BitMEX lets you bet big on bitcoin — for a price | Why do we take EOS seriously when it’s clearly a plutocracy? | Coinbase exploring support for over 30 new cryptocurrencies

Bitcoin $3,385                    Ethereum $91.93 
Crypto Mkt Cap $108B              BTC Dominance 54.60%  

“We missed out on the peak of finance. Instead we got the decline. There’s not as much money, not as much risk, not as much flow. It’s boring. Bitcoin reminds us of what it must have been like trading an asset class in the late ’80s and ’90s.” — Arthur Hayes, CEO BitMEX

The Big Block

Crypto derivatives are essentially bets on whether the price of bitcoin or another cryptocurrency, is going to go up or down. And for retail investors who dream of winning big, the most popular platform for placing those bets is BitMEX, a largely unregulated Hong Kong-based exchange that’s been sneaking into the news of late.

Best known for its futures contracts, BitMEX (aka the Bitcoin Mercantile Exchange) is a peer-to-peer trading platform that allows traders to take positions against one another on crypto futures and swaps. The platform, available in five languages (English, Chinese, Russian, Korean and Japanese), then settles the trades exclusively in bitcoin. 

Founded in 2014, BitMEX is fully owned and operated by HDR Global Trading Limited, which is registered in the Republic of Seychelles. An archipelago in the Indian Ocean, Seychelles is notoriously light on corporate regulation and does not require companies to pay taxes or undergo audits.

Run by a staff of more than 100, BitMEX touts itself as the most liquid bitcoin derivatives exchange in the world. On a typical day, it handles between $4 billion to $5 billion in volume, the bulk of which comes from North Asia. In the U.S., the Cboe Futures Exchange and the Chicago Mercantile Exchange also offer bitcoin futures, but in a conventional regulated environment— while NASDAQ may be joining them soon. But, according to a recent report from CryptoCompare, these financial stalwarts only do a fraction of the volume that BitMEX does.

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Around The Block

Why do we take EOS seriously when it’s clearly a plutocracy?

EOS, the brainchild of seigniorage addict Dan Larimer and noted #1 cryptocurrency project by the Chinese government, has confirmed what we always sort of knew: EOS clearly functions as a plutocracy—governance by the rich, for the rich.

It wasn’t always this way: a company called block.one created EOS in 2017. The team described their mission as providing “end-to-end solutions to bring businesses onto the blockchain from strategic planning to product deployment.” — More


Coinbase exploring support for over 30 new cryptocurrencies

Coinbase announced today that it is working with local banks and regulators to explore the addition of 31 new cryptocurrencies on its exchange. Some notable additions include Maker, XRP, and EOS. According to Coinbase "adding new assets requires significant exploratory work from both a technical and compliance standpoint," and that the exchange "cannot guarantee that all the assets we are evaluating will ultimately be listed for trading." — More


Crypto Caselaw Minute, Week of 12.02.18: When the Sherman Act crashes the Bitcoin Cash party — More

Venezuelan President: We’ll sell oil for Petro tokens by March 2019 — More

Coinbase to list CVC, DNT, LOOM, and MANA — More

YouTube drives the most traffic to cryptocurrency exchanges — More

Gemini to enable custody and trading for bitcoin cash — More

Report: Overbearing US regulations on crypto ‘hampering innovation’ and in need of change — More

Bipartisan congressmen introduce two bills to protect consumers from cryptocurrency price manipulation — More

Grayscale holds over 1% of Bitcoin’s circulating supply — More


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Do Ripple executives’ statements imply that XRP is a security? | An interview with David Silver: The attorney on a crusade to clean up crypto’s act | Buffett Bet 2.0: Crypto asset index vs. S&P 500

Bitcoin $3,679                    Ethereum $97.56 
Crypto Mkt Cap $117B              BTC Dominance 54.80%  

“The higher the price of XRP, the more money Ripple makes by selling XRP, the more money Ripple is worth, the more power Ripple has to incentivize partners, and so on.”” — David Schwartz, CTO Ripple

The Big Block

In the slow dance between the SEC and cryptocurrencies, nothing has garnered more interest – or more confusion – than a single question: “Is this token a security?” Due to recent SEC enforcement and comments, the conditions required to answer that question are becoming a bit clearer. Yet, murky origins and numerous public comments ensure that it is still an opaque question in the case of Ripple and XRP.

Despite the legal uncertainty around XRP, the large investment firm Grayscale offers its customers the ability to gain exposure to the price movement of the asset through XRP Investment Trust, which currently has $4.6M in assets under management. R3 recently launched Corda Settler, an open source application that allows Corda users to settle using any payment method, with XRP being the first payment rail. The Ripple management team regularly talks up pilots of product that require the XRP token in their public statements. 

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Around The Block

An interview with David Silver: The attorney on a crusade to clean up crypto’s act

David Silver is a big fish in a growing pond. A lawyer by trade, Silver half-jokes that he’s led nineteen of the twenty largest crypto cases domestically this year, and claims to have overseen the first crypto lawsuit in history.

But the corporate attorney turned investment-fraud lawyer earned his crypto trophy almost by accident. His first introduction to the volatile digital currency occurred one evening in 2014 at a charity dinner, four years after leaving Washington DC to start his own law firm in Miami. A guest at the event volunteered to give him five Bitcoin – promptly setting up a wallet and making the transfer. Silver had no idea at the time that he had just been given what would become a digital pot of gold and a subject that would define his career. — More


Buffett Bet 2.0: Crypto asset index vs. S&P 500

Morgan Creek Digital, a unit of Mark Yusko's Morgan Creek Capital Management, issued a Warren Buffett-esque challenge on Thursday. The Digital Asset Challenge (or Buffett Bet 2.0) is a bet that Morgan Creek's Digital Asset Index Fund will outperform stock-index S&P 500 (SPX) over the next 10 years starting January 1, 2019. Morgan Creek Digital is betting it will and is looking for a Wall Streeter to take the other side. Readers might recall Buffet's $1 million bet that a passive investment in the S&P 500 would outperform a sample of five actively managed hedge funds. — More


UnitedCorp launches lawsuit against Bitmain, Roger Ver, and Kraken — More

ConsenSys confirms that it is laying off 13% of its staff — More

Binance rolls out sub-accounts amid ‘influx of institutional’ demand — More

US Government offering $800K grants to anti-forgery blockchain startups — More

Two Sigma and ConsenSys back U.K. custody startup in $8 million fundraise — More

BitGo has plucked a finance vet out of retirement to lead institutional custody — More


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Crypto fund manager Bitwise has launched two new funds to address client demand | From Banks to Bitcoin: J.P. Morgan employees who have left Wall Street for the crypto world

Bitcoin $3,799                    Ethereum $103.96 
Crypto Mkt Cap $122B              BTC Dominance 54.20%  

“ConsenSys 2.0 requires us to evaluate our endeavors more rigorously. We will seek to run leaner projects because often better decisions are made in a context of more constrained resources. Scarcity sharpens the senses and forces discernment in decision making. Lush plentitude, while perhaps a noble goal in many circumstances, should be hard won; otherwise it leads to complacency and dull-wittedness.” — Joe Lubin, Founder ConsenSys

The Big Block

California-based Bitwise Asset Management on Wednesday announced the launch of two new crypto funds, a move that could put the firm up against one of the largest investors in the market for digital currencies. 

The two funds, The Bitwise Bitcoin Fund and the Bitwise Ethereum Fund, join the asset manager’s crypto basket Bitwise 10 Private Index Fund. Bitwise says its clients have been clamoring for crypto-specific funds to invest in despite the bear market. “The 68% drawdown in bitcoin prices this year has given investors a unique opportunity to enter the market at prices many thought we’d never see again,” said Hunter Horsley, Bitwise CEO.

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Around The Block

From Banks to Bitcoin: J.P. Morgan employees who have left Wall Street for the crypto world

J.P. Morgan is one of the largest and most well-respected investment firms on Wall Street. The bank has a rich history of producing CEOs of billion-dollar companies and financial executives. J.P. Morgan alumni have established themselves as industry pillars, from traditional finance to politics to tech, and crypto is no exception. And while J.P. Morgan’s CEO, Jamie Dimon, has called bitcoin a “fraud” and “worse than tulip bulbs”, many former employees have made the move to crypto full-time. — More


Ethereum co-founder Joe Lubin sounds the alarm and refocuses ConsenSys in expansive employee letter

Joe Lubin, Ethereum co-founder, sent a missive to the entire organization that he runs last Friday, amidst a significant decline in the price of $ETH. ConsenSys, Lubin’s massive cryptocurrency venture studio with ~ 1,000 employees, has grown at warp speed over the past few years and long been rumored to de-emphasize focused strategic building in favor of rapid growth, project autonomy and experimentation. In fact, the decentralized nature of the organization is something that Lubin and ConsenSys employees took great pride in. However, as first reported by BREAKER, Lubin’s Friday letter highlighted an organization in flux and ready to implement significant change. — More


Seven major EU countries sign declaration to promote blockchain technology — More

R3’s new enterprise settlement app will support payments in XRP — More

Binance gives a sneak peek of its decentralized exchange — More


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The “Bitcoin mining death spiral” debate explained | Polychain's #2 exec leaves leaves the firm amid weak 2018 performance

Bitcoin $3,972                    Ethereum $111.08 
Crypto Mkt Cap $128B              BTC Dominance 53.80%  

“It is hard to grow a strong business in a bull market because you aren’t forced to make tough decisions. Tough decisions leads to better allocations” — Ari Paul, Co-founder BlockTower Capital

The Big Block

Bitcoin is not going into a “mining death spiral.”

Now that we’ve gotten that out of the way… rather than fear-mongering, The Block is committed to clarifying comments and concerns posed by crypto-fund managers and enthusiasts alike with level-headed technical clarity.

The case that Bitcoin is going into a miner-induced death spiral is intuitively compelling: Bitcoin prices drop materially, eventually marginally profitable miners shut off, ad infinitum, until all the miners are gone and no one mines Bitcoin (cue: Bitcoin is dead, redux).

The argument is crutched on a few core assumptions often relied on by critics: $BTC would have to trade sub-$1000, with hash rate dramatically dropping off before the difficulty adjustment, the variable representing the difficulty of mining a new Bitcoin block. Miners, who are strictly rational short-term, would then choose to shut off all their miners or mine alternative cryptocurrencies rather than take losses mining Bitcoin unprofitably.

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Polychain’s #2 exec Ryan Zurrer leaves the firm amid weak 2018 performance

A founding principal at $1 billion crypto-investment fund Polychain Capital is no longer with the firm, The Block has learned. Ryan Zurrer left the firm in recent months and will continue to advise firms including Polkadot, a Polychain-backed blockchain project, in his existing role as a Web3 Foundation Council member. — More


Crypto hedge funds are getting creative as the bear market continues to grip crypto

The crypto explosion of 2017 gave birth to hundreds of hedge funds aimed at generating asymmetric returns from the speculative “crypto asset class.” However, this year’s downwards price action is creating a lot of problems for the once high-flying funds, forcing many to shut and others to explore creative ways to stay afloat. Per Crypto Fund Research, 35 cryptocurrency funds have closed shop since the beginning of the year, 5% of the 633 funds the research firm tracks. As for the funds that haven’t shut down, many are identifying new opportunities in the market or cutting costs, an expert tells The Block. — More


Bitcoin’s mining difficulty saw the largest drop in the ASIC era — More

U.S. Government wants to research ways to perform forensic analysis of Monero and Zcash — More

A group of Wall Street giants, including Fidelity, pour $27.5 million into ErisX — More

Bitfinex and Ethfinex to support four additional stablecoins — More


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Block by Block: Ticketing | Vertcoin experiences a 51% attack | The SEC met again with the VanEck SolidX Bitcoin Trust team to discuss a bitcoin ETF

Bitcoin $3,901                    Ethereum $109.01 
Crypto Mkt Cap $126B              BTC Dominance 53.70%  

“We need the decentralized tech stack to evolve more quickly and show the world how decentralized technology works in a mainstream way at scale before policy makers and regulators force the tech sector to go the wrong way.” — Fred Wilson, Partner Union Square Ventures

The Big Block

Ask any hard-core concert-goer about the worst part of the event, and they will likely tell you a war story about buying a ticket. 

The ticketing industry is incredibly flawed. Ticket-buyers face high-fees and have to compete with bots who buy up tickets seconds after they are on the market. And that is if they are even lucky enough to purchase tickets on the primary ticketing platforms. Event-goers who are forced to look to the secondary markets for their tickets are immediately thrown into a world of fraudulent ticket sales and scalpers that resell tickets at absurdly high marked-up prices. For an industry as broken as ticketing, it is no surprise that the industry has attracted a swarm of startups and entrepreneurs offering solutions. These startups include both centralized ones like SeatGeek and decentralized ones like Aventus. This piece will explore firms leveraging crypto to remedy the headaches of ticketing. 

To sell and distribute their tickets, event organizer and content creators (i.e., artists and performers) will typically issue their tickets onto the primary market. Primary markets include ticket box offices, venue websites, and primary authorized sellers like TicketMaster. Primary authorized sellers generate their revenue through the fees they charge to consumers. A single ticket can have multiple fees. For example, a consumer could end up paying a service fee, a processing fee, and a convenience fee on top of the price they are paying for the original ticket.

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Around The Block

Long-tail cryptocurrency is 51% attacked: Vertcoin edition

With the fall in cryptocurrency prices and ensuing drops in mining hash rate (as marginally profitable miners shut down), crypto-networks remain more vulnerable to attack than earlier this year.

While hash rate may go up in absolute terms due to improved ASIC efficiency (in August, Bitcoin hash rate was up 4x from January 1st), hash rate is just a proxy for network security. The key metric to note is security spend, quantifying how much money is spent on mining opex and capex to secure the network. — More


The SEC met again with the VanEck SolidX Bitcoin Trust team to discuss a bitcoin ETF

On November 28, representatives from three of the SEC's divisions met with representatives from SolidX, VanEck, Cboe and Patomak to discuss a proposed rule change to list and trade the first bitcoin ETF (VanEck SolidX Bitcoin Trust). A previous meeting happened on October 9 and focused on convincing the SEC that the market is mature enough to support the ETF. — More


Leading Ethereum Classic development group shuts down — More

G20 put crypto regulation in the pipeline — More

Report: Over 50% of U.K.-based blockchain companies have difficulties opening bank accounts — More

Ohio startup accelerators and venture funds plan to invest over $100M in early-stage blockchain startups — More

Calastone is bringing blockchain to Britain’s major asset managers — More

Security token offerings deemed illegal in Beijing — More

The SEC knocks Floyd Mayweather Jr. and DJ Khaled out of the ICO promotion game — More


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