Canadian Bunz gives you BTZ

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Canada has a tradition of coming up with interesting community-oriented solutions and a report from The Globe and Mail about Bunz, a Toronto-based online barter market, illustrates the kind of innovative thinking that comes out of this country.

The group has launched a cryptocurrency called BTZ (pronounced ‘bits’) for use by its members. BTZ is an acronym for Bunz Trading Zone and it became available to community members on 9th April.

Each member of the barter platform has been given 1,000 BTZ and they can exchange them with each other, or use them to pay for goods and services at the 100 merchants on the Bunz site. It is estimated that the 1,000 BTZ is worth about three or four cups of coffee, but even in this smallish community, the cryptocurrency value can fluctuate.

Sascha Mojtahedi, CEO of Bunz, told the Toronto paper, “We know the technology works … but we haven’t really seen a viable use case that the mass market can get behind. I think we’re going to be the first example of that.”

The Bunz concept started off as a small Facebook group organised by fashion designer Emily Bitze. She was looking for a place to swap unwanted items with friends. Selling items for cash wasn’t part of the idea; it was completely focused on the barter system. As simple as it may sound, it was an idea that took off through word of mouth and by 2016, Bunz had its own website.

However, the lack of cash transactions posed a problem for the enterprise, because without it there was “no obvious income stream” says its CEO. He hopes that by launching the BTZ cryptocurrency, more users will join the platform. As he told Cointelegraph:

“You have to be able to reward people with cryptocurrency that they’ve earned as a result of their passive involvement in the network and then enable them to use it with their peers and merchants. It gives us the room to create new models that people may not have thought of.”

Mojtahedi came from a financial background at the Dominion Bank and it is also notable that Bunz has attracted institutional investors such as Fidelity Investments. Bunz users have completed more than a million transactions, with 2.3 million items currently on offer in more than 200 cities around the world. BTZ from Bunz could be an interesting crypto ecosystem to watch as it develops and we may see other similar schemes emerging in the future.

 

 

 

 

Abra CEO predicts big investment in crypto in 2018

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Abra is a cryptocurrency investment app and its CEO has recently made the headlines in Cointelegraph by making a bold prediction that big investors will “make all hell break loose” in the altcoin market this year.

Speaking to Business Insider last week, Bill Barhydt of Abra, which is backed by American Express, explained that he believes the cryptocurrency sector will boom again this year when the really big investors stop sitting on the sidelines and decide to get involved.

He said: “I talk to hedge funds, high net worth individuals, even commodity speculators. They look at the volatility in the crypto markets and they see it as a huge opportunity. Once that happens, all hell will break loose.” And, as he also points out, once these guys open the door, it won’t be closed again.

Barhydt admits that the cryptocurrency market has been going through a massive wobble, reflected in the decline in the overall market value of crypto. It peaked at $800 billion in December 2017 and is currently around $300 billion. Searches on Google for Bitcoin and other cryptocurrencies have declined in tandem with this, and there is a correlation between crypto prices and Google activity.

However, he is confident that prices will recover as the year progresses and institutional investors, such as hedge finds, decide to explore the potential of the crypto market. He gave the example of Japan where the crypto prices went up as financial institutions invested in them. Now, Barhydt believes that the West needs to catch up with Japan.

He concluded the interview by saying: “There really is zero large-scale institutional money from the west in crypto right now. Once a large, sizable chunk of Western institutional money starts to come in — watch out.”

Once the floodgates open in the West, what is happening on Google trends will become irrelevant. Will 2018 be the year we see mass adoption of crytpocurrency by big financial investors? We still have a way to go to find out, but if Barhydt is correct then there is a compelling case to HODL your crypto, regardless of the recent volatility.

 

Twitter, Facebook and Google under fire from Eurasia

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The social media giants’ blanket ban on crypto and blockchain related advertising hasn’t gone down well in Russia, China and South Korea. According to a report in Cointelegraph the major blockchain associations of these countries are planning to file a joint lawsuit against Google, Facebook, Twitter and Yandex, says the news agency TASS.

Facebook started the ball rolling with this back in January, although after the emergence of its role in the Cambridge Analytica scandal, Zuckerberg and Co. don’t have much moral high ground to stand on when it comes to “misleading or deceptive promotional practices,” which was its given reason for banning ICO adverts and anything related to crypto.

Google also announced a ban in March, which comes into effect in June, and Twitter confirmed its ban this week. Yet, Jack Dorsey has been talking up Bitcoin as the world’s future single currency. It’s undoubtedly confusing and smacks of something like hypocrisy.

The Eurasian organisations, which include the Russian Association of Cryptocurrency and Blockchain (RACIB), the Korea Venture Business Associations, and LCBT, a Chinese association of crypto investors, are not going to just sit back and let it happen though. The RACIB has already stated at a conference in Moscow, “the actions of these four tech companies have negatively affected the crypto market.”

Its President, said:

“We believe that this is a use of the monopoly position of these four companies, which have entered into a cartel agreement with each other in order to manipulate the market. The ban from these four organizations has led to a significant drop in the market in recent months.”

To fund the lawsuit, the organisations have created an umbrella Eurasian Association of Blockchain, and they have been asking anyone to “chip in” whatever they can.

Most significantly, Yury Pripachkin of RACIB, said the “claim will also be filed against the companies’ shareholders if they have crypto wallets.” The lawsuit will be filed in the USA, primarily because Pripachkin noted that it has states like Wyoming that are “loyal to cryptocurrency.”

This is a story to watch, because if the Eurasian Association of Blockchain is successful, and even if it isn’t, we will all have a clearer view of social media’s muddy waters around the cryptosphere.

 

 

There’s another way to look at Crypto Tokens

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Crypto tokens, and their ICOs, have taken a fair amount of bashing in the media over the past few months, but a paper published by two researchers from MIT and University of Toronto, argues that utility tokens might have a “valuable price discovery role,” according to Coindesk. It also suggests that tokens that act as ‘true commodities’, which the report authors attribute to Bitcoin and Ether, could offer the same service.

When you look at crypto tokens form this perspective, it looks like consumers could turn out to be the biggest winners, provided the tokens are correctly designed.

The paper, called, Initial Coin Offerings and the Value of Crypto Tokens by Christian Catalini (MIT) and Joshua S. Gans (University of Toronto) explores how entrepreneurs can use initial coin offerings — whereby they issue crypto tokens and commit to accept only those tokens as payment for future use of a digital platform — to fund venture start-up costs. It makes interesting reading for ICO entrepreneurs, because as the paper’s synopsis states, “the ICO mechanism allows entrepreneurs to generate buyer competition for the token, which, in turn, reveals consumer value without the entrepreneurs having to know, ex ante, consumer willingness to pay,” amongst other things.

In fact, it goes so far as to claim that in the future, tokens will “empower consumers to choose an optimal price for a service collectively.” It also looks at the benefits of tokens, including the aforementioned benefits of entrepreneurs being able to test the token fundraising model with consumers to see how it goes. This could greatly minimise risk for ICO startups and their founders.

As we have seen, regulatory bodies like the SEC have started to show more interest in ICOs and the remarkable sums of money they are capable of raising. However, Gans, told Coindesk: “”The problem the regulators have is they don’t know what the goals are. Instead the regulators are coming in saying ‘I don’t really know how the market should be working, but it smells terrible.'”

This new paper and its authors want to start a new conversation about “the right way to think about tokens so that societies could rationally consider the correct approach to managing them.”

It’s a more helpful and sane approach than the ‘just ban them’ rhetoric that is coming from some corporate entities and other organisations. It is not against regulation; that is necessary for transparency and consumer comfort. As the guys admit, they have no idea how the ‘token economy’ will play out, but they have laid the groundwork for more research and more balanced thinking. That’s a good start.