The rags-to-riches legend of Cosmos from 2017 (turning a $17 million token sale into roughly $104 million by 2019) almost came to an end in February 2020 when the interoperability project’s co-founders engaged in a scathing feud.
Jae Kwon accused Zaki Manian of blasphemy, arguing over whether this software was “godly” and demanding that Manian renounce his “self-professed godliness.” (This is a quasi-religious industry, after all. Kwon did not respond to requests for comment by press time.) Many tokens are blatantly tethered to their celebrity creators. Would Cosmos fade into the already expansive graveyard of once-hyped token projects?
Don’t put dirt on that grave just yet.
Manian said it was “pointless to continue with the current corporate structure” at Tendermint, adding the dramatic yet amicable breakup split the founding team into three companies, which may benefit Cosmos.
According to the Interchain Foundation (ICF), the Swiss foundation that shepherds the project’s ICO earnings, Cosmos blockchain technologies were used to “secure” $6 billion worth of assets by July 2020.
The foundation committed nearly $15 million so far in 2020, on 36 grants to software developers like the team at Tendermint. ICF plans to continue ongoing grant evaluations throughout the year.
There’s no denying this initial coin offering (ICO) project from 2017 is still impacting real people and their assets.
Kwon continues to spearhead Tendermint’s work on software development, as does Manian’s startup, Iqlusion, and a few other companies like Althea and Chainsafe. Plus, the non-profit created a startup in Berlin, Interchain GmbH, now staffed by former Tendermint technologists working on the same goals as 2019.
“The whole engineering team working on the consensus algorithm moved over to Interchain GmBH when it started,” said Tess Rinearson, VP of engineering at Interchain GmbH. “The transition was very smooth.”
“Interchain Berlin is perhaps the most focused team on the core infrastructure of Cosmos. At the moment, they don’t have any other business interests,” Manian added. “Other teams are working on Cosmos technology but for specific customers who either have launched Cosmos chains or are planning to.”
For example, Iqlusion generates revenue by running Cosmos validators and also offering software development services unrelated to the blockchain industry. Kwon is still president of the foundation and CTO at Tendermint, while Cosmos veteran Peng Zhong has taken the reins as Tendermint’s new CEO.
There’s always going to be politics at play when it comes to who gets funding. This is why ICF grant manager Billy Rennekamp said the foundation is actually working with Swiss authorities to structure an external oversight working board.
“That’s going to bring more eyes, hopefully, to who is getting money and why,” Rennekamp said.
Stepping back, the whole reason Cosmos exists is fans believe there will someday be many robust blockchain ecosystems and people will want tools that can work seamlessly across them.
For example, you might have a product or service that, on the backend, uses several smart contracts and crypto assets; like many ingredients in a single gourmet dish.
“The whole idea of blockchains is there should be many paths to access each other,” Rennekamp said.
It may seem counterintuitive for cypherpunks to seek out even more bureaucracy, but Cosmos fans believe formal governance will keep the project going, regardless of whether any of these particular startups fail.
“Because the mission of the Cosmos ecosystem itself is disparate entities being able to engage and collaborate with each other, it’s a good innovation to spend for us,” Rinearson said, referring to the hassle of coordinating five companies and dozens of stakeholders.
Much like the MakerDAO project, people who own the Cosmos network’s ATOM tokens can vote on how the platform is being built. Each project has different needs. Voting participation among roughly 120 active token-owning validators appears unusually high, with a 55% turnout in the most recent proposal. Manian said this required a significant outreach and coordination effort, which his startup handled so Interchain Berlin could focus on software development.
“It is the first step in the long road towards ATOMs building comparative advantage,” Manian said.
The Cosmos community managed to mature beyond a cult of personality without turning founders into martyrs, working together to reduce individual influence over the shared resources.
It remains to be seen whether the project will evolve, despite conflicting interests, into something that attracts user demand beyond niche crypto circles.
This is a business-to-business model, not a crusade to promote ATOMs as a dominant currency. Other types of companies need to want blockchain-related software services in order for any of this to matter. The token project could still fail to find product-market fit, even if the software works and the builders cooperate.
For now, Rinearson said her team is focused on Inter-Blockchain Communication, which should be live and usable on the mainnet by the end of the year. Meanwhile, Manian is rallying the troops to tackle a controversial software update called Stargate.
“The cost is that, unfortunately, it will be a disruptive upgrade for many ecosystem participants, like wallets and exchanges,” Manian said of Stargate, which will make the Cosmos ecosystem more compatible with external tools used across the mainstream tech industry.
“The purpose of the Stargate [participatory governance] process is going to ensure a high degree of ecosystem coordination in the upgrade,” he said.
It may have started in the trendy rush of 2017, but this token project’s story is far from over.
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“Bitcoin Is A Solid Store Of Value”, MicroStrategy Founder Testifies
The founder of Microstrategy, “the largest independent publicly-traded business intelligence company,” as it brands itself, has recently made remarkable comments about Bitcoin’s ability to scale. Michael Saylor, took to Twitter to express what can be summed up as “tried-and-tested” feedback on Bitcoin’s seamless scalability features. “Bitcoin scales just fine as a store of value,” Michael Saylor, who is obviously still very bullish on Bitcoin said.
Earlier this week, Microstrategy was making rounds in the cryptocurrency space after Saylor revealed that the company has keyed into the wave of digital currencies once again, by increasing its existing Bitcoin holdings by 16,796 Bitcoins at an aggregate purchase price of $175 million.
Michael Saylor also revealed on Thursday that another 21,454 BTC off-chain transaction was recently carried out. 78,388 off-chain transactions were made in the acquisition process, while a significantly lesser amount of 18 on-chain transactions was all that was needed to secure the acquired Bitcoins into a cold wallet for storage. On-chain transactions often require miners to make confirmations that validate the transactions. Up to 51% of the network participants must agree on the accuracy of the transaction before the ledger is updated.
When it comes to scalability, the Bitcoin blockchain has its fair share of barriers and the delay in transaction speed caused by a high volume of pending transactions has called for solutions like the lightning network. While some developers were of the opinion that block sizes should be increased for on-chain renovation, others called for off-chain improvements. In spite of this, as Saylor observed, Bitcoin is still able to carry out transactions at a good rate, even with a 7 TPS, on-chain scaling is still moderate.
Saylor has not always been a Bitcoin advocate. In 2013, the CEO linked Bitcoin to online gambling, alerting the public that Bitcoin was a time bomb waiting to explode. He can be quoted saying “Bitcoin’s days are numbered. It seems like just a matter of time before it suffers the same fate as online gambling.”
Modifying his statement in an interview with the co-founder of Morgan Creek Digital, he said; “I’m really ashamed to say I didn’t know I tweeted it, until the day I said I bought $250 million worth of Bitcoin.” So far, Microstrategy has purchased 38,250 Bitcoins since July 28th when it first showed interest in acquiring cryptocurrencies. It will no longer be surprising to see Microstrategy securing more cryptos in the future as its recent Bitcoin purchase caused a 9% rally in tandem.
Report: Privacy coins don’t conflict with Anti-Money Laundering laws
Privacy-oriented cryptocurrencies like Monero (XMR) do not conflict with Anti-Money Laundering laws, according to a major global law firm.
Perkins Coie, a Seattle-based international law firm, published a report devoted to the AML regulation of privacy coins on Sept. 15. In the report, Perkins Coie aims to dispel the purported misconception that privacy coins like XMR are fundamentally incompatible with AML compliance, arguing that regulated entities are capable of complying with AML obligations while supporting privacy coins.
According to Perkins Coie, privacy coins ultimately present “no incremental challenges or requirements” to Virtual Asset Service Providers, or VASPs, other than the need to collect, retain and transmit certain customer and transactional data to the recipient. The firm emphasized that these requirements are not unique to VASPs, adding that they should remain subject to the same standards as traditional financial institutions.
The report goes on to say that if VASPs serve as custodians of the private keys of their users, they will be able to see the number of privacy coins and report on suspicious activity in compliance with AML measures. For example, Monero — the world’s largest privacy-focused cryptocurrency — essentially enables users and VASPs to disclose certain transactional details associated with a given account to a third party, the report noted.
Perkins Coie’s experts emphasized that these features are part of the key functionality built into the Monero protocol, stating:
“This enables users and VASPs to disclose certain transaction details associated with a given account to a third party without publicly disclosing that user’s transactional information. In addition, VASPs can require up-front disclosures as part of their registration process and on an ongoing basis to meet their obligations.”
Apart from arguing for privacy coins’ compatibility with AML, the report outlines the crucial role of financial privacy in general.
“Businesses rely on and expect financial privacy. Without maintaining confidentiality, commercial transactions would be visible for competitors and nefarious actors to analyze, predict, front-run, and exploit. This radically transparent type of environment would likely result in market manipulation by participants, a hindrance to innovation, and an unfair advantage for competitors and counterparties alike,” it states.
Perkins Coie’s report comes shortly after the United States Internal Revenue Service announced a bounty of up to $625,000 to anyone who can crack Monero’s privacy.
Major cryptocurrency intelligence firm CipherTrace reportedly claimed that their crypto tracking tool is capable of tracing Monero transactions. A number of industry players subsequently expressed skepticism regarding the matter.
European Union will introduce crypto-asset regulations by 2024 – a report by Saumil Kohli.
According to the Reuters report, the European Union will introduce new rules within four years to make cross-border payments quicker and cheaper using blockchain and crypto-assets like stablecoins. The European Commission is due to set out its strategy for encouraging greater use of digital finance at a time when 78% of payments in the eurozone are in cash. The commission also wants a rapid shift to “instant” payments, generally as pandemic lockdowns showed the growing role of cashless payments.
The EU executives will set out new rules for cryptocurrencies.
The European Union executives will present a draft law to clarify how existing regulations apply to crypto-assets and set out new regimes where there are gaps, the documents said. “By 2024, the EU should put in place a comprehensive framework enabling the uptake of distributed ledger technology (DLT) and crypto-assets in the financial sector,” the documents said. “It should also address the risks associated with these technologies.” Stablecoins came on the policymakers’ agendas last year when Facebook revealed plans for its Libra token. Central banks across countries are now studying whether to launch their own.
Instant payment systems should become the “new normal” by the end of 2021.
Brussels wants to make it easier to share data within the financial sector to encourage competition and a wider range of services while upholding the principle of “same risk, same rules, same regulation,” the documents say. The bloc should also have rules in place within the next four years to allow new customers to start using financial services quickly once anti-money laundering (AML) and identity checks have been completed, it said. The report further states that the commission will assess the impact of charges levied on consumers for instant payments and make sure that they are no higher than those for regular credit transfers.
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