Darren analyzes the Bitcoin Cash First look at OmiseGO (OMG). Plasma plans unveiled. Bitcoin.org, r/Bitcoin, r/bcash chicanery and censorship. Crypto funds psychedelic research. Shapeshift sidesteps securities. Secret Service agent who investigated Ross Ulbricht admits stealing Bitcoin. Two new crypto exchanges licensed in the Phillipines. ETH trading now available on SurBTC exchange in Peru. Shapeshift sidesteps securities, may de-list some tokens.
We’ve written out short overviews of the topics discussed on today’s show below! Be sure to listen in to the whole podcast to get more information, insights, and thoughts on each of them from Darren, Pedro and JJ!
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|Traditional Financial Markets||Cryptocurrency Markets|
|Gold $1,290||Bitcoin (BTC) $4,120|
|Silver $17.07||Ethereum (ETH) $316|
|Oil $48.37||DASH $290|
|Dow Jones 21,812 points||Litecoin (LTC) $52.30|
|30Y UST Yield 2.747%||Bitcoin Cash (BCH) $657|
Bitcoin Cash update from Darren
Bitcoin Cash became more profitable to mine this week, and many miners jumped on for a profit. During this time, Bitcoin blocks came out at a rate just under 5 per hour. The slower blocks caused an already backlogged network to become even more backlogged as transaction fees got as high as $20 per kB.
Currently the Bitcoin Cash network is somewhat frozen with a block coming out around every six hours. We suspect that this is to trigger an emergency difficulty adjustment and bring Bitcoin Cash back to profitability. During that six or seven hour period all transactions cleared with a block just under 2MB. The possibility of bigger blocks on the bitcoin cash chain made this possible. The interaction of two major SHA256 coins has been spectacular to watch. Interesting, to say the least.
My analysis without emergency difficult adjustments suggests that there would be a bias for both coins to be at a high difficulty. We’ll have more on some of the social ramifications in just a bit.
OmiseGO is the newest product from the company Omise, a Thailand-based payment platform. Omise has been in business since 2013 offering white label software developer kit that allows customizable Point-of-Sale interfaces and Stripe-like functions. OmiseGO has a ticker symbol of OMG and they recently raised $25 Million with their token sale. The ERC20 OMG token is based on the public Ethereum blockchain.
Southeast Asia has these token-based payment systems in wide use mostly with the telecom providers. These providers typically have closed-loop systems. OmiseGO is looking to offer a better solution: a unified platform with customizable payment gateways. Previously it was thought OmiseGO would make use of the upcoming Raiden network but now it is clear they are skipping right to Plasma.
Plasma has been revealed and a working draft of the white paper is available for reading. The authors are Joseph Poon, the author of the lightning network, and Vitalik Buterin. As described in the abstract, “Plasma is a proposed framework for incentivized and enforced execution of smart contracts which is scalable to a significant amount of state updates per second (potentially billions) enabling the blockchain to be able to represent a significant amount of decentralized financial applications worldwide.”
The world of crypto is full of open source, collaboration, and idea sharing except in a few notable locations, particularly the bitcoin sub-reddit known as r/bitcoin and bitcoin.org. These locations have become a place where censorship is at an all time high. In each case the individual largely at fault has been Michael Marquardt, more commonly known as theymos, a Bitcointalk administrator and Reddit /r/bitcoin moderator. He is also a “contributor” of the bitcoin.org github.
I personally have stopped using the /r/bitcoin subreddit due to the limited bandwidth of conversations. It is commonplace to see comments and threads removed for any number of asinine reasons. Lately, Michael or theymos, has been hard at work creating a fictional world around Bitcoin. At this point it would be fair to call it a cult or religion. Those that don’t get in line are censored or banned for violating the tenets of this cult.
The latest inquisition has surrounded Bitpay and the upgrades needed to the Bitcore client in order to fulfill the 2X portion of SegWit. Ever since the fork of Bitcoin Cash, Adam Back and employees of BlockStream have argued vehemently against the notion that the blocksize increase and subsequent hard fork should happen.
The situation isn’t as straight-forward as a simple disagreement among peers. It was that for a while, but then it became more like a political campaign with tactics you’d expect from an American election: mudslinging, character assassination, outright lies, fear mongering, and a succinct narrative and talking points reiterated ad nausea.
The bogeyman has always been the increase in blocksize and the hard fork that must accompany it. Now that this bogeyman has been once again dispelled with the recent split of Bitcoin Cash, the narrative has lost some luster, the fear mongering is receiving diminishing returns, and the only option left is apparently to ban anyone who seeks to upset the fairy tale.
On top of this you have “journalists” like Aaron van Wirdum from Bitcoin Magazine writing incorrect articles that only confuse people further.
Crypto Funds Psychedelic Research
The non-profit Multidisciplinary Association for Psychedelic Studies (MAPS) already accepts Bitcoin for philanthropic giving and is adding Ethereum and Litecoin to the list of accepted currencies. Since first accepting Bitcoin donations in 2013, MAPS has collected 115 BTC. Their latest project features research on MDMA-assisted psychotherapy for treatment of PTSD.
Secret Service Agent Admits BTC Theft in Ulbricht Case
If you are looking for more philanthropic opportunities, you may want to consider donating to the Free Ross Ulbricht project. We have yet another news story that illustrates just how corrupt the U.S. Secret Service Agents Shaun Bridges and Carl Mark Force really were in this case. In this installment, Shaun Bridges admits to stealing more than 1600 Bitcoins out of a federal account on BitStamp and then attempting to money launder them through BTC-e and Bitfinex. New court documents show this wasn’t a one-shot theft — no, former Secret Service Agent Shaun Bridges moved the Bitcoin out in 100 BTC increments over weeks. This was a methodical, intentional theft of funds.
The testimony of both Shaun Bridges and Carl Mark Force is suspect at best and contrived at worst. Given the latest revelations, their testimony ought to be thrown out as evidence and Ross Ulbricht given another chance to prove his innocence.
Speaking of philanthropic opportunities, we’d like to remind you that Neocash Radio happily accepts donations in many currencies:
BTC Address: 1MmFwDeZPgxJ4GyzbfmZVLJv3aZcpxSfR5
ETH Address: 0xe4689EF88F239C6eed1Ff262876e2499495c1617
DASH Address: XtLEPo6DKeu45e2czdHLEb5EzJRVDz2aLZ
NXT Address: NXT-TT49-WV65-HZJA-5EJF9
BCH Address: 173ADKUvvRcSmb9tnKiYAMQAoB6RhsgQQd
Nestor Espenilla Jr., governor of BSP, spoke about the dramatic growth of the digital currency industry and emphasized the importance of oversight: “We see a rapid increase in the trajectory [of virtual currency]. It is coming from a small base but increasing. That is why we decided to require [the exchanges] to register.” Espenilla added that the exchanges are locally based but have international roots.
South American cryptocurrency exchange SurBTC now allows users to trade in Ether and Bitcoin. The exchange says that it hoped the move will contribute to making the underlying technology accessible for all South Americans.
In the announcement made August 16, 2017, the exchange also said it would suspend commission fees for Ether and Bitcoin trades until September 30, 2017. In a translated statement, CEO of SurBTC Guillermo Torrealba said the discounted rate, “is definitely an incentive for users to try our service.” He went on to clarify the discount will not apply to users in Chile or Columbia, whom the exchange already serves.
In light of the SEC’s recent guidance regarding The DAO, ShapeShift has announced that it will review the tokens listed on its platform. ShapeShift may delist tokens that could be classified as securities.
On August 17, ShapeShift released a statement detailing its hands-on approach to securities compliance. Using the Howey Test, the company’s counsel will conduct a review to determine which tokens offered on the ShapeShift platform may fall under the jurisdiction of the Securities and Exchange Commission (SEC).
“We will need to adapt our service offering to ensure it’s not mischaracterized as a ‘securities exchange,’” explains Emily from ShapeShift. “To err on the side of caution, we may need to halt our inscriptions to certain blockchains. This means that we may need to delist some types of tokens from the platform, which is unfortunate for our users who have enjoyed the ability to participate in these experimental and innovative technologies.”
The “Howey Test” is a test created by the Supreme Court for determining whether certain transactions qualify as “investment contracts.” If so, those transactions are considered securities and therefore subject to certain disclosure and registration requirements.
Under the Howey Test, a transaction is considered to be an investment contract if:
- It is an investment of money
- There is an expectation of profits from the investment
- The investment of money is in a common enterprise
- Any profit comes from the efforts of a promoter or third party
We first talked about Expanse back in episode 149 more than two years ago. Expanse is a spin off of the Ethereum code into a new blockchain with a focus on using a DAO (Decentralized Autonomous Organization). There was no ICO or fundraising event, rather a reserve of EXP was created for the Development team at the genesis block and is locked in a smart contract.
The latest news from the development team has the first prototype of The Expanse DAO being released in the near future. The also recently partnered with CentryLink CTL, the third largest telecommunications company in the U.S.
They are announcing the launch of TokenLab to aid in token sales on the Expanse blockchain.
An Important Disclaimer
We would like to remind you that any content on the Neocash Radio podcast and/or website should not be regarded as financial or legal advice. Please be mindful of any and all regulations regarding cryptocurrency in your particular jurisdiction. Never invest/gamble more than you are willing to lose and always safeguard any digital currencies you own by keeping them in a wallet whose private keys you control.
JJ – firstname.lastname@example.org
Co-Founder, Producer, Managing Director
Darren – Darren@neocashradio.com
Co-Founder, Technical Writer
Pedro – email@example.com
Ethereum and Crypto-mining Expert
Randy – firstname.lastname@example.org
Former Co-host and Cool Dud