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In Its First Public Acquisition, Binance Buys Decentralized Trust Wallet

Major crypto exchange Binance has made its first public acquisition, having bought Trust Wallet, according to an announcement July 31. Launched in 2017, U.S.-based Trust Wallet is an open source, anonymous, and decentralized wallet that supports Ethereum (ETH) and over 20,000 different Ethereum-based tokens (ERC20, ERC223, and ERC721).

While the details of the deal are not disclosed, Binance told TechCrunch that it paid in a mixture of fiat money, Binance stocks, and its own BNB token. Trust Wallet will remain autonomous in most of its operations, while Binance will help with administration and work on marketing development.

Binance CEO Changpeng “CZ” Zhao stressed that Trust Wallet is a strong team in terms of technical knowledge, but requires assistance with their marketing strategy:

“They haven’t done much marketing which is where we can help. They are strong technically but don’t like doing marketing, HR etc… now merging with us they don’t have to worry about money.”

Apart from boosting the service’s business development, Binance plans to list Trust Wallet as a default wallet on the highly-anticipated Binance decentralized exchange. Zhao said that Binance is considering further acquisitions:

“We’re looking for strong tech teams. Acquisition will be a very key component to continuing to grow and contributing to this industry.”

Trust Wallet founder Viktor Radchenko lauded the acquisition as an opportunity to return to focusing on developing the app and technology. Radchenko said, “Having resources will help us grow quicker and so I can focus on adoption for the users that don’t even have wallets.”

Trust Wallet had previously announced the registration for its token sale, but subsequently cancelled it, citing lack of regulation in the market, which makes it “challenging to complete [the] vision without some serious sacrifices with safety.”

The company added that the token sale, “force[d] us to focus more on a tokenized economy and less on product development — something that made Trust a great product in the first place.”

Malta-based Binance is the second largest cryptocurrency exchange by trade volume at press time. Having recorded about $300 million revenue by July, the company is expecting profits to reach $1 billion in 2018.

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Asset Management Firm Northern Trust to Start Crypto Custody Business

Northern Trust Corp., a leading global asset management firm with $954 billion in total assets under management, is planning to start a custody service for digital assets, Bloomberg reported July 31.

The company’s head of corporate and institutional business Pete Cherecwich told Bloomberg that the company has started developing a strategy to secure custody-held digital assets such as cryptocurrencies. He said the firm aims to offer a product similar to existing custodial services while charging lower fees:

“The fees right now the custodians are charging are pretty high, not the same fees that we get — ultimately, I believe unsustainable, because it needs to be an efficient model.”

Chicago-based Northern Trust Corp. currently provides accounting services to several funds that invest part of their assets in crypto futures. The firm will not launch a custody product for digital assets for at least another 12 months, according to Cherecwich.

This spring, Northern Trust launched a blockchain-powered product in partnership with ‘Big Four’ auditing giant PwC, which provides audit firms with instant access to a secure “golden copy” of private equity lifecycle events. This will reportedly improve the efficiency of the auditing process by making underlying transactions more transparent to audit firms.

Early in July, crypto exchange and wallet provider Coinbase announced the launch of its digital assets custodian solution for institutional investors. Their custody offering will be secured through an SEC-compliant and FINRA-member independent broker-dealer, Electronic Transaction Clearing. At the time of the announcement, Coinbase had already been storing $20 billion worth of clients’ crypto over six years.

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Why Tokenization Is Still a Chimera: Expert Take

In our Expert Takes, opinion leaders from inside and outside the crypto industry express their views, share their experience and give professional advice. Expert Takes cover everything from blockchain technology and ICO funding to taxation, regulation and cryptocurrency adoption by different sectors of the economy.

If you would like to contribute an Expert Take, please email your ideas and CV to george@cointelegraph.com.

The views expressed here are the author’s own and do not necessarily represent the views of Cointelegraph.com

Tokenization is nothing new

The term “tokenization” is mainly associated with securities, equities and real assets, and it indicates the creation of a digital token which represents ownership rights of the underlying assets and which is issued on a blockchain.

But tokenization is nothing new, per se. It is an evolution of derivative instruments and securitized assets such as an asset-backed security (ABS). For instance, the collateralized debt obligations (CDOs) and mortgage-backed securities (MBSs) at the heart of the 2008 financial crisis were essentially tokens representing debt. The first examples of securitizations go back to the 17th and 18th centuries.

Despite the beliefs about the potential of Securities Token Offerings (STOs) — and literally dozens of tokenization platforms springing up in the last 12 months with plenty of businesses willing to try to raise funds with them — very little practical progress has been made so far.  Notwithstanding the announcements of imminent issuance of tokens representing equities or real assets, none have yet been practically issued.

Perceived advantages of tokenization

Governance participation mechanisms and automated dividend payments — which can be embedded in the smart contract — are often cited among the biggest advantages, together with the reduction of back-office work, the reduction of costs for the issuing companies and 24/7 trading.  

Fractional ownership is indeed also important — as it helps democratize investing — but it is also not new, and tokenization is just a new tool to achieve what has already been done in the past through fractional ownership of real estate or club-deals.

Securitization vs tokenization

So, in what ways do securitization and tokenization differ in practice? Two things, essentially:

(i) The issuance of the token on a blockchain.

(ii) The tradability/liquidity of the token on a digital secondary market.

But the blockchain has one fundamental feature: enabling the peer-to-peer trusted transfer of digital values while providing certainty and immutability of that transfer. The first-ever blockchain — that of Bitcoin — was created to allow peer-to-peer transfers of Bitcoin, not of real assets. By definition, its use can be easily extended to other digital assets or rights — such as digital photos, music or e-books — which will massively benefit from the certainty and immutability which are intrinsic to the blockchain.

But as far as real assets or equities are concerned, the transfer and ownership of titles are regulated by the law. Each jurisdiction has its own legal authorities which enable and certify such transfers. Real estate and land transfers are generally effective upon their recording into Land Registries (at least in civil law countries, while the situation is more complex in countries such as the United States, where the adoption of a public blockchain-based system can likely introduce certainty to the title ownership and cut conveyance costs and risks), car sales when entered into the motor vehicle registry and sales of equities in private companies when recorded into the companies´ registry. All those transactions are also likely to be certified by public notaries in most jurisdictions. The issue here is not to advocate whether future blockchain adoption may enhance the existing public systems of real estate or corporate ownership titles of any individual jurisdiction — which is also probably true — but to simply evaluate whether the blockchain has some scope of use for tokenizing real assets or private equities within the existing systems.  

Thus, here is the real question to answer: Does the on-chain tokenization of real assets and private equities bring more advantages or more problems in respect to a simple off-chain tokenization?

Tokenization use cases

Let’s look at two use cases: Use case A is the issuance of tokens representing private equity, while use case B is the issuance of corporate bonds/commercial papers or other corporate debt instruments by the same private company.

Private equity tokenzation off-chain

In case A, a Special Purpose Vehicle (SPV) is needed as a vehicle for all the token holders to have a single entry in the XYZ cap table. The SPV subscribes to XYZ’s share capital increase and owns the shares issued. The SPV will be managed by a nominee director under the terms of Trust Agreement I for the benefit of token holders. 100 percent of the shares of the SPV will be owned by Trust I for the benefit of the token holders. Trust Agreement I issues the tokens representing 100 percent of the SPV’s share capital.

Under Trust Agreement II, the shares of XYZ, which are owned by the SPV, are held for the beneficial ownership of token holders. Note that in this case, trusted third parties — such as a public notary and the company registry, are statutorily required in order to validate transactions. Therefore, in my opinion, the use of the blockchain unnecessarily complicates things without bringing noticeable advantages.

In case B, rather, the same private company issues corporate debt. Because there are no statutory requirements for third party validation in the issuance of debt instruments — such as the need to record it on a public registry — the token and the debt instrument are substantially the same thing and function on the same level. Therefore, XYZ can be issued directly to single buyers with the tokens representing its debt. Tokens can be issued on the Ethereum blockchain and a smart contract will embed the terms of the debt issuance in the token, such as automatic coupon/yield payments and the repayment of the principal at the duration expiration with subsequent burning of all the tokens redeemed. Case B is therefore a good candidate for on-chain tokenization.     

Corporate debt tokenzation on-chain

Tokenizing real assets off-chain

As seen above in use case A, when dealing with legally trusted authorities (such as land or company registries) the blockchain’s main functions — which are to guarantee trust, transparency, immutability, non-corruption of data and non-duplication — are already performed by such authorities. Blockchain is therefore redundant.

Well-practised, traditional legal structures such as SPVs, trustees, nominees and escrows — backed up by collaterals such as a mortgage or a pledge — are still needed to guarantee to the investor that the issued token is tied to the real-world asset. This, because of the contractual promise — even if it is embedded in the smart contract — remains just an “unsecured contractual promise” that, without a collateral guarantee, still poses all the enforceability issues of any unsecured (but contractual) promise. And until those public registries are not on the blockchain themselves, the smart contract has limited practical application. Enforcement/execution for real assets takes place off-chain and, therefore, must be secured with traditional guarantees that can only function off-chain.

Moreover, with such complex transaction structures, mistakes and disputes happen all the time and they need to be promptly rectified or solved. With public registries or with trusted parties, mistakes can be easily rectified and disputes solved. Instead, blockchains´ immutability and irreversibility features then become drawbacks. Without an appropriate mechanism for dispute resolution and reversibility, the blockchain can render real-asset transactions unmanageable.

Therefore, in my opinion, the practical aspects of an on-chain real-asset tokenization are still generally insufficiently appreciated. However, when this is done, it appears that — in many cases — it is more efficient to tokenize/digitize real assets off-chain.

Guaranteed liquidity is the key prerequisite

Most importantly, what is still missing from the picture — and it is certainly the essential prerequisite for any tokenization either on- or off-chain — is the guaranteed liquidity and the possibility for the investors to effectively trade the tokens. Surprisingly, not much progress has been done on that very fundamental issue.

Only if deep pools of liquidity are brought in to ensure adequate market making, then tokenized assets may possibly scale up in the future to match traditional financial instruments.  

Conclusions

Summing it up:

  1. Above all, deep liquidity of the digital secondary market is a prerequisite for any tokenization.
  2. We can tokenize assets on-chain or off-chain.
  3. Not every asset is suitable to be tokenized on-chain.  
  4. On-chain tokenization is advisable when the asset can be freely transferred without the statutory need of a third-party, off-chain validation (such as with corporate debt — as in Case B above — or, for example, with unregistered real assets, such as objects of art, or plain digital assets, such as digital photos, music, etc.). Here, the blockchain fully performs its main functions, which are guaranteeing trust, transparency, immutability, non-corruption of data and non-duplication.
  5. Off-chain tokenization is advisable when there is a statutory need for a third-party, off-chain validation of the transaction (such as with private equities — as in Case A above — or with real estate, cars, boats, planes, etc.). Here, the blockchain is redundant because its main functions are already performed by the third-party validation off-chain.
  6. Of course, if and when those statutory registers will be on-chain themselves, then on-chain transactions will be possible also for real assets, and the smart contract will be able to close the loop and to reconcile the ownership title of a real asset off-chain with the digital token (representing the asset) on-chain.
  7. Of course, the above conclusions may vary depending on the jurisdiction (e.g., real estate on-chain tokenization may be advisable in the U.S. and not in Germany or Italy).

Legal Disclaimer: This paper is for general guidance only and it does not constitute legal advice. As such, it should not be used as a substitute for consultation with lawyers on specific issues. All information in this paper is provided “as is,” with no guarantee of completeness, accuracy, timeliness or warranty of any kind, expressed or implied.

Legal Disclaimer: This paper is for general guidance only and it does not constitute legal advice. As such, it should not be used as a substitute for consultation with lawyers on specific issues. All information in this paper is provided “as is,” with no guarantee of completeness, accuracy, timeliness or warranty of any kind, expressed or implied.

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Stellar Cryptocurrency Lives Up to Name With 40% July Gains

Bitcoin’s 26 percent rally left many a cryptocurrency in the dust over the course of July.

Indeed, the bitcoin dominance rate, a widely used indicator that tracks the percentage of the total crypto market cap contributed by bitcoin, rose to 48 percent, up from 42 percent, to record a 7-month high over the 31-day period, a function of money shifting from alternative cryptocurrencies into bitcoin.

That said, not every alternative cryptocurrency saw gains. Ether, the cryptocurrency that powers the ethereum blockchain, and the second-largest cryptocurrency by total value, as an example, recorded a monthly loss.

A notable exception among the largest 25 cryptocurrencies reviewed by CoinDesk, however, was stellar’s XLM token, which was able to defy the odds and become the top monthly performer in its class. Fueled by interest from the most influential U.S. exchange, Coinbase, the news the startup is considering an XLM listing revved up investor interest, spiking 13 percent on the news.

Still, it’s arguable that this simply helped galvanize stellar’s appeal after notable recent milestones.

In recent months, teams seeking to launch initial coin offerings (ICOs), including social messenger Kik, have begun to utilize stellar’s technology. Also notable has been the team’s technical commitments, such as its prominent support for the scaling solution, lightning network, which developers say they aim to implement this year.

Along the ride, stellar would go on to hold its gains, though, eventually displacing litecoin to become the world’s sixth largest cryptocurrency by market capitalization – valued today just north of $5 billion.

Monthly winner

Stellar

Monthly performance: +40 percent
All-time high: $0.90
Closing price on June 30: $0.19
Current market price: $0.27
Rank as per market capitalization: 6

XLM began its monthly ascent on July 13 (Coinbase news), reaching its monthly high of $0.36 12 days later when it showed a 93 percent gain from the month’s open of $0.19.

Still, the crypto asset cooled off during the last week of the July, dropping 11 percent, likely due to overextended technical charts and a wavering bitcoin price. When July came to a close, Stellar finalized its 40 percent month-to-month appreciation.

Daily chart

Price closed above the two-month long descending trendline (yellow) on July 14, a bullish signal seen in the chart above, and continued its journey past the 200 day exponential moving average to the 0.618 Fibonacci Retracement (from May high of $0.47). Its monthly high mark of $0.36 was set shortly after on July 25.

The combination of resistances proved to be too strong as price failed to find acceptance above the levels, first hinted by bearish divergence in the daily RSI. Price consequently reversed over 24 percent to where it stands today just below $0.28.

Only a daily close below the long term trendline (blue) would return the immediate trend to bearish favor and suggest a move towards the 0.236 Fibonacci retracement located near $0.23. On the upside, a bounce off of the trendline could be seen as a successful throwback test and would add credence to the bullish trend change, setting sights back on the elusive $0.36 resistance.

Disclosure: The author holds BTC, AST, REQ, OMG, FUEL, 1st and AMP at the time of writing.

Rocket 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.

This article is intended as a news item to inform our readers of various events and developments that affect, or that might in the future affect, the value of the cryptocurrency described above. The information contained herein is not intended to provide, and it does not provide, sufficient information to form the basis for an investment decision, and you should not rely on this information for that purpose. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.

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Citigroup and Barclays Join Experimental Blockchain Project

In recent years, financial institutions have begun to appreciate the perks that come with the blockchain technology. Its anonymity, speed, and security make it highly attractive to banks for use in their day-to-day transactions. Hence, the design of an in-trial platform for banks who wish to capitalize on blockchain technology.

About LedgerConnect

Multinational technology behemoth, IBM, and foreign exchange services firm, CLS, announced the creation of in-trial app store, LedgerConnect, on Monday. This platform is expected to launch in a few months’ time. With LedgerConnect, banks interested in programs based on the blockchain technology can use the platform trial pad.

These financial institutions will be selecting blockchain vendors, including Baton Systems, Copp Clark, Calypso, IBM, SynSwap, and OpenRisk. Theoretically, banks have it easier when they use LegerConncet to opt-in to blockchain projects. These banks can also use the same blockchain protocol, instead of using several incompatible ones.

In a statement made by Ram Komarraju, managing director of technology at CLS, he said:

What is the point of having these people building the same infrastructure? Instead of building several new blockchain applications for the same problem, banks can then focus their energies on their own firm’s operations.

The in-app trial platform is built on the IBM Blockchain Platform and Hyperledger Fabric Technology. It will apply blockchain technology to areas such as anti-money laundering “Know Your Customer” regulations and collateral loan management.

The platform, however, is yet to receive the go-ahead from central banks and the Federal Reserve Bank of New York. Because of its unregulated nature, banks cannot enjoy the potentials that come with using the platform. At the moment, an exact launch date is yet to be given. Vice president of financial markets of IBM, Keith Bear, gives early 2019 as a tentative date. He also hopes more banks would apply before then.

Citigroup and Barclays Sign up for the LedgerConnect Blockchain

Wall Street banks have in recent times, recognized the potentials of the blockchain technology. To solve a litany of problems and improve security, these financial institutions have tested different blockchain technology platforms.

The blockchain technology, which is the underlying technology cryptocurrencies such as Bitcoin, is a secure way to send sensitive information. Its anonymous nature and speed make it very attractive for banks, which deal in personal data and security.

Nine prestigious banks, including Citigroup and Barclays, have decided to key into the LedgerConncet. Citigroup and Barclays have in the past, partnered with different startups to help build projects that address various issues. These issues range from instant transactions to compliance with onerous financial regulations.

Integrating Legacy Systems with Emerging Technologies

The moves made by these banks is commendable, but there is the problem of the old merging with the new.

Vice president of financial markets of IBM, Keith Bear, commented on the old versus new trend. He said:

The challenge is being able to work together across organizations of different speeds. On one side we have a large highly regulated industry. On the other side we have much more agile and fast-footed fintechs with limited resources. Our role is in some respects of mediating those differences in speed and resources.

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Ripple Partners With Madonna to Fundraise for Orphans in Malawi

Cryptocurrency payments startup Ripple is partnering with Madonna to raise funds for orphans in the African nation of Malawi.

The legendary pop icon announced the fundraiser Monday as a way to celebrate her 60th birthday, saying all donations would go to Raising Malawi, a non-profit organization she co-founded with American screenwriter Michael Berg in 2006, to support its work at the Home of Hope orphanage in Malawi. Notably, Ripple is matching all donations made through the drive.

Ripple senior vice president of business operations Eric van Miltenburg said the charity was important, according to a statement.

He added:

“We’re honored to be a part of Raising Malawi’s amazing work with some of the world’s most underserved children and are grateful to our investors at Sound Ventures for making the introduction to us and this important cause.”

The campaign, which began on July 30 and runs through August 31, has already raised more than $26,000 from nearly 540 people within two days, nearly halfway to the $60,000 target, according to a Facebook donations page.

Madonna said the fundraising event will serve as a gift “connecting my global family with this beautiful country and the children who need our help most” for her birthday.

Malawi is one of the poorest countries in the world, with about 50 percent of the nations’ population living below the poverty line, according to the International Monetary Fund.

Madonna image via Denis Makarenko / 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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Coinbase Hires Former Wall Street Executive As Chief Compliance Offer

The so-called “Wall Street migration” has continued, with executives and employees from legacy markets piling onto crypto-centric startups in a search for the ‘next big thing’.

As per a blog post from Asiff Hirji, Coinbase’s President and Chief Operating Officer, Jeff Horowitz will be joining Coinbase as the firm’s new Chief Compliance Officer, with this role helping the platform see eye-to-eye with regulators.

Horowitz joins Coinbase with years of experience under his belt, with nearly 12 years as a Managing Director at Pershing, one of the world’s largest custody and financial settlement firms, with over $25 trillion under management.

Jeff also comes with experience with regulatory compliance, as he was also a Head of Compliance, Chief Compliance Officer and the Global Head of Anti-Money Laundering at the financial giant. Before his decade of experience at Pershing, the new Coinbase hire led a variety of AML and compliance programs at well-known names, like Citigroup, Goldman Sachs, and Salomon Brothers.

Taking this substantial level of experience into account, it is logical that Coinbase took the opportunity to hire such an established person. Hirji wrote:

His experience managing matters related to broker-dealer regulation, asset custodianship, and AML programs makes him a uniquely qualified leader for our compliance team…

Horowitz’s Role At Coinbase

As noted earlier, Horowitz joins Coinbase as a Chief Compliance Officer or CCO as the role is better known.

To be frank, the cryptocurrency industry isn’t seen in the best light by many regulators. Many see investing into this nascent asset class as risky, baseless, and a waste of time. This negative sentiment has led to multiple crypto-related firms coming under fire by regulators. While Coinbase has yet to run into any concerning legal issues, in such a regulatory-contested industry as crypto, compliance should be an absolute priority.

As pointed out in the blog, Coinbase has always strived to be the “world’s most trusted and easy-to-use cryptocurrency service,” so the addition of Horowitz to the firm’s expansive employee line-up should only allow the firm to continue to offer A-grade-level services for investors.

It was also noted that the hiring of this new CCO will take some weight off the shoulders of Mike Lempres, the firm’s Chief Legal and Risk Officer, who will now be able to focus on leading Coinbase’s “government relation efforts.”

Hirji closed off the blog post with a powerful statement, highlighting what this hire means to Coinbase at heart. The Coinbase President wrote:

Hiring Jeff is recognition on our part that navigating compliance complexities on a global scale requires a concerted, cross-functional effort, guided by leaders with experience that spans policy, financial services, and corporate governance.

Coinbase’s Rapidly Growing Aspirations 

As reported by Ethereum World News, Coinbase has previously announced plans to become the first firm to offer the trading of crypto assets deemed securities by the SEC. There is a high possibility that the firm will run into regulatory concerns as a result of this move, as the industry is still in its early stages.

While Coinbase may still be a few months, if not years away from the competition of this plan, Horowitz’s experience and advice as a compliance-centric individual should help expedite the resolution of regulatory issues.

Title Image Courtesy of RawPixel/PxHere

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NANO Price Fall: Beleaguered Coin Dips Below $2

NANO (NANO)–A declining price continues to impact one of the more resilient communities in cryptocurrency. As the market continues to fall on Tuesday, NANO is nearing a 10 percent loss over 24 hours, dropping to below $2 for the first time since the astronomical price run the coin experienced in December 2017.

Through a combination of anticipated exchange adoption and bullish market timing, NANO experienced one of the fastest price gains to end 2017, reaching an all time high of $36 in the first week of this year. Since that time, a combination of a poor publicity, unexpected hacks and a general erosion in the cryptomarkets has caused the coin to undergo one of the largest declines in price, falling nearly 95 percent in value to its current price of $1.85.

The NANO community has attempted to rally despite the price fall, instituting a user-driven marketing effort to support NANO in the form of E-Sports advertisement earlier in the summer. The crypto community has also been rallying around Venezuelans impacted by the inflation imposed on their government currency, creating a portal for donating directly to families and those affected for buying necessary supplies.

Despite experiencing one of the more high profile hacks of 2018, when $187 million worth of NANO was removed from the exchange BitGrail (leading to an ongoing lawsuit between the NANO development team and exchange owner), NANO’s continued price fall has perplexed the community. While all of crypto has suffered throughout the year’s bearish downturn, few coins have posted the same catastrophic loss in value as NANO. Despite having a relatively active community excited over the technology, some are beginning to question the drastic impact on NANO’s pricing,

Why does nano seem to take the hardest hits? from nanocurrency

The general consensus seems to be that while the underlying technology of NANO is impressive (fastest transactions in cryptocurrency and zero monetary fees), adoption has not reached the point of making NANO a more noticed cryptocurrency, in conjunction with the coin’s origins. NANO was originally given away in large amounts for free through crypto faucets (then under the name RaiBlocks XRB), causing even today’s 95 percent fall in price to be significant gain in ROI for faucet accumulators who paid nothing for the coin.

Given that cryptocurrency adheres to the libertarian ideal of free markets and decentralization, at times perhaps to a fault, it’s hard to contend with any currency being labeled as undervalued: it simply exists at the price point the market is willing to pay. However, NANO could be an indication that while impressive technology will enact a premium in this marketplace, the lack of adoption or use for cryptocurrency makes the underlying technology irrelevant–at this point in time. If Bitcoin was a saturated currency and mining fees approached unacceptable levels, capital would flow to coins that offer a solution to the problem of costly and slow transactions. At present, that is not the case. Therefore, it’s difficult to judge the success or failure of any coin’s technology by price movement alone. NANO may become a prime example of that point if the price continues to tumble.

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Forrester Research: 90% of Blockchain Initiatives by US Firms Will Never Become Operational

About 90 percent of currently active U.S. companies’ blockchain initiatives will ultimately be abandoned. This statistic comes from a study by Forrester Research, cited by Bloomberg in an article July 31.

The U.S. market research firm Forrester Research predicts that most of blockchain-powered projects initiated by American companies will be put on hold in 2018. Specifically, Forrester Research estimates that in a whopping 90 percent of cases, the projects will “never become part of a company’s operations.”

The researcher also claims that “some companies,” which have been striving to incorporate the widely touted distributed ledger technology (DLT) in their businesses, are now pulling back and scaling down their ambitions.

The most recent study marks at least the second instance in which Forrester has predicted a grim future for blockchain applications in corporate America. Back in 2017, the company published an article entitled “Predictions 2018: The Blockchain Revolution Will Have To Wait A Little Longer,” claiming that 2018 will be “the year of reckoning for blockchain initiatives.”

“Those who failed to translate the headlines into reality will write off their investments and give up, while others that have a deep understanding of the technology and its transformational potential in the long run will continue to forge ahead.”

According to Bloomberg, Ron Resnick, the first executive director of the Enterprise Ethereum Alliance (EEA), argued that blockchain development might still experience an uptick in 2019, saying that “[companies] are still testing the waters.”

Previously, Executive Director of Hyperledger Brian Behlendorf claimed that the “coming wave” of blockchain applications will not come from established tech giants, such as Google, Amazon or Facebook, as these companies “have a blind spot when it comes to blockchain.”

Earlier in July, former Wall Street executive Mike Novogratz predicted that mass adoption of cryptocurrencies and blockchain is “still five to six years away.”

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Binance Buys Trust Wallet, Aims To Expand Operations

Despite posting losses of a couple of percent, development in the cryptocurrency industry has trudged forward, with Binance just announcing that they had acquired Trust Wallet in a recent deal.

Binance, the world’s largest crypto platform, has just made its first acquisition, buying out a Calfornia-based cryptocurrency wallet startup. Trust Wallet provides a reliable security solution for users, along with facilitating a so-called decentralized application browser. Unlike other mobile-based wallets, Trust allows users to “control 100 percent of their funds,” not holding the private keys or other confidential information on their servers. In fact, all of the information that will be stored on company-owned servers is just the user’s public addresses, contact information, and social media handles.

According to Bloomberg, the wallet provider was launched in November and is currently home to 10 employees. The Trust Wallet application is currently focused on providing security for Ethereum-based tokens, and supports upwards of 20,000 different cryptos as of the time of writing.

Speaking on the acquisition, Chengpeng Zhao, the well-known CEO and head of the exchange, stated:

“The Trust Wallet team shares the same values as us and the products are very complementary. For users who like to withdraw funds into a wallet now, we have a product they can use.”

The details of the deal were not revealed, but the firm noted that they acquired the startup using a combination of cash, Binance stock and some of its in-house token, the fittingly named Binance Coin. But it was noted that the deal was not of a high value, as the crypto service provider currently doesn’t support an expansive user base.

It is important to note that Trust Wallet will still operate as an independent entity, but the Malta-based Binance will assist in operating the “admin side of the business,” along with market campaigns. Zhao noted:

We plan to keep the app as independent as possible. There will be more features going into it but not so much from a Binance demand perspective. We are like the addition of a godfather for the baby… there’ll be some cooperation.

The CEO took to Twitter to issue a series of tweets, expressing his excitement for the deal which they had just closed. CZ wrote:

“A secure, easy to use, on-chain mobile wallet with full dapp support. The next gen mobile wallet begins.”

He also called it a “diamond in the rough,” alluding to the firm’s plans to expand and integrate the wallet solution into Binance’s services. It is likely that Trust will be the first to be integrated into Binance’s upcoming decentralized exchange, which will allow users to directly transact with one another through a permissionless system.

Closing off his talk with Bloomberg reporters, the CEO added that his firm is in “early-stage talks” with other firms that appeal to the Binance team for future acquisition. Taking into account that Binance made upwards of $500 million since the start of 2018, it makes sense how they have so much capital to spare.

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