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Congress Is Now Holding Two Crypto Hearings This Wednesday

Congress is set to hold not one but two separate hearings related to cryptocurrencies on Wednesday. Last week, CoinDesk reported that the House Committee on Financial Services will gather this week to discuss the subject, with this particular hearing honing in on the question of crypto as a new form …

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Coinbase Says It Now Has Regulatory Approval to List Security Tokens

U.S. cryptocurrency exchange Coinbase has reportedly received regulatory approval to acquire several securities firms – a move that could eventually see it supporting trading in tokens deemed as securities. A spokesperson for the exchange said on Monday that both the U.S. Securities and Exchange Commission (SEC) and the Financial Industry …

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Banks Take Sides as Blockchain Trade Finance Race Heats Up

Trade finance is possibly the busiest space in enterprise blockchain today. And while the people behind the different platforms may say they’re not in competition, that’s not how it looks from the outside. Announced Tuesday, NatWest, a part of the Royal Bank of Scotland, has joined Marco Polo, the consortium …

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IBM Is Helping Launch a Price-Stable Crypto With FDIC-Insured Funds

The latest attempt to create a cryptocurrency pegged to the U.S. dollar, or “stablecoin,” combines 21st-century technology with an invention from the Great Depression. Announced Tuesday, a startup called Stronghold is launching USD Anchor, which will run on the rails of the Stellar blockchain and use its consensus mechanism to …

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Russian Firm Will Reward Staff With Crypto Tokens Tied to Profits

Qiwi Blockchain Technologies (QBT), a subsidiary of the Russian e-payments firm Qiwi, plans to incentivize staff by rewarding them with a custom token. According to a report from Russian news agency Interfax on Monday, QBT – which was launched in March to develop in-house blockchain solutions and provide consultation services …

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Mastercard Wins Patent for Speeding Up Crypto Payments

Mastercard won a U.S. patent on Tuesday for a method of speeding up cryptocurrency payments. The document, published July 17 by the U.S. Patent and Trademark Office (USPTO), explains that though cryptocurrencies have “seen increased usage over traditional fiat currencies by consumers who value anonymity and security,” the wide disparity …

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Augur Betting Volumes Just Topped $1 Million (And They’re Accelerating)

Prediction platform Augur is fast attracting fans, at least if new data is any indication.

Revealed exclusively to CoinDesk, figures from Predictions.Global, a website that allows users to view Augur markets without installing the app, show the platform saw a spike in "open interest" from Sunday to Monday. A metric that denotes how much is being risked on the outcome of real-world events, open interest leapt by 51 percent to more than $325,000 over the period.

That news comes less than a week after Augur's launch, at which time it quickly (but briefly) became one of the top 5 applications on ethereum. One of the first large-scale applications to be deployed on the world's second-largest blockchain, it's believed the market could one day become a large-scale vehicle for the crowd-sourcing of human knowledge and expertise.

Still, while it's early days for that aim, the data makes clear Augur has enjoyed rapid growth in the sum of money users have put on the line, and that the number and variety of markets is increasing. Predictions.Global's data also underscores the speed at which Augur markets are attracting funds.

Open interest surpassed $100,000 on July 11 – the first full day of betting – then rose to $200,000 on Sunday and $300,000 Monday.

money at stake augur

money at stake augur

In this way, the figures add to the growing data on the new product, most of which paint a similar picture.

Another data provider, DappRadar, which measures the total transaction volume passing through Augur's smart contracts (rather than open interest), has found over 3,000 ether has traded on the platform since launch (worth nearly $1.5 million at the current exchange rates), with more than one-third of that total trading within the past 24 hours.

God and ether

Still, in other ways, uses of Augur are arguably becoming more diverse. Predictions.Global's data shows a steady rise in the number of prediction markets created by Augur users, to nearly 320 at the time of writing.

total markets augur

total markets augur

To be sure, money at stake is heavily concentrated in a small number of markets, and most have seen no betting activity at all.

A single market – for whether the price of ether will exceed $500 at the end of the year – accounts for around half the open interest on the platform (nearly $150,000) and drove most of the increase in open interest over the past 24 hours.

And of course, as one might expect from an open, decentralized platform, users have offered some frivolous predictions.

For example, more than one market solicits bets on the existence of God, to be determined (in one case) by news media reports before January 1, 2020. (Interestingly, the app shows that someone is willing stump for a "yes" on the God question, if they can find someone to take the bet.)

Virus spreads

The variety of markets that have sprung up is notable, too.

"We've seen terrific US dollar volume, terrific market creation growth, innovation in the types of markets created and their characteristics in terms of how folks are starting to use the platform," said Ryan Berckmans, co-founder of Predictions.Global.

He specifically pointed to Liquidity Health, a user that has created markets for the spread of epidemic diseases such as human-borne Nipah virus. Liquidity Health's goal is to "fight disease with better predictions," according to its Twitter account.

While skeptics might worry that it's creating a financial incentive to spread viruses, Augur co-founder Joey Krug told CoinDesk that such applications of the platform are "actually really interesting" and could provide "a lot of useful information."

He added:

"I'm less concerned about a person trying to spread a disease to make money off of it."

Other creative uses of the platform have emerged, including an attempt to introduce accountability to the ICO space. MedCredits, which plans to raise money through a token sale, has created a market to bet on whether it will adhere to its roadmap, releasing an application on ethereum's "mainnet" – or live blockchain – by October 15.

Around $5,000 is at stake, and the odds of MedCredits succeeding have climbed from 20 percent to 85 percent at the time of writing.

Users vs bugs

But while the data above might give the impression that Augur is thriving, there's one important metric that's less encouraging.

According to DappRadar, the platform's daily userbase peaked at 265 the day it launched, briefly pushing Augur past CryptoKitties in rankings of the most popular dapps. User numbers have declined since, and at the time of writing, the figure stands at 113 over the past 24 hours.

Krug offered a potential explanation, though he said it was just an "intuitive guess." People might have tried it during the first couple of days, but been discouraged by bugs, he said, which is reasonable to assume, based on complaints about Augur's user experience on forums and social media.

The Forecast Foundation has issued four updated versions of the app since launch, as well as working with the ethereum node provider Infura to improve connectivity.

As these bugs have been fixed, Krug said, it is possible that users – even if there are fewer of them currently – have become more comfortable that Augur is reliable, so they've put more capital onto the platform. The first markets are scheduled to settle this week, paying out users who bet correctly. If all goes well, that milestone could make users even more willing to stake their money on the platform.

The ultimate goal, said Krug, is for Augur to allow users "to create markets on essentially anything" without paying high fees to financial intermediaries. For now, high gas costs on ethereum and other technical limitations mean that goal is years away. But Krug is confident that the technical issues can be sorted out.

He concluded:

"Right now, what we're doing is looking up the exponential curve."

Crystal ball image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Is Pied Piper Serious? How HBO Inspired Crypto’s Most Confounding Coin

"Hey … this is Craig Wright."

It wasn't, but that was far from the strangest part of the conversation.

Thus began CoinDesk's attempts to determine the identity and intent of the individuals behind "Pied Piper Coin," a parody Twitter account inspired by the HBO series "Silicon Valley." Chronicling a plucky startup that suffers hilarious slings and arrows in its quest to remake the internet, the TV show had its characters conduct an initial coin offering (ICO) in May.

So, no one was exactly surprised when, a couple of days later, a Twitter account for the fictional token, Pied Piper Coin, showed up. Less clear, however, was who was behind the account.

Many took it for the kind of corporate Twitter that's fast become fashionable in an age where MoonPie is an absurdist comedy juggernaut. If a has-been confectionary can capture the social zeitgeist, why not HBO? But if that was the case, corporate had given Pied Piper Coin a long leash.

The account's first tweet promised an airdrop – a free distribution of free crypto money – and told followers to tag exchanges so that they'd support the coin (in what would become a pattern, it worked in a dig at Bittrex). In private messages, Pied Piper Coin told us that Craig Wright was behind the account, that XRP was a security, and that yes, the airdrop was real.

But as time went on, Pied Piper Coin's enthusiasm for stoking crypto animosities made HBO backing seem less and less likely.

Interspersed with Silicon Valley-themed jokes about palapas, Teslas and LaVeyan Satanism, the account was laying into crypto's favorite punching bags – not just Ripple (which claims it did not issue XRP) and Craig Wright (who claimed to be Satoshi Nakamoto and utterly failed to prove it), but:

  • Rhett Creighton (who forked zcash, merge-forked that fork into bitcoin, then proposed another merge-fork of bitcoin);
  • John McAfee (for his unorthodox social media evangelism);
  • CoinMarketCap (which listed Bitconnect, which is accused of being a Ponzi scheme);
  • Tron (which allegedly plagiarized its white paper);
  • Iota (which was too quick to call Microsoft its "partner");
  • Roger Ver (a bitcoin evangelist who pledged allegiance to bitcoin cash and then insisted on calling it "bitcoin");
  • thelistgoeson.

Certainly, the account's fluency in crypto argot, memes and beefs was impressive. But who was it, and what was their goal? Eventually the person behind "@piedpipercoin" stated in their bio that they have nothing to do with HBO. (CoinDesk reached out to HBO to confirm that, but they did not respond before press time.) But far from being settled, things only got stranger after that.

At first it seemed pretty clear what was happening. A principled prankster was using "Silicon Valley" memesas a megaphone to call out bad actors and inject some healthy skepticism into crypto Twitter.

The person behind the Pied Piper account told CoinDesk:

"We are using humor to help remind the cryptosphere of all the shady things that have occurred and to help the broader community avoid these mistakes. […] People need to learn their history before they can progress into the future. Our way of teaching is through humor."

Others were inspired to follow their lead, with the crypto-meme ecosystem expanding beyond Pied Piper Coin.

PPCash insisted that its "vision of the new internet has been the true path from the start" (a send-up of bitcoin cash originalism). Meanwhile HooliCoin promised, "Soon the world will understand centralized cryptos are the way of the future" (a parody of corporate blockchains).

Yet amid all the jokes, Pied Piper Coin appeared to be serious about doing an airdrop. And that would complicate matters.

A scam?

The integration of a real cryptocurrency into the experience left a bad taste in the mouths of fans.

Neeraj Agrawal, the head of communications at the cryptocurrency policy think tank Coin Center and a powerful engine of crypto-memes in his own right, laid into Pied Piper Coin days after its appearance.

He wrote:

"Leave it to crypto to turn a mention of your thing on a popular TV show from cute parody account to scam airdrop within a week."

The narrative that Pied Piper Coin's creators might be out for a quick buck took hold as it became clear that the project was, in fact, creating an ethereum-based token. The creator's continued anonymity and a brief media blitz, in which he appeared on crypto YouTube shows wearing a Guy Fawkes mask and a Peter Pan hat, did little to counter that perception.

As May progressed, the price of PPI ("PPC" was taken) shot from a couple of cents to over $1. It has since fallen back down to nearly nothing.

Many of the ingredients of a classic crypto scam appear to be there: marketing that (briefly) implied backing from a legitimate, mainstream entity; an unaccountable team; a token without a product; aggressive social media promotion; a brief spike in the price followed by a long jaunt towards oblivion.

Plus, on May 28, the piper (let's call him that) sold 4,500 PPI over the counter "to recoup some costs from the coin."

And yet there are a couple of problems with this tidy scam narrative: Pied Piper Coin, as its creator pointed out on Twitter and in an interview with CoinDesk, never accepted investor money. It was a free airdrop, not an ICO. And we know about the OTC sale because the piper announced it publicly.

Whether Pied Piper Coin is remembered as a scam will likely depend on whether it follows through with its masked founder's increasingly ambitious promises.

Seriously serious

While corresponding with Pied Piper Coin's creator, it became clear he was serious – or at a minimum, serious about convincing us he was serious.

"PPI will have one of the biggest communities in crypto. We believe a lot of developers will be building on top of Piperchain," he said.

A one-pager posted to Steemit in late May straddled the line between parody and roadmap, proposing forking one of a few major blockchain protocols to create Piperchain and building decentralized applications (dapps) on top of it – but closing with a flurry of trolly hashtags: #HailSatan #WenPalapa #WenTesla.

In an email a couple of weeks later, though, the piper was adamant that Piperchain would happen – in Q3 no less.

The line separating plans from parody was still fuzzy, though. "Hopefully we integrate all the fluff words," he wrote: "Masternodes, Atomic Swaps, Sharding, Plasma, Lightning, etc."

In a call in mid-June, however, the piper had much more concrete plans for Piperchain: a fork of EOS that removes the constitution, increases the number of block producers (the network participants who maintain the blockchain) from 21 to 50, and decreases the number of tokens that participants need to stake. (He's no longer targeting Q3, he added.)

Between questions to a server about what a "fully dressed" grilled chicken sandwich entailed and side-bar conversations with Ken Bossack, a cryptocurrency and cannabis enthusiast, the piper explained two dapps that a team of four developers ("stallions") was building to run on Piperchain.

One would let users vote on which of two memes they prefer, with tokens going to the winning side, he said. The other would use geocaching to allow users to complete quests in the physical world.

(At the time of writing, the roadmap on the project's site is still firmly in parody territory.)

The piper said that he and Bossack were on their way to make a "surprise appearance" at Dogecon.

Dogecoin's heir

Perhaps the appearance shouldn't have been a surprise. Pied Piper Coin's founder told CoinDesk in early June, "We see dogecoin as the standard bearer for the meme-coin space."

And, to be fair, memecoins have turned over the years into somewhat of a cottage industry. First gaining traction in 2014, dogecoin may have faded away, but it never actually died. (Its market cap even briefly passed $1 billion in 2017).

Dogecon, a four day "un-convention," further brought together dogecoin enthusiasts in Vancouver in late June. The event was a showcase of what's made the project so appealing: its large, dedicated fanbase who won't let the joke go.

In this environment, Pied Piper Coin might even make sense. Dogecoin, founded by Jackson Palmer and Billy Markus in 2013, is the original memecoin, growing out of a popular image in which a nervous-looking Shiba Inu uses "very" and "such" wrong.

Its community has combined a serious devotion to the decentralized idea of cryptocurrencies with utter refusal to take themselves seriously. And unlike so many cryptocurrency projects that promised to decentralize the world and make their investors fabulously rich, only to fail in a more or less dramatic fashion, dogecoin has survived through nearly five years of enthusiastic self-parody.

Watching the piper sit on a panel with Palmer and discuss the philosophy of memes, the question of whether he's "serious" seemed just as absurd as the question of why he's dressed that way – or why grown men and women are talking about dog-themed internet money – would in any other context.

Among Palmer's other side projects is "are we decentralized yet?", a site that tracks various metrics of decentralization for major cryptocurrencies. Pied Piper Coin's founder appears to share a similar set of priorities, and was quick to decry the warped motivations he sees as taking over crypto.

He told CoinDesk:

"Too much of the space is empowering those very things we were wishing to overthrow. The space is getting excited about Wall Street and banks getting involved with the space. It shows people are more interested in their own individual greed than the actual reason crypto was created."

Dogecoin and Pied Piper Coin seem to occupy the same delicate singularity, where sincere – even naive – idealism and cynical parody are one.

In the spirit of memes, though, a picture is worth more than words:

pied piper coin dogecoin jackson palmer

pied piper coin dogecoin jackson palmer

Last supper image courtesy of Pied Piper Coin

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Bitcoin Price Retakes 50-Day Moving Average in First Since May

Bitcoin (BTC) scaled the crucial 50-day moving average (MA) on Monday for the first time in nearly two months, taking its price above $6,700. The corrective rally picked up the pace 24 hours ago, possibly due to reports stating that BlackRock, INC – the world’s largest asset manager and exchange-traded …

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Peter Thiel, Bitmain Co-Founder Invest in EOS Developer Block.one

EOS protocol maker Block.one has received new backing from a number of big-name investors, including PayPal co-founder Peter Thiel. In a fresh round of funding – the amount of which was not disclosed – Block.one, the company behind what has now become the fifth-most valuable cryptocurrency by market capitalization, has …

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Bitcoin’s Road Back to $7K (And the Chart Hurdles In the Way)

Having defended $6,000 last week, bitcoin (BTC) appears to be building momentum for a price rise, but nearby technical hurdles still present a formidable challenge. At press time, the world’s most valuable cryptocurrency is changing hands at $6,689 on Bitfinex and looks to be gaining steam for another test of …

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Schnorr Is Looking Poised to Become Bitcoin’s Biggest Change Since SegWit

Schnorr is coming...

In fact, the bitcoin upgrade arguably took its most significant step yet toward implementation last week when influential developer Pieter Wuilleunveiled a draft outlining its technical makeup. With the release, the idea, one that's been in the works by bitcoin developers for years, is one step closer to improving the scaling and privacy of the world's most valuable cryptocurrency.

Effectively, this sets up Schnorr as the next big change to bitcoin, meaning it will be the largest code change since Segregated Witness (SegWit), a pivotal bug fix that prompted a drawn-out battle in the bitcoin community last year before ultimately being adopted.

At a technical level, adding support for Schnorr, a digital signature scheme, would give bitcoin users a new way to generate the cryptographic keys they need to used to store and send bitcoin. By doing so, it also paves the way for a number of exciting benefits, including tackling privacy and scalability, arguably two of bitcoin's most worrisome problems.

"It is a building block for a variety of improvements," Wuille told CoinDesk, adding there are even some further-out improvements that haven't gotten a lot of attention quite yet. And while Wuille hopes the change will ultimately be adopted, he added it's "ultimately up to the users" if they want to adopt it - as was the case with SegWit.

Co-authored by several top bitcoin developers, including the likes of Bitcoin Core contributor Johnson Lau and Gregory Maxwell, the technical, math-ridden proposal outlines the exact signature scheme that could be coded in bitcoin.

And while it's far from that final goal, it's a necessary piece.

Blockstream engineer and co-author Jonas Nick told CoinDesk:

"Standardizing Schnorr for bitcoin is a big step towards using it in bitcoin."

A way forward

For one, the BIP draft helps to avoid future confusion by proposing a standard that ensures that all developers and merchants eventually implement the Schnorr signature code in the same way.

Though the full description can be read in the highly-technical BIP, the main idea is it describes the math necessary to produce Schnorr signatures, offering an alternative to Elliptic Curve Digital Signature Algorithm (ECDSA), the sole algorithm used to produce keys and verify transactions in bitcoin today.

Schnorr will have one thing in common with the signature scheme it seeks to crowd out, though. If plan is accepted, it will use the same mathematical "curve" that ECDSA uses to produce the keys, called "secp256k1."

It's a lot of tricky math, so it's no surprise the release sparked technical discussion on the bitcoin developer mailing list.

But nothing major has come up so far and developers are optimistic, especially since one of Schnorr's key benefits is that, unlike ECDSA, Schnorr's security can actually be proved mathematically.

While Schnorr offers a number of improvements on its own, developers are also excited that it will also pave the way for a range of changes that can be built on top of it, such new privacy techniques.

Right now, it's obvious when users send so-called "multi-sig transactions," which are a more advanced type of transaction where more than one person is required to sign off on a transaction, because of bitcoin's public ledger. But Schnorr pave the way for a technique that will make these transactions look the same as every other transaction.

Nick noted Schnorr will also lead these advanced transactions will be cheaper as well, an important improvement since transactions can grow very expensive in times of congestion.

And it seems like new tech built on top of Schnorr are being proposed on a regular basis.

"Due to the wealth of new discoveries lately I believe these technologies should be developed in a step-by-step basis, and my focus for a first step is just Schnorr and Taproot," Wuille said, referring to the bitcoin improvement "Taproot" proposed earlier this year by another influential bitcoin developer Greg Maxwell to further improve bitcoin's privacy.

Less detractors?

That said, there's still a ways to go - Schnorr's a massive project with many moving pieces.

While this BIP proposes a standard for developers to chime in on, Nick noted there's also a code implementation that's been in the works for ages, putting much of what's in the BIP draft into practice.

Plus, once developers fight it out until they decide there are no longer any outstanding problems, developers need to come up with a way to actually add it to bitcoin, among other things.

"The specifics for how to deploy it in bitcoin are still being actively discussed," Nick said.

Having been through a few so-called "consensus" changes in his years as a bitcoin developer, Wuille gave a particularly long list of things to do.

"Like any consensus change, it will be a long process involving fully fleshing out a draft for integration, publishing it, gathering comments from the technical community and ecosystem, writing implementations of both consensus rules and integration in wallet software, proposing a deployment plan, and if all goes well, get it activated," he said.

In the email where he introduced the BIP, he added that if the BIP is "accepted" by the broader bitcoin community "we'll work on more production-ready reference implementations and tests."

Not to mention, there's another potential stumbling block on everyone's minds.

Schnorr is a particularly big upgrade. Although changes are being made to bitcoin's most-used client every day, with code contributions coming from a diverse group of contributors stationed around the world, Schnorr is a rarer type of change, since it affects the most important rules in bitcoin.

SegWit was the last code change "consensus" change made to bitcoin, sparking a debate so big, those who disagreed with the change split off and created their own cryptocurrency with SegWit removed.

The most enthusiastic SegWit supporters even made hats to express their support for the code change. Blockchain consultant Francis Pouliot joked that similar advocacy hats should be made in advance of Schnorr, in case a similar vicious debate breaks out.

He's not the only developer mulling this possibility.

"It looks for now there are less detractors than there was for SegWit," developer Riccardo Casatta said, though adding he's not taking any chances:

"You cannot say how things​ will go and as always, it is better to be patient."

Welding laser image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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​​Market Mania Is Unavoidable, But Crypto Must Get Past It

Michael J. Casey is the chairman of CoinDesk’s advisory board and a senior advisor for blockchain research at MIT’s Digital Currency Initiative. The following article originally appeared in CoinDesk Weekly, a custom-curated newsletter delivered every Sunday exclusively to our subscribers. The financial bubbles of 17th and 18th century Europe are …

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American Express Thinks Blockchains Could Help Prove Payments

American Express is on the hunt for better ways of proving when transactions occur and a new patent filing suggests the financial services giant may be looking at blockchain as part of a possible solution. In a patent application released by the U.S. Patent and Trademark Office last week, American …

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