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We Asked 66 Startups Just How Bad This Crypto Winter Has Been



“Crypto winter” has come and brought its toll on a number of prominent payrolls.

However, a survey by way of CoinDesk of 66 startups has discovered that almost all say they’ve controlled to keep away from severe setbacks or revisions to their product roadmap. Of the 45 who answered to the inquiry, 40 gave a usually certain diagnosis in regards to the coming 12 months, regardless that many got here with caveats about additional fundraising or hiring.

No one loves this marketplace, the corporations say, however it’s no longer making founders abandon their tasks simply but.

Brayton Williams, a co-founder of Boost VC, instructed CoinDesk:

“The investment money is returning back to the norm of difficult to obtain. I think the ‘winter’ is greatly exaggerated. We are just back to normal behaviors.”

Boost dedicated to making an investment in 100 crypto corporations again in 2014 and effectively reached that goal remaining 12 months.

Treasury leadership

There had been quite a few tactics to head “long” on crypto but keep away from publicity. One dominant technique: don’t do an preliminary coin providing (ICO). In quick, the existing knowledge is corporations must construct for crypto with out exposing their payroll and hire cash to its volatility. One merit to going the course of conventional fundraising: the cash is available in fiat.

Doug Petkanics of Livepeer, a decentralized video transcoding challenge, instructed CoinDesk that Livepeer has saved maximum of its capital in fiat, and due to this fact hasn’t felt headwinds.

Petkanics wrote in an e mail:

“The market drop affects the general ecosystem and sentiment around the space that we’re working within. Projects don’t get a free ride in terms of blockchain tech being seen as cool or disruptive amongst the general public.”

But most of the top of the range groups that raised finances by the use of ICO also are managing to live to tell the tale. Ricky Li, founding father of Altonomy, a buying and selling company and advisory, instructed his ICO purchasers to liquidate sufficient ETH so they might have a minimum of two years of runway.

“A lot of people listened,” he instructed us. Those that did don’t care in regards to the present marketplace. Those that didn’t, neatly, no longer such a lot.

Li additionally urged crypto believers to transport a big portion of ETH they raised into crypto indices, in order that they aren’t uncovered to at least one asset. Some additionally purchased choices on their holdings as a way to ensure the associated fee held in a undeniable vary.

“We were expecting an extended downturn as we were around for the last bear market,” Matt Luongo, the challenge lead of Keep, instructed CoinDesk. Keep, a challenge from Fold for storing personal knowledge on blockchains, determined it might wish to transcend the protocol and construct its first app as neatly, as a way to spur adoption.

Trevor Koverko of safety token company Polymath instructed CoinDesk that his corporate went in with a excellent treasury-management plan and he’s been proud of the consequences.

Said Koverko:

“Our technical roadmap has been accelerated. We view the bear market as a blessing for quiet, heads-down, development-focused projects.”

There’s differently to ensure an organization’s core concepts continue to exist, after all.

One investor, Meltem Demirors, leader technique officer at CoinShares, hopes marketplace forces will rally to avoid wasting the most productive portions of faltering corporations. She wrote by the use of e mail: “I do hope more companies decide to merge and join forces, especially if competing for the same wallet share, to build more cohesive user experiences and increase the chances of success.”

Additional investment must be there for firms that turn out their value, Demirors argued, including:

“In this environment, most companies with a reasonable business model, some proven traction, and a reasonable valuation should be able to find support in various forms.”

Employers’ marketplace

There’s a powerful “buy” score on BUIDL at this time.

Koverko and a number of other founders instructed us the undergo marketplace has quite progressed employers’ bargaining place in relation to hiring blockchain engineering ability. As some tasks wind down, there’s a broader ability pool to be had.

“We view this as a great time to pick up talent and build great technology, much like Google and Amazon got their head start during a bear market,” Josh Fraser of Origin Protocol wrote in an e mail.

It is value noting, regardless that, that no longer everybody stated hiring is more straightforward. Robert Leshner, CEO of the venture-backed Compound Finance has had a distinct revel in. “Candidates are by default skeptical of blockchain right now,” he stated.

Fortunately, Leshner has sufficient runway to make it for a number of years, he instructed CoinDesk. This is essential as a result of he expects his core early buyer base to be crypto finances, and lots of of the ones are closing down.

For instance, CoinDesk has showed {that a} token fund-of-funds, Apex Token Fund, that had introduced its goal to boost $100 million in November in the long run by no means hit its minimal investment goal. The failure to boost took down the automobile created for the fund.

Trimming the fats

Several corporations nonetheless status inform CoinDesk the time has come to reduce on extra outward-looking bills. Several companies instructed us about reducing again on occasions and public-relations bills.

“We feel that it is a waste of time and money to travel all over the place while the audiences are small and dwindling,” Marco Peereboom of Company 0, which leads building at the Decred Protocol, instructed CoinDesk in an e mail.

Other corporations instructed us that they’ve been reducing again on contractors, PR companies specifically. Compound Finance’s Leshner is seeing a equivalent decreased pastime. “I get invited to a lot less conferences,” he wrote.

Beyond advertising and marketing, corporations are getting extra internally centered, as neatly. Nebulas used to be one corporate nonetheless keeping on that has had significant cutbacks. A spokesperson instructed CoinDesk that it jettisoned some inner groups that weren’t noticed as central to the project. Erik Voorhees of ShapeShift sounded equivalent subject matters when he introduced his company’s contraction in early January.

Surprising survivors

Some corporations have long gone lengthy on ETH and controlled to stay going.

We lately wrote about Bee Token, a would-be competitor to Airbnb that’s now using income thru conventional charges, moderately than the unique plan: fostering expansion in its token’s price.

Some corporations used the ability of good contracts to offer their ICO backers extra energy, however that value them in flexibility all over a undergo marketplace. For instance, The Abyss, a crypto startup within the video-game trade, gave its backers the power to vote on how a lot ETH to unencumber to the staff each month, a type first-conceived by way of Vitalik Buterin, who known as it a decentralized autonomous ICO, or DAICO.

The upshot of this: they couldn’t promote the locked ETH for fiat in the event that they sought after to, and – as the cost of ETH plummeted – each new emission of finances used to be value lower than the only earlier than it.

“Despite that, we managed to provide all the key deliverables in accordance with the project’s roadmap and declared timeline. All points were executed,” founder Konstantin Boyko-Romanovsky instructed CoinDesk in an e mail. He expects the winnowing of token corporations to in the long run get advantages the blockchain trade.

The Abyss these days employs 25 other folks.

Netflix challenger Flixxo has maximum of its finances in ETH, so the downturn hasn’t been simple. Still, its founder, Adrián Garelik, instructed CoinDesk that Flixxo believes there’s a unprecedented opening within the streaming trade for a token-based industry type.

Garelik stated:

“We feel there is a time-sensitive opportunity and we’d rather spend all our resources and take the opportunity than waiting for a better moment for crypto. It’s a bet, but we have a lot of confidence in our vision.”

Without further investment, the corporate has 365 days to appreciate that imaginative and prescient, Garelik stated.

Mild wintry weather forecast

Peereboom used to be some of the resources who when compared nowadays to the remaining primary bitcoin contraction.

“It doesn’t quite feel like 2014 because ICOs raised so much money, but the space is not done consolidating,” he stated.

New token gross sales aren’t over, both. TokenSoft, which is helping corporations habits compliant choices, expects to do a forged industry this 12 months. “We have several raises still ongoing and expect our clients collectively to raise more than $1 billion in 2019,” Stacy Orff-Whitfield, the corporate’s head of selling, instructed CoinDesk.

To that time, crowdfunding platform Republic introduced its goal to do a token sale in June, however that has remained on grasp and would possibly sit down for some months extra, CEO Kendrick Nguyen showed.

Once a token has been generated, the marketplace raises every other query.

Harmony COO Nicolas Burtey stated his corporate confronted the catch 22 situation of when to start out pushing for token listings. “On one facet, we truly wish to have our token to construct our group,” he instructed CoinDesk. “On the other side, we presume that if we list the sell pressure might be high and will have a negative effect on the project.”

Random Crypto, a mining corporate headed by way of Josh Metnick, is increasing briefly. “Best time to mine is when difficulty stagnates and prices on gear are reasonable,” he wrote to CoinDesk. Coinmine, the corporate aiming to convey again house mining, gave CoinDesk a equivalent review.

Beyond mining, Williams, the co-founder of Boost VC, stays assured about all of the trade. He wrote:

“This ‘winter’ is 100X better than the 2014/15. People don’t think crypto is going to die. They are all just trying to time for when it comes back. In 2014/15, the conversation was all about if crypto survives at all.”

Snowflake symbol by the use of Shutterstock

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Crypto exchange BTCNEXT seeking Japan license



BTCNEXT, an Asian based cryptocurrency exchange, earlier this month announced it received notification from the Japan Financial Services Agency (FSA) that it must suspend services for Japanese residents.

As part of Noah Ark Technologies Ltd., BTCNEXT operates with a Virtual Currency Exchange license issued by the Cagayan special economic zone and Freeport Philippines.

The BTCNEXT team says that its legal department is currently working with the FSA in regards to getting a Japanese license and will take necessary steps to ensure full compliance with all FSA requests.

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NEO Price Prediction: Long-term (NEO) Value Forecast – June 2



  • The long-term outlook is in a bullish trend.
  • The 1.618 in the fibs at $19.17 is the bulls target in the long-term.

NEO/USD Long-term Trend: Bullish

Supply zone: $20.00, $30.00, $40.00
Demand zone: $2.00, $1.00, $0.50

NEO continues in the uptrend in its long-term outlook. The strong pressure on the cryptocurrency by the bulls’ comeback at the 61.8 on 18th May has kept price up with new high each week. $12.59 and $15.04 in the supply area were the highs on 20th and 30th May respectively.

The new week is started on a bullish note with today’s opening candle at $13.72 higher than last week opening price at $11.45, an indication that the bulls are more in the market.

Price is above the two EMAs that are fanned apart which suggest strength in the trend and in this case the uptrend.

The journey to 1.618 of the fib extension with price at $19.17 in the supply area is the bulls target in the long-term as the bullish momentum increase and more bullish candle open and closed above the two EMAS.

The views and opinion as expressed here do not reflect that of and do not constitute financial advice. Always do your own research.

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Why Bitcoin’s ‘Culture War’ Matters



Michael J. Casey is the chairman of CoinDesk’s advisory board and a senior advisor for blockchain research at MIT’s Digital Currency Initiative.

Let’s talk about bitcoin, toxicity and inclusiveness.

(Boy, my Twitter feed is going to have fun over the next few days.)

To start with, let me take a position: I stand with those people, especially women, who’ve lately been calling out maltreatment from members of the bitcoin community and citing rude and abusive behavior as proof of that community’s lack of inclusiveness. These are people who believe in cryptocurrency technology’s potential but feel discouraged to believe that they belong to the community’s dominant white-male subculture. If this technology is to fulfill its global potential, the community associated with it must confront this problem.

But the real point of this column is not to just defend these critics. It’s to debunk one of the more common positions adopted by those who take issue with their complaints, particularly on Twitter. In doing so, I hope to emphasize just how important the concepts of “community” and “culture” are to the healthy development of crypto technology and the ecosystem growing around it.

Hammer culture?

The line that’s most often thrown back at those calling out incivility is that bitcoin is nothing more than a technology, a tool, and that it’s meaningless to attach to it value judgments relating to human behavior. Bitcoin is amoral, apolitical and a-cultural, the argument goes, and like any technology it is used by good and bad people alike.

These pundits, warning of a political correctness-based threat to free speech, will then advise the injured party to take issue directly with the bad actors but refrain from agitating for community-wide change.

A perfect example of the genre came from outspoken lawyer Preston Byrne.

Clever, yes. But it’s extremely unhelpful, because the examples given do not share equivalent terms of reference.

Byrne’s “hammer” refers solely to the steel implement that tradesmen use. By contrast, people complaining about “bitcoin” are clearly using the word in a much wider context than in merely a reference to the code, to the ones and zeros that comprise the bitcoin protocol. They are inherently talking about the wider ecosystem and community gathered around the idea of bitcoin.

So, let’s equalize the terms, shall we? We can turn each of these nouns into a modifier of the word “community.”

While it might sound silly to talk about a “hammer community,” there may well be groups of hammer-obsessed souls who debate questions of design and ease of use at meetups and in chat rooms. If so, I’m going to guess that that community would probably also be predominantly male.

But the real issue is that such a hammer community is going to be far less important to the future design and evolution of hammer technology than bitcoin’s community is to its. I’m no expert, but I don’t see a great deal of change in hammer technology having occurred over the centuries and I’m not sure people expect much in the future. As such, we don’t see much jockeying among users to ensure that proposals for hammer upgrades are implemented and standardized to their preferred design.

By contrast, the open-source technology behind bitcoin is in a constant state of evolution. It is, by definition, under development, which is why we talk about the engineers who work on it as “developers,” not “custodians.” As such, there is a constant battle of interests over who gets to modify the code. Exhibit A: the block-size debate.

Counter-arguing that those who don’t like the process can just fork the code, as the large-blockers did, and set up their own new community, doesn’t cut it for me. Bitcoin is the brand that matters. Any newcomer will struggle to achieve the same network effects. Secession just isn’t viable for anyone who likes its current design but doesn’t like how its future is being defined.

Also, is there a “hammer ecosystem?” Maybe. But beyond producers of nails, and perhaps steel and rubber or wood suppliers, you can hardly call it a complex ecosystem.

Bitcoin, by contrast, which purports to reinvent the global system of money, has attracted an inherently vast array of different technology providers, all of whom have competing interests in how it is designed, managed and marketed to the world. I’m not just talking about businesses applications built on top of it, but also the developers of related encryption, payment channel, smart contract and other vitally important technologies, all of which are themselves in a constant state of flux.

(I’m guessing that the exhibition halls at hammer conventions don’t have quite the same spread of offerings as cryptocurrency events such as Consensus.)

Saying that bitcoin is nothing but a tool, is like saying that music is nothing but a system for ordering different audible tones.

Money = community

When Paul Vigna and I wrote The Age of Cryptocurrency, we spent a lot of time chronicling the emergence of the community that had formed around bitcoin, which we saw as fundamental to its success. It struck us that the notion of a bitcoin community was so prominent — the “c” word was always being bandied about — because bitcoin embodied a profound and sweeping social idea. It offered nothing less than a reinvention of money, a revolution in the entire system for coordinating human value exchange.

Money only works to the extent that there is widespread belief in it, that people buy into its core myth. Money, Felix Martin says, is a social technology, by which he means that its functionality and usability depend far less on the physical qualities of the token that represents it than on the collective agreement among large communities of people that their token captures, represents and communicates transferable value. This is true whether we’re talking about gold, dollar bills, entries in a bank account, or cryptocurrency.

By extension, then, for any form of money to succeed, it must sustain a vibrant, growing community.

Communities = culture

The thing about communities is that they inevitably develop cultures. In self-defining their boundaries of belonging, they develop shared ways of seeing and language — akin to a kind of social protocol – that regulate (in a very unofficial, and quite subconscious way) their members’ behavior.

As they evolve, cultures can become more or less open, more or less inclusive, more or less abrasive in their treatment of outsiders. And inevitably, these cultural features will either encourage or impede the growth of the community.

All this should hardly be a revelation. Anthropology, the study of culture, is a globally widespread and influential field (one that is now appropriately turning its attention to cryptocurrency communities.)

Studies of U.S. culture, from Alexis de Tocqueville down, have rightly pointed to the inclusiveness of the founding fathers’ ideas as a key driver of its economic expansion. In fact, American culture is arguably its most important ingredient for success, a social manifestation of Joseph Nye’s notion of the United States’ “soft power.”

So, yes, bitcoin culture really, really matters. If the compelling ideas behind permissionless, peer-to-peer exchange and censorship-resistant money that attract people of all stripes to it are to retain those people’s interest and grow in influence, the bitcoin community needs to evolve a more inclusive culture.

The only way to do that is to spur the kind of open debates that have always driven the progress of human culture — those which shifted norms and mores to the point that it became unacceptable to own slaves, to spit in public, or to jump a queue.

So, listen up, bitcoin. It’s time to confront your toxicity.

Hazard drums image via Shutterstock

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Holiday Spending up 14.6% as E-Commerce Beats Brick-and-Mortar



E-commerce sales hit record highs this year as Americans continue to move their holiday shopping online.

According to Mastercard’s SpendingPulse report, online retail grew 18.8% over last year’s holiday season. That’s enough to make online sales a record 14.6% of holiday shoppers total spend, the report says.

Online consumers this year spent 17% more on apparel, 8.8% more on jewelry, 10.7% more on electronics, and 6.9% more at department stores. 

Overall, holiday spending jumped 3.4% compared to 2018.

The strong numbers came in spite of 2019’s unusually short holiday season, commonly defined as the period between Thanksgiving and Christmas. Shoppers had six days fewer than they had in 2018.

Steve Sadove, an advisor for MasterCard, said in a press release that retailers adapted to the shortened season. 

“Due to a later than usual Thanksgiving holiday, we saw retailers offering omnichannel sales earlier in the season, meeting consumers’ demand for the best deals across all channels and devices.”

Interestingly – or ominously – retailers who accepted crypto or managed crypto payments were slow to respond when we asked them how their holiday shopping season went. eGifter, a gift card trading service, noted that it had not yet “crunched the numbers” on holiday sales but that “We saw growth in overall crypto sales,” said Bill Egan, the site’s VP of Marketing.

“We saw more gifting with crypto in 2019, compared to buy-for-self use cases in prior years,” he said.

Payment processor BitPay found the holidays quite inspiring as well.

“We saw twice our daily averages of processed volume leading up to the holiday,” said BitPay’s CMO, Bill Zielke.

It will be interesting to see what kind of statistics surface over the next few seasons as e-commerce becomes king and crypto payments come to the fore.

Disclosure Read More

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Crypto Custodians Grapple With Germany’s New Rules



Crypto firms in Germany are getting ready to exist under a new regime. 

Under a law going into effect Jan. 1 requiring digital asset custodians to be licensed, each company that currently custodies crypto and targets German clients must announce to Germany’s Financial Supervisory Authority (BaFin) its intention to get a license before April 1 and submit an application before Nov. 1.  

A clause allows current crypto custodians to keep serving German customers without being penalized if they declare their intent to apply, but those same companies are waiting on BaFin to release final regulations around the law.

“As long as the legislation is not in place, BaFin is not going to think about how to cope or how to deal with the legislation,” said BaFin press officer Norbert Pieper. The regulator declined further comment and Germany’s Federal Ministry of Finance did not respond to request for comment by press time.

Pieper added: “There is no date foreseeable [yet] by which we’ll be able to communicate the results of our assessment. We will certainly communicate that on our website.” 

While the final regulations haven’t been set yet, the new license requirement may not produce the same kind of exodus of crypto firms that New York saw after the BitLicense requirement, said Miha Grčar, head of business development at Bitstamp.

London-based Bitstamp, one of Europe’s largest crypto exchanges, plans to continue operating in Germany but declined to say whether it would apply for a license, said Grčar. Crypto firms could also use a white-labeled custody service to operate in Germany. 

Because the law is an “updated version of the existing banking regulation,” banks will likely have the most to gain from it, Grčar added. Companies that get the license will be German financial institutions, but not classified as banks.

The law also means that German regulators now see crypto as a “legitimate” industry, he said. 

Ulli Spankowski, chief digital officer and managing director of the crypto custody subsidiary of German stock exchange Boerse Stuttgart, called Blocknox, sees the license as a step forward for “the professionalism of the industry.” The subsidiary has already advised BaFin that it plans to apply.  

“There are other countries that won’t go for a full-fledged license,” he said. “If you want to get traditional, established players from the banking side, you need to give them this environment to feel safe.” 

DLC group is taking advantage of the new regulatory framework by offering consulting services for firms interested in applying, and its own white-labeled crypto custody service. 

Sven Hildebrandt, head of Distributed Ledger Consulting Group, is concerned some exchanges won’t understand the nuances of the new law.

“The law is only in German and no English translation of the law is out there,” he said. “What’s going to happen to exchanges? [Operating without a licence] is actually a felony and not a misdemeanor so that’s jail time.”

Hildebrandt predicts the costs of licensing will be similar to other German financial services licenses where firms will need two managing directors, an established German entity and 125,000 euros of starting capital. He also estimates installation will cost 250,000 to 350,000 euros and recurring yearly costs will be 350,000 euros. 

Switzerland-based Crypto Storage AG, a subsidiary of Crypto Finance AG, is opening a branch in Germany to offer crypto custody to banks and then financial technology startups. 

“Large banking houses will do custody business in the future,” Stijn Vander Straeten, CEO of Crypto Storage AG, said. “They are moving slowly, though. We’ll build it up now for a premium.” 

Berlin-based solarisBank this month opened a subsidiary called solaris Digital Assets to offer crypto custody as a service. So far, the bank has a handful of customers testing the service with more than 40 companies in the pipeline, said Alexis Hamel, managing director of solaris Digital Assets.

In addition to waiting for details from BaFin, crypto firms are also waiting to see if the law can be passported to other European Union states. 

“Germany is definitely at the forefront with the clearer regulation,” Hamel said. “We still need to see how other European countries level up.”

Disclosure Read More

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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