| April 29, 2019 | View in browser |
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Today's top reads
- Tether won't crumble
- IEOs under water
- Satoshi is mining
- A car that earns crypto
This week's poll: Tether FUD?
Click to answer:
Yes, it's important
Yawn...it's not that relevant
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Market update
| COIN | PRICE | 7-DAY |
| BTC | $5,147.98 | - 3.50% |
| XRP | $0.462 | - 10.70% |
| ETH | $151.18 | - 11.78% |
| XLM | $0.0948 | - 16.05% |
| EOS | $6.51 | - 13.12% |
1. Tether won't crumble
USDT is a different kind of beast. Despite facing allegations of fraud ever since the Paradise Papers leak in 2017, stablecoin Tether (USDT) has continued to chug along - straying from its dollar peg from time to time.
One of those times, though, was this week. On Thursday, the New York Attorney General's (NYAG) office released a statement that accuses crypto exchange Bitfinex of losing $850 million of customer funds and covering up the loss with the help of its sister company...the one and only Tether Limited.
But that doesn't mean squat. That's because, the sad reality is, no matter what the NYAG finds during the investigation, traders will determine the price of USDT. In the words of Felix Salmon at Axios, "all currencies are ultimately based on faith" and for some reason, the crypto community still has faith that USDT is worth $1.
So what's going to happen? Here's a few scenarios that we could see playing out:
- Guilty as charged. The NYAG finds Tether Limited and Bitfinex guilty of defrauding investors and markets lose faith in the stablecoin - sending its dollar peg spiralling and opening a new wave of angry lawsuits.
- Steamrolled by the competition. While the lawsuit might not halt Tether operations, other USD-backed stablecoins such as USDC, TUSD, PAX, and GUSD could actually gain control of stablecoin market share. This, however, has yet to play out since Tether's stablecoin dominance grew over 7% since the start of the year.
- Business as usual. And of course, Tether and Bitfinex could continue operations as usual, chugging along, and continuing to be the backbone of the stablecoin market for crypto.
The bottom line: Tether FUD isn't anything new, but will the stablecoin's consistent resiliency be able to keep it afloat again? Or is its reign over?
2. IEOs under water
Let's walk down memory lane. If you remember, the 2017 crypto bubble was riddled with ICOs (initial coin offerings) that lied to investors, failed to build working products, or fell to near-zero trading activity which only led to numerous exchange delistings. There had to be a better way to protect investors.
And there is...It's called an IEO. Basically, instead of buying tokens from an unknown website and trusting that an investment would actually be returned (not stolen), investors could participate in credible IEOs (initial exchange offerings) from projects that exchanges vetted first.
But it's not all sunshine and rainbows. Here's what our IEO research is telling us:
- It's a gamble. Out of the 20 IEOs that are actively trading, only five had positive returns.
- BTT is the outlier. Excluding BitTorrent's (BTT) whopping 438% return since its record 15-minute $7.2 million IEO, the average IEO only leaves investors with $0.79 for every $1 invested.
In the end, a question remains: Did IEOs actually make the ICO landscape more safe for investors? Or is it just another creative way for exchanges to profit?
3. Satoshi is mining
A mystery miner is here. On Sunday morning eastern time, Reddit user money78 discovered that an unknown miner going by the name "Satoshi Nakamoto" is controlling over 35% of the Bitcoin Cash (BCH) hash rate.
So who's really behind it? Tough to tell. But many people in the community are speculating that Craig Wright and his teams at nChain and CoinGeek are the culprits.
Craig's motive? Well, there are two theories circulating that might hold some weight:
-
Market manipulation. Reddit user unitedstatian explained:
"I'm willing to bet it's hashpower ran by Coingeek et ell which is trying to pull the same trick as before: first amass BCH by mining it over time, then trying to "flip" it with the state-friendly BSV by exchanging all the mined coins at once for BSV thus triggering a crash in the BCH price while attracting money from speculators into BSV."
- A planned attack via empty blocks. Mining empty blocks is an interesting way to attack BCH, as it hurts the narrative that it is an alternative to cash. If transactions aren't confirming on the network – BCH becomes a not-so-useful cash system.
Interesting times in the world of Bitcoin forks. We'll keep our eyes and ears open to this as things progress. In the meantime, it appears "Satoshi Nakamoto" is yielding some heavy hashpower and directing it at BCH.
4. A car that earns crypto
Jaguar Land Rover wants a slice of crypto. Early last week, the British car manufacturer announced that it will start testing software that allows drivers to earn the IOTA cryptocurrency for sharing data.
That data includes, but isn't limited to:
- Traffic congestion
- Potholes
- Navigation providers
- Local authorities
In addition, drivers could also collect IOTA if they participate in a ride-sharing program.
Okay you've got IOTA, now what? While drivers can spend wherever they wish, Jaguar Land Rover's statement mentioned that the earned IOTA could be used to pay for tolls, parking and charging for electric cars.
And to top it off...IOTA is aiming to integrate this new smart wallet technology into "all new vehicles" so there won't be a specific "Jaguar coin or BMW coin, but one universal token for this machine economy."
5. You should also know
6. Convenience over keys
From last week's poll, 62.3% of respondents answered that it's "cheaper and easier" to store their cryptocurrencies on exchanges rather than on their own.
We've got a problem with this. While it may be "convenient" to store cryptocurrency there, we certainly don't recommend it. Remember Mt. Gox? Or how about something more recent like QuadrigaCX?
Either way, you get the point: Not your keys, not you crypto.
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