All posts by Vin Narayanan

Google and Facebook Up Their Blockchain Game

Do you remember the “browser wars” in the 1990s? It started when young upstart Netscape took the world by storm with its web browser.

At the time, Microsoft – with its Windows operating system – dominated the computing industry. It was a behemoth feared by all. Apple, IBM and HP were mere flecks in Microsoft’s rearview mirror.

Yet Microsoft knew that the web (and Netscape) represented an existential threat. It could be the only thing to drive Microsoft out of business.

So Microsoft pivoted. It embraced the internet and the web. And it created Internet Explorer. It was Microsoft’s bid to own access to the web.

Microsoft bundled Internet Explorer for free with its Windows operating system in an effort to crush Netscape and any other company that might have the temerity to launch its own browser.

The company’s efforts didn’t work. But they did define the competitive landscape for the better part of a decade.

Just like Microsoft more than 20 years ago, Facebook and Google have been hard at work trying to determine how they want to approach crypto – and the blockchain.

And this week, we learned more about their efforts.

Last May, David Marcus left Facebook’s Messenger product to lead Facebook’s blockchain initiatives. In December, media reports suggested Facebook was developing a cryptocurrency to be used on its WhatsApp messaging platform. And this week, Facebook hired away Chainspace’s top talent (Mashable).

The move, first reported by Cheddar, gives Facebook a talented crypto team that had been working on building smart contracts and a payment ecosystem (Cheddar).

Facebook didn’t get Chainspace’s technology. But Facebook doesn’t need the tech. It now has the talent and resources to build its own crypto ecosystem. And Facebook’s existing user base (2.32 billion monthly active users) could drive mainstream adoption. That makes Facebook a crypto force to be reckoned with.

Google, meanwhile, is entering crypto in typical Google fashion – by making it searchable. Google has uploaded the entire bitcoin and ethereum blockchains to its BigQuery cloud database and provided open-source tools to search it. It’s in the process of uploading litecoin, zcash, dash, bitcoin cash, ethereum classic and dogecoin to BigQuery. And independent programmers are uploading their own crypto datasets to BigQuery so they can search them (Forbes).

This is a remarkable development. One of the biggest regulatory issues facing crypto is market surveillance. But with the right programming or AI (artificial intelligence) in place, that problem can be solved. In fact, a Google developer has already spotted bitcoin cash being hoarded and autonomous agents moving ethereum around.

An independent developer used Google’s tools to find a specific smart contract flaw. Another created a heat map of XRP flow.

Google’s new foray into crypto has the potential to be transformational. And the entire crypto community should be on notice. Google and Facebook are playing for keeps. Everyone else needs to raise their game.

Now to the News Fix!


It’s earning reports season. Here’s the lineup:

Speaking of MedMen, it’s been an interesting few months for James Parker. In the beginning of November, he was MedMen’s chief financial officer. In mid-November, MedMen announced his resignation. And by the end of January, Parker was suing MedMen for breaching its fiduciary responsibility to shareholders (Seeking Alpha).

A Florida judge has struck down a law that limits the number of medical marijuana facilities an operator can have (Orlando Sentinel).

And in Arizona, medical marijuana is legal – except when a county prosecutor says it isn’t (ABC15).

Okay, let’s follow the bouncing ball here. Arizona voters legalized medical marijuana in 2010. In 2017, a cancer patient was told by his oncologist that he should try medical marijuana. He obtained a medical marijuana card from the state and visited a legal medical marijuana dispensary where he bought some wax to help with his nausea.

A few days later, he was stopped by police for a traffic violation. And when they discovered the wax in his car, they arrested him and charged him with possession of a narcotic. He faces a 10-year prison term if convicted.

Whether this Arizona man gets convicted depends on the Arizona Supreme Court. The court is hearing a similar case about an Arizona man currently serving time for the same “crime.”

The legal “argument” at play is that the medical marijuana law says only the plant form of marijuana can be used for medical purposes. All other forms are illegal.

It’s a technicality – one that ignores the fact that he purchased the wax legally. And even the state’s attorney general doesn’t want anything to do with this case.

But the conviction has already been upheld once. Here’s hoping the Arizona Supreme Court does the right thing and frees these men from this legal nightmare.


Spotify is betting big on podcasts. It just bought podcast startups Gimlet and Anchor to fortify its strategy. The two startups had raised about $43 million combined from venture capital funds (Fortune). Spotify spent about $230 million on Gimlet and wants to spend about $500 million this year on acquisitions (Recode).

And Jetty, a startup that sells rental insurance, just raised $25 million in a Series B funding round. The round was led by Keith Rabois from Khosla Ventures (The Real Deal).


Twitter CEO Jack Dorsey recently revealed that the only cryptocurrency he owns is bitcoin. Why bitcoin?

“Bitcoin is resilient,” Dorsey said on Twitter. “Bitcoin is principled. Bitcoin is native to internet ideals. And it’s a great brand” (Daily Hodl).

And in Argentina, 37 cities now accept bitcoin as payment for buying bus and metro (train/subway) passes (Bitcoinist).

And that’s your News Fix.

Have a great weekend!

Vin Narayanan
Senior Managing Editor, Early Investing

Source: Early Investing

Congressional Hearings Show Appetite for Smart Crypto Regulations

Earlier this week, I visited my old stomping grounds in Washington, D.C. to cover a pair of Congressional hearings about cryptocurrencies.

If you’ve never been to a Congressional hearing, you should try to attend one. They’re actually open to the public. And there’s no need to sign up or get tickets. But show up early! Seating is extremely limited. At the House Committee on Agriculture, there’s room for about 25 spectators – not including a press table that seats about six reporters (that’s where I was). At the House Financial Services Committee, there’s room for about a dozen spectators. The remaining dozen chairs are reserved for Congressional staff and reporters.

I’ve covered my share of House and Senate hearings – and it never gets old. The rooms that hold these meetings are impressive, awe-inspiring and intimidating. And that’s by design.

The witnesses testifying before Congress are typically the smartest, most accomplished professionals in their field. Members of Congress are not usually described that way.

That’s why the legislators sit on raised platforms and desks while the witnesses testifying before them sit at the bottom of the room, staring up at the bright lights and people in power. It’s a power play – a not-so-subtle reminder that it doesn’t matter how rich or accomplished you are. In that moment, you are answering to Congress.

If you think that such an obvious and dramatic power play wouldn’t rattle truly accomplished people, think again. As I talked to the crypto experts who testified on Wednesday, their reactions ranged from “that was terrifying” to “well, that could have gone worse.”

So how did the “crypto double-header” go on Wednesday? Actually, way better than expected.

For the first time, there seems to be an emerging consensus from the crypto industry about how cryptocurrencies should be regulated. Even better, the suggested framework was either tacitly accepted or (at worst) unchallenged by the politicians in attendance.

In oral and written testimony to the Agriculture Committee, Perkins Coie Managing Partner Lowell Ness outlined a two-phase approach to regulating cryptocurrencies (emphasis mine):

  1. Pre-Functionality – Until the token achieves full functionality, offers and sales of tokens would generally constitute investment contract type securities under Howey, unless a reasonable purchaser is purchasing with consumptive intent. In this case, the token should generally be treated as a security unless use of the token (as opposed to resale) is reasonably certain.
  2. Full Functionality – Once the token achieves full functionality, offers and sales of tokens would generally not constitute investment contracts under Howey. Software networks, however, generally require ongoing updates and upgrades, so it may be appropriate to create limited but ongoing investor protections.

This regulatory approach to cryptocurrencies is both innovative and remarkably practical. It allows for cryptocurrencies to be defined as securities (and regulated by the SEC) when they’re being created and developed. Once the development phase is over, so is the “third party” work that adds value to the coin (that’s the Howey test at play). At that point, the cryptocurrency becomes a commodity and can be traded without SEC oversight.

This new “hybrid” asset class formalizes a conclusion the SEC has already reached about ethereum. Here’s what the SEC’s corporate finance division director, William Hinman, said about ethereum in a speech in San Francisco (emphasis mine):

And putting aside the fundraising that accompanied the creation of ether, based on my understanding of the present state of ether, the ethereum network and its decentralized structure, current offers and sales of ether are not securities transactions. And, as with bitcoin, applying the disclosure regime of the federal securities laws to current transactions in ether would seem to add little value.

Reading between the lines, the SEC’s view of ethereum matches up pretty nicely with the proposed regulatory scheme. In the minds of the regulatory agency, when ethereum was in its development phase, its initial coin offering (ICO) constituted a sale of securities. The coins were an investment that investors hoped would rise in value based on the work/efforts of a third party. But once ethereum launched, its decentralized nature and usage made it a commodity.

If this seems like pretty technical stuff, well, it is. But it’s also critically important. The marketplace needs clarity and certainty in order to mature. It also needs a light regulatory touch. Anything less than that will stifle growth. And this path potentially walks that tightrope.

In many ways, Wednesday’s hearings mark a sea change in the government’s approach to cryptocurrencies. It was a significant effort to create a positive, constructive framework for cryptocurrencies.

At previous crypto hearings, much of the discussion (by politicians) centered on people using bitcoin for nefarious purposes like money laundering, dodging U.S. sanctions, smuggling drugs and whatever other shady activities people could think of.

And there was still some of that on Wednesday. Over at the House Financial Services Monetary Policy and Trade subcommittee hearing, Rep. Brad Sherman (D-Calif.) said:

There is nothing that can be done with cryptocurrency that cannot be done with sovereign currency that is meritorious and helpful to society. The role of the U.S. dollar in the international financial system is a critical component of U.S. power. It brought Iran to the negotiating table… We should prohibit U.S. persons from buying or mining cryptocurrencies… As a medium of exchange, cryptocurrency accomplishes nothing, except facilitating narcotics trafficking, terrorism and tax evasion.

Sherman wasn’t the only member of Congress who shared that sentiment. Fortunately, it’s both laughable and provably false. As Andreessen Horowitz Managing Partner Scott Kupor noted in the Agriculture Committee hearing, the digital trail created by bitcoin allows law enforcement officials to track down criminals – including Russian hackers.

Sherman (and others like him) is now the outlier in Congress. Even his fellow subcommittee members looked like they were just humoring him because he put on a good a show. Far more prevalent was the approach of Agricultural Committee Chairman Mike Conaway (R-Texas):

For the first time, we have a tool that enables individuals to reliably exchange value in the digital realm, without an intermediary. We can have assets that exist – and can be created, exchanged and consumed – in digital form. The promise of being able to secure property rights in a digital space may fundamentally change how people interact with one another. This technology holds the potential to bring enormous benefits to each of us, if we are willing to give it the space to grow. Providing a strong, clear legal and regulatory framework for digital assets is essential.

We’ve moved from the “bitcoin is bad” era to the bitcoin acceptance era. That’s a huge step forward. Let’s celebrate that before we think about the next step – getting Congress to pass crypto-friendly legislation.

Good investing,

Vin Narayanan

Senior Managing Editor, Early Investing

Can a $10 Bill Really Fund Your Retirement? The digital currency markets are delivering profits unlike anything we’ve ever seen. ​23 recently doubled in a single week. And some like DubaiCoin have jumped as much as 8,200X in value in 18 months. It’ unprecedented... but you won’t receive any of the rewards unless you put a little money in the game. Find out how $10 could make you rich HERE. ​

FRED Starts Publishing Crypto Data

When does something cross over from fad to part of life? It’s a question that’s vexed investors for decades.

Sometimes it’s easy to pinpoint the moment.

Before there were smartphones, there were personal digital assistants (PDAs) and electronic organizers. They did almost everything a smartphone did except make phone calls. For 23 years, they were barely a niche product. Objects of curiosity, if you want to be generous. And if you were one of the few people who used one, there was a good chance you would be mocked for it.

Then came the iPhone in 2007. It was basically a PDA that could make phone calls and play music. But consumers loved it. And the smartphone became a fixture of modern life.

Sometimes, it’s much more difficult to pin down the moment that changed everything.

In the mid-‘90s, the conventional wisdom was that the internet was a fad that wouldn’t take off. This line of thinking from author and astronomer Clifford Stoll was par for the course in 1995:

Then there’s cyberbusiness. We’re promised instant catalog shopping – just point and click for great deals. We’ll order airline tickets over the network, make restaurant reservations and negotiate sales contracts. Stores will become obsolete. So how come my local mall does more business in an afternoon than the entire internet handles in a month? Even if there were a trustworthy way to send money over the internet – which there isn’t – the network is missing a most essential ingredient of capitalism: salespeople.

Whoops. Stoll clearly didn’t see Amazon coming.

Newspaper publishers told the people building their online brands (their own employees!) that the internet was a waste of time and money and people wouldn’t want to read news online. I know – because I was there. I was one of the journalists creating online journalism content and business models.

Music companies didn’t believe people would want to listen to digital music. The list goes on.

So when did the internet move from fad/object of derision to our constant companion?

It wasn’t in 1993 when the first web browser (Mosaic) was released. Nobody knew what was going on then.

It wasn’t in 2000, when the tech bubble burst. That was a time for “I told you so’s” – proof that the internet wasn’t going to last.

It wasn’t 2001, when the number of adults using the internet in the U.S. finally reached 55%, according to the Pew Research Center.

And it wasn’t in 2007, when broadband penetration cracked the 50% barrier.

The die had been cast well before then. Most people just missed it.

The moment the internet gained the credibility it needed to last came in 1994, when the White House released its first website. By today’s standards, the 1994 White House site is terrible. But that doesn’t matter.

What counts is that, by publishing a website, the White House gave the web legitimacy. It went from a slightly underground publishing platform to a legitimate way to publish information and reach people. If the White House was publishing on the internet, it meant the internet was safe to explore and use. It gave permission to skeptics to start using the internet. It told them the web was worth their time.

It was the type of endorsement money couldn’t buy.

Cryptocurrencies received that kind of endorsement this week when the Federal Reserve began tracking and publishing the prices of bitcoin and other key cryptocurrencies. The research division in the St. Louis branch of the Federal Reserve (FRED) is publishing the data.

This is the 2018 equivalent of the White House publishing a website. The central bank of the United States, in its own understated way, legitimized cryptocurrencies. Why would the Fed track assets it didn’t believe were legal, legitimate and worth tracking? The short answer: It wouldn’t.

Bitcoin and other digital currencies like it have become an important asset class in the investment community. The Fed just acknowledged it.

FRED is one of the go-to resources for economic data. Investors and economists from all over the world rely on FRED for information. And FRED just lent its credibility to bitcoin and cryptocurrencies.

This is a significant moment.

But it’s not this week’s only significant crypto moment. Facebook is starting to allow cryptocurrency advertising again as long as the ads – and the companies buying the ads – meet strict guidelines.

And top venture capital firm Andreessen Horowitz announced in its blog that the company has launched a $300 million “venture fund that will invest in crypto companies and protocols. (The) fund is designed to include the best features of traditional venture capital, updated to the modern crypto world.”

FRED’s decision to list cryptocurrency data is a significant milestone in cryptocurrency history. It marks a final countdown to mainstream (and Main Street) acceptance and investment. The Facebook and Andreessen Horowitz announcements take us further down that path.

Good investing,

Vin Narayanan
Senior Managing Editor, Early Investing

Can a $10 Bill Really Fund Your Retirement? The digital currency markets are delivering profits unlike anything we’ve ever seen. ​23 recently doubled in a single week. And some like DubaiCoin have jumped as much as 8,200X in value in 18 months. It’ unprecedented... but you won’t receive any of the rewards unless you put a little money in the game. Find out how $10 could make you rich HERE. ​

Source: Early Investing 

Volume Is Important When Trading Bitcoin

“Follow the money” is an old adage in journalism. (It was memorialized in the movie All the President’s Men). It’s a useful saying for investors too. In this week’s chart, we follow the money to see which bitcoin exchanges Americans (or U.S. dollar holders) are trading on.

So why is this chart important? Let’s follow the money.

We should note that this chart is just a snapshot in time. The data is from May 23, 2018. Another thing to remember is that the chart only reflects U.S. dollars being traded as bitcoin. It doesn’t reflect the yen (Japan), won (South Korea), euro (European Union) or other currencies being traded as bitcoin. That chart would look quite different. But neither of these factors affects the value of this chart.

The first thing to notice is the exchanges Americans are using to buy and trade bitcoin. That’s useful information. At Early Investing, we’re fans of Coinbase. But as you can see, there are other exchanges out there that do plenty of business.

The second thing this chart does is approximate overall market activity. This past Wednesday was a pretty busy day. If you had looked at this chart on Friday, you would have seen the highest 24-hour trading volume was $182.7 million. That’s a much quieter day.

Finally, the chart helps measure the volume of trading activity on an exchange, which is an important factor in price volatility. Bitcoin is already volatile enough as it is. But the more trades that are happening on an exchange, the more you can believe that those price gains (or losses) are real.

And in the cryptocurrency world, all you can do is ask for real!

Good investing,

Vin Narayanan
Senior Managing Editor, Early Investing

Can a $10 Bill Really Fund Your Retirement? The digital currency markets are delivering profits unlike anything we’ve ever seen. ​23 recently doubled in a single week. And some like DubaiCoin have jumped as much as 8,200X in value in 18 months. It’ unprecedented... but you won’t receive any of the rewards unless you put a little money in the game. Find out how $10 could make you rich HERE. ​

Likely Good News for Crypto Investors

Woohoo! Standards fight!

Okay, so that’s not as much fun as shouting “food fight!” in a crowded cafeteria. But it’s still fun. Many of you, possibly without even knowing it, have participated in a standards fight before.

Remember VHS vs. Beta? This was the fight for the VCR (which is what the world used before DVDs). Beta, which was Sony’s standard, recorded an hour of beautiful high-quality video.

VHS couldn’t match Sony’s quality. But you could record for two hours (and eventually four). The two video formats (and machines) were incompatible. So consumers had to pick one and stick with it. VHS won out and everyone who bet on Sony lost.

VHS vs. Beta is likely the most famous standards battle in recent history. But there have been others, like Blu-ray vs. HD DVD, Mac vs. PC and alternating current vs. direct current.

Now the blockchain world is getting its own standards fight. This battle isn’t for consumers (yet). It’s for enterprise class solutions – blockchain for businesses.

The two (for now) competing entities in this fight are Hyperledger and the Enterprise Ethereum Alliance (EEA).

The EEA is made up of 500 companies, including Credit Suisse, Hewlett Packard, ING, Samsung, Shell and Toyota. And it just released the first version of its open-source framework to speed up and automate business transactions. As the name of the group suggests, the EEA is using Ethereum as its blockchain platform.

Unlike the EEA, which can use Ethereum or tokens based on the Ethereum blockchain, Hyperledger doesn’t have a native currency. But it does have a similar mission. It wants to “build a new generation of transactional applications that establishes trust, accountability and transparency at their core, while streamlining business processes and legal constraints.”

Hyperledger also has a series of heavy hitters contributing to its development: IBM, Intel, Fujitsu, Deutsche Bank and SAP. Hyperledger is hosted by The Linux Foundation.

Before we get too carried away with this standards fight, we should note there are a few companies hedging their bets. Cisco, Accenture, Deloitte and J.P. Morgan, among others, are betting on both.

So what does all of this mean to you, the investor?

In the short term, this is good news for Ethereum.

Last week, the EEA launched the first version of its Enterprise Ethereum Client Specification. (Hyperledger Fabric 1.0 came out last year.) And while the technical details of this standard mean something to developers, the important takeaway for investors is that the use case for Ethereum just improved. And ultimately, that’s important.

Whether it’s as a store of value, an enterprise software solution or something else, cryptocurrencies need a use case – and Ethereum is clearly demonstrating one here.

In the long term, this is another factor to take into account as you evaluate investment opportunities. What environment are they developing in? Which standard is gaining momentum? And are those decisions following market trends?

In the end, all of this is good news for cryptocurrencies and blockchain tech. And we should all celebrate that.

Good investing,

Vin Narayanan
Senior Managing Editor, Early Investing

Can a $10 Bill Really Fund Your Retirement? The digital currency markets are delivering profits unlike anything we’ve ever seen. ​23 recently doubled in a single week. And some like DubaiCoin have jumped as much as 8,200X in value in 18 months. It’ unprecedented... but you won’t receive any of the rewards unless you put a little money in the game. Find out how $10 could make you rich HERE. ​

Blockchain Beer Vending Machine Debuts at Consensus 2018

When the history of blockchain technology is written, 2018 will be known as the year it arrived. How do we know that?


Anheuser-Busch InBev – which makes Budweiser and Bud Light (among others) – and blockchain identity company Civic are demonstrating the first blockchain beer vending machine at Consensus 2018. Actually, Civic is doing most of the demonstrating because Consensus is the world’s most influential cryptocurrency and blockchain conference.

This vending machine is cool. If you’ve ever used your phone to pay for something with Apple Pay or Google Pay, it works a little bit like that.

Everything starts with setting up your phone. You have to download the Civic app and set up an account that verifies your age and identity. It’s almost like signing up for a digital driver’s license or ID. Once your account is created, you can use the app to verify your age at the vending machine (or any service that accepts Civic). Then you transfer some bitcoin, and the machine gives you a can of cold beer.

Civic handles the identity verification. Anheuser-Busch InBev operates the vending machines.

And it’s important that Anheuser-Busch is involved. Its beers – from television commercials to consumption – dominate American culture. And when a major sector or company embraces a new technology, it’s an early indicator that mainstream consumer acceptance is on the way.

Consider the e-commerce landscape in 1989. Yes, there was e-commerce in 1989. The web wasn’t around. But dial-up services like Prodigy, America Online and CompuServe still connected people to the internet.

It was in that environment that American Airlines offered its easySABRE service on Prodigy. The service allowed you to book flights on 300 airlines, make reservations at thousands of hotels and even rent cars. It was ahead of its time. (Yes, I used it. Don’t judge.)

In 1996, with the web still in its infancy, Travelocity and Expedia were launched, making the travel sector the first to truly embrace e-commerce and the internet.

Civic and Anheuser-Busch are charting a similar path. And beer isn’t the only sector where large established players are getting into blockchain.

In finance, Nasdaq is actively using blockchain tech to settle certain transactions. In medicine, Quest Diagnostics has launched a pilot program with UnitedHealth, MultiPlan and Humana to create a data-sharing platform. In shipping and logistics, UPS and Maersk are investing heavily in blockchain to develop systems to track and manage global shipping and supply chains. In fact, they’re so vested in blockchain technology that they testified before Congress last week about its importance.

So as you watch blockchain take off this year and beyond, take time to appreciate that it all started with an ice-cold beer.

Good investing,

Vin Narayanan
Senior Managing Editor, Early Investing

Can a $10 Bill Really Fund Your Retirement? The digital currency markets are delivering profits unlike anything we’ve ever seen. ​23 recently doubled in a single week. And some like DubaiCoin have jumped as much as 8,200X in value in 18 months. It’ unprecedented... but you won’t receive any of the rewards unless you put a little money in the game. Find out how $10 could make you rich HERE. ​

Source: Early Investing