The Disrupt Weekend

Public blockchains, specifically Ethereum, are set to become the main mechanism that companies use to manage and coordinate their business relationships with each other.

In the world of information technology, this is called Middleware, and it’s just a fancy name for a set of tools that connect one system to another. The difference this time is that public blockchains will take what has historically been of limited scope or highly customized and turn it into a standardized, flexible, and scalable set of tools.

Right now, we can already see the very specific use cases for blockchain technology in the enterprise emerging, each with its own specific return on investment. The most popular by far is using blockchains to trace product or asset history. Our clients use it for everything from tracking blood donations to vaccine safety to verifying the history of a bottle of wine.

The second emerging use case is execution of enterprise business contracts. While most consumer transactions are relatively simple fixed prices and payments, enterprise transactions often involve complex sets of rules, many individually negotiated.

Blockchain-based smart contracts make it possible to encode each agreement as unique and execute it reliably every time and to do so in a way that is verifiable and inspectable by all the parties involved. EY is doing this with Microsoft for software licensing agreements and a public version of the same technology can be used for implementing enterprise purchasing agreements.

My own expectation is that these simple use cases of product traceability and contract execution will mature and scale quite rapidly and widen the scope of enterprise adoption. The most direct path I see in the near term is linking up the physical supply chain.”

“This interest in crypto isn’t driven by technology. And it isn’t driven by ideology. These money managers are looking to cut out the bank for an existential reason to them: a search for yield—risk-adjusted yield to be more accurate.

Historically, savers have been able to earn a decent return just from having their funds in a bank account or holding government bonds. This changed after the 2008 banking crisis. For the past decade there has been a quiet war on savers.

The advent of negative rates over the past year has caused a crisis amongst institutional money managers. While many people have complaints about their bank, these money managers are on the front line of trying to figure out alternative solutions to bank middlemen.

These past months feel like a genuine breakthrough, a movement from “if” to “how” do I take advantage of this new world.

As a tangible example, we have had in-depth discussions with some clients about plans to create a money market on Aave for an insured savings product. This is similar to what we offer in the traditional space, but it provides greater liquidity, the potential to boost returns through staking, and a gateway to other DeFi products.

Since the spring, the psychological borders between traditional finance and DeFi seem to be coming down, at least for some money managers. These people see that if you cut out the bank, the risk-return opportunities offered in DeFi are simply superior to what traditional finance can offer, in addition to the convenience benefits.

In our view, the DeFi revolution is more likely to come from savers than anywhere else. Just based on the trend over the past few months, expect adoption by institutional money managers looking for yield to lead to an increasingly bankless future.”

See Also: Banks Need to Adopt Crypto, Now

“We’ve seen lots of DAO action this year. And much of it is in the right direction. So let’s take a look at this year’s good, bad and ugly in the world of DAO.

In terms of decentralized exchanges, dxDAO, Curve and Nectar all saw notable appreciation, while MakerDAO, mStable and Bancor continued to make their presence known in the world of decentralized finance (DeFi). The launch of the LAO, a law focused DAO, had notable experiments with governance while Trojan DAO and attempted to gain a foothold in the burgeoning crypto art scene.

Aragon is the only DAO technology platform to date that is anywhere close to developing its own self-governance. This is a huge step towards the vision of DAO tech, which is to provide truly self-governing distributed software.

The concept of “anyone can propose anything” sounds fair, but the flaws are so deep that, this year, major DAO technologies have created additional layers beyond reputation and staking to combat potential issues.

The recent release of Cardano network’s Voltaire system recognizes the importance of maintaining and rewarding a panel of reviewers prior to the vote. The reviewers give a ranking to each proposal, so voters are still free to vote for any proposal, but the rankings reduce overwhelm and give voters a solid starting point.

Given all of these advancements in the technology and its adoption, the outlook is optimistic for building on this success.”

See Also: Experiments in Crypto’s Governance Lab

  1. “Time Your Crypto Sales
  2. Use HIFO Accounting To Reduce Crypto Taxes
  3. Harvest Tax Losses To Offset Crypto Gains
  4. Donate Crypto to reduce taxes
  5. Gifting Crypto To Family Members
  6. Move to a State with No State Taxes On Crypto”

“What are Bitcoin’s biggest challenges today? First, for it to become the universal reserve currency, Bitcoin must be able to scale to hundreds of millions—or even billions—of transactions. Second, there needs to be a way to safely introduce smart contracts on the blockchain.

Most experts interviewed by Decrypt agreed that many innovative Bitcoin solutions are still in the early stages of their development and are far from ready for mass adoption.

While Bitcoin will likely play a leading role as a long-term value storage method in the cryptocurrency world, it is still relatively slow and has low throughput—and will likely remain this way due to how hard it is to upgrade the blockchain. Thus, other blockchains are likely to surpass Bitcoin in terms of speed and throughput (which are crucial for day-to-day transactions) or complex algorithms such as dapps and smart contracts.

In the long term, Bitcoin will look more like an investment instrument and less like money.

Polemitis expressed the same sentiment, suggesting that Bitcoin is likely destined to become a store of value rather than a medium of exchange.

Great thread on the proposed FinCEN AML rule

“If you want to do your shareholders a $100 billion favor, convert the $TSLA balance sheet from USD to #BTC. Other firms on the S&P 500 would follow your lead & in time it would grow to become a $1 trillion favor.

In a huff, Musk said that “Bitcoin is almost as bs as fiat money” before proclaiming the One True Coin: Dogecoin.”

See Also: Jefferies’ Wood Cuts Gold Exposure in Favor of New Position in Bitcoin