Episode 205 - EOS troubles brewing, N. Korea is all about that crypto, and finally... it's a bird! It's plane! It's the Federal Reserve!
Welcome once again to Flagship Friday! Although one day late, we're still calling it Flagship Friday to keep our tradition alive. Flagship Extended Weekend didn't sound all that nice.
Tune in as Karim and Adam (Brent's got the sniffles :') dive into EOS and its latest scandal, talk about North Korea's crypto project and the Federal Reserve's intervention on the economy, along with some juicy commentary and rants by Karim, our in-house "important things" expert. So if you wanna hear Karim spit some fire preaching and Adam PASSIONATELY agreeing with him, put on your headphones and press play cause this episode is a feisty one.
Dive into the cryptoverse with us on this week's Flagship Friday.
HELP SUPPORT THE PODCAST!
- Patreon- $1 an episode would be the best thing ever and keeps us afloat.
- Join our Discord right here
- Subscribe Via iTunes
- Ledger Nano S or Ledger Nano X- This is where you buy the hardware wallet that we're always talking about on the show - we all use a Ledger Nano S.
- Cash App has Bitcoin- If you sign up through that link the show gets $5 and so do you! Stop the presses. The easiest to use money transfer application (yes it's easier than Venmo) now as a built in way to buy and sell Bitcoin. They even have a no - fee debit card you can use.
- CryptoBasic Podcast Email
Flagship Friday 9/20/19
Netflix has an upcoming series on crypto. Altcoins to be exact. Will be interviewing Vitalik, Charles, and Da Hongfei (NEO)
EA tweets out â€œinvest in Cryptoâ€. New character in Apex Legends
Istanbul, the Ethereum mainnet update has a release date after most recent maintenance update. Istanbul is Ethereumâ€™s long-debates hard fork. First update will be by in October or November and the second update will be 1Q 2020. That update will include ProgPoW (progressive proof of work)
J.P. Morgan's nlockchain-based network grows to over 330 banks. It's called the Interbank Information Network. Deutschbank is big players. They are using Quorum, a permissioned version of the Ethereum blockchain.
Ethereum celebrates the end of August with more than 75 million unique addresses.
Ethereum has had a steady rise Q1 of 2018. Basically looks like a 45 degree angle since then. Back in July of 2017 it was at roughly 2 million addresses.
overnight borrowing rates shot up, forcing the New York Federal Reserve to come to the rescue with a special operation aimed at easing stress in financial markets
- First wanted to understand overnight rate
- Amount of cash a bank has can fluctuate a lot based on daily activity, they can have shortage or surplus of cash at the end of the day.
- Banks with surplus can lend money overnight to banks with shortages to maintain reserve requirements
- Interest rate that large banks use to borrow and lend from one another.
- This rate is targeted by the central bank, which is also a participant in the market (lending and borrowing)
- Since this is the base borrowing rate it can be used as a predictor of short term rates for broader economy. Goes up when liquidity decreases
Fed target rate for July? Between 2% and 2.25%. On Monday it hit 5%, which was up from 2.29% previous week, it kept surging until 10% high on tuesday
Called an overnight repo operation, where Fed eases downward pressure on markets by purchasing treasuries and other securities
- Managed to inject $53b into the system
- One theory was for the stress is a large quarterly withdrawal by US companies to pay Taxes (estimated around $100b total)
- On wednesday Fed had to pour an extra $75b, so $128b, getting rates to lower to 3% (still above target rate)
- Bigger pic, we now have a $1 trillion federal deficit so Government borrowing has climbed (Tax revenue decreased because of tax cuts, but bipartisan surge in spending)
- First wanted to understand overnight rate
EOS Troubles Brewing
- A few weeks ago one of it's early supporters, EOS Tribe, a small company that participated in the launch of the first EOS chain called it quits as an EOS block producer. In a post made on Steemit Eugene Luzgin said "We at EOS Tribe have never participated in the game of vote trading and stayed true to our principles, and hence while we leave EOS as Block Producer, we are also free to speak truth and give warnings to the rest." WHOA. Shots fired!!
- You guys covered in your EOS 101 how there were issues with governance and that it's pretty centralized. 21 block producers at any time that make governance decisions, establish consensus on the chain, and earn substantial rewards. This has always been a concern and now the most technically proficient BPs are receiving little to no rewards at all.
- Luzgin called it a braindrain. What does he mean by that exactly?
- Most of the BPs are in located in China
- May 8th 2019 they burned $167 million in EOS for the worker proposal system, which was a way to fund EOS dapp development
- EOS NY proposed an EOS user agreement which was adopted y 15 of the 21 BPs at the time but nothing against vote-buying was in the agreement
- two forks already, Telos and Worbii. Telos has a token cap at 40k and number of innovations to ensure potential BPs actually serve. Worbii created with certain consumer protections and more of a focus on the financial industry.
- not saying EOS is a sinking ship but touting themselves as the Ethereum killer is a bit much.
Crypto Around the World
- North Korea Is Building Its Own Bitcoin
- NK in the early stages of developing its own Bitcoin!
- Trying to avoid / circumvent sanctions, apparently they had a blockchain conference in April
- â€œWe are still in the very early stages in the creation of the token. Now we are in the phase of studying the goods that will give value to it,â€
- There are of course other ways for NK to take advantage of crypto
- In 2018, Jonathan Foong Kah Keong established a company in Hong Kong called Marine Chain that sold digital tokens in exchange for partial ownership of maritime vessels.
- Hong Kong called Marine Chain that sold digital tokens in exchange for partial ownership of maritime vessels.
- According to a U.N. investigation, â€œthe platform could be used to generate money for the regime and as a potential means of evading sanctions on shipping by creating a new method of obscuring the ownership of a vessel.â€
- Cubans flock to cryptocurrency to shop online, send funds
- the roll-out of mobile internet nearly a year ago has opened the way for cryptocurrency transactions,
- and enthusiasts have multiplied as the currency helps overcome obstacles created by U.S. sanctions on Cuba.
- Jason Sanchez, 35, was able to start buying spare parts online last year for his cellphone repair shop in Havana
- Sanchez, who uses Bitcoin to purchase parts not available new in Cuba from an online Chinese store.
- since Cubans mostly do not have credit cards, many have to ask relatives abroad to purchase them their first installment of cryptocurrency
- To show how important a lifeline this can be,
- Several crowdfunding platforms shut down accounts for victims of the tornado in Havana earlier this year, for example, despite donations being legal, simply due to the mention of Cuba.
THAT'S A SCAM
- SEC Filed a lawsuit against ICOBox and its founder, Nikolai Evdokimov over an allegedly illegal $14 million in securities in 2017.
- Sold to more than 2,000 individuals
- ParagonCoin, which settled charges with the SEC over its own ICO last year made use of the ICOBox platform.
- ICOBox exposed investors to investments which are now basically worthless without providing investors pertinent info to make informed investment decisions.
- Of note, ICO Rating, a cryptocurrency ratings site was fined $269k last year for failure to disclose payments received from issuers of digital assets. basically they got in trouble for shilling