Reggie Middleton is an entrepreneurial investor who guides a small team of independent analysts, engineers & developers to usher in the era of peer-to-peer capital markets.
1-212-300-5600
reggie@veritaseum.com
On October 24, 2022, Coinbase Prime announced entering into a partnership with MakerDao to become a custodian of USD1.6 billion worth of USDC, of which MakerDao is the largest holder. In return, MakerDao will earn a 1.5% reward on its USDC holdings while holding funds with a “trustworthy” institutional custodian. Through this deal, Coinbase regained control of the tokens held by its investors and utilized the tokens for re-lending
Analysis
Contrary to popular belief, Coinbase is a crypto asset broker/dealer, not an actual exchange. This misunderstanding is not through duplicitous actions of Coinbase, though. The term “cryptocurrency exchange” was most likely originally used by a software developer/tech enthusiast who did not understand the actual meaning of the parlance, and its usage has simply stuck over time.
Broker/Dealer: A broker is an individual or financial services company that enables the trading of assets for other individuals. A dealer is an individual or financial services company that enables the trading of assets for themselves. Coinbase does both of these:
3.21 Coinbase, Inc., which owns and operates Coinbase Pro and Exchange, also trades its own corporate funds on Coinbase Pro and Exchange – Coinbase help site.
Exchange: Exchanges and brokerages are different types of markets with unique functionality. Exchanges match traders, allowing them to execute orders with each other. Brokerages transact with their clients directly.
See pdf Coinbase/MakerDao USDC Rehypothecation Analysis (1.45 MB) for the full report.
In light of the current events surrounding FTX, Voyager, 2 Arrows Capital, Celsius and BlockFi (among many other centralised trading entities), trust in the crypto market has been deeply affected, and based on our initial understanding of the following factors, the coins BNB and BUSD are considered risky, and the credit quality of Binance cannot be confidently ascertained:
likely carries these tokens as assets on its balance sheet to be used as collateral for loans and hypothecation. Think about it! And you thought FTX was bad???
Download our free report to finish reading. pdf Binance Cursory Forensic Analysis Considering the FTX Collapse…. Uh Oh! (1.77 MB)
I'm talking to award winning (i.e., Sundance) Director(s) about what is apparently a captivating story about one man's underdog struggle in finance, technology and crypto against entrenched special interests, both public and private.
In the mean time, please enjoy this feature article from Executive Global.
The Coinbase Global Forensic Analysis is available for free download. Extremely comprehensive at 114 pages, and written in plain English. There are things here that even the company's CEO likely does not know.
Download the pdf Coinbase Forensic Analysis (5.32 MB)
We have recently produced an addendum our updated views on Coinbase's profitability. We expect both operating and net income losses, as well as the potential for material patent infringement liability. Reference pdf Coinbase Analysis Addendum July 2022 (350 KB)
TL;DR You can skip past all of this and just Download the full Circle report here- pdf Circle's USDC Stablecoin Analysis (1.12 MB) .
Bloomberg reports in its Technology section, ‘Terra $45 Billion Face Plant Creates Crowd of Crypto Losers’ and “ ‘Everything Broke’: Terra Goes From DeFi Darling to Death Spiral” wherein they detail the failure of what they (as an old school concern) say are shortcomings in crypto and DeFi. Terra’s problem was very, very simple, yet many either ignore it or fail to understand it. They based their entire system on a methodology that has not proven to work over time, since inception – at least not yet. That methodology is stabilizing digital assets in a “centralized” decentralized market (ex. fractured pricing and liquidity) around a traditional asset that does not exist natively on the blockchain. A shorter way of saying that is algorithmic stablecoin. To my knowledge, and I may be wrong here, every stablecoin that has had significant volume has broken the buck under pressure. Now, physically backed stablecoins have broken the buck as well, but you always have good ole fashion human greed manifested through arbitrage to save the day there. This greed factor works in the opposite direction when it comes to algo coins. This is not a secret hence no one should have been surprised about what happened over there at Terra Labs.
My name is Reggie Middleton, and I’m the storied, founder and patented (US11196566 and JP6813477) creator of DeFi.
I’m here to truly educate you…
Bloomberg also reported in its “Finance” section: “The Crisis at Celsius Is Rocking DeFi and Crypto”. I mention the sections because nuance is actually very important here. Crypto, and more to the point, DeFi, is nearly purely technology and IP driven. It is not finance, it is technology – a technology that can be used to dramatically improve finance, but technology, nonetheless. Those that fail to understand this are quite likely toing to get their $sses handed to them over time. Further to the title of the article, this has nothing to with DeFi. It is CeFi (centralized finance, yes – that traditional stuff) which is rocked by this scandal, and it is CeFi which funds, operates and is most effected by the profligate consumption of risk over reward that is common between all three of the aforementioned articles, the extant and current news cycle and unfortunately, this report as well.
The media is not anxious to report the truth and facts, for if it was you would have heard of me a long time ago. The negative and unproven allegations against me actually do catch wind in the media, but the proven and positive accomplishments haven’t been covered since 2014, write about the time I invented DeFi - which is also quite unfortunate, Draw from that what you may. I digress, thus back to the topic at hand and the tenor of the Bloomberg articles…
Reference the latest funding rounding Circle Internet Financial – a prominent crypto company that issues the number two stablecoin in the industry, above that of the recently demised UST from Terra labs They are similar in operations to Celsius, BlockFi, Genesis Trading, etc. in that they use the products of DeFi technology to conduct CeFi and TradFi (traditional finance) business. What’s wrong with that? Well, imagine tacking a high-powered Tesla Plaid motor onto a horseshoe, then writing articles about the shortcomings of electric care technology when the horse breaks its leg! Yep!
Now, note that DeFi protocols, which are purely (or at least, they’re supposed to be) smart contract driven, are humming along just fine.
This goes to show that the media, the management and above all, the regulators, still have no clue as to what this space is about.
It is about technology and IP, just like the internet in 1995. No one should be trying to make IP packets securities and tradeable, speculative SEC-bait, and doing so now will not work any better than doing so then.
Download the full Circle report - pdf Circle's USDC Stablecoin Analysis (1.12 MB) .
Note, this report was researched and completed in around 24 hours. If you think it is hard hitting, wait until you see our upcoming Coinbase report. Brrrr....
Here are some timely tidbits for those who simply can't wait to read good stuff!
As pdf per Veritaseum’s earlier report prediction (1.68 MB) that the margins would decrease and the Company would incur losses, the Company incurred a loss of USD114 million even after excluding all supposedly non-recurring the above items. Cli.ck pdf here for the original (1.68 MB) , full forensic analysis, and click here for pdf Block Financial Highlights Q1 2022 Analysis (597 KB) .
This is out inaugural public company crypto analysis. Many do not realize that Block, Inc, formerly Square, is a full fledged crypto company with 57% of its 2021 revenues coming from Bitcoin. Its bitcoin contribution to revenues is rapidly increasing, and is likely to be around 70% within a quarter or two barring a dramatic correction. You can download the report here: pdf Block, Inc, Forensic Analysis, w/ Patent & IP Deep Dive (1.68 MB)
Here are some snippets that I think you will find of interest.
The patent “Devices, Systems and Methods for Low Trust and Zero Trust Transfers”, was recently issued by the USPTO (patent number US11196566 in the world’s largest economy) and the JPO (patent number JP6813477B2 in the (world’s 3rd largest economy).
Reggie Middleton was first in enabling the conditional transfer of value over any arbitrary distance using nearly any network connected computing device, without a middleman or authoritative 3rd party, and without the need to trust your transaction party. Further, due to this invention, counterparty risk and credit risk has been either eliminated or minimized via use of the immutable attributes of blockchain and DLT technology.
These patents represent foundational technology in the realm of value transfer through a distributed ledger. Mr. Middleton and his team look forward to using these technologies to expedite the entrance of the age of Peer-to-Peer Capital markets where anyone can trade nearly anything in any amount directly with anyone else, anywhere, without middlemen and rent seekers.
The aboriginal name of this invention was “Peer-to-Peer Capital Markets”, but it is better known today by the moniker of its most popular subset, “DeFi” – or “decentralized finance”, which was discovered in 2013 by Reggie Middleton, the primary inventor.
In the globally leading economies, where patents have been attained, as well as those entities that operate using the invention with and through them, it is Mr. Middleton’s opinion that patent protection now exists over:
Reggie Middleton, the inventor and founder of the technology in question, states, “It has been a long road since 2013 - fraught with accusations of fraud regarding the validity of our IP, regulatory ambiguity, rampant discrimination and extremely inequitable treatment of the Veritaseum project and its principal(s). We ran into new versions of an old paradigm - the old boy’s network, as well as lacking equitable access to capital and distribution. None of this prevented the inevitable - the next evolutionary step in commerce and business – the development of the foundational technology known as P2P Capital markets and DeFi. I am uber-excited! We’re pulling off an American success story, despite the odds!”
“How did we get this far? Embracing – versus fearing – a massively disruptive, value creating, progressively disintermediating vision combined with good old hard work, perseverance and integrity. Looking back at our marketing documents from 8 and 9 years ago, we are delivering on our promises, despite the odds and immensely powerful naysayers. Where Wall Street and Silicon Valley view success in the world 90 days at a time, we look at world progress in terms of decades.”
Middleton continues, “Case in point – P2P capital markets encompasses so much more than mere finance. Transferable capital has three major components:
P2P Capital Markets facilitate the ability to trade and distribute all of these pillars of the economy on the most sophisticated, yet most direct, platform the world has seen. Humankind Is essentially being reintroduced to the concept of direct barter, but for the digital age.
VERI tokens are in consideration as a discount mechanism for the licensing of the use of the IP. There are only 2 million left in circulation after adverse litigation.
The VERI community has been active in the support of Veritaseum, forming (independently from Veritaseum and Reggie Middleton) a DAO (distributed autonomous organization) tasked with researching IP licensure prospects from around the world.
For more information on the community, visit Veritaseum Community Telegram group https://t.me/Veritaseumofficial
Tweets of interest"
Hex is easily, the most controversial crypto analysis project the Veritaseum research team has performed to date. This analysis is sure to make some waves. It contains a project overview, detailed project description, a strengths section, risks and liabilities and a token valuation. The "Risks and Liabilities" section is sure to turn some heads.
Here's a preview of the contents...
You may download the full document for free here: default HEX FORENSIC ANALYSIS and VALUATION
Excerpt:
Importantly, it should be noted that we are not declaring HEX a Ponzi scheme. We are not lawyers, and such a declaration requires a legal conclusion better suited to be resolved by the courts. However, from a forensically analytical investor’s perspective, this issue is deserving of very careful consideration to avoid unanticipated events that can severely affect an investment. Below, please find an illustration of a hybrid Ponzi/Pyramid scheme, with characteristics of a typical Ponzi scheme on the right and the characteristics we perceive to be inherent in HEX on the left.
It is common for many to conflate the terms “Ponzi scheme” and “pyramid scheme”. A Ponzi scheme, as noted above, involves a promoter who has no real investment opportunity. The promoter simply collects payments from a stream of investors, promising them all the same high rate of return on their investment.
People have been asking me, "How did you manage to score such a monumental crypto patent before all of these billion and trillion dollar companies?". The answer is actually quite simple. I understood what crypto and blockchain were, early on.
These videos were all made in the first week of 2014 - over 7 years ago - before the birth of Ethereum!
Foresight and understanding enabled me to see what many others couldn't or didn't. That was back in 2013. Fast forward to 2021, and some of the biggest names on Wall Street still don't have a clue. This means that I still have a distinct advantage!
Reuters reports: Bitcoin is 'economic side show' and poor hedge against stocks: JP Morgan
For one, you know there's a problem if someone is trying to value a paradigm shifting, inter-industry protocol by using its "production costs"!
It shows a blatant misunderstanding of how platform-based, paradigm shifts behave - or even of what they are.
Let's take a look at using that logic as applied to the last protocol-based paradigm shift.
What is the "production cost" of the Internet? We can back into that by quantifying the complete operating costs of those entities that actually supply the Internet.
This is the Internet Protocol's applied production cost (the cost to actually use the value of the protocol in real life) - $395B.
Now, how much is the Internet worth? A common sense view...
At a glance
The internet became a global commercial network in the 1990s. Less than three decades later, it is everywhere. Now that we’ve created it and come to rely on it, we inevitably wonder: what is it worth?
Well some studies say in excess of $10 trillion, others $7.8 trillion - all account for.... just the US! As the US is roughly 20% of global GDP, multiply that by 5, and.... you will find that $40 to $50 trillion is a lot more than the cost of production at $395 billion. But wait...
As excerpted from "How Much is the Internet Worth?"
... Most recently, yet more economists – this time Erik Brynjolfsson, Avanish Collis and Felix Eggers – tried yet another tack: in 2017, they asked people already on the internet whether they would give up a particular internet service in return for money.
On average, respondents said they would forgo services such as search engines for US$17,530, email for US$8414 and maps for US$3648.
This study tells us a lot about what people value most about the internet. It also gives us a figure for internet consumer surplus across the US: almost US$8 trillion a year in an economy with a US$20.5 trillion economy.
Source: Internet Association data from BEA.
At this point, Greenstein says, valuing the internet is a task for which economics lacks the tools.
“It’s no longer a partial equilibrium,” he explains. Or in plainer English: “It’s not a well-grounded question anymore.”
The internet, it seems, is now too deeply ingrained in our society to be assessed with mere money.
Why am I comparing the Internet to Bitcoin? Because I truly understand what Bitcoin, distributed ledger protocols, and the crypto industry are really about. It's the underpinnings of a global value transfer network that has the real potential to easily dwarf the Internet Very much like the Internet exists as the result of its underpinnings in information transfer protocols (IP, or Internet protocol), it is a utility with unprecedented global reach and ability.
It is not a commodity, nor an investment or a security. It is much too monumental to be measured in mere materialistic, one-dimensional Wall Street parlance. Big banks, regulators, investors, the media - many have this all wrong. This is how I was able to score the patent. I knew what it was that I was patenting., while nearly everyone else was looking at price charts and thinking money remittances. Granted, that was almost 8 years ago. Fast forward to today, have the big investment houses learned their lesson?
In the meantime, JP Morgan advisory customers, with friends like these, who needs enemies???.
Now, I'm not a Bitcoin maximalist, nor do I even think that Bitcoin is the most valuable crypto, but that doesn't mean that I will just sit back and ignore the spread of misinformation! If you want to know what I'm into, then just Imagine having the keys to the internet back in 1995. Well, that's where I feel we are in 2021, with the same Luddite movement acting the role o f the naysayer! For my take, read "A Most Powerful Invention Comes to Life"
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This is a video that I published over 7 years ago. I find it be quite prescient.
This is an extended appearance that I made on CNBC on the same topic. Remember, this was 7 years ago (click graphic below)...
Fast forward to today, we have built functional product which utilizes the invention, and more importantly, a patent has been granted and registered - with reach into nearly half of the G20. Now, we move forward to implementing what I believe to be one of the most powerful technological inventions of modern time (then again, please realize that I am biased). Let's walk through what it is that I invented, and how it fits into today's world.
First, a few definitions....
Market efficiency tends to increase—and therefore transaction costs tend to decrease—in proportion to the degree that transacting parties trust each other. However, rent extraction tends to increase—and therefore trust decreases—in proportion to market size1. Economic rent is any payment to an owner or producer in excess of the costs needed to bring what is being purchased into production.Efficient and productive participation in larger markets therefore requires mitigating trust issues, but that comes at a cost. That cost can often be reduced by economies of scale, but even today, there is substantial overhead from buffering against risks introduced by counterparties, intermediaries, post-delivery payment failures, guarantor failures, escrow, etc. 1 Rose, David C. The Moral Foundation of Economic Behavior. New York: Oxford UP, 2011. Print.
Since the mid 1990s, there has been an explosion of commercial activity where parties previously unknown to each other agree to transact using the internet as the fundamental communication medium, sometimes even across international borders. Establishing and maintaining trust between those parties has played a central role, and various crude solutions based on traditional, but inefficient and high friction methods have been attempted (e.g., electronic exchanges with expensive fees that step in as the counterparty, “online” escrow and dispute resolution using third parties, various reputation systems, third party guarantors, etc.).
Among those markets where unknown and untrusted individuals interact are those which trade financial instruments (e.g., stocks, bonds, options, futures, swaps, currency exposure, etc.). With the advent of financial engineering, individuals and businesses have been able to leverage computing in financial trading, including automating the process of entering and exiting trades based on programmable conditions or algorithms. However, even with the explosion of the use of technology in this space, such technology is overwhelmingly layered on top of legacy centralized markets. Nearly all impose relatively large costs to conduct trades with untrusted counterparties. Some very high-volume exchanges sell the ability for “high value” (i.e., high-paying) customers to cut in line ahead of less savvy or less well equipped investors. Some have questioned the fairness of this practice.
Further, the cost of contract enforcement in international trade can be prohibitive, and success might be very difficult to predict. In addition, a seller may wish to receive one currency, and a buyer may wish to send another. The value of one currency denominated in another can be volatile. Historically, one way that remote parties have mitigated risk is to engage the assistance of trusted intermediaries. One such mechanism is a letter of credit (L/C). L/Cs are appropriate where a seller does not know whether to trust a buyer wishing to place a large order, but does trust a bank where the buyer has established a line of credit. The buyer and bank agree that the bank will release funds from that line of credit to the seller when the seller meets certain conditions (most often transmitting evidence of shipment to the bank before a certain date). The bank provides the promise (L/C) to the seller, and the seller and buyer agree on the remaining terms of the transaction. However, payment often happens at a later date than the agreement, and exchange rates could vary between the time that the agreement was struck and the time payment is received. Only the largest of institutions have the resources necessary to properly hedge against exchange rate volatility. Additionally, the fees charged by banks for L/Cs and currency exchanges are substantial. Perversely, a high degree of trust must also be placed in the intermediary institution(s), who effectively acts as self-interested document examiners who may or may not independently verify the veracity of said documents before releasing the funds, perhaps leaving much of the risk of mistake, forgery, or fraud on the shoulders of the seller. As such, L/Cs are typically not well-suited for consumer transactions, or where transactions involve currencies whose values may vary wildly in relation to each other.
Decentralized digital currencies (or so-called “cryptocurrencies”)—technologies that promise tightly-controlled asset creation coupled with the ability to transfer control or ownership of those assets computationally when rigorously-defined criteria are met, with little-or-no dependency on third party intermediaries, and with very low transaction costs compared to traditional mechanisms—are relatively new creatures. The Bitcoin protocol and progeny (Ethereum, Litecoin, etc.) are one such class of technologies that have recently enjoyed meteoric rises in popularity (and valuation).
The invention pertains to systems and methods enabling parties with little trust or no trust in each other to enter into and enforce agreements conditioned on input from or participation of a third party, over arbitrary distances, without special technical knowledge of the underlying transfer mechanism(s), optionally affording participation of third-party mediators, substitution of transferors and transferees, term substitution, revision, or reformation, etc. Such exchanges can occur reliably without involving costly third-party intermediaries who traditionally may otherwise be required, and without traditional exposure to counterparty risk.
This patented invention description explores example embodiments enabling two forms of value transfer: arbitrary swaps and L/Cs. Arbitrary swaps and L/Cs are useful as illustrative examples because traditionally the two are very different animals. However, the invention allows for their expression and enforcement in remarkably similar terms. As one skilled in the art will appreciate, the invention can be applied to many other forms of value transfer as well.
A quick Google search for letters of credit and swaps yields…
Note: The net economic exposure of swaps is roughly 1/10th or less of this figure, but for the purposes of this invention’s discussion, fees would be charged on notional amounts, not netted amounts.
$6.6 trillion daily times a 360 day year is approximately $2,376,000,000,000,000, to view this as an annualized number.
These are but two of what is possibly hundreds of permutations to be achieved by those skilled in the art, who can take the invention and use it to replicate nearly any transaction of value in a fashion that eliminates counterparty and credit risk, to wit (as per simple Google searches):
With the advent of faster block and settlement times and more efficient consensus systems, the speed and usability of this invention combined with the simplicity of user-friendly interfaces that allow those unskilled and unfamiliar in the art can transform finance, commerce and any transaction of value to an extent that far exceeds the transformation witnessed by the popularization of the Internet pre-ecommerce days.
This invention seeks to claim that transformation as its addressable space, and this space is monumental and set to grow exponentially larger, to wit:
Op-ed: A new global arms race in digital finance is heating up
www.cnbc.com › 2021/01/21 › op-ed-a-new-global-arms...
4 days ago — Much like the space race, development of central bank digital currencies will influence ... Specifically, this latest phase of progress has its sights set on a massive ...
What Are the Main Goals for Central Banks in 2021?
internationalbanker.com › Banking
Jan 4, 2021 — It has been an unusually eventful year for central banks all over the world in ... see the introduction of the first major central bank digital currency (CBDC) in 2021. ... pushing collectively for the development of the international monetary system
2021 the year for central bank issued digital currencies ...
www.cityam.com › 2021-the-year-for-central-bank-issu...
Jan 4, 2021 — 2021 the year for central bank issued digital currencies? ... China is well ahead in this journey, having planned for a Central Bank Digital Currency (“CBDC”) ... to a blockchain that is controlled by the rules built into the algorithm that powers it.
Turkish central bank announces surprise digital currency pilot ...
coingeek.com › turkish-central-bank-announces-surpris...
Jan 2, 2021 — ... new digital currency in 2021, after the country's central bank announced it had ... Turkey is now at a more advanced stage of development than other countries ...
Bank of France settles $2.4M fund in central bank digital ...
cointelegraph.com › news › bank-of-france-settles-2-4...
6 days ago — The Bank of France has successfully wrapped up a $2.4 million CBDC pilot, which saw ... The Bank of France successfully piloted a central bank digital currency — or ... “From a technological point of view, the experiment required the development ... underway at the Bank of France, with some expected to run until mid-2021.
China's CBDC 'Dress Rehearsal' Sets Stage for Other Central ...
Jan 4, 2021 — Notably, the digital currency offered by China's central bank does not carry ... Fed and seven central banks have put forth a framework for CBDC development ... the central banks' approaches may differ, but 2021 may show marked progress ...
Swedish Bankers Face Identity Crisis Over Digital Currency ...
www.usnews.com › News › Technology News
Jan 5, 2021 — For a graphic on Central bank digital currencies across the world: ... advisor for the Swedish Bankers Association is concerned that the Riksbank has not made it ...
Venezuela to have 100% digital monetary system - FXStreet
www.fxstreet.com › analysis › venezuela-to-have-100-...
Jan 4, 2021 — To facilitate the entry of the digital currency, the country began demanding Petro in the form of payment in the country's oil-related transactions, which turned ...
FIG. 1 depicts a typical embodiment for practicing the invention, especially for use with or comprising a transfer mechanism such as a decentralized digital currency, where the clients, transfer mechanism, facilitator, and data source are distinct participants connected by a computer network.
Aa lot of crypto industry rags cheered the news that banks were given the regulatory go ahead to use stable coins and the blockchain as a transfer settlement layer. My suggestion is to be careful of what you wish for. The Office of the Comptroller of Currency (a regulatory arm of the US Treasury) released the following note: Federally Chartered Banks and Thrifts May Participate in Independent Node Verification Networks and Use Stablecoins for Payment Activities, as excerpted:
“While governments in other countries have built real-time payments systems, the United States has relied on our innovation sector to deliver real-time payments technologies. Some of those technologies are built and managed by bank consortia and some are based on independent node verification networks such as blockchains,” said Acting Comptroller of the Currency Brian P. Brooks. “The President’s Working Group on Financial Markets recently articulated a strong framework for ushering in an era of stablecoin-based financial infrastructure, identifying important risks while allowing those risks to be managed in a technology-agnostic way. Our letter removes any legal uncertainty about the authority of banks to connect to blockchains as validator nodes and thereby transact stablecoin payments on behalf of customers who are increasingly demanding the speed, efficiency, interoperability, and low cost associated with these products.”
The agency letter concludes a national bank or federal savings association may validate, store, and record payments transactions by serving as a node on an INVN. Likewise, a bank may use INVNs and related stablecoins to carry out other permissible payment activities. In deploying these technologies, a bank must comply with applicable law and safe, sound, and fair banking practices.
Engaging in INVN within the federal banking system may enhance the efficiency, effectiveness, and stability of payments activities and achieve the benefits of real-time payments already enjoyed in other countries. For example, such activities may be more resilient than other payment networks because of the decentralized nature of INVNs, which allows a comparatively large number of nodes to verify transactions in a trusted manner. An INVN also limits tampering or adding inaccurate information to the database because information is only added to the network after consensus is reached among the nodes validating the information.
that blockchains have the same status as other global financial networks, such as SWIFT, ACH, and FedWire. Sounds like good news, right? Well, yes, and no... Banks, by their very business models, are gatekeepers of capital. No one will every really have as much capital on hand to deploy as we bank. Combine that access to capital with implicit and explicit preferential rights given by regulators (we are not all invited to play the game on the same terms, let's face it) and the banks willingness to play hardball as opposed the the blochchain's genesis entrepreneurs coming from mainly an opensource mentality and you may find a recipe for disaster for the entrepreneurial blockhain/token startup. There's near guaranteed doom for the ICO funded startup, as the US regulatory environment is downright vociferous if not lethal!
That leaves self-funded and VC funded ventures - again, limited in scope and depth of creativity. Not everybody has the hook-up for capital! Then there's the open-sourced mindset of the typical blockchain developer or architect. The look at companies that attempt to place their stake in the ground and claim territory for themselves, and say, " But... Can't we all just get along???" Well, on Wall Street, the answer is... No! Or, at least it has been since I've been alive. You have to be part of the old boys club, and that club ain't very big, and even more to the point, it ain't offered to just any or everyone.
So, with that preamble, we have a bunch of the crypto pioneers who came up with many great ideas, yet failed to protect them. Then we came up with banks who took these ideas, and did very little to build upon them, yet stand quite likely to capitalize on them. Let's take Wells Fargo, who apparently has patented the cryptocurrency exchange, and done so right under the nose of the industry. If this is the case, all of you Stellar, Tether, USDC and other USD stable coin aficionados might need to site down and hold on tight. The rug may be snatched from under you.
Wells Fargo patent number: US10565645B1 United States -
Systems and methods for operating a math-based currency exchange
BACKGROUNDMath-based currency (“MBC”), commonly referred to as cryptocurrency, is rising in popularity, use, and public acceptance. MBC differs from fiat currency (i.e., currency that is declared by a government to be a legal tender) in that principles of cryptography are used to create, secure, and transfer MBC directly from a first user to a second user. A user of MBC can transfer funds to another party by using a private key associated with a certain value of MBC. The private key may be used to generate a signature for the transaction, and the signature can be verified by nodes in the MBC network, thereby completing the transaction. Additional information, including the identities of the parties involved in the exchange, is not required to effectuate the transaction. Accordingly, MBC allows for anonymous transfers of currency between users without the reliance on financial institutions (e.g., a bank) to facilitate the transfer. Examples of MBCs include Bitcoin, Ripple, Litecoin, Peercoin, and Dogecoin, among others.
Generally, users of MBC store information relating to private key and public key pairs that are associated with specific values of MBC in MBC wallet applications. The wallet applications are used to facilitate the above described transfers. Services that provide a secure place for users to store private keys associated with MBC. Beyond that, however the wallet applications do not take actual possession of or an ownership interest in the MBC.
I warned of this 5 years ago, this week! For those who didn't pay attention, the result is what you see and read above....
See also...
A couple of days ago, I tweeted...
#Bitcoin headlines industry, business & mainstream media but the truth is:
— ReggieMiddleton (@ReggieMiddleton) January 2, 2021
A) #ETH has significantly more fundamental value than #BTC
B) It has MUCH more utility value that $BTC
C) appreciated more
BTC spikes from speculation, $ETH >value, so says the inventor & #founder of #DeFi pic.twitter.com/orR9NC5wjw
This is what that chart looks like now...
Tesla's data store allows it to do things that no other car manufacturer can accomplish at this time, and no amount of capital can enable them to catch up in the short to medium term. That's not to say that TSLA is not overvalued, but I think the pundits are mis-valuing Tesla more than overvaluing it. No company is worth 150 P/E, but the data store and gathering machine is by far its greatest asset and needs to be worked into the equation.
As a refresher, Tesla has well over 1 million data delivery drones, aka semi-autonomous cars fitted with (as quoted from the Tesla website):
Eight surround cameras providing 360 degrees of visibility around the car at up to 250 meters of range.
Twelve updated ultrasonic sensors complement this vision, allowing for detection of both hard and soft objects at nearly twice the distance of the prior system.
A forward-facing radar with enhanced processing provides additional data about the world on a redundant wavelength that is able to see through heavy rain, fog, dust and even the car ahead.
To make sense of all of this data, a new onboard computer with over 40 times the computing power of the previous generation runs the new Tesla-developed neural net for vision, sonar and radar processing software. Together, this system provides a view of the world that a driver alone cannot access, seeing in every direction simultaneously, and on wavelengths that go far beyond the human senses.
To make use of a camera suite this powerful, the new hardware introduces an entirely new and powerful set of vision processing tools developed by Tesla. Built on a deep neural network, Tesla Vision deconstructs the car's environment at greater levels of reliability than those achievable with classical vision processing techniques.
These millions of fully autonomous data discovery and remittance drones are constantly roaming on all five continents, sent exabytes of data to Tesla's servers - 24 hours per day, 7 days per week, during rain, snow, sleet, sunshine, sandstorms... The works. All types of obstacles, driver and pedestrian behavior, natural occurrences, everything that normally and abnormally occurs during driving is being sent to Tesla in exquisite and complete detail - constantly, from everywhere. If you think Google's data advantage is insurmountable (think search and maps), you ain't see nothing yet.
This enables Tesla cars to do things like fully autonomous driving - right now, not 5 years into the future.
Engadget: Watch Tesla's Full Self-Driving navigate from SF to LA with (almost) no help.
Now, how much is that worth? Hard to tell since the Fed has destroyed risk pricing and price discovery with the onslaught of unprecendeted printing, but I do know that it is worth something, even in this ridiculous multi-asset bubble!
Reggie Middleton is an entrepreneurial investor who guides a small team of independent analysts, engineers & developers to usher in the era of peer-to-peer capital markets.
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reggie@veritaseum.com