All posts in “cryptocurrency”

Blockchain media startup Civil is issuing full refunds to all buyers of its cryptocurrency

Many doubted The Civil Media Company‘s ambitious plan to sell $8 million worth of its cryptocurrency, called CVL. 

The skeptics, as it turns out, were right. Civil’s initial coin offering, meant to fund the company’s effort to create a new economy for journalism using the blockchain, failed to attract sufficient interest. The company announced today that it would provide refunds to all CVL token buyers by October 29.

Civil’s goal was to sell 34 million CVL tokens for between $8 million and $24 million. The sale began on September 18 and concluded yesterday. Ultimately, 1,012 buyers purchased $1,435,491 worth of CVL tokens. A spokesperson for Civil told TechCrunch an additional 1,738 buyers successfully registered for the sale, but never completed their transaction.

Civil isn’t giving up. The company says “a new, much simpler token sale is in the works,” details of which will be shared soon. Once those new tokens are distributed, Civil will launch three new features: a blockchain-publishing plugin for WordPress, a community governance application called The Civil Registry and a developer tool for non-blockchain developers to build apps on Civil.

ConsenSys, a blockchain venture studio that invested $5 million in Civil last fall, has agreed to purchase $3.5 million worth of those new tokens. The purchase is not an equity; all capital from the token sale is committed to the Civil Foundation, an independent nonprofit initially funded by Civil that funds grants to the newsrooms in Civil’s network.

In a blog post today, Civil chief executive officer Matthew Iles wrote that the token sale failure was a disappointment but not a shock. Days prior, he’d authored a separate post where he admitted things weren’t looking good.

“This isn’t how we saw this going,” Iles wrote. “The numbers will show clearly enough that we are not where we wanted to be at this point in the sale when we started out. But one thing we want to say at the top is that until the clock strikes midnight on Monday, we are still working nonstop on the goal of making our soft cap of $8 million.”

A recent Wall Street Journal report claimed Civil had reached out to The New York Times, The Washington Post, Dow Jones and Axios, among others, but failed to incite interest in its token.

Separate from its token sale, Civil has inked strategic partnerships with media companies like the Associated Press and Forbes, both of which confirmed to TechCrunch today that the failed token sale doesn’t impact their partnerships with Civil. 

Forbes became the first major media brand to test Civil’s technology when it announced earlier this month that it would experiment with publishing content to the Civil platform. As for the AP, it granted the newsrooms in Civil’s network licenses to its content. 

Civil, of course, isn’t the only blockchain startup targeting journalism. Nwzer, Userfeeds, Factmata and Po.et, which was founded by Jarrod Dicker, a former vice president at The Washington Post, are all trying their hand at bringing the new technology to the content industry.

Which, if any, will actually find success in the complicated space, is the question.

Sudden price drop shows largest ‘stablecoin,’ Tether, isn’t so stable after all

Tumbling.
Tumbling.

Image:  Malte Mueller / getty

I mean, it’s right there in the name.

The largest so-called stablecoin by market cap, Tether (USDT), is supposedly pegged to the U.S. dollar and always worth $1. However, if there’s one thing we know for sure about the world of cryptocurrency, it’s that things don’t always go according to plan — a fact emphasized by Tether’s sudden plunge in value over the last 24 hours. 

The stablecoin briefly traded below $.87 on the exchange Bittrex before climbing back up to the still-abysmal price of $.915 at the time of this writing. 

USDT’s instability is a troubling sign not just for those HODLing that particular coin, but for potentially anyone sitting on cryptocurrency. That’s because, as demonstrated by researchers at the University of Texas this past June, Tether has likely been used to “provide price support and manipulate cryptocurrency prices.” 

Not looking good.

Not looking good.

Image: screenshot / bittrex

Critics have long argued that Tether is a scam — a claim bolstered by Tether’s seeming refusal or inability to release an audit — that artificially inflates the price of bitcoin. Even if this were not true, with almost $2.5 billion worth of USDT in circulation, a crumbling of the stablecoin — of which a temporary 13 percent price drop might be an early sign — would be more then enough to spook cryptocurrency investors and the market at large. 

Which appears to be exactly what we’re seeing. On Monday, the exchange Bitfinex, which the New York Times reported last November is “owned and operated by the same people” as Tether, issued a statement declaring that it would “temporarily pause fiat deposits (USD, GBP, EUR, JPY) for certain customer accounts in the face of processing complications.”

Bloomberg suggests that concerns over those “processing complications,” and what they mean for Bitfinex’s relationships with banks, led to a crisis of confidence in Tether and a corresponding sell-off. That sell-off, in turn, both drove down USDT’s price and simultaneously drove up bitcoin’s as traders sought to dump their Tether for BTC. 

None of this was helped by the fact that the exchange Binance temporarily suspended Tether withdraws (they have since resumed). 

Meanwhile, traders are running to stablecoins other than Tether. TrueUSD, a stablecoin that is also supposedly pegged to the U.S. dollar, surged to as high as $1.07 on Bittrex in the last 24 hours. In other words, people were willing to pay a 7 percent premium to hold something that wasn’t Tether.

What all this means for the future of Tether specifically, and stablecoins more broadly, isn’t exactly exactly clear. However, what it means for today perhaps is. Namely, “stable” might be more of a suggestion than an accurate descriptor.

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Google mocks cryptocurrency as ‘not real’ in Call Screen ad

Google thinks your crypto is a joke.  

The search and advertising giant released a new tool on Tuesday known as Call Screen, which helps Pixel owners screen unwanted calls. In a seemingly out of place move, the company used the product’s announcement as an opportunity to dunk on cryptocurrency. 

To promote the feature, Google released a short video starring The Daily Show’s Dulcé Sloan and Ronny Chieng. Meant to demo Call Screen in action, the minute-long ad depicts the two comedians — dressed as Google employees — screening calls from a scammer and the power company. 

“Cryptocurrency? That money’s not real.”

It’s the latter of these two scenarios that caught our attention. 

“It’s the electric company,” Sloan explains to Chieng while reading a transcription of a phone call provided by Call Screen. “They said your bill is super high.”

Chieng replies, noting that “cryptocurrency mining takes a lot of energy.”

Here’s where it gets good. 

Sloan, oozing derision, responds to Chieng with a statement seemingly designed to break the hearts of bitcoin maximalists everywhere: “Cryptocurrency? That money’s not real.”

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Chieng attempts to diffuse the situation by claiming that “money isn’t real,” but it doesn’t go over well with Sloan. 

“You gonna live that lie?” she asks, pointedly.

And yeah, of course this is all a joke meant to promote Call Screen. But hey, that’s kinda the point, isn’t it? Because in Google’s eyes, cryptocurrency is nothing more than a punchline. 

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Circle Invest lets you buy cryptocurrency collections

With Circle Invest, Circle has been trying to make it as easy as possible to get started with cryptocurrency trading. And the company wants to go one step further with collections of multiple tokens.

When it first launched, Circle Invest was pretty straightforward. You could download an app, sign up and buy Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic and Litecoin in just a few taps.

But the company then started adding more coins. And if you’re new to the cryptocurrency industry, it’s hard to understand the difference between Ethereum and Ethereum Classic if you weren’t looking at the market when the fork happened.

That’s why Circle introduced a feature called “buy the market”. In one tap, you can buy all the coins on Circle Invest, weighted depending on their respective market capitalization. For instance, the total market capitalization of Bitcoin is much higher than the market cap of Monero. So you’ll end up with a lot of bitcoins.

30 percent of Circle Invest users are using this feature. People who buy this package probably don’t invest as much as users who build their own portfolio, so it might not be 30 percent of Circle Invest’s transaction volume.

Coinbase recently introduced a similar feature called bundles. In just a few taps, you can purchase all the coins on Coinbase. Of course, both Coinbase and Circle Invest provide a limited selection of coins. But it’s clear that they both want to list more assets in the future.

With collections, you can buy a subset of the tokens available on Circle Invest. There are three packages for now — Platforms, Payments and Privacy. For instance, you’ll find Bitcoin, Bitcoin Cash, Stellar and Litecoin in the Payments collection. Once again, collections are weighted by market cap.

Compound launches easy way to short cryptocurrencies

Think Ethereum and other crypto coins are overvalued? Now you can make money when their prices fall via Compound, which is launching its money market protocol for shorting cryptocurrencies today. The Coinbase and Andreessen Horowitz-funded startup today opens its simple web interface allowing users to borrow and short Ethereum, 0x’s ZRX, Brave’s BAT, and Augur’s REP token, or lend them through Compound to earn interest.

Compound’s protocol isn’t just useful for crypto haters, or HODLers who want to generate interest instead of just having their coins gathering dust in a wallet.  “If/when Compound scales, this will lead to some really interesting improvements in market structure, namely, fairer prices” Compound CEO Robert Leshner tells me.

The startup spent the summer completing a security audit by Trail Of Bits and adding 26 hedge fund partners who will trade with Compound, offering liquidity to independent investors looking to be matched with borrowers or lenders. Next, the startup wants to offer a stablecoin on its protocol, bring in big financial institutions to add even more liquidity, and partner with a wallet provider to make signup faster.

Compound users visit its site through a Web3 browser such as MetaMask or Coinbase Wallet and enter their Ethereum price. They can then view the interest rates for borrowing and shorting or lending and earning interest for each of the supported tokens. Compound’s secret sauce is that those interest rates are set algorithmically based on demand, though eventually it wants a community governance body to oversee this process. “It ranges from 5 percent to 45 percent APR depending on how scarce liquidity is . . . in general, we expect supply to outnumber borrowing about 5-1, and borrowing rates to be about 10 percent”.

To make sure no one thinks they’re getting scammed, Compound is also releasing a transparency dashboard users can view to check up on all the assets moving through the protocol and see what Compound is earning. It charges 10 percent of what borrowers pay in interest, with the rest going to the lender. That margin is what attracted the $8.2 seed round for Compound that also included Polychain Capital and Bain Capital Ventures.

It could also make crypto exchanges like Coinbase or Robinhood less attractive to users because leaving their coins there comes with the opportunity cost of not lending them for profit. Meanwhile, shorts could pop the volatile crypto bubble and push prices to more sensible and stable levels. That’s market health is a critical precursor to big banks and traditional investors diving into crypto.

[Disclosure: The author owns small positions in Bitcoin and Ethereum, but has no financial motive for writing this article, did not make trades in the week prior to this article, and doesn not plan to make trades in the 72 hours following publication.]