Congratulations, you’ve finished another one. A full week, that is, of convincing people of the woes of centralized databases, with a will as staunch and unwavering as an immutable ledger.
At Decrypt, we’ve done our bit, too, and have neatly summarized our offerings to the blockchain with the latest installment of This Week in Crypto. And what a week it’s been: blockchain visited the elite conference of Davos, Tether Gold launched, and Hacker Noon goes on the blockchain...and that’s just the tip of the iceberg. Hang tight, and read on.
Davos: Blockchain edition
The world’s presidents and prime ministers; CEOs, CTOs and COOs (as well as a few plucky CMOs!); activists and journalists, all head down each year to the World Economic Forum in the small town of Davos in Switzerland. Representatives from blockchain companies also attend, either at the WEF or in one of the smaller tech conferences set up nearby.
So what came out of this year’s Davos?
A handbook for state-rolled crypto
Central banks, listen up. If you’re thinking about creating and issuing a digital currency, here’s what to do: Read the CBDC Policy-Maker Toolkit, a guide announced by the WEF at Davos that’ll give you all the know-how you need to build your own cryptocurrency. The WEF created the toolkit in tandem with around 40 academics and organizations, including over a dozen central banks.
It’s composed of several worksheets and information guides, and the WEF claims it’s the first time something like this has been written before. The Bank of Thailand and the Central Bank of Bahrain are both using it. Will other central banks suffer from FOMO?
Christopher Giancarlo, the former chairman of the Commodity Futures Exchange Commission, sure hopes so. He launched the Digital Dollar Project last week, a non-profit aimed at convincing the Fed to release its own cryptographic version of the US dollar. He gave some more details at Davos.
Such a dollar, opined Giancarlo, would “enjoy the full faith and credit of the US government as central bank money,” he said. It would be distributed through banks and “trusted” payment processors—following the precedent (about to be) set by China’s digital yuan—and would support retail, wholesale, and cross-border transactions.
Giancarlo thinks that central banks have already been stirred into action by private initiatives like the Facebook-run Libra Association. These companies “Help advance innovation. They are also causing us to take a new and more clear-eyed view of money—especially the efficacy of traditional analogue fiat money in the new digital economy,” he said.
Vodafone hangs up on Libra
Speaking of Libra, the stablecoin network run by the Facebook-led Libra Association—telecommunications giant Vodafone just quit. Vodafone said that it’s because of regulatory uncertainty. This marks the eighth firm to quit Libra; others include PayPal, Visa, Stripe, and eBay.
“We will continue to evaluate and our ultimate decision will be determined by a number of factors, including the Association’s ability to fully satisfy all requisite regulatory expectations,” a Vodafone spokesperson told The Verge.
And as told to Coindesk, "We have said from the outset that Vodafone’s desire is to make a genuine contribution to extending financial inclusion,” adding, “[we] do not rule out the possibility of future cooperation.”
The news is perhaps unsurprising. EU's Finance Commissioner Valdis Dombrovskis said he would regulate Libra strongly. A French finance minister said he’d block development in Libra, and the President of Switzerland—the ruler of the country that the Libra Association is headquartered in—has called it a failure.
Tether launches Tether Gold
The stablecoin company Tether this week launched Tether Gold, a stablecoin that’s pegged to physical gold. It’s available on the Ethereum and TRON blockchains, and the minimum buy-in is $75,000.
Owning one XAU₮ is the equivalent to holding one troy fine ounce of physical gold. In fact, if you really want, you can go and look at it in a Swiss vault (Tether has “direct control over the physical gold storage”, it said in a statement).
In addition, Tether, along with its sister company, Bitfinex, is being investigated by the New York Attorney General, which claims that Bitfinex used Tether to loan itself funds in order to cover up an $850 million dollar gap in its finances.
The companies “dissipated the cash backing tethers: first by going from actual cash in hand to $625 million in an inaccessible Crypto Capital account; and then by replacing even that questionable source of backing with nothing more than a $625 million IOU from Bitfinex.”
“Tether repeatedly failed to keep their word regarding something as intrinsically simple as doing regular attestations for basic accounting. Now you’re assuming that gold bars locked away in a vault are there because Tether says so. Hard to take this offering seriously,” the pseudonymous Tether critic CasPiancey told Decrypt.
Hacker Noon goes on the blockchain
David Smooke, the guy who runs the popular tech site Hacker Noon, spoke to Decrypt from his Colorado residence and described a new way to cut down on hosting costs: Get the readers to do the work! As well as being invited to write for free—in return, Hacker Noon gives writers the time of its editors, as well as its shiny website and huge readership—readers can volunteer to host small bits of text within their browser, which in turn will be hosted on the blockchain.
To be specific: Readers can opt to host new annotations and in-line comments, which are new features he’s added to the site. And if readers don’t want to do the work, Salesforce will do the remainder of the work.
“There's just too many central entities right now with too much power. A lot of that power gets consolidated into hosting,” he told Decrypt.
“We served millions and millions of popup ads for Medium, and every time I could just see in our Google analytics how they were changing our bounce rate,” he said. “We just removed that. It's a better experience for everyone,” he said.
That’s a wrap!