JP Morgan, the mega New York based US bank, is launching its own Stablecoin. It has been called the “JPM Coin” and it is pegged to the price of 1 US Dollar. The JPM Coin will be used for settling international payments, securities transactions and for large corporations using the bank’s treasury services. So it appears that is is purely for in-house use.
Stablecoins are becoming a major gateway or bridge between the world of Fiat currency and the Crypto world. Their stability in price is the attraction. This feature makes other gateways look like Unstable coins in comparison , such as Bitcoin, Ethereum, XRP (Ripple) etc.
The oldest Stablecoin, Tether, is growing in usage. Its 24 hour Volume traded is now almost as much as Bitcoin. US$ 9.36 Billion traded versus US$ 9.9 Billion for Bitcoin.
The USDC Stablecoin from Circle is also steadily growing in 24 hour Volume since it was launched just 4 short months ago.
Everyone has heard of Bitcoin and most have heard of Blockchain. Some are experts. Some are not. Some are almost religious in their zeal. “This will change the world” is often heard. But the cynics say — “it’s a solution looking for a problem to solve”. So where is the truth? Let’s look at some facts.
1. The first Cryptology Block Chain paper occurred in 1991. The first work on a cryptographically secured chain of blocks was described by Stuart Haber and W. Scott Stornetta. The Paper was called “How to time-stamp a digital document” and was published in the Journal of Cryptology January 1991.
In March 1992, the authors, Bayer, Haber and Stornetta incorporated Merkle trees to the block chain as an efficiency improvement to be able to collect several documents into one block. Their paper was called “Improving the Efficiency and Reliability of Digital Time-Stamping”.
2. The National Security Agency of the USA (the NSA) released a paper on 18th June 1996 — “How to Make a Mint – The Cryptography of Anonymous Electronic Cash”. It was published by MIT October 31st 1996 — the Massachusetts Institute of Technology. It was authored by a group of people from the Cryptology Division of the National Security Agency of Information Security Research and Technology.
3. Satoshi Nakamoto released the original paper on Bitcoin on October 31st 2008 on Bitcoin.org (that URL must have been registered previously). The Source Code was implemented early 2009.
Now, let’s think about those events.
Here we are in 2019. So we are over 10 years into the “new” Bitcoin phenomenon as measured from the appearance in 2008 of Satoshi Nakamoto who has since magically disappeared. We are close to 22 years since the NSA published its paper. And we are almost 27 years (more than a quarter of a century) since the first Cryptology discussions appeared describing the basis of a Block chain technology – a chain of blocks.
Bitcoin was the first so-called “digital coin” that was created and promoted as an alternative currency even though all national currencies are digital and have been digital for over 50 years since computer ledgers were developed by the banking industry. Since Bitcoin was launched, thousands of such “digital coins” have been created and sold in exchange for national currencies.
The total market capitalization of this phenomenon reached its peak of $ 830 Billion in early January 2018. It is now around $ 120 Billion. That means that over $ 700 Billion in value has been lost in 13 months. Some people think that $ 120 Billion is a large valuation and that it underlines the importance of this “revolution”. But, it is a very small sum when compared to total global credit of US$ 250 Trillion and US$ 1.5 Quadrillion of derivatives.
There are now 2,062 so-called “cryptocurrencies” and there are 16,042 online markets, all of which are unregulated. However, despite all this activity, there has been very little real world impact so far. We have moved through the promise of alternative currencies, the promise of better payment systems, the promise of “utility coins” and the promise of these coins being a better store of wealth. All of these arguments carry some weight but so far they don’t seem to have had enough impact to change the world of finance in a revolutonary sense. So what’s next?
The next iteration of this phenomenon has already started and it is the digital tokenization of assets, cash flows, future cash flows, profits and non profit organizations. This is called Security Tokenization and it is very different to all the previous iterations. Why? Because it is concentrated on being strictly legal.
And another iteration is also forming and that is Crypto Credit. It is very early days here but this has huge potential to grow the supply of Cryptos globally.
The world of finance is changed and changing. It is not clear where the future lies but it will certainly be different to the past yet inevitably tied to the past, especially in regard to Jurisdictional aspects.
There was a significant event last week in the Crypto world. Arc from New York and Xinova from Seattle announced their ARCNET global innovation showcase. The Press Release read: “Innovation experts and top-tier financial engineers join forces and launch an online platform where ideas can openly compete for capital”
“Xinova, a global market network of over 12,000 innovators, and Arc, a team of asset managers with decades of capital markets experience, today announced Arcnet, an online capital marketplace that allows investors to find and directly invest in innovation projects and alternative assets. Ultimately, Arcnet will use innovations in cryptography, like blockchain and distributed ledgers, to empower individuals to compete for investment based on the merits of their idea.”
The initial opportunities are listed here https://arcnet.com/opportunities One is an Australian company, GiG VR
And here is a good article summarizing what is happening. Could this herald the death of the Venture Capital industry?
Another interesting development in the world of Crypto trading is Coinroutes. CoinRoutes provides traders a unified view of many cryptocurrency markets with the ability to find the best prices from multiple exchanges. CoinRoutes claims to show a more accurate view of the market. It covers more than 75 exchanges.
As there are now 16,132 markets according to Coinmarketcap, this appears to be a much needed service. But, in reality, the vast majority of those “exchanges” have very little, if any volume.
So how many exchanges are worthy of analysis? The Top 120 have 24 Hour Volumes of more than $ 1 Million (according to Coinmarketcap). The Top 10 markets have 24 Hour Volumes of more than $ 300 Million and the Top market has 24 Hour Volume of more than $ 500 Million (data from Coinmarketcap). Avestix cannot vouch for the accuracy of this data. Please note that Crypto exchanges are essentially unregulated with no regulators and no regulations. Thus, some of the reported volumes for Crypto exchanges could possibly be complete frauds.
Make your own conclusions, do your own research. Avestix does not offer investment advice.
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