htc-exodus-1 blockchain phone

Sirin Labs has unveiled its flagship product, the FINNEY blockchain phone, after raising $157 million earlier this year in the fourth-largest initial coin offering (ICO) ever.

Named after the iconic computer scientist and early bitcoin develop Hal Finney, the new phone is available to pre-order now (just in time for Christmas delivery).

It comes just a few weeks after the launch of HTC’s blockchain phone, the Exodus 1. So how do they stack up against each other? Which blockchain phone should you buy? We dive into the details of both so can make a better decision. But first…

What is a blockchain phone?

A blockchain phone is a device that incorporates blockchain and cryptocurrency features. Most notably, a hardware wallet for storing crypto safely and access to a “decentralized app” store where you can access blockchain “dapps.”

HTC was the first to launch a commercially available blockchain phone, the Exodus 1, but Sirin Labs followed up with the FINNEY. Others include the Sikur phone.

Sirin Labs FINNEY

Sirin labs finney blockchain phone

Pre-order here.

The much-anticipated FINNEY is the first in a line of blockchain products planned by Sirin Labs which will also include a blockchain PC. What do you need to know about the new phone?

Price

The phone launches for pre-order at $999. However, you can only pay with the Sirin Labs token, SRN. More payments options are coming soon, but SRN holders will get a 10% discount.

Cryptocurrency Storage

The Finney features cold wallet storage for your cryptocurrency. It’s essentially a second device built into the same phone case. It operates completely separate to the phone’s processing system.

There’s even a separate LCD screen which slides up out of the phone to enter your seed phrase.

The reason for this separation is simple. The cold wallet should not be accessible to the main phone processor, which connects to the internet and therefore vulnerable to hacks.

Siring Labs Finney Blockchain phone

Operating System

The Finney runs on a modified version of Android, called SirinOS. It is an “ultra-secure, Google-certified fork of Android.”

Access to Dapps

Just like your smartphone has access to an app store, the Finney will bring you easy to access to “dapps” (decentralized apps) through its dCenter.

Sirin Labs has also anticipated the problem of using requiring different cryptocurrencies for different dapps. The Finney will automatically convert BTC, ETH, or SRN to an app’s native token when required. The idea being to streamline the user experience.

Further reading: There’s a Dapp for that! 10 Best Dapps in 2018

Storage and processing

The Finney features 128GB storage, 6GB RAM, and a Qualcomm Snapdragon 845 Chipset (exactly the same as the HTC Exodus 1, if you’re wondering).

Other features?

The Finney blockchain phone also features a unique artificial intelligence intrusion detector and a cybersecurity suite. The phone is built with security and safety in mind.

Bottom line

The Sirin Labs Finney is built by, and for, the blockchain community. It puts security at the forefront with a super-modified OS, security features and a separate cold wallet. Whether the user experience is as enjoyable as a traditional smartphone remains to be seen.

HTC Exodus 1

HTC Exodus 1 blockchain phone

Pre-order here.

The Exodus 1 is HTC’s big play in the blockchain space. Some of the security features fall short of the Finney, but it may offer a better user experience.

Price

The Exodus 1 blockchain phone is available for 0.15 BTC (about $633 at today’s price). That makes it slightly more affordable than the Finney unless crypto prices change dramatically again.

Cryptocurrency Storage

The Exodus 1 also features a separate hardware wallet called Zion. It works by ring-fencing the storage outside the main processor, again to prevent the wallet from being “online” and vulnerable to threats through the main operating system.

It uses a “quarantined” system called Trustzone, but this is not without its vulnerabilities. Exploits are theoretically possible and early critics may give the edge to the Finney here when it comes to crypto storage.

HTC Exodus 1 blockchain phone front

Operating System

The Exodus 1 blockchain phone will use the basic Android operating system. The Finney may offer a little more security thanks to its modified OS with additional security features.

Access to Dapps

We are promised a trusted and user-friendly interface for accessing decentralized apps but we are yet to see exactly how this will function.

Storage and Processing

The processing specs here are identical to the Finney: a Snapdragon 845 processor, 128GB storage, 6GB Ram.

Other Features?

The Exodus 1 features a 16-megapixel dual rear camera (and a forward facing camera for selfies).

Additional security features include a “Social Key” recovery system. In case the phone is lost or stolen, you can give three-five friends a piece of your private key. When brought together you can access your crypto again, even if the phone is lost.

Conclusion

The Sirin Finney is developed by blockchain enthusiasts for blockchain enthusiasts. Security and crypto storage is the number one priority. You could look at it as a hardware storage device with smartphone capabilities.

The HTC Exodus, on the other hand, is very much “smartphone first,” with additional crypto storage capabilities as a bonus. 

The Finney is likely to be the phone of choice for the crypto community right now. But the HTC Exodus 1 could be the phone that takes blockchain mainstream.

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sminem crypto meme

The bear market can’t last much longer. Crypto-enthusiasts around the world are staring at charts seeking the pending and inevitable pump. Watching the order-book and drawing lines on graphs to rationalize their bullish sentiment. Waiting for the big green stick that paves the road to riches and profitable scalp trades. In truth, we await our crypto-savior; the perma-bull whale of crypto-myth. We await Sminem.

sminem crypto meme
Figure 1. Bullish Sminem Leading the Pump.

Seemingly the protagonist of the crypto-chronicle, Sminem is the arch-nemesis of all bears. When Bitcoin jumps ten-percent on the hourly charts we all know who to thank. His eternal struggle for control of the market is an epic on par with The Odyssey. His faith in bitcoin unfaltering and his bullish sentiment unshakeable. 

Sminem himself is emblematic of anyone left holding bitcoin in this market. He’s a symbol of our faith in crypto. And it all started with a picture of a Russian lake, a boy, and a knock-off Eminem tee; misspelled as ‘Sminem.’

Originally posted in May of 2014 to a Russian forum, Sminem’s internet debut was met with little fanfare. The image soon found its way to Reddit and even still only found itself a modicum of attention. Submitted to /r/ANormalDayInRussia, in the summer of 2015, Sminem garnered less than 1,000 upvotes. Completely unrelated to cryptocurrency and little more than an image of a funny boy with a goofy t-shirt.

sminem original
Figure 2. The original ‘Sminem’ Photo Posted to Pikabu.ru

But that wasn’t the case for long. Like any good myth, Sminem’s image began taking hold. Posted on forums and IRC channels for crypto-enthusiasts. Soon it would seem Sminem had found a home in the cryptocurrency community. Near the end of 2016 Sminem’s image was slowly becoming the go-to for bullish traders on /biz.

sminem meme crypto
Figure 3. Common Sminem Meme on /biz/

‘Praise Sminem’ became the moniker of every pump and a regular sight on /biz/ in late 2017. More images of the boy were soon found by a few internet sleuths and by early 2018 he had become the unofficial mascot of the pump,  the banisher of bears, the savior of crypto, and the arch-nemesis of the Bogdanoffs. Finding his image featured in everything from Bizonacci videos, YouTube videos, crypto meme tees, and subreddits.

Sminem is the embodiment of every Bitcoin maximalist and cryptocurrency lover’s hopes and dreams. Arms open and head held high to embrace the impending pump and volatility that is bitcoin. Enjoying some good memes along the way.

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bitcoin etf approval date

It’s the question on everyone’s lips right now: when are we getting a bitcoin ETF?

If, and when, a bitcoin ETF (exchange-traded fund) is approved, it would provide an easy way for institutional investors to get exposure to the crypto market, without having to buy or store bitcoin itself.

Many see the approval of a crypto ETF as a game-changer and the catalyst for a market recovery.

But if discussions at this week’s Consensus event are anything to go by, that bitcoin ETF approval date might keep moving further back.

Background reading: What is a Bitcoin ETF? (And WIll it Trigger a Price Surge?)

In a discussion with the chairman of the Securities and Exchange Commission (SEC) Jay Clayton, we got an insight into what the regulators need to see before approval is granted. Here are five stumbling blocks that need to be overcome.

1. Crypto Theft

One of Clayton’s biggest concerns is the threat of theft in the cryptocurrency market. Almost $1 billion worth of crypto has been stolen from exchanges this year alone and that number is weighing on the SEC’s decision.

“We’ve seen some thefts around digital assets that make you scratch your head,” Clayton explained.

Before we see the approval of a bitcoin ETF, we need an infrastructure of safe, reliable crypto storage.

2. Better Custody of Bitcoin

As Clayton went on to explain, “we care that the assets underlying [the] ETF have good custody, and that they’re not going to disappear.”

Custody and storage solutions are on the horizon. BitGo is one of the pioneers in digital asset custody services and many others are cropping up.

Fidelity will soon launch a cryptocurrency exchange and custody solution and Goldman Sachs is reportedly working to integrate a crypto custody service. Meanwhile, existing exchanges like Gemini have incorporated full insurance coverage in a bid to strengthen its custody security.

However, even with all the progress, Clayton maintained that these services “need to be improved and hardened.”

3. Market Manipulation

There’s still a dark cloud hanging over the crypto market in terms of price manipulation. It’s one of the key reasons cited by the SEC when rejecting previous ETF proposals.

In Clayton’s words, “what investors expect is that trading in the commodity that underlies that ETF makes sense and is free from the risk of manipulation. It’s an issue that needs to be addressed before I would be comfortable.”

He went on to say that he doesn’t trust crypto exchanges to halt market manipulation. Clayton has good reason to be cautious here. One research paper concluded that bitcoin’s 2017 bull run was driven by market manipulation at the Bitfinex exchange.

He did at least offer a hint into what mechanisms the SEC is looking for to counter manipulation:

4. Market Surveillance

Traditional stock exchanges are monitored by smart surveillance systems which spot signs of manipulation and wash trading. 

“Those kinds of safeguards do not exist currently in all of the exchange venues where digital currencies trade.”

Again, there are improvements on the horizon. Nasdaq’s new bitcoin futures market, for example, will integrate some of those surveillance features into the crypto trading arena. Similarly, the Gemini exchange (owned by the Winklevoss Twins) struck a deal with Nasdaq to integrate its surveillance technology.

Better regulated exchanges are likely to be a key requirement before a bitcoin ETF is approved by the SEC.

5. Anti Money Laundering Protections

The final point of contention comes down to anti-money laundering. In order to counter money laundering in the crypto space, exchanges would need to implement the following: 

  • Identity and background checks
  • Reporting of suspicious activity 
  • An internal task force to identify laundering

The global anti-money laundering task force is reportedly close to issuing a full set of guidelines regarding cryptocurrency, but the SEC needs to see wide implementation of these guidelines before approving an ETF.

Conclusion

Despite the excitement around the pending approval of a bitcoin ETF, we’re still a long way from satisfying some of the key concerns. Progress is being made, but it may be some time before that approval date comes.

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Bitcoin OTC trading

As much as half of all crypto trades take place in secret, behind closed doors.

The trades are executed quietly, with billions of dollars worth of crypto changing hands outside the main exchanges. According to many experts, including Binance CEO Changpeng Zhao, this means the crypto trading market is twice as big reported.

Welcome to the mysterious world of OTC crypto trading, or “over-the-counter” trading where bitcoin “whales” buy and sell ludicrous amounts of crypto between each other.

Very little is known about OTC trading, how it works, or its true effect on the market. 

During my research, I spoke with OTC expert Mark Sapolinski, who has organized bitcoin OTC deals since 2012 and currently manages an order book worth about $2 billion. 

During our energetic conversation, I gained several precious insights into the mysterious world of over-the-counter trading that I’m now about to share with you.

What Is Bitcoin OTC Trading?

In a nutshell, OTC, or “over-the-counter” trades are private deals for buying and selling cryptocurrencies. They are not done through regular exchanges and are therefore not displayed in any public order book, which means increased privacy for both the buyer and the seller.

Some estimates suggest that the volume of crypto traded on OTC markets is two-three times larger than regular exchanges.

OTC Transactions are Private and Have Lower Impact on Market Price

Apart from the improved anonymity, another reason to trade in this way is to minimize the impact on the market itself.

Trades worth millions or even billions of dollars would inevitably move the price in the opposite direction of your need. Nowadays, it appears that a large share of the OTC volume comes from only a few hundred massive transactions. 

As a result, many “whales” seek private deals that will not affect the market as much as deals on regular exchanges.

Further reading: Who are the Bitcoin Whale? (Criminals, Traders, & Early Adopters)

How are OTC Trades Executed?

At the moment, there are two different ways to handle OTC transactions: through a middleman or by using big online platforms. 

OTC brokers, the men in the middle, have their very own network of crypto investors and cryptocurrency sellers. They constantly keep themselves up to date with who wants to sell or buy coins, how much they want to deal with and when they want to pursue the deal.

It’s a very personal, bespoke service.

In the end, they want to match a crypto buyer with a crypto seller and take a commission for the service. Unfortunately, dealing with OTC brokers usually takes a lot of time. Establishing trustful relationships is a key element of conducting business in this way.

… Or Through an Online Platform like Circle

On an OTC platform, the intermediary will be replaced by a software platform. Think of it like Coinbase for the uber-rich. Perhaps the best-known crypto OTC platform is Circle, but even Coinbase has quietly opened an OTC trading desk.

Circle OTC bitcoin trading

In this method, algorithms will match buyers and sellers, and trades will usually be conducted over the platform. Just like with OTC brokers, the platform will take a fee for setting up the deal. 

The main downside of using a platform instead of a broker would be the omnipresent risk of a hack, as we have seen in the past. 

Additionally, one should always make sure that the platform is compliant with the current regulations, such as KYC and GDPR, since authorities might crack down on it otherwise.

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The History of Bitcoin OTC Trading

Many crypto people believe that engagement in OTC deals requires them to be a high net-worth individual, or, in other words, a whale. 

You might be surprised to know that one of the most popular and oldest OTC markets is actually for the small fishes: LocalBitcoins. The popular platform matches local bitcoin buyers and sellers since 2012 and still serves more than four million users worldwide, as recent reports have shown.

Especially in the first few years of Bitcoin’s life, OTC transactions appeared to be the most common way of trading the digital currency. “At this time, OTC deals were done completely different than now,” says Sapolinski. 

localbitcoins logo

From Small Trades to Multi-Million Dollar Deals

From 2013 to 2016, the number of Sapolinksi’s clients ranged from 1,000 to 2,000 clients a month, but with rather small order sizes of $1 to $50,000 dollars. As Sapolinski later explained. “I remember a general negative stigma for doing Bitcoin transactions in these years. There were not many questions asked.” 

2017 would be the year that brought change to the cryptocurrency market. Easier methods of buying and selling small amounts of bitcoin cropped up, like Coinbase and Binance.

Meanwhile, with continuously rising prices of bitcoin, there was suddenly a greater need for larger purchases, larger amounts. The new, vastly wealthy bitcoin whales needed a place to trade.

The OTC space changed from quantity to quality. Fewer clients, bigger transactions. However, with great power comes great responsibility. “As Bitcoin was now traded in unbelievable monetary value, it also became a liability to report big transactions to banks and financial authorities,” Sapolinski mentioned.

How Does a Bitcoin OTC Transaction Work?

As explained, the most popular way of conducting large OTC transactions during the past few years was using OTC brokers. 

According to Sapolinski, bitcoin and other cryptocurrency OTC trades usually follow a traditional discount model. Using an example name of “Bob,” here’s how it works:

Bob wants to sell a large amount of bitcoin. He’ll offer a discount of about 3% against the market price to do so. In order to make such a transaction, Bob will first look for an intermediary, an OTC agent, that he can personally trust. 

Bob needs to provide his trusted intermediary with a proof that he actually owns the bitcoin he wants to sell, which is also known as a “Satoshi Test.” Satoshi Tests can be done by conducting a small transaction from a wallet with the alleged funds.

At the same time, there is a buyer somewhere hoping to find a person willing to sell their precious coins or tokens. 

That person, let’s call her Alice, will also find a trusted intermediary herself. She will also provide proof of funds. Both intermediaries will now find each other through their complex black book of contacts. They’ll start negotiating with each other. 

However, there is still an inherent problem with every OTC deal that is done through two different middlemen: the buyers and sellers are often not able to trust each other.

Can You Trust an OTC Deal?

This is where the “OTC Tango,” as Sapolinski calls it jovially, starts. Both parties are expecting the information they need from the other party, which could either be a proof of coin or a proof of funds. 

The problem is: they will only provide each other with this highly private information if they feel absolutely comfortable in trusting each other. 

In many cases, buyers and sellers are separated by several thousand miles, sometimes there’s even a language barrier. It is now the time to find a base of trust, which can be pretty hard if you are not able to properly meet. 

This can usually be achieved by leveraging the network of colleagues that brokers already have a trustful relationship with. Otherwise, trust can also be established through honesty, transparency and the documentation that is provided.

What About OTC Platforms Like Circle?

Although working with intermediaries has been the crypto OTC method of choice for most of the last decade, it seems like OTC platforms are steadily gaining more influence and power.

This may be due to the fact that large institutional investors would most probably prefer using an OTC platform rather than working with middlemen. 

Many financial heavyweights fear the severe trust issues that come with regular cryptocurrency OTC deals. In order to provide a suitable solution for such clientele, many companies started working on fully regulated and secure electronic bitcoin OTC exchanges. 

As explained, Goldman Sachs-backed Circle is probably the best-known cryptocurrency OTC desk. In April this year, Circle Trade told Business Insider that their minimum transaction size moved to $500,000, with the average trade being valued around $1,000,000.

Another interesting project is Republic Protocol. The team is currently building the world’s first decentralized dark pool, which aims to be a fully anonymous OTC platform, expected to work with smart contracts, and hence eliminates any possible trust issues for its users.

Republic Protocol bitcoin OTC trading

What Impact Do OTC Transactions Have on Bitcoin Price?

While unlisted transactions should theoretically not affect prices of cryptocurrencies, the past has clearly shown that it doesn’t work that way in the real world. 

Imagine a whale that is sitting on thousands, if not tens of thousands, of bitcoins that he wants to sell. Due to the incredible amount of bitcoin he wants to sell, he will contact multiple OTC brokers to find him one or more trusted buyers. 

The word about this deal will slowly spread and some bigger investors might now start to sell their bitcoins in order to participate in that deal and obtain bitcoin at a steep discount. 

As you see, OTC deals might have an impact on the price of bitcoin, but they could also be completely excluded from it. 2018 was undoubtedly a year that brought many innovations to the world of crypto over-the-counter trades and it remains to be seen how the space develops in the years to follow.

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Nasdaq bitcoin futures Wall Street

Forget the plunging prices, Wall Street is still thirsty for bitcoin and cryptocurrencies.

According to Bloomberg, Nasdaq will launch a trading platform for bitcoin futures contracts as early as the first quarter of 2019.

The news comes as ICE, the parent company of the New York Stock Exchange, prepares to launch its own bitcoin futures exchange called Bakkt. 

It’s a sign that institutional players and Wall Street see strong demand for bitcoin trading even amidst the 80% price drop.

What are Nasdaq Bitcoin Futures?

After hinting at the prospect late last year, Nasdaq will finally launch a platform for trading bitcoin futures contracts in early 2019.

The news was reported by Bloomberg and confirmed by Nasdaq partners, VanEck, at Coindesk’s “Consensus” conference yesterday.

The launch will be the first in a range of institutional crypto trading solutions.

What’s a Futures Contract?

A futures contract is a simple way for traders to bet on the future price of an asset, like bitcoin.

It works by agreeing to purchase the asset for a predetermined price at a specific date in the future. 

For example, I agree to buy bitcoin for $6,000 on December 22nd.

If the price of bitcoin is much higher than $6,000 on the date of expiry, I get my bitcoin at a huge discount to the market. I can then turn around and sell it at market value for a big profit.

Of course, it can work the other way too. If bitcoin has fallen far below $6,000, I’m still obligated to pay the agreed price (or I can exit the trade before the expiry date). 

Futures contracts are used by traders to make future bets on price rises (or falls), and they exist for most market assets, like oil, gold, and stock market indices.

Nasdaq Bitcoin Futures: “We Ran A Few Extra Miles With [Regulators]”

The news is a long time coming after the first whispers emerged in 2017. During that time, Nasdaq has been working closely with US regulators, the Commodities Futures Trading Commision, to tighten the screws.

VanEck’s director of digital asset strategy, Gabor Gurbacs, explained: 

“What I’d like to point out is we ran a few extra miles working with the [Commodity Futures Trading Commission] to bring about new standards for custody and surveillance.”

Nasdaq already operates a strict surveillance system on its exchange to pick up signs of manipulation such as wash trading. By integrating this into a crypto trading system, it will give institutional investors a great deal more confidence to trade and invest in bitcoin.

Settled with Bitcoin?

One thing we don’t yet know about the Nasdaq bitcoin futures is how the contracts will be settled.

The only bitcoin futures contracts on the market right now (available via CBOE and CME Group) are settled in cash. So when the futures contract expires, the trader pays (or receives) cash.

The much-hyped Bakkt futures contracts, which are slated for launch in January 2019, are unique because they are settled in bitcoin.

Nasdaq nor VanEck have confirmed how their product will operate.

Wall Street is Coming: Bakkt Launch in January 2019

The Nasdaq futures announcement comes shortly after the hype around Bakkt’s futures contracts.

Bakkt is a cryptocurrency exchange platform, backed by the parent company of the New York Stock Exchange. To put it another way, it’s a big deal.

Bakkt will also facilitate bitcoin futures contracts settled with real bitcoin.

Originally slated to launch early December, the Bakkt launch has been pushed back to January 24th, 2019. The delay was caused by the large “volume of interest.”

2019: a Big Year for Bitcoin?

The first quarter of 2019 is lining up to be huge for crypto. Bakkt is scheduled to launch in January. The Securities and Exchange Commission will make a decision on the much-anticipated bitcoin ETF proposal, and Nasdaq’s futures market will launch.

If 2018 was the year of slow, painful regulatory issues, 2019 could be the year it all comes together.

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