Messaging firm Line launches a dedicated crypto fund

Messaging company Line is continuing to burrow deep into the crypto space after it announced the launch of a $10 million investment fund. The fund will be operated by Line’s Korea-based blockchain subsidiary Unblock Corporation, which is tasked with research, education and other blockchain-related services. The fund will be called Unblock Ventures and it’ll initially have […]

Messaging company Line is continuing to burrow deep into the crypto space after it announced the launch of a $10 million investment fund.

The fund will be operated by Line’s Korea-based blockchain subsidiary Unblock Corporation, which is tasked with research, education and other blockchain-related services. The fund will be called Unblock Ventures and it’ll initially have a capital pool of $10 million but Line said that is likely to increase over time.

The company said the fund will be focused on early-stage startup investments, but it didn’t provide further details.

Line is listed in Tokyo and on the NYSE. This fund makes it one of the first publicly traded companies to create a dedicated crypto investment vehicle. The objective, it said, is “to boost the development and adoption of cryptocurrencies and blockchain technology.”

Line claims nearly 200 million users of its messaging app, which is particularly popular in Japan, Taiwan, Thailand and Indonesia. The company also offers a range of connected services that include payment, social games, ride-hailing, food delivery and more.

This marks Line’s second major crypto move this year following the launch of its BitBox exchange last month. It isn’t available in the U.S. or Japan right now but Line envisages closes ties with its messaging service and other features further down the line.

These moves into crypto come despite some serious downturn in the valuation of the space this year following record highs in January which saw the value of one Bitcoin touch nearly $20,000 and Ethereum, among others, surged. In the months since then, however, many cryptocurrencies have seen their valuations decline. This week, Ethereum dropped below $300 in what is its first major price crisis. Bitcoin has, for many years, risen and fallen although January’s valuations took the extremes to a new level.

Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

Ethereum’s falling price splits the crypto community

Hello And Welcome Back To The Latest Edition Of All The Cryptos Are Getting Rekt Right Now. Crypto bloodbaths have become fairly common in 2018 — mainly because of the insane growth in 2017 — but we’ve not covered them all because they are so numerous and often include so-called ‘flash crashes’ or small drops, but […]

Hello And Welcome Back To The Latest Edition Of All The Cryptos Are Getting Rekt Right Now.

Crypto bloodbaths have become fairly common in 2018 — mainly because of the insane growth in 2017 — but we’ve not covered them all because they are so numerous and often include so-called ‘flash crashes’ or small drops, but the fall happening today is worth noting for several wider reasons.

Primarily that’s because this is a major test for Ether — the token associated with the Ethereum Foundation that is the second largest cryptocurrency by volume — has been on a downward spiral with little sign of change.

Ether, which is the preferred platform of choice for most developers building on the blockchain, is down nearly 17 percent over the past day. That’s erased billions of dollars in paper (crypto) value as the bear market for cryptocurrencies continues to pull markets south.

The drop also marks the first time ever that the price of an Ether has fallen below its valuation over one year: one Ether is worth $266 right now at the time of writing, versus $304 on August 14 2017. The token has been steadily falling since early May, when its peak value was $808, and as the lynchpin for many ICO project tokens, its demise has sent the value of most other tokens down, too.

Just looking at Coinmarketcap.com this morning, all but two of the top 100 tokens are down over the last 24 hours with many losing 10-25 percent of their value over the past day. Bitcoin, too, has dropped below $6,000, having topped $8,000 for a time last month.

Ether’s plummet below $300 has sparked a mixed debate among those in the crypto community. The token had been held as visionary, an improvement on Bitcoin that gives developers a platform to build on — whether it be decentralized apps, decentralized systems or more — but that hasn’t been reflected in in this months-long price retreat.

Certainly, two founders who spoke TechCrunch and have held ICOs expressed a belief that Ether “needs to find some price stability” to allow the focus to become about product and not just ‘get rich’ speculation. Of course, it helps that the two founders and many of those who held token sales have long since sold the Ether or Bitcoin they raised in exchange for fiat currency. Indeed, if their token sale was last year, the chances are they got a lot more real-world cash than they initially bargained for or would get now.

But still, the idea of consistency is shared by others who are in crypto professionally. That includes investors like Kenrick Drijkoningen, who is in the midst of raising a $10 million fund for LuneX, a spinout of Singapore-based VC firm Golden Gate Ventures.

In an interview last week, Drijkoningen told TechCrunch that raising a fund and doing deals in a ‘low tide’ market like now beats attempting to do the same amid a frothy period with hype and peak valuations — one Ether was worth nearly $1,400 in January, for example. A number of others VCs have long said that, ultimately, stability is good for the ecosystem.

Vitalik Buterin is the creator of Ethereum

But, on the other side, there are more pessimistic voices.

Among some investors canvassed by TechCrunch, the sense is that with the downturn of the ICO funding boom that fueled much of Ethereum’s rise, there may be less incentive to hold as the broader market’s interest in the cryptocurrency wanes.

For one Bitcoin bull, the intrinsic value of Bitcoin as an immutable, decentralized ledger acts as a more powerful draw than the perceived mutability and centralization that the Ethereum platform offers.

“People are also beginning to understand the unique value of an immutable, decentralized ledger, and recognize that Ethereum is not that,” the investor wrote in an email.

Another long-term problem that Ethereum faces, according to this investor, is that the promise of decentralized apps backed by the token is yet to be released. Crypto Kitties, a smash hit earlier this year, has faded and now there’s competition as Bitcoin’s Lightning Network is adding nodes and apps — referred to as LApps — which can operate in a similar but leverage the Bitcoin ledger.

It’s still early days, of course, and markets will always rise and fall, but this is the first big test for Ether and Ethereum. Beyond the sport of price speculation, it’ll be worth watching to see where this heads next.

Note: One of the authors of this post — Jon Russell — owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

Singapore’s Golden Gate Ventures announces a $10M fund for crypto deals

VCs around the world are trying to wrap their head around crypto, and the new investment paradigm it brings. Some have made one-off deals but a few have jumped in off the deep end with dedicated crypto funds, with A16z in the U.S. the most prominent example. Now Singapore has its first from the traditional […]

VCs around the world are trying to wrap their head around crypto, and the new investment paradigm it brings. Some have made one-off deals but a few have jumped in off the deep end with dedicated crypto funds, with A16z in the U.S. the most prominent example. Now Singapore has its first from the traditional world after prominent firm Golden Gate Ventures announced a spinoff fund called LuneX Ventures.

The fund is focused on crypto and it is targeting a $10 million raise. Its announcement comes weeks after we reported the first close for Golden Gate’s new $100 million fund, its third to date, which is backed by Naver, Mistletoe and others.

Golden Gate already has some exposure to ICOs, having backed the company behind OMG, and plenty of rumors have done the rounds about its plans for a standalone fund considering the surge in ICOs, which have scooped up over $10 billion in investment this year so far.

Notably, LuneX will be the first crypto fund from a traditional investor in Southeast Asia, although Wavemaker Partners — which is backed by early Bitcoin proponent Tim Draper — does have a U.S.-based fund.

LuneX will be run by founding partner Kenrick Drijkoningen, who was previously head of growth for Golden Gate, with associate Tushar Aggarwal, who hosts the Decrypt Asia podcast. The two are assembling a small support team which will also be assisted by Golden Gate’s back office team.

Drijkoningen told TechCrunch in an interview that he believes the time is right for the fund, even though the price of Bitcoin, Ether and other major tokens is way below the peaks seen in January.

“Despite the fact that public markets are down, the amount of talent that’s moving into this space is exciting. There are young entrepreneurs who are passionate about this space and want to build an ecosystem,” he said, adding that stability on price is a good thing.

“There’s a lot of crypto funds but most of them are hedge funds,” Drijkoningen added. He explained that LuneX intends to take a longer-term approach to investments by helping its portfolio and generally doing more than shorting and quick trades.

Kenrick Drijkoningen, Founding Partner, LuneX Ventures

Drijkoningen explained the capital will be divided equally for token sales, purchasing existing tokens and equity-based investments in crypto projects. That means getting into private sales and pre-sales for ICOs, and seeing what tokens already on the market have long-term return potential. On the equity investment side, Drijkoningen is looking for what he calls “infrastructure” businesses, such as solutions for token custody, banking and more. The fund’s capital is being raised in fiat, but it is considering allowing Bitcoin, Ether and other tokens.

Although Singapore is seen by many as a ‘crypto haven’ the legal status of crypto and tokens is unclear since the Monetary Authority of Singapore (MAS) has deferred on making these decisions. That’s in contrast to places like Malta, Gibraltar and Bermuda, which are actively wooing crypto companies with incentives and legalization frameworks, but Singapore’s status as a global financial hub and a destination for Southeast Asia’s investor capital has helped make it a destination for crypto companies all the same.

MAS is known for engaging with crypto stakeholders, and Drijkoningen said there had been discussions although he did not elaborate further other than to say that the regulator is “quite well informed.” He clarified that the new fund is structured so that it is legally compliant while it is banking with a “crypto-friendly” bank in the U.S. since Singaporean banks to do provide services to crypto companies.

Drijkoningen said the fund’s LP base is comprised of high net worth individuals who understand crypto or are crypto-curious, as well as hedge fund managers and family offices. He said there’s been interest from projects that raised significant capital from ICOs and want to invest in the ecosystem and grow networks, as well as some long-time Golden Gate LPs.

There’s no doubt LuneX is an early mover in Southeast Asia — well, the world — but Drijkoningen believes it won’t be long before others in the traditional VC space follow suit. He revealed that already a number of other funds are “looking into” the opportunities, and expects that some will make a move “this year or next.”

As for LuneX, the plan is very much to scale this initial fund in the same way that Golden Gate has gone from a small seed fund to a $100 million vehicle in less than eight years.

“We want to get up and running, get a good return and raise a larger fund,” Drijkoningen said. He added that the fund is currently looking over half a dozen or so deals that it hopes to wrap up soon as its first investments.

Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

Starbucks drops major hint at plans to accept Bitcoin

Back in May, reports surfaced that New York Stock Exchange owner Intercontinental Exchange (ICE) was developing a Bitcoin trading platform. This morning, it officially announced the creation of Bakkt, a new company that will help trade and convert the best known cryptocurrency to fiat money — government-backed legal tender. As one might expect from a […]

Back in May, reports surfaced that New York Stock Exchange owner Intercontinental Exchange (ICE) was developing a Bitcoin trading platform. This morning, it officially announced the creation of Bakkt, a new company that will help trade and convert the best known cryptocurrency to fiat money — government-backed legal tender.

As one might expect from a new company with close ties to the NYSE, Bakkt has enlisted some big names already, including backing from Microsoft, Starbucks and BCG. Microsoft, for its part, will provide cloud infrastructure for the service. Even more compelling, however, is the involvement of Starbucks.

After all, the coffee giant has played an outsized role in helping mainstream mobile payments among the U.S. population, it has worked with Square (which accepts Bitcoin) and it just announced a deal with Alibaba in China for coffee deliveriesThe chain isn’t always the first to adopt payment solutions, but its involvement goes a long ways toward legitimizing technologies among the public. If played right, this could be the push Bitcoin as a payment systm for mainstream consumers here in the States.

In a statement, Starbucks referred to itself as “the flagship retailer” involved in the project, hinting at the very real potential that the company is setting itself up to accept Bitcoin converted through the Bakkt system.

“As the flagship retailer, Starbucks will play a pivotal role in developing practical, trusted and regulated applications for consumers to convert their digital assets into US dollars for use at Starbucks,” said Starbucks Payments VP Maria Smith said in the statement. “As a leader in Mobile Pay to our more than 15 million Starbucks Rewards members, Starbucks is committed to innovation for expanding payment options for our customers.”

Bakkt’s implications go well beyond mobile payments, of course. As Fortune notes, the system could help attract investors who have been put off by Bitcoin’s extremely volatile nature. Among other things, it could help make the currency a safer choice for 401(k)s, IRAs and other retirement plans. That, in turn, could help propel Bitcoin toward wider Wall Street trading.

Bitcoin slowly surpasses $8,000 after two months

You can now buy and sell bitcoin for over $8,000 on all exchanges, and even for over $8,150 on some of the most popular ones. $8,000 is an important milestone for bitcoin after some complicated weeks. When you compare the price of bitcoin today with what it used to be back in December of last […]

You can now buy and sell bitcoin for over $8,000 on all exchanges, and even for over $8,150 on some of the most popular ones. $8,000 is an important milestone for bitcoin after some complicated weeks.

When you compare the price of bitcoin today with what it used to be back in December of last year, it’s quite disappointing. From December 1st until January 31st, one bitcoin was worth over $10,000. At some point, a single bitcoin was worth nearly $20,000.

It’s been a lot more boring since then. After reaching rock bottom on February 6th at $6,465 per bitcoin, the cryptocurrency bounced back over $10,000 but never really recovered completely. It’s been a slow and steady downhill slope since then.

The good news is that bitcoin has performed a little bit better for a couple of weeks. Today’s performance represents a two-month high, with bitcoin reaching prices that we haven’t seen since May 22nd.

To put this into perspective, bitcoin is back to its price of November 22nd 2017. In other words, everybody who has bought bitcoins before November 2017 is still in the black. According to CoinMarketCap, people have traded the equivalent of $6.5 billion over the past 24 hours.

Disclosure: I own small amounts of various cryptocurrencies.

The quantum meltdown of encryption

Shlomi Dolev Contributor Shlomi Dolev is the Chair Professor and founder of the Computer Science department of Ben-Gurion University of the Negev. He is the author of Self-Stabilization. Shlomi also is a cybersecurity entrepreneur and the co-founder and chief scientist of Secret Double Octopus. More posts by this contributor The quantum computing apocalypse is imminent […]

The world stands at the cusp of one of the greatest breakthroughs in information technology. Huge leaps forward in all fields of computer science, from data analysis to machine learning, will result from this breakthrough. But like all of man’s technological achievements, from the combustion engine to nuclear power, harnessing quantum comes with potential dangers as well. Quantum computers have created a slew of unforeseen vulnerabilities in the very infrastructure that keeps the digital sphere safe.

The underlying assumption behind nearly all encryption ciphers used today is that their complexity precludes any attempt by hackers to break them, as it would take years for even our most advanced conventional computers to do so. But quantum computing will change all of that.

Quantum computers promise to bring computational power leaps and bounds ahead of our most advanced machines. Recently, scientists at Google began testing their cutting edge 72 qubit quantum computer. The researchers expect to demonstrate with this machine quantum supremacy, or the ability to perform a calculation impossible with traditional computers.

Chink in the Armor

Today’s standard encryption techniques are based on what’s called Public Key Infrastructure or PKI, a set of protocols brought to the world of information technology in the 1970’s. PKI works by generating a complex cipher through random numbers that only the intended recipient of a given message, the one in possession of the private key, can decode.

As a system of encoding data, PKI was sound and reliable. But in order to implement it as a method to be used in the real world, there was still one question that needed to be answered: how could individuals confirm the identity of a party reaching out and making a request to communicate? This vulnerability left the door open for cybercriminals to impersonate legitimate servers, or worse, insert themselves into a conversation between users and intercept communications between them, in what’s known as a Man-in-the-Middle (MITM) attack.

The industry produced a solution to this authentication problem in the form of digital certificates, electronic documents the contents of which can prove senders are actually who they claim to be. The submission of certificates at the initiation of a session allows the parties to know who it is they are about to communicate with. Today, trusted third party companies called Certificate Authorities, or CAs, create and provide these documents that are relied upon by everyone from private users to the biggest names in tech.

The problem is that certificates themselves rely on public-key cryptographic functions for their reliability, which, in the not too distant future, will be vulnerable to attack by quantum machines. Altered certificates could then be used by cyber criminals to fake their identities, completely undermining certificates as a method of authentication.

Intel’s 17-qubit superconducting test chip for quantum computing has unique features for improved connectivity and better electrical and thermo-mechanical performance. (Credit: Intel Corporation)

 

Decentralizing the Threat

This isn’t the first time we’ve had to get creative when it comes to encryption.

When Bitcoin creator Satoshi Nakamoto, whose true identity is still unknown, revealed his revolutionary idea in a 2008 white paper, he also introduced the beginnings of a unique peer-to-peer authentication system that today we call blockchain. The brilliantly innovative blockchain system at its core is an open ledger that records transactions between two parties in a permanent way without needing third-party authentication. Blockchain provided the global record-keeping network that has kept Nakamoto’s digital currency safe from fraudsters. Blockchain is based on the concept of decentralization, spreading the authentication process across a large body of users. No single piece of data can be altered without the alteration of all other blocks, which would require the collusion of the majority of the entire network.

For years, blockchain and Bitcoin remained one and the same. About five years ago, innovators in the industry began to realize that blockchain could be used for more than just securing cryptocurrency. Altering the original system designed for Bitcoin could produce programs to be applied in a wide range of industries, from healthcare, to insurance, to political elections. Gradually, new decentralized systems began to emerge such as those of Ripple and Litecoin. In 2015, one of the original contributors to the Bitcoin codebase Vitalik Buterin released his Ethereum project also based on blockchain. What these new platforms added to the picture was the ability to record new types of data in addition to currency exchanges, such as loans and contractual agreements.

The advantages of the blockchain concept quickly became apparent. By 2017, nearly fifteen percent of all financial institutions in the world were using blockchain to secure aspects of their operations. The number of industries incorporating decentralized systems continues to grow.

Digital security key concept background with binary data code

Saving PKI

The best solution for protecting encryption from our ever-growing processing power is integrating decentralization into Public Key Infrastructure.

What this means essentially, is that instead of keeping digital certificates in one centralized location, which makes them vulnerable to being hacked and tampered with, they would be spread out in a world-wide ledger, one fundamentally impervious to alteration. A hacker attempting to modify certificates would be unable to pull off such a fraud, as it would mean changing data stored on enumerable diversified blocks spread out across the cyber sphere.

Decentralization has already been proven as a highly effective way of protecting recorded data from tampering. Similarly, using a blockchain-type system to replace the single entity Certificate Authority, can keep our digital certificates much safer. It is in fact one of the only foreseeable solutions to keep the quantum revolution from undermining the foundation of PKI.