SEC Considers Ether ETF

The SEC is now considering an exchange traded fund (EFf) for ether (ETH).  The SEC began considering the request in 2016. The agency was reported as saying

Institution of such proceedings is appropriate at this time in view of the legal and policy issues raised by the proposed rule change. Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved. Rather, as described below, the Commission seeks and encourages interested persons to provide comments on the proposed rule change.

The SEC has already turned down two cryptocurrency ETFs. The SEC is seeking feedback on this ETF, though comment solicitation has  not received a single answer so far.

Also, the SEC has decided to review its negative verdict regarding the Winklevoss ETF.

In related news, the UN Wants to Adopt both Bitcoin And Ethereum – soon. In order to do so, the UN is starting an ethereum pilot project on the way to buying and selling cryptocurrencies as a matter of course.

Is Trust in Government Enhanced by Blockchain?

State Tech magazine asks if Blockchain Can help build trust in goverments. The answer of course is yes. But it’s not an answer we subscribe too.

We don’t think blockchain will build trust in government for the simple reason that governments will not produce products that create trust. Government wants trust but trust is not a byproduct of government.

The article states,

By increasing transparency and building more comprehensive records, state and local governments can formulate ways to reduce risk across processes and move innovation forward.

The article also states:

Bitcoin transaction ledgers that can provide the public with a permanent and transparent record of government transactions — with the aim of improving financial transaction management, contract management and regulatory compliance across their government organizations, according to a new report by IBM.”

But IBM has 1,000 people working on blockchain related activities and has spent something like 200 million on turning those activities into reality.

One of IBMs big targets is government, and one way or another, some of IBM’s solutions will indeed be used by officials.

People will still find ways to make government untrustworthy. The trouble with government is simple: It is a monopoly, and artificial monopolies never work.

“On blockchains, data can be shared widely, seamlessly and, when needed, anonymously. Time-stamped transactions can be verified in something close to real time instead of long after the fact, helping deter fraudulent behaviors. As transparency is amplified, trust becomes more likely,” the report notes.

Perhaps. But the bottom line here is that what can be built up can also be torn down. Time/stamped transactions can be made, but they also can be forgotten. Transparency can be amplified, but it also can be diminished as necessary.

Anything that requires government is ultimately unpredictable or purposefully unworkable. We wish it were different. It is not.

Is Blockchain Just Financial?

The Internet is a major influence and now it is time to ask if blockchain and cryptocurrencies will have a similar influence.

But defense spending helped a lot with the Internet to begin with. Also e-mail.

For instance, Bitcoin is big enough to allow people to work on its drawback and to influence the larger Internet as well.

Bitcoin drives adoption of its underlying blockchain, and its strong technical community and robust code review process make it the most secure and reliable of the various blockchains.

There are financial uses for blockchain that will be similar. Blockchain is quickly being utilized for numerous financial reasons and more are to come.

Blockchain may soon have the effect on finance and related fields that bitcoin is starting to have on money.

Dubai Continues Smart City Progress

Dubai has big global tech ambitions. It is creating smart city opportunities to bolster cities and create new one.

Additionally, Smart Dubai is looking to blockchain technology to help with smart city programs. Meanwhile, DubaiNOW lets Dubai residents gain many smart services through government entities.

Of course this is the same Dubai than almost went bankrupt in 2008 because of its ambitious plans, and many of its Smart Dubai services have something to do with government and regulation.

That’s the problem generally with smart city services. They may make your life easier, but they also build regulation into your life and even spying.

In that context both blockchain and smart cities are a two edged sword.

Banks Trimming Compliance

According to Bloomberg, banks are starting to cut back on compliance jobs and may let go up to 2,000 compliance personnel.

Compliance teams are shrinking as banks get out from under $321 billion in fines.  Royal Bank of Scotland Group Plc will let go 2,000 jobs probing suspicions over customers.

It is similar with other lenders who are increasingly using computers to take the place of individuals. “A lot of monitoring and surveillance activity can be automated,” one official says.

But apocryphally speaking, plenty of banks are still involved in questionable activities. It begins with their associations with the Federal Reserve which itself has done many wrong things. This is one of the reasons the Fed is actively opposing attempts to audit it.

In some sense all large banks are monopoly creatures and monopolies almost inevitably break the law and need to fall back on regulatory authorities.  So it’s not necessarily a good thing that banks are cutting back on compliance.

Better they realize their problems are larger than compliance.

No More Trading in Stamford – UBS

Does UBS know something about blockchain that has not been fully internalized by the general public?

UBS is trading no more in Stamford, Conn. It defaulted on its mortgage as part of leaving. At one point the trading floor housed 5,000 traders on its 712,000-square-feet.

Recently the bank took what was left of its trading group back to Manhattan.

UBS had spending money to mortgage the floors. But it sold the mortgage to CWCapital Asset Management in Maryland. UBS ceased payment, causing the loan to default which cost investors $100 million.

Maybe UBS is realizing that the fees trading charges and other paraphernalia associated with old fashioned trading is about to go out of style for good.

Polychain Is Increasingly Active

Token fever is taking hold in Bitcoinland.

‘Token sales’, ‘initial coin offerings’ or ‘ICOs’, are becoming a good deal more popular.

Simply using cryptocurrencies to link with a blockchain for purposes of selling an investors and potentially others as well is a intriguing idea.

Yet cryptocurrencies go beyond blockchain to hedge funds like Polychain Capital, a crypto hedge fund.

But Polychain isn’t just any crypto fund, but one that has attracted $10 million from Andreessen Horowitz and Union Square Ventures.

Polychain was founded in mid-2016 (shortly after ceo Carlson-Wee left VC-backed bitcoin exchange Coinbase), and is now a leader in the market.

Carlson-Wee told CoinDesk:  ”If your token really doesn’t interact with your business, that token isn’t part of what you’re building. You’re building a business. You’re using tokens to raise money but you could use something else.”

But Polychain is already active in public, investing in such projects as MakerDAO.  It’s also backed ethereum, which means it may be interested existing concerns.

We’ll keep following Polychain to see where it goes next.

 

 

Combating Airbnb

The New York Times has written a lengthy piece on how the hotel industry plans to combat Airbnb.

The company, which is based in San Francisco, helps people list and rent out rooms. At least 150 million travelers have used Airbnb services in 191 countries, the company says.

Additionally, Airbnb has generated more than $3 billion and secured a $1 billion line of credit.  Brian Chesky, Airbnb’s chief executive, believes the company might go public next year. Too bad it won’t be doing a blockchain coin offering. Maybe later.

Meanwhile, the hotel industry is trying to enmesh Airbnb in a regulatory morass. They believe if they involve enough regulatory authorities and make enough charges some of it will stick.

But not enough, from what we can tell. Airbnb is moving ahead despite what hotels are trying to do. The time to try to take out the company was years ago, not millions of visits later.

 

Who’s Ahead When It Comes to Blockchain

VB Global believes blockchain will have significant impact. What is more Europe and Canada lead the way while the US is behind.

Canada is especially blockchain friendly. Ethereum came from Toronto, and ethereum is the basis of many new blockchain enterprises. And unlike the U.S. SEC, the Canadian Securities Administrators (CSA) been helpful with blockchain startups.

Europe generally has been friendly to blockchain, even beyond Canada. According to the article, China, too. The government is supposedly taking a relatively friendly approach.

“The central government is putting massive investment into some of the poorer regions in China and are planning to build blockchain parks to entice some of the top blockchain minds globally to come to China backed with significant funding,” Skyledger’s Jane Zhang is quoted as saying. “There are a lot more blockchain startups this year than last year.”

Who will continue to lead? It certainly won’t be the US unless the regulatory authorities are less hostile. They could start by letting the Winklevoss twins exchange traded fund actually begin to run. That’s probably not going to happen anytime soon.

California Splits Up?

California is thinking of splitting up.

The current split is being driven by Democrats who want even more socialism. But the split itself is larger than a Democratic/Republican schism and has elements that partake of a general longing for smaller kinds of living.

There are plans afoot to make numerous countries smaller and this is directly contradicted by elements of the deep state that want to see further expansion. The EU is one such expansionist entity.

You can always make states bigger in contradiction to what the general population is feeling. But whether you can make such larger entities available and healthy in long term is not nearly so clear.

California’ current movement is Democratic, but there is also a Jefferon, Conservative movement that wants split up California and combine some elements with Oregon.

It may seem as if these movements won’t get very far, but their constant reoccur one way or another indicates the serious and growing intention of California to take action,

And California is by no means alone. There are numerous “micronations” that have been carved out of larger countries benefiting from certain economic elements that differ from the parent country.

The next phase may be true micronations at sea, who knows. Many are already established. Then coupling of micronations together with blockchain interfaces for smart contracts, currency exchanges, etc. would be an interesting combination to say the least.