Institutional Investors, EOS Manipulation And Private Blockchains

Volume 35

Blockchains have the potential to store over 10% of our global GDP, ~ $8 Trillion in value. At Proteum, we are dedicated to understanding tomorrow's "Internet of Value". This newsletter is our weekly roundup of some of the significant blockchain news this week. News we think is worth sharing for you to map your blockchain strategies, be aware of regulatory announcements and get an overview of the rapidly changing blockchain landscape.

Quote of the Week

"This whole blockchain deal has the potential it does only because it is applicable across national borders [and] income groups. The permutations and possibilities are staggeringly great.”

- Bill Clinton, former US President

The Main Story - Institutional Investors Are Buying Crypto

Institutional investors are becoming more involved in the $220 billion cryptocurrency market than many observers may realize. Buyers such as hedge funds have replaced high-net-worth individuals as the biggest buyers of large swaths of digital coins worth more than $100,000 through private transactions

“Wait until institutional investors embrace crypto” has long been the rallying cry for digital-currency enthusiasts as prices surged and collapsed in the past year amid shifting expectations for regulatory acceptance of the asset class. Now, many of the largest miners have also set up their own liquidity desks and operations.

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EOS | "Mutual Voting" Between Nodes

Controversy is never far away from EOS. Multiple EOS block producers (miners) that keep the network running were caught having coordinated voting and one of the suspected platforms turned out to be Huobi, a large crypto exchange. Block.one, the developer of the EOS protocol, acknowledged the manipulation and said that the company is “aware of some unverified claims regarding irregular block producer voting, and the subsequent denials of those claims.”

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Tokenization | A Fix for Asset Privatization

Privatizing state-owned assets or state-run services and functions has been an easy option for governments to raise money to contribute fixing their budgets. However, privatization often replaces a state monopoly with a privileged rent-extracting private monopoly, which is shielded from free market competition. However, blockchain and token-economics can be a viable model to reverse wrong and dysfunctional privatizations in strategic public sectors.  

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Payments | SBI and Ripple in Japan

A joint venture between SBI Holdings and Ripple has moved a step closer to launching its blockchain-based payments app for consumers. The move clears the regulatory path for SBI Ripple Asia to roll out its MoneyTap payments app – one aimed to facilitate peer-to-peer money transfer for retail users over a DLT network.

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Startups | Goldman Sachs Leads Veem's $25M Round

Blockchain payments startup Veem has closed a $25 million funding round led by Goldman Sachs, it announced Wednesday. The firm also saw participation in the new strategic round from investors including GV (formerly Google Ventures), Silicon Valley Bank, Kleiner Perkins and Pantera Capital. Veem offers both traditional SWIFT-based transfers and blockchain networks aimed to provide speed, security and low fees by selecting the most advantageous route for a particular transfer. 

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Cryptocurrency | Backed by a Basket of Metals

Swiss asset manager and commodities trader Tiberius Group AG is stepping into the $215 billion digital coin market by offering a new token backed by seven metals. The company plans to make a market in the Tiberius Coin so that its value holds close to that of a price of a basket of copper, aluminum, nickel, cobalt, tin, gold and platinum.

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Enterprise | Hyperledger and EEA Formalize Partnership

The Enterprise Ethereum Alliance (EEA) and Hyperledger announced they would join each other’s organizations as “Associate Members”. “This will enable more active and mutual cross-community collaboration through event participation, connecting with other members, and finding ways for our respective efforts to be complementary and compatible.”

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Baidu's Blockchain | New Kid on the Block

Baidu, the company behind the most important search engine in China, announced to the public the release of the final version of a whitepaper with all the details behind a project of services based on the use of blockchain technologies. Baidu’s vision is consistent with that of the Chinese government, which is sure that the use of blockchain technologies can be instrumental in the development of many industries, especially those that have some kind of relationship with technological services.

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The Final Word | Private Blockchains - Are Business Processes Disconnected from Technology? 

Since 2015, while there has been a myriad of permissioned blockchain announcements from enterprises, questions have been raised as to the long-term viability of these projects. A common theme in the small number of projects that have gone live is a disconnect between an understanding of traditional industry and the technical understanding required has made the value difficult to define.

It may be easiest to think of a blockchain as a distributed database with the ability to administer it taken away. The key question to ask then, is what are the reasons an enterprise would prefer to sacrifice many measurable metrics – transactions per second, disk space, speed and efficiency of computation, cost of maintenance – and opt instead for deploying a technology that is harder to administer?

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About Proteum
Proteum is global blockchain advisory firm that works with public, private and start-up companies to help them transition into the world of blockchains and decentralized applications. We help companies strategically build their capabilities so that they can own and control their future. Let's put blockchains to work for your business.
 
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