July 7, 2015- In This Issue:


Wall Street's 3 Biggest Bitcoin Investors Have One Thing In Common: The Instinct To Survive

Bitcoin may have started as a subversive technology intended to cut out the middlemen of traditional economics, but this year things got complicated. As the currency - and the technology behind it - have proved surprisingly resilient in the face of a wide-range of obstacles, the very organizations which once were the target of so much ire are now investors.


But a closer a closer look at the investment strategies of the New York Stock Exchange, Goldman Sachs and the Fortress Investment Group - three Wall Street mainstays that have ventured into bitcoin and the decentralized ledger technology behind bitcoin, called the blockchain, reveals there's more to gain by getting skin in the game than just cold hard cash. Or as the case may be, warm, ethereal, crypto-currency.


"They are investing for monetary reasons," said David Berger, the founder of CEO of New York City-based Digital Currency Council, a cryptocurrency association that offers certifications to bitcoin companies, and is currently a member of 500 Startups. "But at the same time, as with all of us, they are participating in a learning curve."

BitBeat: How Bitcoin Technology Could Shake Up the Loyalty-Points Business

Crossing Our Desk:


-When the BitLicense came out last month and many bitcoin startups moaned about the innovation-killing new compliance burdens from New York's Department of Financial Services, the team at Ribbit.me celebrated.


Retail rewards points - frequently flyer miles, hotel loyalty points, return-customer retailer programs and so forth - that make use of cryptocurrencies or their underlying blockchain technology were exempted from the regulations. For Ribbit.me, whose RibbitRewards are tradeable, blockchain-based loyalty tokens,  that was good news.


But even if regulators ignore "crypto-reward" tokens, accountants could have a hard time with them. That's because, under one Ribbit.me model, founders Sean Dennis and Greg Simon claim to effectively make disappear the loyalty program liabilities that merchants have traditionally had to carry to recognize their future obligation to deliver goods and services against those points.

With a viewpoint that upends the centuries-old principles of double-entry bookkeeping, Messrs.


Dennis and Simon argue that if reward points are generated by an algorithm and issued in the form of a digital token on the blockchain, it creates an asset for the individual holder but the countervailing liability resides with the entire blockchain itself.


That means "there's no liability on merchants' balance sheets anymore...and that's what's huge," says Mr. Dennis. "We can take millions of dollars in liabilities off their balance sheets."


As Mr. Simon concedes, this kind of thing could blow a bookkeeper's mind. "We tell them the liability disappears, because the blockchain belongs to no one," he says.

One of the World's Biggest Banks Just Admitted Bitcoin Could Destroy Existing Financial Firms

French bank BNP Paribas says the technology underpinning bitcoin has the potential to make existing companies "redundant," a huge admission from one of the world's biggest banks.


Analyst Johann Palychata writes in the company's magazine Quintessence that bitcoin's blockchain, the software that allows the digital currency to function, "should be considered as an invention like the steam or combustion engine," that has the potential to transform the world of finance and beyond.


The blockchain is an online ledger of all the bitcoin transactions that take place. It's spread across thousands of computers and servers globally.


It lets people exchange bitcoin by spreading the record of exchanges and ownership history across a wide area. It adds a layer of trust that is essential to bitcoin - everyone can check a coin hasn't been double spent and is actually owned by the person claiming to.

Venture Capitalist Reid Hoffman Talks Unicorns, Valuations, and Bitcoins

The high-profile Silicon Valley entrepreneur and investor has a lot to say about tech.


If there was a godfather of social networking, Reid Hoffman's name would be near the top of the list. Hoffman co-founded professional social network LinkedIn LKND and was an early investor in Facebook FB -1.61% when it was only worth $5 million.


It's not surprising that he's looking for ways to add social networking to the venture capital world. Greylock Partners, the firm where Hoffman is an investment partner, recently launched a series of networking events called Communities to scale professional networking in Silicon Valley.

We sat down with Hoffman to talk about Silicon Valley's growth explosion, unicorns, the state of valuations and a sector he's particularly focused on, bitcoin.


Kleiner Perkins: Blockchain Tech Will Spawn Amazon-Sized Sucesses

As one of the oldest and most established venture capital firms in the US, Kleiner Perkins Caufield & Byers (KPCB), has had a helping hand in mainstreaming technologies from IT to biotech since its founding in 1972.


While Kleiner Perkins hasn't yet invested in a bitcoin or blockchain company, it's likely it will soon do so via its newest fund, KPCB Edge. The seed-stage investment firm, announced 16th June and launched with a $4m budget, will have blockchain technology as one of its six core areas of focus.


Leading KPCB's exploration will be founding partner Anjney Midha, the firm's youngest partner and a former Google policy fellow. In a recent Medium post, Midha explained his interest in the blockchain, bitcoin's underlying decentralized ledger, heralding the technology's strong increase in developer adoption, which he contrasted against the decline in the price of bitcoin.

Bitcoin Is Transforming the Remittance Market Around the World

A recent article by Forbes shows that Frontline Media Publications have started accepting the fact that Bitcoin is emerging as a leading option to help remittance market not just reduce cost but increase speed as well.


The blog post says:


The global economy spent approximately $44 billion last year on fees for remittances. Remittances-money sent from one country to another-most often goes to low-income households and is proven to reduce the overall poverty of a given nation. They also come with high transaction fees and long transfer delays-significant obstacles to people trying to pull themselves out of poverty.