#Blockchain In the Daily: Elon Musk Talks Bitcoin, Shanghai’s Fudan University, Xdat Exchange

In the Daily: Elon Musk, Shanghai’s Fudan University, Xdat Exchange

In this edition of The Daily we cover some largely supportive remarks the famous entrepreneur Elon Musk has made about Bitcoin, the latest academic institution to launch a blockchain R&D center, and a new offering from Malta-based exchange Xdat.

Also Read: Bank of Spain Report: Bitcoin Is a Solution for a System Without Censorship

Elon Musk Talks Bitcoin

The founder of Tesla and Spacex, Elon Musk, is once again making headlines about crypto. He recently went on the Ark Invest podcast to discuss the future of autonomous driving technologies. Most of the half-hour interview focused on the strategy behind his electric car company but the topic of cryptocurrency eventually popped up in the last four minutes.

Musk commented: “I think the Bitcoin structure is quite brilliant. There seems like there is some merit to Ethereum as well, and obviously others. But I’m not sure if it’s a good use of Tesla resources to get involved in cryptos … We’re really just trying to accelerate the advances of sustainable energy. One downside of Bitcoin is … computationally it’s quite energy intensive. There has to be some kind of constraint on the creation of crypto. It’s very energy intensive to create the incremental bitcoin at this point … It bypasses currency controls. Paper money is going away, and crypto is a far better way to transfer value than pieces of paper. That’s for sure.”

Shanghai’s Fudan University Launches Research Center

Shanghai’s Fudan University has become the latest academic institution to launch a blockchain R&D center. Founded in 1905, Fudan is one of the most prestigious and selective schools for higher learning in China. The Shanghai Blockchain Engineering Technology Research Center is tasked with carrying out basic research in the field, developing demo applications in collaboration with the broader industry, and training talent to serve Shanghai’s economic development.

In the Daily: Elon Musk Talks Bitcoin, Shanghai’s Fudan University, Xdat Exchange

Last month the University of California, Berkeley announced the formation of its own blockchain-focused startup accelerator program, the Berkeley Blockchain Xcelerator. This program is meant to help aspiring entrepreneurs create high-value ventures in the blockchain space with industry guidance from Silicon Valley.

Xdat Exchange Lists 18 Trading Pairs

Xdat, a new Malta-based cryptocurrency trading exchange, has announced the listing of 18 trading pairs. These comprise ETH/BTC, BCH/BTC, EOS/BTC, ETC/BTC, XRP/BTC, DASH/BTC, LTC/BTC, BTC/ETH, BCH/ETH, EOS/ETH, ETC/ETH, XRP/ETH, DASH/ETH, LTC/ETH, BTC/TUSD, ETH/TUSD, BTC/EURO, and ETH/EURO. The company has further plans to add other pairs over time.

The exchange is compliant with Maltese regulations for KYC and AML procedures and caters to both retail and institutional investors. Its fiat gateway allows users to deposit funds in 12 major currencies: USD, GBP, JPY, HKD, CHF, AUD, NOK, SEK, DKK, CZK, PLN, and HUF. This selection is meant to eliminate the need for involvement of a foreign bank for the supported options and allows users to work solely with Xdat’s bank.

“Xdat is on a mission to address the key problems of existing exchanges … including lack of flow of new capital, lack of trust, no approach for mass adoption, and high fragmentation,” said CEO Prashanth Swaminathan. “Our aim is to bring crypto to all. To that end, we will be working closely with our community and using their support and feedback to make our interface more user-friendly and trading as streamlined as possible.”

What do you think about today’s news tidbits? Share your thoughts in the comments section below.

Images courtesy of Shutterstock.

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#Blockchain Survey: Nearly Half of Millennial Traders Have More Faith in Crypto Than Stock Market

Survey: Nearly Half of Millennial Traders Have More Faith in Crypto Than Stock Market due to 'Generational Shift'

Nearly half of millennial traders have more faith in cryptocurrency exchanges than they do in traditional ones. They are also enthusiastic about the prospect of traditional financial institutions offering crypto assets. That’s according to a new survey which shows a “generational shift” where millennials “place their faith in the power of technology and open networks.” 

Also read: Drug Dealer Fights to Prevent Canadian Police From Forfeiting his BTC

The Beginning of a Generational Shift

The survey by U.S.-based investment platform Etoro interviewed 1,000 online traders. It found that 43 percent of millennial online traders trust crypto exchanges more than they do U.S. stock exchanges. 93 percent of millennials surveyed also said that they would invest more money in crypto if it were offered by traditional financial institutions such as TD Ameritrade, Fidelity, or Charles Schwab. Even among millennials who don’t trade crypto, one third said they would trust crypto over the stock market. Guy Hirsch, Managing Director of Etoro U.S. said:

We’re seeing the beginning of a generational shift in trust from traditional stock exchanges to crypto exchanges. At the heart of this change are the asset classes themselves. Younger investors’ experience with the stock market has seen a great deal of loss of trust, with the fall of Lehman Brothers because of irresponsible practices followed by the worst recession since the Great Depression.

He added: “Trust further eroded when Americans saw how hundreds of billions of dollars of taxpayers’ money are funneled to the largest financial institutions while their savings evaporated and how banks get free money through quantitative easing while their cost of living continued to rise.”

The survey also showed that two thirds of millennial crypto traders say they have more faith in crypto as a whole than the stock market. Of millennials who don’t trade crypto, one third said they would trust crypto over the stock market. In contrast, 77 percent of generation X respondents revealed they trust stock exchanges more.

The Perfect Asset Class

Etoro’s survey also showed that among investors across all age groups that don’t trade crypto, 59 percent would invest more money in crypto if it were offered by a traditional financial institution. Current crypto traders would be more at ease investing in the asset class if it were offered by a traditional financial institution, with 92 percent admitting they would invest more money if a conventional financial institution provided this investing option. This shows that despite crypto enthusiasts and millennials distrusting traditional institutions, established companies with a global reputation could draw in younger investors were they to offer crypto assets.

Survey: Nearly Half of Millennial Traders Have More Faith in Crypto Than Stock Market

The survey looked at savings plans too. Half of online investors surveyed expressed interest in a crypto allocation in their 401k plans. Of those that don’t trade crypto, 45 percent expressed interest in having some of their 401k allocated to crypto assets, while 74 percent of crypto traders are interested in seeing the option from their 401k provider. Hirsch added: “While there is clearly a demand for crypto assets in 401k portfolios, there are a number of regulatory and market changes that need to occur before it becomes a mainstream offering.”

Mati Greenspan, a senior market analyst at Etoro, told news.Bitcoin.com: “Millennials tend to place their faith in the power of technology and more specifically the power of open networks. This is why crypto is the perfect asset class for our generation.”

What do you think about the results of the survey? Do you trust crypto exchanges over traditional ones? Let us know in the comments section below.

Images courtesy of Shutterstock and Etoro. 

Express yourself freely at Bitcoin.com’s user forums. We don’t censor on political grounds. Check forum.Bitcoin.com

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#USA Resooma launches Resooma Bills to help ‘generation rent’ manage household expenditure


Resooma, the U.K. accommodation booking platform, is entering the fintech and utilities space with the launch of Resooma Bills, a new product to help “gen rent” manage household expenditure. The Cardiff, Wales-based company’s core offering is an accommodation marketplace primarily targeting students and other renters aged 18-30.

Previously trading under the brand name of University Cribs, Resooma was founded in 2014 by Jack Jenkins, Dan Jefferys and Christian Samuel as a solution aimed specifically at the student lettings market. The company has since broadened its remit to “fix the outdated methods” of renting a home and living together in shared accommodation.

“The existing processes, much of which [are] sitting offline, was a total mess and the numbers of people who have to experience it is climbing rapidly,” says co-founder Jenkins. “With more people living in shared accommodation post University life, we aim to appeal to a time constrained user base that want instant gratification from the products and services they use. We’re building a solution for generation rent”.

As a first step, Resooma set out to eradicate the viewing process, or at least make it digital, and help facilitate bookings online. This includes rolling out “VR tours” for homes, in a bid to gain the trust of renters booking online. “Student and young professionals are time sensitive, often nomadic in choosing where they work and live and as such our platform needs to cater for this,” says Jenkins. The startup also has plans to introduce rental guarantees and “Resooma Verified” stamps for rentals.

“Interestingly, we brand ourselves as a booking platform, a relatively unused term in the market we are in. People are used to booking directly on platforms for short-term accommodation, with the rise of Airbnb and Booking.com but our goal is to make this the norm for people renting medium or longer term homes,” adds the Resooma co-founder.

Jenkins says the next problem the company wants to solve is around utilities and the splitting of household bills. “We’ve all sat there in our new home, admiring the wall paper for the first 2 weeks while we wait for the internet or Sky TV to be set up. It’s brainless really, and we’re fixing it,” he says.

“Our product journey will put utilities as part of the rental transaction, allowing users to set up their household bills directly through the platform at the time of booking. What’s more, we’ll allow you to split these bills evenly between all tenants. No more arguments because Tom didn’t pay for his share of the internet bill. Our solution will track utility payments, aim to source the cheapest deals for our customers and then automatically issue each of the housemates one single bill each month for their share of the total house bills.

“While part of the full product vision of Resooma, Resooma Bills will sit as a standalone product as well to allow users the flexibility to use the service for homes found away from the Resooma platform”.

Asked to name Resooma’s competitors, Jenkins says the likes of Spotahome or Uniplaces are probably its most direct competition from a product perspective. “We differentiate ourselves through our adaptation of the utilities, as well as our focus on working with letting agents rather than directly with Landlords,” he says.

With regards to utilities and bill splitting, London-based Acasa could also been considered a very direct competitor.

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#USA StarOfService switches business model for its independent contractor marketplace


French startup StarOfService has recently switched its business model and has been profitable for the month of January 2019. The company operates a marketplace for independent contractors, a sort of Thumbtack for the rest of the world.

If you’re looking for a plumber, a music teacher or a DJ for a wedding, StarOfService can help you find one. The service is now available in 80 countries in Europe and has worked with 500,000 professionals over the years. It’s unclear how many of them are active right now.

There are 6 million requests posted every year, and StarOfService currently generates $73.7 million (€65 million) in transactions per month.

Originally, you first created a request and sent in to the platform. Professionals had 24 hours to bid on your request, and clients could pick a service providers based on reviews and quotes.

StarOfService would charge contractors every time they’d see a request. It was a sort of lead generation platform for independent contractors. Depending on the conversion rate, StarOfService could have been more attractive for some platforms compared to others.

The company has shifted to a more traditional yellow pages model — even though you don’t pay to get listed. Based on your request, you get a list of potential contractors and you can then contact them through the platform. If you say that you’re interested by sending a message or clicking on the phone number button, StarOfService charges the contractor.

It’s also interesting to see that the startup is communicating about its profits & losses. It sounds like StarOfService is optimizing its bottom line for an acquisition or a fundraising round.

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#Africa SA’s Sun Exchange partners with Decentral Energy to fund projects


Cape Town-based global solar micro-leasing marketplace Sun Exchange has signed an agreement with Decentral Energy, a boutique clean energy fund manager based in Johannesburg, to fund projects on the platform.

Sun Exchange is a buy-to-lease solar marketplace that leverages cryptocurrency to allow users across the world to buy into solar projects and receive income from the power generated by the projects.

The startup has built a global community of over 14,000 members across 130 countries, and introduced SUNEX, its own digital rewards token, in April of last year, eventually raising US$1 million.

This new agreement gives Decentral Energy’s Grovest Energy, a Section 12J fund, first right of refusal to fund 51-100 per cent of selected Sun Exchange off-taker projects, and to fund any balances after Sun Exchange solar cell crowd sales are completed.

Decentral Energy has already provided equity and debt financing for the largest Sun Exchange project to date, the 473kW Cape Town-based Nioro Plastics, which came online in January of this year.

“We invest in small scale energy assets that demonstrate predictable, inflation-linked cash flows, because we believe that the energy future will be decentralised and built upon similar financing systems”, said Christian Bode, fund manager at Decentral Energy.

“For that reason, we support Sun Exchange in their vision to create a thriving, inclusive and decentralized solar-powered economy. We’re so confident about their business model that we’ve already bought into the Nioro Plastics project, and our goal is to fund 20 MWp of Sun Exchange projects by 2020.”

Abe Cambridge, chief executive officer (CEO) and founder of Sun Exchange, said he was delighted with the partnership.

“Their confidence in our projects demonstrate that our solar cell leasing marketplace offers a reliable, lucrative and socially responsible source of income for anyone,” he said.

The agreement increases the ability of the Sun Exchange to host larger projects with less risk. For Sun Exchange users, this means that they can be part of large or small projects and there is greater reliability around the completion dates of crowd sales and subsequently quicker time scales to having their solar cells rented out.

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#Blockchain Coinbase Wallet App Adds Bitcoin Cash Support

Coinbase Wallet App Adds Bitcoin Cash Support

Coinbase announced on Tuesday that users of its wallet app can now directly store their bitcoin cash. The app update will be rolled out to all iOS and Android users in the next few weeks. Both Cashaddr and legacy address formats are supported alongside Bitcoin Cash Testnet for developers.

Also read: SEC Chair Explains Key Upgrades Needed for Bitcoin ETF Approval

Adding BCH Support

San Francisco-based digital currency platform Coinbase announced on Tuesday that its noncustodial wallet app now supports bitcoin cash. Siddharth Coelho-Prabhu, Product Lead at Coinbase, wrote that “Starting today, you can now store your bitcoin cash (BCH) directly in the Coinbase Wallet app.” However, he elaborated:

The new wallet update with bitcoin cash support will roll out to all users on iOS and Android over the next few weeks. BCH support is activated by default — all you need to do is tap ‘Receive’ on the main wallet tab and select bitcoin cash to send BCH to your Coinbase Wallet.

Coelho-Prabhu emphasized that the wallet “supports both newer Cashaddr address formats, as well as legacy addresses for backwards compatibility in all applications.” It also supports “Bitcoin Cash Testnet to aid developers and power users,” he detailed, adding that his team also plans “to add support for the JSON Payment Protocol in the future.”

Coinbase Wallet App Adds Bitcoin Cash Support

The security of the Coinbase Wallet app is more advanced than its custodial web wallet counterpart. According to the announcement, users’ private keys are encrypted and stored on their mobile devices using a Trusted Execution Environment (TEE), or Secure Enclave technology. “This specialized hardware is considered the most secure way to safeguard private data on mobile devices,” Coelho-Prabhu claims.

The BCH support follows the BTC support announced on Feb. 5. Coinbase Wallet previously supported only “ethereum, ethereum classic, and over 100,000 different ERC20 tokens and ERC721 collectibles built on Ethereum,” the product lead noted.

Other Developments

A week before BCH support was added, Coinbase announced that users “can now backup an encrypted version of your Coinbase Wallet’s private keys to your personal cloud storage accounts, using either Google Drive or iCloud.” Coelho-Prabhu described, “This new feature provides a safeguard for users, helping them avoid losing their funds if they lose their device or misplace their private keys.”

However, the optional feature was met with a large amount of negative feedback on social media. Tallycoin developer DJ Booth tweeted, “This is a terrible idea and encrypting with a user-chosen password is even worse. Most people cannot choose/remember strong passwords and generally reuse passwords.” After hundreds of tweets disapproving of the new feature, the company responded: “If you feel uncomfortable storing an encrypted backup in your cloud account, you can keep a copy of the recovery phrase (mnemonic seed) by yourself.”

Coinbase Wallet App Adds Bitcoin Cash Support

Then, on Tuesday, Coinbase announced that it has acquired Neutrino, which describes itself as a blockchain data intelligence platform. “By analyzing data on public blockchains, Neutrino will help us prevent theft of funds from peoples’ accounts, investigate ransomware attacks, and identify bad actors,” explained Varun Srinivasan, Coinbase’s director of engineering. “It will also help us bring more cryptocurrencies and features to more people while helping ensure compliance with local laws and regulations.”

What do you think of Coinbase Wallet app? Will you use it? Let us know in the comments section below.

Images courtesy of Shutterstock.

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#UK Arm meets Harry Potter as Disley conjures new magic


A Cambridge company that has mastered the Holy Grail of direct cell conversion has unveiled Darrin Disley as CEO, clinched almost $4 million seed funding after a second close and cornered markets worth billions with an IP-centric business model echoing Cambridge technology great Arm.

Cell Mogrify, soon to morph into Mogrify, can convert any mature cell type into any other mature cell type without going through a pluripotent stem cell – or even a progenitor cell-state. 

While Mogrify’s solution is proven science it might help lay people better understand the principle of transmogrification by thinking of the transfiguration capabilities of Minerva McGonagall in Harry Potter who switches between different human forms and even a cat!

A year to the day since he left as CEO of gene editing world leader Horizon Discovery, Dr Disley picked up the wand to help Mogrify conjure some mind-boggling personalised medicines magic.

The funding round was led by existing backer Ahren Innovation Capital with 24Haymarket and Dr Disley also investing. Mogrify will use the cash to market novel IP and cell types generated using its proprietary direct cellular conversion platform, which will power the development and manufacture of lifesaving cell therapies across all therapeutic areas. 

Dr Disley says the technology is powerful enough to “carpet-bomb” all these therapeutic areas.

Mogrify builds on a 10-year investment by its co-founders in the development of a systematic big data-science approach powered by next-generation sequencing and gene-regulatory data to identify the optimal combination of transcription factors (in vitro) or small molecules (in vivo), needed to convert any mature cell type into any other mature cell type without going through a pluripotent stem cell- or even a progenitor cell-state. 

The company is applying this approach to address the issues of efficacy, safety and scalability currently associated with cell therapy development and manufacturing, which is estimated to represent a $30 billion market opportunity and is rapidly growing (CAGR +30 per cent).

Also, through its internal development and partnership programmes, Mogrify is positioned to directly address growing markets that are unserved by approved cell therapies – such as cardiac repair and cartilage regeneration end-user markets – estimated to be worth $120bn and $7bn by 2022 and 2025, respectively.  

Mogrify’s leadership team is of significant commercial and scientific calibre. The company was founded by leading academics in bioinformatics, Professor Julian Gough (LMB, Cambridge, UK), cell reprogramming, Professor Jose Polo (Monash University, Melbourne, AU), and machine learning, Assistant Professor Owen Rackham (Duke-NUS, Singapore), and is chaired by Professor Steve Jackson – Frederick James Quick Professor of Biology (University of Cambridge), head of CRUK Laboratories (Gurdon Institute), founder of KuDOS Pharmaceuticals, co-inventor of Olaparib (Lynparza®), founder of Mission Therapeutics and co-founder of Ahren.

Dr Disley is a renowned scientist, entrepreneur, angel investor and enterprise champion who has started, grown or invested in over 40 startup life science, technology and social enterprises, raising $500m in business financing and closing $600m in commercial deals.

He was CEO of Horizon Discovery Group plc for 11 years, during which he led the company from startup through a $113m IPO and rapid scale-up powered by multiple acquisitions of US peer companies to become a global market leader in gene editing and gene modulation technologies.

He was appointed OBE for his services to business and enterprise in the healthcare sector and picked up the accolade from Prince William at a ceremony at Buckingham Palace last week.

Crowning glory: Dr Disley at the Palace with his OBE

Dr Disley, said: “Direct reprograming between mature human cell types is a holy grail of regenerative medicine and pharmaceutical applications. We will commercialise the Mogrify cellular trans-differentiation platform via IP licensing, product development, internal and partnered drug development.

“I am thrilled to be working with a world-class multi-disciplinary founding team and a lead investor with founders of rarely matched scientific pedigree, as we rapidly expand to address the global cell therapy opportunity.”

Alice Newcombe-Ellis, founder and managing partner, Ahren Innovation Capital, added: “Mogrify’s team has a strong track record of success, and their cutting-edge approach to direct cellular conversion has the potential to disrupt cell therapy, placing the company in a unique position to address a large market opportunity. This is an exciting time for Mogrify.”

On leaving Horizon, Dr Disley embarked on a year-long series of adventures around the world that would have left Indiana Jones and Phileas Fogg dizzy.

Rejuvenated, reinvigorated and fitter than he has ever been, Dr Disley told me in an exclusive interview that he felt Mogrify’s IP-centric business model could have a similar impact on next generation cell therapies as Arm’s superchip licensing approach had achieved across cutting edge technology devices. He said: “Ours is a hub and spoke IP centric business model – a similar model to the one that enabled Arm to be so dominant globally for so long in the world of hi-tech devices and, going forward, in IoT.

“Arm was clever: It didn’t set out to build devices – it chose to design the chips that drive them all. Mogrify’s IP will broadly cover and enable market sectors where the cell lies at the heart of value creation.

“With the model we have chosen everyone is our customer. We don’t have to make the tools, therapies and manufacturing processes that drive the healthcare revolution; customers right across the chain can use our IP to make the products, provide the services and create the processes that will power their businesses.”

“The concept of how you Mogrify a cell really is a Holy Grail for generating cells whose phenotype is precisely tailored to the end application. In our model, we generate and control new composition of matter IP.

“The currency of our success is the development of new and market relevant IP – we are not chasing short-term revenue which would be be a barrier to the creation of real value.

“Using Mogrify researchers can create target cells (e.g, lung, prostate, cartilage) with desired properties that may enhance efficacy, safety and manufacturability from more readily available cells, such as skin, meaning the generation of almost any target cell is tractable. 

“On speaking with investors and potential customers it is clear they readily understand the power of the Mogrify value proposition and the huge leap forward it could make in transforming how cell therapies are developed. 

“In recent times solid state single molecule DNA sequencing developed by Sir Shankar Balasubrumanian and Professor David Klemnerman (Solexa/Illumina) and the expression of therapeutic monoclonal antibodies developed by 2018 Nobel Laureate Sir Greg Winter (CAT/MedImmune) were the most fundamental breakthroughs in understanding the genetic drivers of disease and the development of novel biotherapeutics that have lifesaving outcomes.

“I am very pleased that the lead institutional investor was Ahren Innovation Capital – a new venture fund founded by Alice Newcombe-Ellis and amongst other great scientists Sir Shankar, Sir Greg and our chairman Professor Steve Jackson who know what it is like to bring transformative technology platforms to market.

Professor Steve Jackson

“Whilst there is a long way to go, the Mogrify approach could dramatically accelerate the quest for new cell therapies which are currently limited by the lack of available sources of cells with suitable efficacy, safety and manufacturing profiles.

“Stem cell approaches are in vogue right now but I believe they are fundamentally limited and will in time be seen as a directional technology that showed the way in cell conversion. The future is direct cell trans-differentiation and I hope to lead Mogrify in this mission to transform the generation of lifesaving  cell therapies.” 

Mogrify is looking for an additional 10,000 sq ft of lab and office space at the heart of the Cambridge cluster and is set to hire fast and big, including senior positions.

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#Blockchain Market Cap: A Flawed Ranking System for Valuing Crypto

Market Cap: A Flawed Ranking System for the Valuation of Crypto

Market cap is often used as a metric of importance in the crypto industry. Communities will react jubilantly as their preferred coin moves up the rankings. People will often invest in the top X coins based solely on their market cap as they think it is representative of a diversified portfolio. However, is market cap the right metric to focus on?

Also read: Coinbase Acquires Cryptocurrency Surveillance Company Neutrino

In this post I will explore the fallacy of market capitalization. I will look at the methods with which market cap is often determined and why it could be considered flawed for a number of reasons. I will also touch on other potential metrics which could be more representative of “value.”

But first, let’s start with some basics…

Recap on Market Cap

Market capitalization is a concept that has been borrowed from the traditional equity markets. In the context of a publicly traded company, it is supposed to give a measure of how much the outstanding free float of shares are worth on the market. It is merely calculated by taking the price of the shares and multiplying it by the outstanding free float of shares.

Capitalization is often used as a metric of size, value and importance in the equity markets because all the shareholder information can be publicly verified and the shares are often traded on one exchange.

There is no disagreement as to the market cap of Coca Cola because analysts can easily replicate it themselves. They can pull the shareholder records from their databases and grab the latest price from the NYSE ticker information. However, the same cannot really be said for the cryptocurrency markets.

Market Cap in Crypto

When cryptocurrencies first started gaining the public’s attention a few years ago, numerous websites wanted to find a quick and easy way to compare all of the different coins on the market. They needed a simple ranking number that people could use as a rough benchmark.

Market cap was one of the most applicable metrics that they could use. It was also relatively easy to understand for those who were new to the cryptocurrency markets. It was understood to imply the total value of all coins in circulation.

A problem that is unique to cryptocurrencies though is the fact that this “circulating supply” is often defined subjectively by the coin ranking websites. For example, if we were to take a look at the definition of “circulating supply” on Coinmarketcap (CMC) it states the following.

Market Cap: A Flawed Ranking System for Valuing Crypto
How circulating supply is calculated on CMC. Image via Coinmarketcap.

While this seems like a pretty thorough examination of the circulating supply of a project, a great deal of it will come down to the judgement of the folks at CMC. You will have to trust their assessment of what is freely circulating based on information that is provided to them by project teams.

As many Bitcoin proponents know, “Don’t trust, verify.”

Potential Manipulation of Numbers

Something specific that CMC does is exclude the pre-mined coins from the circulating supply of a particular project. While the intentions behind this may be right, there are some negative externalities that come with this.

For example, when a project has pre-mined a large proportion of their coins, every time they release these funds, their circulating supply will go up. If these coins are not sold immediately (which impacts price) then the market cap of the coins is also likely to increase.

There have been many projects that have been accused of this tactic. While some of them may not have been intentionally seeking to impact price, it is disconcerting that such an important metric can move at the whim of the developers.

This is of course only the circulating supply number that we are talking about. We are well aware of how crypto whales are able to impact price in relatively illiquid markets. Through wash trading and limited external demand, nefarious actors can pump the price and hence impact market cap.

What Can Be Done?

In a sense, the coin ranking websites are in a bind when it comes to market capitalization. They are using it precisely because it is well known, easy to understand, comparable and seemingly applicable. They are trying to provide an objective view of the coin’s total value and the more they try to tweak the formula, the more they can be accused of being subjective.

Another coin ranking site, Coingecko, has taken a slightly more transparent and innovative approach to their rankings. For example, when it comes to listing their circulating supply they do not exclude pre-mined coins. They do this more for consistency because technically tokens issued on smart contract platforms are all pre-mined. Similarly, pre-mined coins could potentially already be traded on exchanges because they are not locked.

They also give the user more information on how circulated supply is calculated for each coin that they have listed. For example, in the below image you can see the supply numbers for the 0x (ZRX) project.

Market Cap: A Flawed Ranking System for Valuing Crypto
Circulating supply breakdown for ZRX. Image via Coingecko.

Indeed, determining the “value” of a cryptocurrency project is itself such an involved discipline. If someone really wanted to analyze this then they would need to look at factors such as on-chain metrics, developer activity, community interest and so forth.

In fact, exchanges such as Binance have even started to roll out their “gold standard” metric which awards projects based on their “communication.” Although this is not an endorsement by Binance, projects that regularly communicate with their community could be a valuable metric.

Of course, one can’t really look at these other metrics in isolation and compare them to another coin. They have to be broken down and analyzed piece by piece and adjusted for particular technicalities of the coins in question.

None of these metrics can be viewed as a potential replacement for the quick-and-dirty measure that comes with a coin’s market cap. They can only be used as a complement to it by the analyst should they decide to delve deeper into the relative “value” of a project.

Don’t Get Bitconnect Rekt

Market capitalization is a useful metric. It allows us to get a rough sense of the general market value of particular coins that are on the market. However, that is where its usefulness should stop.

It should not be used as some sort of a metric of importance, value or market support for the project in question. It is a simple metric which, although useful, can and has been manipulated.

While circulating supply numbers can be tweaked to better reflect market dynamics, market cap should be a singular factor in a much more thorough due diligence process. Development, user numbers, scaling and communication should all be thrown into the “DYOR” soup.

Let us not forget that Bitconnect was at one time in the top 10 of CMC. If you had invested solely based on this fact, you would have been utterly Bitconnect rekt.

Do you think crypto market capitalization is inherently flawed? How useful is market capitalization for determining the crypto market’s total valuation?

Images courtesy of Shutterstock, Coinmarketcap, and Coingecko.

OP-ed disclaimer: This is an Op-ed article. The opinions expressed in this article are the author’s own. Bitcoin.com does not endorse nor support views, opinions or conclusions drawn in this post. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the Op-ed article. Readers should do their own due diligence before taking any actions related to the content. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any information in this Op-ed article.

This article was written by Nic Puckrin. He is an ex Investment Banker and blockchain enthusiast. He has founded several online businesses and fell down the crypto rabbit hole in 2016. When he’s not sitting behind six screens trading Bitcoin, Nic is maintaining his numerous mining rigs.

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#Africa Leadspace, FCMB launch Hub One co-working space in Lagos


Nigerian co-working space Leadspace has partnered local bank FCMB for the launch of a tech hub in Lagos, in a bid to address infrastructural gaps holding back tech startups.

Disrupt Africa reported in 2016 Nigerian tech accelerator firm Passion Incubator moved into co-working with the launch of the Leadspace office in Lagos.

The launch of the new Hub One co-working space sees Leadspace expand to a second location in Lagos; with the office opened in partnership with FCMB.  The duo aim to offer a conducive environment designed to foster collaboration and drive creativity within Nigeria’s tech startup ecosystem.

FCMB said despite the local tech industry growing in leaps and bounds, infrastructural gaps remain, creating the need for affordable tech-enabled spaces where startups can work and share ideas without having to deal with exorbitant overhead costs.

Hub One offers a professional office space with unlimited internet, constant power supply, free coffee and a community of tech entrepreneurs.

“Hub One is designed to engage the tech ecosystem as a means of providing solutions for today and the future,” said Bukola Smith, executive director of business development at FCMB.

The hub will host regular incubation programmes, hackathons and pitching events, and will act as a platform for tech startups.

Hub One provides necessary infrastructure for tech startups, as well as capacity building events, to enable them focus their limited resources on their business development,” said Olufunbi Falayi, chief executive officer (CEO) of Leadspace.

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#Africa Kenya’s Paytree helps merchants grow with free e-commerce stores


Kenyan startup Paytree is helping businesses reach more customers through the provision of free e-commerce stores integrated with payment solutions and last-mile delivery services.

Formed in early 2018, Paytree only went to market in August but has already built up a customer base of more than 300 merchants.

It has three main products – integrated payments tool Paytree Direct, payments distribution system Parallel, and Mzizzi, its online shop platform. The latter is its main focus, with projects director Dayvee Ngugi telling Disrupt Africa it was the first African solution that allowed anyone to open a fully branded online shop for free.

The platform has integrated payments from major mobile money providers, and all major cards and banks, and allows businesses to start selling in less than a week. Once a sale is made merchants can withdraw their funds immediately, with Mzizzi then collecting the purchased goods and delivers them to the customer anywhere in the country.

“Mzizzi serves merchants of all sizes, from global brands such as Subaru to small-time entrepreneurs who are just starting up, and exposes their products to a continent-wide audience in a way that wasn’t possible before,” Ngugi said.

“The cost of setting up a fully fledged e-commerce shop for any business, especially SMEs, can be quite high. Integrating with payment providers is a major headache, and delivery, even for established brands, is a real nightmare.”

Mzizzi levels the playing field by providing these solutions at no cost to a business, making revenues through commissions on sales. The startup has been bootstrapped so far, but is looking for funding to take the next step. It has been a case of so far, so good even without investment, however, with more than 300 businesses of all shapes and sizes using its platform. Ngugi said it is still a work in progress.

“Mzizzi is very different from a marketplace. What you find with Mzizzi is everything from people trying to grow their businesses while having regular employment, and more recently all the way up to global brands. Africa is still a nascent industry in e-commerce, we are working hard to get it right,” he said.

The startup operates only in Kenya for now, but does have plans to expand to the rest of East Africa and eventually across the continent.

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