Blockchain media startup Civil is issuing full refunds to all buyers of its cryptocurrency

Many doubted The Civil Media Company’s ambitious plan to sell $8 million worth of its cryptocurrency, called CVL. The skeptics, as it turns out, were right.

Many doubted The Civil Media Company‘s ambitious plan to sell $8 million worth of its cryptocurrency, called CVL. 

The skeptics, as it turns out, were right. Civil’s initial coin offering, meant to fund the company’s effort to create a new economy for journalism using the blockchain, failed to attract sufficient interest. The company announced today that it would provide refunds to all CVL token buyers by October 29.

Civil’s goal was to sell 34 million CVL tokens for between $8 million and $24 million. The sale began on September 18 and concluded yesterday. Ultimately, 1,012 buyers purchased $1,435,491 worth of CVL tokens. A spokesperson for Civil told TechCrunch an additional 1,738 buyers successfully registered for the sale, but never completed their transaction.

Civil isn’t giving up. The company says “a new, much simpler token sale is in the works,” details of which will be shared soon. Once those new tokens are distributed, Civil will launch three new features: a blockchain-publishing plugin for WordPress, a community governance application called The Civil Registry and a developer tool for non-blockchain developers to build apps on Civil.

ConsenSys, a blockchain venture studio that invested $5 million in Civil last fall, has agreed to purchase $3.5 million worth of those new tokens. The purchase is not an equity; all capital from the token sale is committed to the Civil Foundation, an independent nonprofit initially funded by Civil that funds grants to the newsrooms in Civil’s network.

In a blog post today, Civil chief executive officer Matthew Iles wrote that the token sale failure was a disappointment but not a shock. Days prior, he’d authored a separate post where he admitted things weren’t looking good.

“This isn’t how we saw this going,” Iles wrote. “The numbers will show clearly enough that we are not where we wanted to be at this point in the sale when we started out. But one thing we want to say at the top is that until the clock strikes midnight on Monday, we are still working nonstop on the goal of making our soft cap of $8 million.”

A recent Wall Street Journal report claimed Civil had reached out to The New York Times, The Washington Post, Dow Jones and Axios, among others, but failed to incite interest in its token.

Separate from its token sale, Civil has inked strategic partnerships with media companies like the Associated Press and Forbes, both of which confirmed to TechCrunch today that the failed token sale doesn’t impact their partnerships with Civil. 

Forbes became the first major media brand to test Civil’s technology when it announced earlier this month that it would experiment with publishing content to the Civil platform. As for the AP, it granted the newsrooms in Civil’s network licenses to its content. 

Civil, of course, isn’t the only blockchain startup targeting journalism. Nwzer, Userfeeds, Factmata and Po.et, which was founded by Jarrod Dicker, a former vice president at The Washington Post, are all trying their hand at bringing the new technology to the content industry.

Which, if any, will actually find success in the complicated space, is the question.

SpankChain spanked

SpankChain, a cryptocurrency aimed at decentralized sex cams, has announced that a hacker stole about $38,000 from their payment channel thanks to a broken smart contract. They wrote: At 6pm PST Saturday, an unknown attacker drained 165.38 ETH (~$38,000) from our payment channel smart contract which also resulted in $4,000 worth of BOOTY on the […]

SpankChain, a cryptocurrency aimed at decentralized sex cams, has announced that a hacker stole about $38,000 from their payment channel thanks to a broken smart contract. They wrote:

At 6pm PST Saturday, an unknown attacker drained 165.38 ETH (~$38,000) from our payment channel smart contract which also resulted in $4,000 worth of BOOTY on the contract becoming immobilized. Of the stolen/immobilized ETH/BOOTY, 34.99 ETH (~$8,000) and 1271.88 BOOTY belongs to users (~$9,300 total), and the rest belonged to SpankChain.

Our immediate priority has been to provide complete reimbursements to all users who lost funds. We are preparing an ETH airdrop to cover all $9,300 worth of ETH and BOOTY that belonged to users. Funds will be sent directly to users’ SpankPay accounts, and will be available as soon as we reboot Spank.Live.

The hacker used a ‘reentrancy’ bug in which the user calls the same transfer multiple times, draining a little Ethereum each time. The bug is the same one that previously affected the DAO.

The company pointed out that a security audit on their smart contract would have cost $50,000, a bit more than the amount lost. “As we move forward and grow, we will be stepping up our security practices, and making sure to get multiple internal audits for any smart contract code we publish, as well as at least one professional external audit,” they wrote.

I’ve reached out to the company for clarification but in short it seems the spanker has become the spankee.

Report: Most ICO project financing unaffected by crypto market crash

Despite a bear market that has seen the price of Ethereum drop by over 80 percent since the start of the year, most projects that raised money via an ICO remain unaffected, according to the findings of a new report. Bitmex, best known for a crypto trading service, claims to have crunched the numbers on […]

Despite a bear market that has seen the price of Ethereum drop by over 80 percent since the start of the year, most projects that raised money via an ICO remain unaffected, according to the findings of a new report.

Bitmex, best known for a crypto trading service, claims to have crunched the numbers on over 200 of the biggest ICOs and found that, on average, most projects have already converted what they had raised in crypto into fiat currency. That’s not to say that they did so immediately or that 100 percent of the proceeds have been converted — many projects didn’t, and haven’t — but the general trend is that most have reaped the paper gains of their ICO without being stung by the crash.

One Ethereum — technically an ‘Ether,’ the crypto token associated with the Ethereum Foundation and the Ethereum Blockchain — was worth nearly $1,400 in January, a then record. That valuation has plunged during 2018, to the point that the cryptocurrency ducked below $200 during September, raising alarm among some in the community over its long-term sustainability.

Ethereum’s rollercoaster ride over the last twelve months including a record valuation of nearly $1,400 in January 2018

It’s easy to assume, therefore, that ICO projects — which raise the majority of their funds in Ethereum — have been hit hard. But the Bitmex research appears to suggest that many projects managed to convert their crypto and also retain a decent amount of Ethereum, too. It’s, of course, important to remember that this is a report, not gospel truths, but there’s plenty of insight to dig into.

Bitmex suggests that the projects it looked at collectively still hold 3.8 million Ethereum, or around one-quarter of the crypto total that they originally raised. If that’s true — and the accuracy will vary from project to project — then it’s a big win. Not only do projects get the money they thought they’d earned from their ICO, but they also retain some ‘skin in the game’ and are thus incentivized by the future value of Ethereum.

According to Bitmex, the deficit between total Ethereum value raised and the total amount of Ethereum cashed into fiat is just $11 million. Spread across over 200 projects, that’s quite low and it leaves plenty of Ethereum for future opportunities. Estimated unrealized Ethereum gains — i.e. crypto raised that hasn’t been cashed out — stands at $93 million, and that’s based on the current ‘low’ value of Ethereum.

The Bitmex data is fairly skewed by the huge EOS ICO — which raised around $4 billion in crypto earlier this year. Not only does the EOS project inflate the numbers, but it also continuously offloaded Ethereum during its year-long token sale making it tricky to track value.

Nonetheless, even taking EOS out of the acquisition, the shortcoming between ‘paper’ ICO raises and the net conversion to fiat is $79 million and that’s padded out by the $93 million in estimated unrealized gains.

Despite the industry-wide figures, there are examples of companies who quickly cashed their crypto into fiat in order to plump for a sure thing, and others who held off converting the pile or cashed out small bits when needed. The situation is certainly more challenge for any ICOs happening right now, although — as we wrote recently — the market has shifted towards private sales which makes tracking the flow of money a great detail more challenging.

You can read the full report on the Bitmex blog here.

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

Peep the future of distributed ledgers with the leaders of Hyperledger, Parity Technologies and Tradeshift

As cryptocurrencies emerge from the speculative bloodletting of the past months, believers in the promise of distributed ledger technologies for business and consumer applications are casting about for what comes next. On our stage at Disrupt San Francisco we’ll be welcoming some of the leading thinkers in how distributed ledgers can create an entirely new […]

As cryptocurrencies emerge from the speculative bloodletting of the past months, believers in the promise of distributed ledger technologies for business and consumer applications are casting about for what comes next.

On our stage at Disrupt San Francisco we’ll be welcoming some of the leading thinkers in how distributed ledgers can create an entirely new architecture for computing and new processes for almost every conceivable transaction framework.

For Brian Behlendorf, the executive director of Hyperledger, distributed ledger technologies represent a powerful path for the future of networked computing — no matter the underlying technology.  That’s why Behlendorf –through the Linux Foundation — is investing resources in ensuring that viable open source distributed ledger projects are supported and coming to market for any number of applications for businesses and consumers.

One of the leading lights of the internet revolution, Behlendorf’s career shaping the future of the networked world began in 1993 when he co-founded Organic Inc. — the first business dedicated to building commercial websites. Going on to become one of the foundational architects of the Apache http protocol, Behlendorf has served as the chief technology officer of the World Economic Forum and as an executive director for the technology investment fund, Mithril Capital.

Meanwhile, Parity Technologies is attempting to ensure that businesses don’t need to worry about the underlying technologies at all. Selling a suite of services that are all enabled by distributed ledger technologies and cryptographic computing, Jutta Steiner is giving businesses a way through the maze of competing protocols with a service that can enable the creation and adoption of distributed apps for businesses.

“We see it as a way for people to build blockchains that fulfill their particular needs,” Steiner told our own Samantha Stein at our Blockchain event earlier this year in Zug. “One of the challenges we’re addressing in this is to come up with a scalable framework.”

Before Parity, Steiner was responsible for security and partner integration within the Ethereum Foundation when the public blockchain first launched in 2015. Steiner also co-founded Project Provenance — a London based start-up that employs blockchain technology to make supply chains more transparent.

Supply chains are at the heart of Tradeshift’s offerings — and the company is hoping that distributed ledgers will be too. That’s why the company created Tradeshift Frontiers, an innovation lab and incubator that will focus on transforming supply chains through emerging technologies, such as distributed ledgers, artificial intelligence and the Internet of Things.

“The use cases we’re working through Frontiers cover a very wide variety of themes, including supply chain financing, asset liquidity, and supply chain transparency,” said Gert Sylvest, co-founder and GM of Tradeshift Frontiers, at the time. “There is so much more potential than just cryptocurrencies.”

That potential will be one of the things that Sylvest, Steiner, and Behlendorf discuss. We’ll hope you’ll be in the audience to listen.

Disrupt SF will take place in San Francisco’s Moscone Center West from September 5 to 7. The full agenda is here, and you can still buy tickets right here.

The collapse of ETH is inevitable

Jeremy Rubin Contributor Share on Twitter Jeremy Rubin is currently a technical advisor to Stellar, a Bitcoin Core Contributor, investor and advisor to early-stage crypto startups, starting a company for Bitcoin scalability and privacy solutions, and a freelance consultant for cryptocurrency tech fundamentals and due diligence. Previously, Jeremy also co-founded the MIT Digital Currency Initiative, […]

Here’s a prediction. ETH — the asset, not the Ethereum Network itself — will go to zero.

Those who already think that ETH will not see real adoption — thanks to a failure to scale, to adopt more secure contract authoring practices, or to out-compete its competitors — don’t need to be convinced that a price collapse would follow as a consequence.

But, if one believes that Ethereum will succeed beyond anyone’s wildest dreams as a platform then the proposition that ETH (as a currency) will go to zero will take a bit more convincing running a substantial share of the world’s commerce securely.

So here’s how Ethereum ends up succeeding wildly but ETH becomes worthless. Ethereum’s value proposition, as given by ethereum.org, is as follows:

Build unstoppable applications

Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third-party interference.

These apps run on a custom built blockchain, an enormously powerful shared global infrastructure that can move value around and represent the ownership of property.

This enables developers to create markets, store registries of debts or promises, move funds in accordance with instructions given long in the past (like a will or a futures contract) and many other things that have not been invented yet, all without a middleman or counterparty risk.

If Ethereum succeeds on its value proposition it will therefore mitigate external risk factors for decentralized applications.

İstanbul, Turkey – January 28, 2018: Close up shot of Bitcoin, Litecoin and Ethereum memorial coins and shovels on soil. Bitcoin Litecoin and Ethereum are crypto currencies and a worldwide payment system.

No Future for ‘Gas’

There’s no value proposition for ETH in the official description. Perhaps this omission is because ETH’s value seems so obvious to the Ethereum Foundation that it is hardly worth mentioning: $ETH fees (dubbed ‘Gas’) is how you pay for all this.

If the concept of gas isn’t immediately obvious, let’s expand the metaphor: The Ethereum network is like a shared car. When a contract wants to be driven by the shared car, the car uses up fuel, which you have to pay the driver for. How much gas money you owe depends on how far you had to be driven, and how much trash you left in the car.

Gas is a nice metaphor, but the metaphor is insufficient as an argument to support non-zero $ETH prices. Gasoline actually burns inside an internal combustion engine; an internal combustion engine will not work without a combustible fuel. $ETH as Gas is a metaphor for how gasoline is consumed; there is no hard requirement for Gas in an Ethereum contract.

(Photo by Manuel Romano/NurPhoto via Getty Images)

Buying the “BuzzwordCoin”

Suppose we’re building a new decentralized application, BuzzwordCoin. By default, following a standard ERC-20 Token template, every transaction on BuzzwordCoin will pay gas in $ETH. Requiring every BuzzwordCoin transaction to also depend on ETH for fees creates substantial risk, third party dependency, and artificial downwards pressure on the price of the underlying token (if one must sell BuzzwordCoin for ETH ahead of time to run a BuzzwordCoin transaction, then the sell-pressure will happen before the transaction requires it, and must be a larger sale than necessary to ensure sufficient funds to cover the transaction).

Instead of paying for Gas in ETH, we could make every BuzzwordCoin transaction deposit a small amount of BuzzwordCoin directly to the block’s miner’s address to pay for the contract’s execution. Paying for Gas in a non-ETH asset is sometimes referred  to as economic abstraction in the Ethereum community.

The revised BuzzwordCoin contract has no functional dependence on ETH. We’re able to incentivize miners to mine transactions without paying any fees in ETH whatsoever.

If the BuzzwordCoin contract has non-transactional contractual clauses — that is, a functionality that should be regularly called by any party for tasking like computing and updating cached statistics in the contract — we can specify that the miner performing those clauses receives coins from an inflation or shared gas pool. In the shared pool, all fees for user’s transactions in a specific contract are paid to the contract’s wallet. A fee dispensing contract call performing the non-transactional clauses releases the fee to the miner (this bears some semblance to Child Pays for Parent in the Bitcoin Ecosystem).

Battling the economic abstraction

There are four main counterarguments to economically abstracting Ethereum: the lack of software support for economic abstraction; difficulty in pricing many tokens; the existence of contracts not tied to tokens; and the need for ETH for Proof-of-Stake. While nuanced, all four arguments fall flat.

Software Support: Currently, miners select transactions based on the amount of Gas provided in ETH. As ETH is not a contract (like an ERC-20 token), the code is special-cased for transactions dealing in ETH. However, there are efforts to make Ethereum treat ETH less special-cased and more like other ERC-20 Tokens and vice-versa. Weth, for instance, wraps ETH in a 1:1 pegged ERC-20 compliant token for trading in Decentralized Exchanges.

Detractors of economic abstraction (notably, Vitalik Buterin) argue that the added complexity is not worth the ecosystem gains. This argument is absurd. If the software doesn’t support the needs of rational users, then the software should be amended. Furthermore, the actual wallet software required for any given token is made much more complex, as the wallet must manage balances in both ETH and the application’s token.

Market Pricing: To mine on Ethereum with economic abstraction, miners simply need software which allows them to account for discrepancies in their perceived value of active tokens and include transactions rationally on that basis.  Such software requires dynamically re-ordering pending transactions based on pricing information, gleaned either through the miner’s own outlook or monitoring cryptocurrency exchanges prices.

Vlad Zamfir argues that the potential need to monitor market information on prices makes economic abstraction difficult.

However, miners requiring pricing information is already the status quo — rational actors need a model of future ETH prices before mining (or staking) to maximize profit against electricity costs, hardware costs, and opportunity costs.

Non-Token Contracts: Not all contracts have coins, or if they do, they may not be widely recognized, valuable, and traded on exchanges. Can such contracts pay fees without ETH?

Users of a tokenless contract can pay fees in whichever tokens they want. For example, a user of TokenlessContract can pay their fees in a 50/50 mix of LemonadeCoin and TeaBucks. To ensure liquidity between users and miners with different assets they would pay or accept fees with, a user can simply issue multiple mutually-exclusive transactions paying with fees in different assets.

Specialized wallet contracts could also negotiate fees with miners directly .  A miner could also process transactions paying fee with an asset they do not want if there is an open Decentralized Exchange (DEX) offer to exchange the fee asset for something they prefer —  it is possible to create DEX orders for paying fees which allowing only a block’s miner to fill a user’s offers in proportion to the fees that a user has paid in that block preventing the case where a user’s fee diversifying offers are taken by non-miners.

Proof-of-Stake: Without ETH, a modified version of Proof-of-Stake with a multitude of assets could still decide consensus if each node selects a weight vector for the voting power of all assets (let’s call it HD-PoS, or Heterogeneous Deposit Proof Of Stake). While it is an open research question to

show under which conditions HD-PoS would maintain consensus, consensus may be possible if the weight vectors are similar enough.

Proofs of HD-PoS may be possible by assuming a bound on the pairwise euclidean distance of the weight vectors or the maximum difference between any two prices. If such a consensus algorithm proves impossible, the failure to find such an algorithm points to a more general vulnerability in Ethereum PoS.  

Assuming a future where ETH’s main utility is governance voting, why wouldn’t all the other valuable applications on Ethereum have a say in the consensus process? Rolling back actions in a valuable token contract by burning ETH stake could be a lucrative business; if HD-PoS is used such attacks are impossible.

Vitalik Buterin (Ethereum Foundation) at TechCrunch Disrupt SF 2017

ETH’s ethereal value

If all the applications and their transactions can run without ETH, there’s no reason for ETH to be valuable unless the miners enforce some sort of racket to require users to pay in ETH. But if miners are uncoordinated, mutually disinterested, and rational, they would prefer to be paid in assets of their own choosing rather than in something like ETH. Furthermore, risk-averse users would want to minimize their exposure to volatile assets they don’t have to use. Lastly, token developers benefit because pricing in their native asset should serve to reduce sell-pressure. Thus, in a stateless ecosystem, replacing ETH is a Pareto Improvement (i.e., all parties are better off). The only party disadvantaged is existing ETH holders.

  • The author holds Stellar and Bitcoin,  but has relatively little holdings in other cryptocurrencies. He has previously done a Virtual Lapel Pin Sale (like an ICO) for his cause, “Fuck Nazis”, on top of Ethereum which faced both government censorship and censorship from the Ethereum community. 

World Bank launches first bond instrument built on a blockchain with the Australian Bank

The World Bank has launched the first bond on a blockchain with the Commonwealth Bank of Australia. The A$110 million ($87 million) bond-i (blockchain operated new debt instrument) — so named, I’m assuming, because of Australia’s famed Bondi Beach (bankers have the funnies!) — is the first bond to be created, allocated, transferred and managed […]

The World Bank has launched the first bond on a blockchain with the Commonwealth Bank of Australia.

The A$110 million ($87 million) bond-i (blockchain operated new debt instrument) — so named, I’m assuming, because of Australia’s famed Bondi Beach (bankers have the funnies!) — is the first bond to be created, allocated, transferred and managed using distributed ledger technology.

The investment is one small step for Australian finance and one giant leap for blockchains in the world (or not).

Investors in the blockchain bond include CBA, First State Super, NSW Treasury Corporation, Northern Trust, QBE, SAFA and Treasury Corporation of Victoria. It’s a smorgasbord of Australian state financial institutions and makes a ton of sense, because the Australian fintech community is one that’s strong, and blockchain is something that these institutions are definitely interested in exploring.

According to a statement from the World Bank, this will be one of many experiments that the global financial organization will make into blockchain research. Last June, the World Bank launched a Blockchain Innovation Lab to play around with the technology.

“We are particularly impressed with the breath [sic] of interest from official institutions, fund managers, government institutions and banks. We were no doubt successful in moving from concept to reality because these high-quality investors understood the value of leveraging technology for innovation in capital markets,” said World Bank Treasurer Arunma Oteh.

Coinbase now supports buying and selling Ethereum Classic

Coinbase has added a new buying option for its customers after the crypto exchange introduced Ethereum Classic to its collection. The addition was first announced in July but Coinbase took its time to implement its newest addition following criticism over the way it added Bitcoin Cash last year. Allegations of insider trading led the company to […]

Coinbase has added a new buying option for its customers after the crypto exchange introduced Ethereum Classic to its collection.

The addition was first announced in July but Coinbase took its time to implement its newest addition following criticism over the way it added Bitcoin Cash last year. Allegations of insider trading led the company to investigate the incident which saw service outages and wild price fluctuations for Bitcoin Cash right after its addition to the exchange. It later introduced a framework for adding new tokens.

Nonetheless, Ethereum Classic’s value spiked 20 percent on last month’s news. Today, though, it is down two percent over the last 24 hours, according to Coinmarketcap.com.

Coinbase has taken a conservative approach to adding more crypto. Today’s addition takes it to five tokens — Bitcoin, Ethereum, Litecoin and Bitcoin Cash are the others — but that’s likely to change this year. Last month, it announced it is “exploring” the addition of another five tokens while CTO Balaji Srinivasan hinted that the selection would grow further when I interviewed him at the recent TechCrunch blockchain event in Zug.

“We hear your requests, and are working hard to make more assets available to more customers around the world,” Dan Romero, who heads Coinbase’s consumer business, said in a blog post published today.

A note on Ethereum Classic — it was created in June 2016 following a major hack on The DAO, a fundraising vehicle for the project. In short: the Ethereum Foundation created a new version of Ethereum — known today as Ethereum — that rescued the lost funds, while those who opposed continued on with the original chain which was known as Ethereum Classic.

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.

Sagewise pitches a service to verify claims and arbitrate disputes over blockchain transactions

Sometimes smart contracts can be pretty dumb. All of the benefits of a cryptographically secured, publicly verified, anonymized transaction system can be erased by errant code, malicious actors, or poorly defined parameters of an executable agreement. Hoping to beat back the tide of bad contracts, bad code and bad actors, Sagewise, a new Los Angeles-based startup […]

Sometimes smart contracts can be pretty dumb.

All of the benefits of a cryptographically secured, publicly verified, anonymized transaction system can be erased by errant code, malicious actors, or poorly defined parameters of an executable agreement.

Hoping to beat back the tide of bad contracts, bad code and bad actors, Sagewise, a new Los Angeles-based startup has raised $1.25 million to bring to market a service that basically hits pause on the execution of a contract so it can be arbitrated in the event that something goes wrong.

Co-founded by a longtime lawyer, Amy Wan, whose experience runs the gamut from the U.S. Department of Commerce to serving as counsel for a peer-to-peer real estate investment platform in Los Angeles, and Dan Rice, a longtime entrepreneur working with blockchain, Sagewise works with both Ethereum and the Hedera Hashgraph (a newer distributed ledger technology, which purports to solve some of the issues around transaction processing speed and security which have bedeviled platforms like Ethereum and Bitcoin).

The company’s technology works as a middleware including an SDK and a contract notification and monitoring service. “The SDK is analogous to an arbitration clause in code form — when the smart contract executes a function, that execution is delayed for a pre-set amount of time (i.e., 24 hrs) and users receive a text/email notification regarding the execution,” Wan wrote to me an email. “If the execution is not the intent of the parties, they can freeze execution of the smart contract, giving them the luxury of time to fix whatever is wrong.”

Sagewise approaches the contract resolution process as a marketplace where priority is given to larger deals. “Once frozen, parties can fix coding bugs, patch up security vulnerabilities, or amend/terminate the smart contract, or self-resolve a dispute. If a dispute cannot be self-resolved, parties then graduate to a dispute resolution marketplace of third party vendors,” Wan writes. “After all, a $5 bar bet would be resolved differently from a $5M enterprise dispute. Thus, we are dispute process agnostic.”

Wavemaker Genesis led the round, which also included and strategic investments from affiliates of Ari Paul (Blocktower Capital), Miko Matsumura (Gumi Cryptos), Youbi Capital, Maja Vujinovic (Cipher Principles), Jordan Clifford (Scalar Capital), Terrence Yang (Yang Ventures) and James Sowers.

“Smart contracts are coded by developers and audited by security auditing firms, but the quality of smart contract coding and auditing varies drastically among service providers,” said Wan, the chief executive of Sagewise, in a statement. “Inevitably, this discrepancy becomes the basis for smart contract disputes, which is where Sagewise steps in to provide the infrastructure that allows the blockchain and smart contract industry to achieve transactional confidence.”

In an email, Wan elaboraged on the thesis to me writing that, “smart contracts may have coding errors, security vulnerabilities, or parties may need to amend or terminate their smart contracts due to changing situations.”

Contracts could also be disputed if their execution was triggered accidentally or due to the actions of attackers trying to hack a platform.

“Sagewise seeks to bring transactional confidence into the blockchain industry by building a smart contract safety net where smart contracts do not fulfill the original transactional intent,” Wan wrote.

Blockchain media project Civil turns to Asia with fund to kickstart 100 new media ventures

Civil, the blockchain-based journalism organization, is casting its eye to Asia after it set up a $1 million fund that’s aimed at seeding 100 new media projects across the continent over the next three years. The organization has teamed up with Splice, a Singapore-based media startup which will manage the fund, according to an announcement. There’s […]

Civil, the blockchain-based journalism organization, is casting its eye to Asia after it set up a $1 million fund that’s aimed at seeding 100 new media projects across the continent over the next three years. The organization has teamed up with Splice, a Singapore-based media startup which will manage the fund, according to an announcement.

There’s been a lot of attention lavished on Civil for its promise to make media work more efficiently using blockchain technology and its upcoming crypto token, CVL. The organization has raised $5 million in financing from ConsenSys, the blockchain corporation led by Ethereum co-creator Joe Lubin, and its ICO takes place next month with the goal of raising around $32 million to launch its network and actively onboard new media companies worldwide.

But the company is waiting around. Civil has already actively jumped into the media space — providing financial backing to the newly-formed The Colorado Sun — but the scope of the project in Asia is different in trying to kickstart a wave of new media organizations by giving them money to get off the ground.

Alan Soon, co-founder and CEO of Splice, told TechCrunch that it hasn’t been decided whether the financing will be in the form of grants or equity-based investments. Despite that, he said deals will be “pre-seed, micro-investments to help entrepreneurs take their ideas to prototype stage.”

Soon said that all kinds of media are in play, ranging from the more obvious suspects such as publishers, reporting websites and podcasts to behind-the-scenes tech like automation, bots and adtech.

Notably, though, he clarified that the beneficiaries of the fund will be under no obligation to adopt Civil’s protocol, the technology that will be funded by the upcoming ICO. Splice itself, however, has committed to doing so which will mean it gains access to the network’s content, licensing opportunities and more.

“I’m with Civil because I really believe in their values,” Soon added. “They want to do the right thing for this space.”