Will regulators make an example of Ethereum?

Leo Zhang

By Leo Zhang

News & Commentary

It is no secret that SEC Chairman Jay Clayton thinks every ICO should be regulated as a security. The advent of ERC-20 tokens last year opened up a path for venture capitalists to rotate out the illiquid part of their portfolios using red-hot cryptocurrencies. Some Silicon Valley VCs have opportunistically reinvented themselves as ICO factories. As regulators catch up, one critical question is whether Ethereum itself, the mother of all ICOs, should also be deemed a security. (See story below.)

Venture capitalists seek 'Safe Harbor' for virtual currencies
(NYT, by Nathaniel Popper)

"Regulators have indicated in private meetings that they are considering whether virtual currencies — including Ether, the second most widely used digital token — should be categorized as a security, according to three people who have been in the meetings. That designation could cause a significant drop in the value of Ether."

ICO projects, in addition to their dubious legal nature, make very little economic sense.

Commentary on PoW mining vs. ICOs

Relevant and profound observation on platforms:

Petronomicon
(Jill Carlson)

"It’s also about the problem with platforms. If you create a tool or platform for innovation, you probably have a vision for how it gets used… but ultimately you don’t get to choose. Maybe you built a platform to make the world more open and connected, but instead transformed how people’s data gets used."

Palantir knows everything about you
(By Peter Waldman, Lizette Chapman, and Jordan Robertson)

"As shown in the privacy breaches at Facebook and Cambridge Analytica—with Thiel and Palantir linked to both sides of the equation—the pressure to monetize data at tech companies is ceaseless."

Tools like Palantir illustrate how easily big data can be misused
(TechRepublic, by Connor Forrest)

"Peter Thiel's data consultancy Palantir was used at firms like J.P. Morgan to track every aspect on an employee's life, in an effort to protect against insider threats."

Why Bitcoin works
(Jimmy Song)

"Bitcoin’s main benefit to society can be understood as bringing back sound money. Sound money allows for capital accumulation which allows for investment, leading to better goods and services for less effort. This, in turn, benefits all of civilization. We’re not there yet, but this is the main value proposition."

Much of the debate in the Bitcoin community focuses on whether it is a Storage-of-Value (SoV) or Medium-of-Exchange (MoE). This debate focuses on whether the most important aspect of cryptocurrency is to optimize on transaction-per-second. The thread below offers an excellent takedown on why storage-of-value needs to happen before anything else.

Mt.Gox and the surprising redemption of Bitcoin's biggest villain
(Fortune, by Jen Wieczner)

"Over the next four years, Nilsson estimates he spent a year-and-a-half’s worth of full-time hours pursuing the Mt. Gox hackers. He’s never been paid for his work; his 12.7 Bitcoin claim at Mt. Gox makes him one of its smallest creditors."

Bitfury: private blockchains are intermediate step for governments
(Bitcoin Magazine, by Kyle Torpey)

"So what about the debate over private versus public blockchains? During the recent interview, Vavilov analogized private blockchains to intranets, which were popular among governments before the internet became more widely trusted."

Technical & Updates

Don't count your FUD before the Lightning strikes: 15 claims against Lightning, answered

Why ASICs are great
(Neural Capital)

"Maintaining hash rate is critical to the soundness of a cryptocurrency, and we should welcome biases that enforce this. We should only brick ASICs, or upgrade networks in a way where hash rate stays stable, and/or doesn’t destroy transaction throughput until the subsequent difficulty adjustment."

Zcash founder Zooko Wilcox shares his thoughts on ASICs

"However, I am not yet convinced that declaring that we’ll change the PoW to fight ASICs is the right thing to do. I really appreciate that the Monero devs+community have done it, because it gives us a chance to learn from their experience about how it works."

Chip maker TSMC breaks sales record on Bitcoin mining boost
(CoinDesk, by Wolfie Zhao)

"During its shareholder conference call on Thursday, the world's largest independent semiconductor maker said it generated 248 billion Taiwan new dollars (US$8.5 billion) in sales revenue for Q1 - a year-on-year increase of 6.1 percent. Furthermore, the company saw NT$89 billion (US$3 billion) in net income, reflecting a 2.5 percent growth year-on-year."

Amazon wins patent for data stream to 'identify' Bitcoin users for law enforcement
(Motherboard, by Jordan Pearson)

"While a gigantic corporation like Amazon identifying Bitcoin users for police is no doubt a worrying thought for privacy-obsessed cryptocurrency fans, it’s worth emphasizing that tech companies regularly file all sorts of wild patents that never come to fruition."

The deep complexity in electric engineering
(IEEE Spectrum, by Robert W.Lucky)

"Not so long ago AM/FM radios and TVs were the ubiquitous home electronics exploiting the electromagnetic spectrum. Those were the days when radios were just simple devices whose only standardization was the frequency band and a fairly simple modulation scheme."

Millions of Chrome users have installed malware posing as Ad Blockers
(Motherboard, by Kaleigh Rogers)

"Meshkov discovered that the AdRemover extension for Chrome—which had over 10 million users—had code hidden inside an image that was loaded from the remote command server, giving the extension creator the ability to change its functions without updating."