters for [ether] at pre-determined exchange rates by transferring their Quarters to the Quarters Smart Contract.

”The SEC’s Ingram warned that “any different facts or conditions might require the Division to reach a different conclusion.”“Further, this response expresses the Division’s position on enforcement action only and does not express any legal conclusion on the question presented or on the applicability of any other laws, including the Bank Secrecy Act and anti-money laundering and related frameworks,” he wrote.

Reaching this point took PoQ and DLX the better part of a year, Michael Weiksner said.Cohen told CoinDesk, “we have long championed the importance of working with, rather than against, regulators, and we believe the outcome today of this … letter, the first-ever ERC-20 that can be sold without being a securities offering, I think it’s an incredibly important point.”He concluded:

“It required a lot of patience, and it shows that not every ERC-20 token is a securities offering and it is a positive event in working with regulators.”

Opinions expressed by Entrepreneur contributors are their own.

A little over two years ago, I was at my company’s holiday dinner, and the only topic of conversation was the stratospheric rise of cryptocurrencies like Bitcoin, Ethereum and those others that were lesser known but certainly more amusingly named (like Putincoin).

Related: Should You Still Invest in Bitcoin in 2018?

With Bitcoin at that time topping $20,000 and Crypto Kitties also hitting the world by storm, something momentous was afoot; and we all wanted in. Yet, my company’s CTO called a halt to our excitement, cautioning that a deep decline was coming.

The reason he gave: The potential of the blockchain -- the platform through which cryptocurrencies are built -- to create real-world applications with strong customer use cases had yet to be realized.“Raising $10 million from retail investors on a two-page paper is not enough,” our CTO said.

Boy, was he ever right. What came next was that massive slump, in which Bitcoin lost over 80 percent of its value, and the swiftness with which the SEC put an end to initial coin offering scams.Yet, a few weeks ago, as I was attending a demo day for Binance Labs -- a kind of accelerator program but for blockchain startups -- I saw that some of our initial energy had returned.

In particular, I was struck at the focus and discipline of these entrepreneurs from Binance Labs, the venture arm of Binance. Rather than releasing a white paper and trying to raise money on ideas and theory alone, these people had already fully built their product, conceived of applicable real-world use cases and secured strong early customer traction.

More important: They were focusing, as has startup fund-raising has traditionally done, on getting skilled investors on board, the kind of investors who contribute so much more than just capital.

This got me thinking: Is now the time to invest in or start a blockchain-focused company?  What are the factors that entrepreneurs and investors should be looking for in this space?To quote the words of Wired founding editor Kevin Kelly, now (yes, right now) is the best time to start something (never mind that he wrote those words in 2014).

This mindset, in my opintion, is extraordinarily applicable to the blockchain which, as it matures, presents more and more opportunities to create new solutions. To take advantage of this trend, entrepreneurs and investors should seek opportunities that present an immediate real-world application as well as customer traction.

And these investors should be ones whose value-add is more than just capital; the colleagues they bring in, meanwhile, should be the type interested in the long-term impact of the technology.

Real-world traction matters.

At Binance’s demo day, nearly all presenting companies had some early customer buy-in and traction.  Whether it was a brand signing up for a test run on a new decentralized loyalty platform or a marketplace touting the growth of its supply-side volume, customer-use cases won the day.

Many entrepreneurs commented that with blockchain solutions slowly gaining acceptance among everyday consumers, it was only appropriate to demonstrate real-world adoptionA case in point: Cerebellum Network, a decentralized version of Salesforce’s famed CRM. 

Rather than publish a white paper, the founders built a product and tested it, to positive feedback, with early customers like Benefit Cosmetics. Because of this, Cerebellum’s founders were able to secure significant early investment from the likes of Arrington XRP Capital and others. 

Related: Why Entrepreneurs Shouldn't Panic About the Bitcoin Slump

Are you starting or investing in a blockchain company? If so, the first question to ask yourself is: What real-world problem are you solving for consumers?

For instance, an entrepreneur friend of mine is planning to start a next-generation nomadic home-sharing platform that will allow members to hop from house to house at exciting locations around the world.

While the entirety of the database, billing and identity components of the product will be built on the blockchain, that’s not what the founder is excited about. Rather, he’s psyched about bringing to market a product  that people have expressed a desire for. In this instance, blockchain technology is just acting as the enabler. 

Seek investors who add more than just capital.

During the height of “Crypto Mania,” it was not uncommon to see new ICOs floated to retail investors, and see coin prices shoot skywards in a matter of hours, if not minutes.

These cryptocurrencies were an incredibly efficient way to acquire capital to scale a business.Yet, this process misses the most important point: Advice and help from investors is often more important than money in early-stage companies. Yes, this includes blockchain companies, as well.

Early-stage investors offer so much more than just capital.  They offer connections to talent, first-mover customers and additional investors.  Some, like Match.com co-founder Will Bunker, use help as a form of due diligence.

Even if he does not invest in a prospective company, Bunker goes out of his way to offer help and guidance because he knows that that’s what matters to early-stage companies.

So, if you're launching a business, seek investors who offer resources help and guidance, even if this route it costs you a bit more than other fund-raising channels do. While you may be paying a little more now, you will be able to maximize your valuation down the road.

Seek out long-term colleagues who “get it.”

Sitting down on my friend’s couch one night, talking crypto with others, I was struck by how short-term many of those attendeess' thinking seemed. Rather than building a sustainable, real-world application, my friends were more interested in releasing a hot new coin and pumping value out of it, rather than in the long-term transformative nature of their product.

Of course I understand that any new field will generate a lot of buzz, excitement and FOMO, or fear of missing out. Like moths to a flame, people often flock to what’s “hot” rather than what’s sustainable.

Yet this instinct of theirs misses the foundational point of cryptocurrencies and blockchain: their long-term revolution and transformation. The potential of cryptocurrencies to fundamentally alter our global economy, trade pathways, financial system and supply networks cannot be understated. 

According to investor Lou Kerner, blockchain is “the biggest thing to happen in the history of humanity.” Okay, maybe that's over the top, but Kerner follows up that phrase by cautioning that this revolution will be a long time in the making.

Naturally, founders should seek out colleagues, partners and even investors that understand the long-term nature of the space and are willing to invest the time, capital and, yes, the patience needed in order to make something happen.

Related: 7 Reasons Experts Say It's Not Too Late to Invest in Cryptocurrency

Right now is the best time to start something.

With crypto prices recovering, albeit slightly, and the market opening up to new entrants and applications, now may be the best time to start a blockchain-powered company. 

While the technology offers unlimited opportunities, when starting a new business, founders should not ignore the key points. Namely: Build a product that people want; seek out investors who are true advisors and partners; and hire colleagues who are in it for long-term gain.