Moonday Mornings: 30% of cryptocurreny startups failed in 2018
Another weekend has come and gone, meaning there’s blockchain and cryptocurrency news to catch up on.
Thankfully, you’ve got Hard Fork’s weekly wrap-up, Moonday Mornings, to take the stress out of it. Let’s get down to business.
1. The Brazilian Court of Justice in São Paulo has dismissed an appeal made by Spain’s largest bank, Banco Santander, against cryptocurrency exchange, Mercado Bitcoin. Banco Santander originally closed the exchange’s account, claiming it had breached the bank’s policy. The bank will have to return nearly $350,000 after the appeal was dismissed unanimously, a local cryptocurrency news outlet reports.
The irony that cryptocurrency startups rely on banks needs no explaining, but the fact that the courts sided with the startup in this case is unique. Earlier this month, the Times of Malta reported that, despite gunning to become a “blockchain island,” startups are still struggling to get support from traditional banks.
2. SPACE10, a research and design lab supported by IKEA, has launched a project to explore whether solar power and blockchain can work together. The design lab’s SolarVille project will be using blockchain to help facilitate “electricity microgrids,” smaller community-based off-grid energy infrastructures, that can help provide a stable and affordable power supply for those in energy poverty, Power Engineering International reports. Let’s just hope we don’t have to assemble it ourselves.</p>
3. German authorities have made their move on regulating blockchain-based securities, according to a Federal Ministry of Finance document published last week. The document states that regulating electronic securities should be technology-neutral; basically, regardless of the technology the security token is based on, the laws governing it should remain applicable. According to the report, “crypto-tokens” will not fall under the remit of current securities regulation, but initial coin offerings (ICO) will as they pose potential risks to investors.
As one of the world’s top economies, Germany’s move into regulating tokens as securities could mark the start of more countries passing security tokens regulations. Smaller nations tend to hold off passing financial regulations; and when they do they usually look at how larger countries regulate for inspiration. We’ll just have to wait and see.
4. Forbes reports that 1,811 of the 9,000 blockchain-based companies that have posted code to GitHub are no longer doing so. Twenty percent of the blockchain companies one active on the code repository stopped showing signs of life in 2018, “and many simply vanished entirely.” Forbes claims some were outright scams and Ponzi schemes, while others were just mismanaged, or thwarted by “shifting regulations.”
The report further outlines that the most promising sector for blockchain development is education and academia, where only 10 percent of companies have failed. Not surprisingly, with the prolonged “crypto-winter,” 30 percent of cryptocurrency startups failed. If this trend continues, 2019 could be the year we see the less legitimate blockchain startups fail
5. US lawmakers at the Texas House of Representatives have introduced a bill to ban the use of anonymous cryptocurrencies in the state, Finance Magnates reports. The bill proposes that individuals must be properly identifiable when sending or receiving cryptocurrencies. If the bill is successful, the law will come into effect on September 1, this year.
While a blatant shot across the bows of coins like Monero and Zcash, there is still a long way to go before this law could be passed. The bill states, anyone using a “verified identity digital currency” will be exempt, as they will be known to the state. But what constitutes a “verified identity digital currency” is not clear. Indeed, it’s not the first time that US authorities have stuck their nose into privacy coins. In December last year, the US Department of Homeland Security began soliciting for firms to help with forensic analysis of privacy-focused cryptocurrencies.
Another week, another Moondays. See you next week.
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Published March 11, 2019 — 09:58 UTC