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Former Coinbase CTO Talks On Bitcoin During Its 11th Year

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  • So its been eleven years since bitcoin became a thing. 
  • To commemorate the occasion, Balaji Srinivasan wrote a post titled, “Bitcoin becomes the Flag of Technology”.

So its been eleven years since bitcoin became a thing. Specifically, it’s been eleven years and three days as on the 3rd January many people will have ‘celebrated’ the birthday of the leading cryptocurrency. 

To commemorate the occasion, the former chief technology officer of Coinbase and the General Partner at Andreessen Horowitz, Balaji Srinivasan wrote a post titled, “Bitcoin becomes the Flag of Technology”.

Part of the post by Srinivasan read:

“Bitcoin [and crypto more generally] moves us beyond the implicit by expressing these values in a piece of code that doubles as an investment vehicle. The code speaks

to the developers, the upside appeals to the investors, and the values encoded within speak to both. If you believe in these values, you tend to buy Bitcoin.”

The former Coinbase CTO goes onto make the argument that bitcoin is “ideological flag and a Schelling point.” So essentially what Srinivasan cites is that Bitcoin’s symbol is a representation of an idea. 

In another sense, Bitcoin has become a global ‘thing’ so to speak. Everyone will most likely have heard of the digital currency but still might be unsure on the capabilities of the asset. 

Srinivasan adds:

“For example, Jack Dorsey runs Twitter, Reid Hoffman founded LinkedIn, and Marc Andreessen and Peter Thiel are on the board of Facebook – but all of them are pro-Bitcoin. Similarly, Binance founder Changpeng Zhao and Telegram founder Pavel Durov are Chinese-Canadian and Russian expatriates respectively, and are also pro-Bitcoin.”

For more news on this and other crypto updates, keep it with CryptoDaily!

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Coinbase’s Bitcoin holdings indicate its dominance in the market

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The importance of exchanges is widely accepted in the community fact but what’s constantly debated about is the difficulty in judging the reliability of exchanges. The estimation with different metrics has its shortcomings and the lack of transparency makes the assessment less reliable.

According to a recent analysis by Longhash, in order to find a transparent metric, the cold wallet storage of different exchanges was analyzed. The study also accounted for the transfers that took place across deposit addresses, hot wallet addresses, and cold wallet addresses across the major exchanges.

The data was collected directly from on-chain assets, which is difficult to alter or fabricate.

Source: Longhash

The study suggested that Coinbase has the largest amount of Bitcoin amid all other crypto institutions and its holding capacity has periodically increased over the past year. Its BTC holdings were unaffected by any price action in 2019 but at the moment, the exchange was very close to exceeding a hold margin of over 1 million BTC coins.

Coinbase’s stronghold over BTC holdings and steady incline over the

past year can be attributed to its share of long-term institutional investors.

Source: Longhash

In comparison, other exchanges’ cold storage holdings remained far less than Coinbase. Binance was able to maintain its 2nd position for most of 2019 but price volatility evidently impacted its holdings.

Bitfinex started the year on the third position but the Tether controversy and the repeated legal bouts with NYAG seemingly depleted BTC holdings.

Surprisingly, Huobi managed to jump from being the 5-largest exchange in terms of cold wallet storage to 2nd in the market toward the end of last year. The reason may be far from ideal as it has been alleged that a bulk of the PlusToken transactions were facilitated on the exchange. PlusToken has been largely deemed a scam by a majority of the community, hence the dramatic jump from 5th to 2nd had an asterisk mark on it.

Although Coinbase registers far lesser transaction volume rather other exchanges, its significant BTC holdings indicate the presence of strong liquidity with its assets.

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Former Coinbase CTO claims Nakamoto.com is a step towards changing culture

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I understand the rationale behind crypto-anarchy, but I believe in crypto-civilization,” said Balaji Srinivasan, founder of Nakamoto.com, when asked about the reason behind the formation of the now-controversial forum.

Srinivasan recently appeared on a podcast with Messari’s Ryan Selkis and spoke about Nakamoto.com, a project which after its release, has caused quite a stir. Srinivasan’s motivations behind the same stemmed from his interest in educating himself and others about the various gaps known within the community. Nakamoto.com has a list of contributors – right from the many big-shot names in the industry to technical gear heads and according to the website,

“We want to create a venue for quality technical, philosophical, and cultural writing that is of general interest to the crypto community as a whole, for beginner and expert alike.”

Even though the idea of the website is novel to Srinivasan, Selkis expressed his concern about the future, claiming that if/when it explodes, it might bring in similar chaos as Reddit did in the early stages of Bitcoin. However, the former CTO of Coinbase argued that it might act

more like a forum where the community can discuss various assets, with moderators helping keep the conversation going.

According to Srinivasan, social media may get more radicalized as it incentivizes people for their actions in terms of attention or money. He highlighted the culture offered by these platforms and claimed that “there is no guiding culture for Reddit.”

He added,

“Getting the culture right seems like a very good step with the launch of Nakamoto.”

Recently, a prominent Bitcoin Telegram channel changed its settings to read-only mode, with the moderators citing trolls and spambots. In order to put an end to the unhealthy culture, Nakamoto.com was created, as per the founder. However, he was highly criticized for the name, with many claiming that Srinivasan used Bitcoin’s creator’s name to just publicize his new venture.

Peter McCormack, a proponent of Bitcoin, had said,

“Any use of the Satoshi Nakamoto name to promote anything outside of Bitcoin is disingenuous AF!”

However, Srinivasan has received support from a few others like Ran NeuNer who asked the community to celebrate “another credible source that can drive adoption.”

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Coinbase-Led Crypto Ratings Council Plans Transparency Boost as New Members Join

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The Crypto Ratings Council (CRC), the Coinbase-led organization hoping to create a standard for assessing whether different cryptocurrencies are securities under U.S. law, is adding new members.

The group announced Thursday that eToro, Radar and OKCoin US have joined the aspiring industry group looking to streamline how exchanges assess whether a cryptocurrency is a security. The new members bolster the level of technical and legal information that the group can utilize, said Juan Suarez, a VP and general counsel at Coinbase working with the CRC.

Suarez told CoinDesk in a phone call that every CRC member reviews the ratings before they are made public, and each asset is listed by at least one of the group.

The CRC rates assets on a scale of 1 to 5, with 1 denoting cryptocurrencies that do not appear to have the characteristics of a security under U.S. law. Five new assets were rated Thursday: cosmos (ATOM) and livepeer (LPT) have both received a 3.75 score, while dash (DASH) and horizen (ZEN) received 1s and ethereum classic (ETC) received a 2.

In addition, the CRC will refine the explanations on its current list, Suarez said. The ratings themselves won’t change but the reasoning behind whether each asset resembles a security will be condensed.

“It just is a part of routine operations of the company that we’ll be changing,” he said. “We’re refining the bullet points to make them more factual and explicit.”

While its ratings indicate the CRC’s confidence that a particular asset resembles – or doesn’t resemble – a security, the group is not affiliated with the U.S. Securities and Exchange Commission, which to date has only stated that bitcoin and

ethereum are not securities.

As a press release puts it: “The CRC’s analysis is its own and is not endorsed by developer teams, regulators or any other third party.”

Public reveal

As part of its 2020 roadmap, the CRC plans to share details of the actual framework it uses to arrive at its evaluations. Suarez said the group plans to continue providing its analysis for any given asset, but releasing the broader framework may help the industry.

The current lack of transparency around how assets are evaluated was one major criticism of the CRC when the group was first unveiled. Industry lawyers told CoinDesk the initiative seemed a beneficial one overall for the space, but revealing the framework in particular would help non-member companies.

“We’re going to release the framework in the hopes that it creates a useful discussion for the industry and we’re going to recruit more members,” Suarez said. 

There’s also work afoot to address questions raised by current CRC members about the framework. Once those are finalized, the analytical framework will be released.

As part of this effort, several meetings are planned in the coming weeks, according to Suarez. 

“We just want to make sure we release the best and final work product possible,” he said. The plan is to make sure it’s “scalable and easy to use” by legal teams at exchanges.

By releasing the framework, the CRC may be able to create guidelines and best practices for companies and developers to look at. The end goal, according to Suarez, is to help crypto startups more easily comply with existing securities law.

“That’s kind of the North Star that we’re driving to,” he said.

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