Businesses risk big losses accepting cryptocurrency payments. Do we need a ‘stablecoin’ that holds its value – or government ‘fedcoins’?
Havven is an Australian startup creating a ‘stablecoin’ on the back of a very well-subscribed ICO, raising USD $30,000,000 (closer to AUD $40M). Those funds serve as the surety so that their currency can be exchanged dollar-for-dollar with USD.
We spoke to Havven founder Kain Warwick about what it takes to create a stablecoin – and why people might want to use one.
Tether is the most well-known stablecoin. But it’s been devilishly hard to find an auditor willing to say Tether has an adequate store of USD:
We’ve invented ‘sandboxing‘ – your smartphone apps can’t steal data from one another, nor can the websites you visit.
Vitalik Buterin created a cryptocurrency with coding features built into the currency. Ethereum runs millions of programs, each in its own sandbox.
Enabling ‘smart money’ – money that can think for itself – Ethereum has proven among the most useful of all coins – and as a result is now worth more than any cryptocurrency other than Bitcoin.
EtherScripter is an amazing tool that lets you drag-and-drop the design of smart contracts. It draws heavily from the SCRATCH programming language used to teach children as young as 6 years old the essential skills of programming. So EtherScripter is easy to understand – and fun.
Here’s a simple EtherScripter smart contract that performs a coin flip:
What gives a coin its value? Gold is rare (as is Bitcoin), but most coins are plentiful. So we need to ask another question – is a coin useful?
The utility of a coin can be determined by observing how it’s been designed to be used – and comparing that against how people actually use it.
Bitcoin was originally meant to facilitate peer-to-peer cash transactions on the Internet, but because of its long settlement times (in the tens of minutes) and high fees, it’s rarely appropriate. Instead, Bitcoin’s utility comes from its store of value.
In 2015, Ethereum came along – more about that in episode 5 – and the number of ‘initial coin offerings’ exploded, generating well over twenty billion dollars (USD) in sales:
PowerLedger provides a blockchain-based accounting mechanism allowing individuals generating energy at home – via renewables such as solar and wind – to sell that energy to their neighbors, with real-time payments.
Dr. Jemma Green joined us to discuss the utility of the POWR token – created to act as a ‘bond’ against settlement of electricity bills – but with much broader applications.
Dr. Green described a system of POWR tokens and another token – SPARKS – used together to facilitate payments:
According to Mark Jeffrey, the real value of any coin can be surmised by its usefulness – and he suggests we head over to Block’tivity to see the real-time chart of the most useful coins.
Here’s a snapshot from 25 August 2018:
Mark Jeffrey also took us through the tokenomics of Guardian Circle, his ‘decentralised 9-1-1’ application that aims to bring emergency services to billions in the developing world. It uses a ‘Guardium‘ token to incentivise first responders. (Disclaimer: I am both an adviser to Guardian Circle and am a Guardium token holder in recognition of my services as an adviser. This is not investment advice.)
The opening story for episode two features the Global Digital Currency Conversation, and event held during the 2014 G20 summit in Brisbane, bringing together together policymakers and digital currency pioneers. I gave the opening keynote:
Bitcoin’s value – relative to the US Dollar – from its launch in 2009 through the present:
Back in 2013, Ron Tucker launched BitTrade – one of the first Bitcoin exchanges in Australia.
Later that same year Ron co-founded the Australian Digital Currency Association (ADCA), so that governments – who have a lot of questions and concerns about cryptocurrencies – have a peak body liaise with.
Ron Tucker mentioned the importance of cryptocurrencies in the developing world – here’s VICE reporting on the launch of ACOIN, which is meant to become the functioning currency for a whole Senegalese city.
Money is changing – evaporating into digital banknotes known as cryptocurrencies.
CRYPTONOMICS explores and explains how cryptocurrencies – like Bitcoin – and the technology underneath them – known as the blockchain – are transforming finance, business and everything else touched by money.
CYRPTONOMICS shows you what makes it all tick – starting with an explainer of the blockchain so easy anyone can understand it.
In every episode of CRYPTONOMICS we hear from experts using this tech to do amazing things – reinventing agribusiness, energy, even gambling – and we’ll learn what it all means for the future of investing and the economy.
We start at the very beginning – all the way back to the first writing.
The origins of writing are the origins of accounting. Here’s a 5500 ledger tracking ownership of that most important of commodities – beer!
Baked clay tablets are a reliable form of record keeping – you can’t change them without breaking the tablet – but as we moved to papyrus and paper, records grew more complex and errors crept in.
In the 14th century, the Genoese invented double-entry bookkeeping, which used the balance of assets and liabilities to keep the books in order – leading to the world of banking and finance as we know it today.
All of this was ‘good enough’ – but far from perfect. Those flaws became apparent in the collapse of Lehman Brothers in September 2008, triggering the Global Financial Crisis, and nearly bringing the entire global banking system down with it.
Six weeks later, Satoshi Nakamoto posted his white paper to the Internet: