Cryptocurrency
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Veridium Labs teams with IBM and Stellar on carbon credit blockchain
Veridium Labs has been trying to solve a hard problem about how to trade carbon offset credits in an open market. The trouble is that more complex credits don’t have a simple value like a stock, and there hasn’t been a formula to determine their individual value. That has made accounting for them and selling them on open exchanges difficult or impossible. It’s a problem Veridium believes they can finally solve with tokens and the blockchain.
This week the company announced a partnership with IBM to sell carbon offset tokens on the Stellar blockchain. Each company has a role here with Veridium setting up the structure and determining the value formula. Stellar acts as the digital ledger for the transactions and IBM will handle the nuts and bolts of the trade activity of buying, selling and managing the tokens.
Todd Lemons, chairman at Veridium Labs, which is part of a larger environmental company called EnVision Corporation, says that even companies with the best of intentions have struggled with how to account for the complex carbon credits. There are simpler offset credits that are sold on exchanges, but ones that seek to measure the impact of a product through the entire supply chain are much more difficult to determine. As one example, how does a company making a candy bar source its cocoa and sugar. It’s not always easy to determine through a web of suppliers and sellers.
Moving forward
To partly solve this problem, another Envision company, InfiniteEARTH developed a way to account for them called the Redd+ forest carbon accounting methodology. It is widely accepted to the point that it has been incorporated in the Paris Climate Agreement, but it doesn’t provide a way to turn the credits into what are called fungible assets, that is an easily tradable one. The problem is the value of a given credit shifts according to the overall environmental impact of producing a good and getting it to market. That value can change according to the product.
Jared Klee, blockchain manager for token initiatives at IBM, says that buying and accounting for Redd+ credits on the company balance sheet has been a huge challenge for organizations. “It’s a major pain point. Today Redd+ credits are over the counter assets and there is no central exchange,” he said. That means they are essentially one-off transactions and the company is forced to hold these assets on the books with no easy way to account for their actual value. That often results in a big loss, he says, and companies are looking for ways to comply in a more cost-efficient way.
Putting it together
The three companies — Veridium, IBM and Stellar — have come together to solve this problem by creating a digital token that acts as a layer on top of the carbon credit to give it a value and make it easier to account for. In addition, the tokens can be bought and sold on the blockchain.
The blockchain provides all the usual advantages of a decentralized record keeping system, immutable records and encrypted transactions.
Veridium is working on the underlying formula for token valuation that measures “carbon density per dollar times product group,” Lemons explained. “That can be coded into a token and carried out automatically,” he added. They are working with various world bodies like the United Nations and The World Resource Institute to help figure out the values for each product group.
All of the details are still being worked out as the idea works its way through the various regulatory bodies, but the companies hope to be making the tokens available for sale some time later this year.
Ultimately this is about finding ways to help businesses comply with environmental initiatives and remove some of the complexity inherent in that process today. “We hope the tokens will provide less friction and a much higher adoption rate,” Lemons said.
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Rare Bits launches a market for digital collectables
As we plunge into our baffling future, it is believed that, at some point, we will be trading in cryptographically secure kittens, monsters, and playing cards. While it is unclear why this will happen, Rare Bits and their new service, Fan Bits, is ready for the oncoming rush.
Co-founded by Dave Pekar, Amitt Mahajan and Danny Lee (who met after selling their gaming startups to Zynga) and Payom Dousti (formerly of fintech VC fund 1/0 Capital), the company trades in digital goods and has built a blockchain-based solution for buying and selling digital collectables. Lee brought in a team of ex-Zynga and other digital platform creators to build a blockchain-based solution for buying and selling digital collectables. For example, on Rare Bits you can buy this monster and battle it against other monsters on the blockchain. Further, with their new platform called Fan Bits, you can buy actual collectables that are tied to the blockchain. For example, you can sell collectible cards and give some of the proceeds to charity. If the new owner resells those cards then some of the resell price also goes to charity, an interesting if slightly intrusive use of smart contracts.
The team has raised $6 million in Series A. Fan Bits launches on May 17.
“To date, collectible content has only been created by developers for their own dapps – which I suppose could be considered our competition,” said Lee. “Fan Bits is the first to let anyone, especially people who are not technical, to create collectibles. It will create an abundance of supply that didn’t exist before.”
“We started Rare Bits to let people buy, sell, and discover crypto assets. We believe that assets on the blockchain mark a fundamental shift in how we own and exchange property. Our overall mission is to enable the worldwide exchange of online and offline property on the blockchain,” he said.
Lee sees this as a Trojan horse of sorts, allowing non tech-savvy creators sell digital art and designs online without having to understand the vagaries of blockchain.
“For creators, it’s a DIY platform to turn their content into unique collectibles and earn Ethereum on every sale,” he said. “For the first time, a creator can go from idea to published cryptocollectible on a live marketplace without having to have any technical knowledge.”
Given the popularity of other digital collectables – including in-game gear for many multi-player games – things look like they’re going to get pretty interesting in the next few years.
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Goldman Sachs CFO Martin Chavez and Roblox CEO David Baszucki to hit up Disrupt SF
We’ve already got a star-studded lineup prepped to speak at Disrupt SF, running September 5 to September 7. So far, we’ve announced appearances by Sophia Amoruso, Carbon’s Dr. Joseph DeSimone, Adidas’ Eric Liedtke, Ripple’s Brad Garlinghouse, Michael Arrington, and Drew Houston.
But given that today is the last day to purchase early bird tickets, we thought we’d let slip a couple more stellar speakers joining the agenda.
We’re thrilled to announce that Roblox CEO and cofounder David Baszucki and Goldman Sachs CFO Martin Chavez will be joining us on the Disrupt SF stage. (Not together, to be clear.)
David Baszucki – Roblox
Back in 2006, Roblox started out as an interactive physics program, giving people the opportunity to test out their own physics experiments in a virtual setting, from testing out pulley systems to simulating a car crash.
In the time since, Roblox has managed to turn physics into a gaming sensation for young people.
The massively multiplayer online game has overtaken Minecraft and is wildly popular with the pre-teen crowd. In fact, the company recently announced that it has hit 60 million monthly users, spending more than 780 million hours on the platform.
Roblox lets users build their avatars and almost anything else using their imagination, sort of replacing the LEGO of older generations. But because those users tend to skew young, Roblox has made safety a priority, implementing a number of parental controls, with moderators scanning all communication between users, ensuring that a young person doesn’t give out any personal identifying information.
The company has raised nearly $100 million from investors like Index Venture Partners, First Round Capital, Altos Ventures, and Meritech Capital Partners. Roblox also recently signed a deal with HarperCollins to grant them the publishing rights for Roblox, marking the beginning of Roblox’s existence in the physical world.
Plus, Roblox has established itself on YouTube as well as with merchandise, which is an increasingly important part of successfully running a game studio.
We’re absolutely psyched to have David Baszucki join us on stage to talk about the company’s meteoric rise.
Martin Chavez – Goldman Sachs
Many don’t think of Goldman Sachs as a technology company. But those people would be wrong.
Goldman Sachs CEO Lloyd Blankfein has said many a time that the firm is a technology company, and has gone on to state that Goldman Sachs employs more engineers than companies like Facebook and Twitter.
But Goldman Sachs is also a huge investor, with more than 600 investments according to CrunchBase. Some of those investments include WeWork China, Cadre, Dropbox, Uber, and Ring, which recently sold to Amazon for more than $1 billion, according to reports.
Trust us, keeping a finger on the bleeding pulse of technology is exhausting. But Goldman Sachs CFO Martin Chavez, who has a long history in the technology sector, is keeping up with the Joneses.
Before serving as the CFO, Chavez was the Chief Information Officer at Goldman Sachs and led the technology division. He’s also a serial founder, cofounding and serving as CTO of Quorum Software Systems from 1989 to 1993, as well as cofounding Kiodex, where he served as Chairman and CEO until 2004.
We’re excited to pick Chavez’s brain on how fintech might evolve over the next five years and what role Goldman Sachs might play in that evolution, especially given the rise of cryptocurrencies and the blockchain.
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Aion launches first public blockchain network
If you believe blockchains will proliferate in the coming years, it stands to reason that you will need some sort of mechanism to move information between them — a network of blockchains with bridges and processes for sharing information between entities. That is exactly what The Aion Network is providing with a new blockchain network released today.
The company wants to be the underlying infrastructure for a network of blockchains in a similar way that TCP/IP drove the proliferation of the internet. To that end, the company, which originally began as a for-profit startup called Nuco, has decided to become a not-for-profit organization with the goal of setting up protocols for a set of interconnected blockchains. They now see their role as something akin to the Linux Foundation, helping third-party companies build products and creating an ecosystem around their base technology.
Graphic: Aion Networks
“The core design of network we have been building is to connect various networks, and route data and transactions through a public network. We are launching that network today. It allows you to build bridges to other blockchain networks. That public network acts as relayer between blockchains,” Matthew Spoke, CEO and co-founder at Aion Networks told TechCrunch.
While there clearly could be security concerns with a public by-way for blockchain data moving between systems, Spoke says that can be minimized. Instead of transmitting a medical record between a hospital and insurance company, you send a proof that the person had an operation, which the insurance company can check against the coverage rules it has created for that individual and vice versa.
The idea behind this venture is to provide the underlying plumbing to encourage more highly scalable blockchain use cases. Spoke and his team once ran the blockchain practice at Deloitte before starting this venture, and they saw roadblocks to scaling first-hand. “When we were doing enterprise projects, our biggest realization was that the plumbing wasn’t sophisticated enough. The scaling wasn’t meeting specs that enterprise companies would need long-term. Because of that, we were not seeing anyone moving beyond proof of concept projects. What we are doing is trying to mature the possible use cases,” he said.
In order to drive adoption, the company is introducing a token or cryptocurrency to be used to move data across the network and build in a level of trust. Spoke believes if the users have skin in the game in the form of tokens, that could create a higher level of trust on the system.
“Instead of paying for infrastructure, you are going to pay to be part of a common trusted protocol. It comes down to the mechanism of consensus and being incentivized to do business in an honest way,” Spoke said
This is probably not something that will get adopted widely overnight. Just because they have built it, they still require a level of utilization for it to really take off, and that will require more blockchain projects. “We still need a few years of pure focus on infrastructure to make sure we are getting these layers right. Every time you move data of any kind there are security vulnerabilities, and we need to make sure there are good specs and comfort in using it,” he said.
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Crypto-collectibles and Kitties marketplace Rare Bits raises $6M
Rare Bits wants to be eBay for the blockchain, where you buy, sell and trade non-fungible crypto-goods. After CryptoKitties raised $12 million from Andreessen Horowitz last month for its digital collectibles game, there’s been an explosion of interest in the space. But without a popular marketplace, it’s hard to find the goods you want at the right price. Now a team of former Zynga staffers is building out the Rare Bits crypto-collectible auction and commerce site with a $6 million round led by Nabeel Hyatt at Spark Capital, and joined by First Round Capital, David Sacks’ Craft Ventures and SV Angel.
“Because of the Ethereum ledger, for the first time, users can truly own their digital items,” says co-founder Amitt Mahajan. “Previously in mobile or social games, virtual items earned through play or by spending money were actually owned by the company operating the game. If they shut down their servers, the items would go away and users would be out of luck. We believe this new asset class represents a paradigm shift in digital property whereby centralized assets will be moved onto decentralized systems.” 
For now, Rare Bits isn’t slapping any extra fees on its marketplace, compared to paying up to 1 percent on other marketplaces like Open Sea, or even more elsewhere. Instead, if a crypto-item developer charges a fee on secondary sales, say 5 percent, they’ll split that with Rare Bits for arranging the transaction.
Rare Bits lists more than 500,000 items from a dozen games, including CryptoPunks, Ether Tulips, CryptoBots, CryptoFighters, Mythereum and CryptoCelebrities. Users get the benefit of having all their crypto-collectibles in a single wallet. They can see historical pricing before they buy anything thanks to the transparency of the Ethereum ledger, whether they want to “Buy Now” or win an auction. The collectors can also see related items rather than transacting in a vacuum. One item sold for more than $10,000, and sales in the 5-10ETH range ($555 each today) aren’t uncommon.
Rare Bits founders from left: Danny Lee, Payom Dousti, Dave Pekar and Amitt Mahajan
Mahajan, Danny Lee and Dave Pekar all met after selling their gaming startups to Zynga . [Disclosure: I know Pekar from college.] Their fourth co-founder, Payom Dousti, worked at fintech VC fund 1/0 Capital and sold his sports analytics startup numberFire to FanDuel. With experience across the gaming, virtual goods and crypto space, Mahajan tells me, “We thought long and hard about potentially building blockchain-based games ourselves, but ultimately decided that there was a larger opportunity in focusing on crypto-based property as a whole.” The Rare Bits exchange launched in February and did more than $100,000 in transactions in its first month.
With some CryptoKitties selling elsewhere for as much as $200,000, investors liked the idea of taking a cut of everyone’s transactions rather than just launching another digital trading card. That led Rare Bits to raise a $1 million seed from Macro Ventures and angels like Steve Jang and Robin Chan. As scaling issues threaten to prevent the Bitcoin and Ethereum blockchains from supporting micropayments and mainstream commerce, new use cases like crypto-collectibles are taking the spotlight.
Now with the $6 million Series A, Rare Bits is bringing in some heavyweight angels from the world of gaming. That includes Emmet Shear and Justin Kan, the co-founders of Twitch. Former Dropbox execs and married couple Ruchi Sanghvi and Aditya Agrawal are also in the round, alongside Greenoaks Captial MD Neil Mehta and Channel Factory CEO Tony Chen.
The team hopes the runway will help it secure partnerships with developers and creatives to publish new collectibles for the blockchain that have a home on Rare Bits. Mahajan says, “People are viewing these items as assets that can be invested in instead of liabilities that are one way transfers of value towards the developer, it’s one of the major changes in this ecosystem versus traditional virtual items.”
Rare Bits will have to deal with the inherent scaling troubles of the Ethereum blockchain it operates on. For now, it’s refunding users the “gas” it costs to execute purchases and sales on its marketplace in a timely manner. Those range from a few cents to a few dollars, depending on network congestion. But Rare Bits could be looking at a steep bill or be forced to push those fees onto users if it gets popular enough.
There’s always the danger that CryptoKitties and the like are just the new Beanie Babies — valued today, but worthless when the fad dies. Rare Bits benefits from getting to follow the trend to whatever crypto-collectible is in vogue, and just has to hope the whole concept doesn’t fade.
But Rare Bits has a hedge against that. “While today most of these items are items from games and collectibles, we envision that we will see licenses, tickets, rights, even tokenized physical goods represented as digital assets,” Mahajan tells us. It’s now building a Fan Bits feature that will let YouTube creators, Twitch streamers and Instagram celebrities create crypto-based collectibles “to engage with their audience and let their fans support them,” he explains. You might one day be able to buy and resell a meet-and-greet pass for your favorite band.
“Our ultimate goal is to convince millions of new people to begin owning and transacting crypto-based property,” says Mahajan. But the founders will probably be okay regardless. “Like anyone crazy enough to start a crypto app company this early, we started buying and HODLing BTC and ETH years ago.”
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A minor cryptocurrency partners with a major porn network. What could go wrong?
Yesterday brought some interesting news in the cryptocurrency space. In a move that is at once sleazy and ridiculous, PornHub and its tech arm MindGeek announced a partnership with the creators of VergeCoin (XVG), an anonymized cryptocurrency in the vein of Monero that is currently trading at 7 cents, down from an all-time high of about 26 cents during a recent pump.
XVG is an epitome of a coin driven by mania. Originally billed as DogecoinDark in 2014, the currency has had some ups and downs but has always displayed the “move fast and break things” mentality that gives cryptocurrencies a bad name. The product is so hapless it can’t even get their Wikipedia entry right.
The currency developers recently beseeched its rabid fans — many of whom have been waxing confused on Reddit — to raise $2 million to build a secret partnership. Weeks of speculation followed as Vergins speculated about partners, including eBay and Amazon. The price went up and down and has settled below 10 cents, placing it at position 23 on the CoinMarketCap list. It’s doing well, but not great.
Yesterday the big announcement came, as it were. I received a few emails from PornHub PR announcing a crypto partnership but they refused to announce the currency. Now that the currency is officially announced, I’m sure there are some folks who are upset they bought a load of Titcoin.
Verge has partnered with PornHub to allow users to pay with the currency. Why? And why would you want to? This is unclear. Presumably the currency allows you to pay completely anonymously but you still have to acquire Verge to pay with Verge and associating a currency with porn pretty much gives the game away as to why you’d spend it. Further, the extensive marketing efforts make PornHub look far more interesting than Verge, especially since Verge shares the same name with the Verge tech site, something that is bound to confuse average buyers. Finally, you get no real benefit from paying with Verge and, in fact, you can’t get your Verge refunded if you decide you no longer want to pay $9.99 a month for premium PR()N.
Ultimately this is better for porn than it is for cryptocurrency. PornHub gets a little bit of a media boost and cryptocurrencies — including Bitcoin, Ether and ICO tokens — look like the only source for porn. While VHS and the internet grew out of porn, cryptocurrencies are already well-established and they don’t need any more “sin” associated with them. You can also pay for a number of services with crypto, including Flirt4Free, a cam girl site associated with LiveJasmin. Given that a series of stars in big trucks will be rolling through the U.S. over the next few months promoting cryptocurrencies — that $2 million had to go somewhere — it could be positive for crypto uptake but very bad for crypto perception.
While I agree that crypto needs a shot in the arm and a sense of mission, I doubt making it easier to see naked people is quite it. I’d like to see real remittances, real real estate transactions and even real voting systems put in place. Until then, however, stunts like this do little to help.
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Ripple’s Brad Garlinghouse and Michael Arrington to talk cryptocurrency at Disrupt SF
Ripple CEO Brad Garlinghouse and Arrington XRP Capital founder (and TechCrunch founder) Michael Arrington will be joining us at TechCrunch Disrupt SF in September to talk money.
Garlinghouse has had a long and storied career in the tech industry, serving as a senior vice president at Yahoo!, president of Consumer Applications at AOL and CEO of the file collaboration service Hightail. But in 2016, Garlinghouse was promoted from COO to CEO at payment services company Ripple.
Ripple’s goal is to try to make it as easy as possible to transfer money between two stores of value. Right now, that process is incredibly tedious, with no unifying structure to send money overseas or to underbanked communities. The notion of a unifying ledger is not a new one, but it’s one that’s transformed Ripple into a full-fledged company.
But Ripple also created the world’s third-largest digital token, XRP. The token has a current total market cap around $30 billion, and the company is working to expand the use cases for XRP, which has primarily been marketed as a tool for banks but has only attracted cross-border payment services.
As cryptocurrencies continue to evolve and gain mainstream attention, questions continue to mount around how these tokens will revolutionize the economy and gain utility.
TechCrunch founder and former Editor-In-Chief Michael Arrington will join Garlinghouse onstage to discuss the evolution of cryptocurrencies. Arrington left TechCrunch in 2011 and went on to start CrunchFund, which has invested in big-name startups such as Uber, Airbnb and Yammer.
In 2016, Arrington reduced his role at CrunchFund and has since started Arrington XRP Capital, a $100 million digital asset management firm in blockchain-based capital markets. Ripple is one of the first portfolio companies for Arrington XRP Capital.
This comes at a time when the SEC is doing everything it can to learn more about cryptocurrencies, sending out subpoenas to crypto funds far and wide, including Arrington XRP Capital.
This conversation is sure to be an interesting one, and one you won’t want to miss. Tickets to Disrupt SF (September 5 to September 7) are available now.
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Crypto fans, let’s meet in New York next week
I’ll be helping build a larger meetup focused on pre-ICO companies in New York on April 23 and I’d love to see you there. It will be held at Knotel on April 23 at 7pm and will feature a pitch-off with eight startups — I will write about the best ones — and two panels with some yet-unnamed stars in the space.
I’d love to see you there, so please sign up here. It’s free for early birds, so hurry.
The event will be held at 551 Fifth Avenue on the 9th Floor and you can sign up to pitch here. I’ll have more information as we get closer to the event. This is still an experimental format, so let’s see how it works.
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Someone made a game where you ride the rapidly changing prices of cryptocurrencies
The cryptocurrency world is a strange one, but at least it has a sense of humor. A new game has you riding a little crypto-car along the wildly fluctuating prices of major and minor currencies. It’s quite ridiculous, and it isn’t even a bad game!
It’s called Crypto Rider, predictably, and is very much a spawn of the popular Line Rider type of game, though (hopefully) different enough that there won’t be any cease and desists forthcoming.
You select your car, then pick a chart to ride — most are a ride from a coin’s humble start to its highest value. But there’s a mountain-like “total market cap” track, a “drag race” where you need to clear a valuation gap and one that must be depressing for BTC holders: a bumpy downhill ride from $20K to $7,850. New tracks should appear in time, as new cryptocurrencies rise and fall.
The game is cute — there are fun messages along the track, and the exhaust is tiny coins — and you collect coins toward unlocking new cars. I’m pretty sure they’re just aesthetic changes, but I’m gunning for a Dogecar anyway.
“The game was a side project for me to do in my own time,” wrote back Daniel Fahey, founder of the developer, SuperFly Games. “So the first original 10 tracks were what I felt were needed to give the game some replayability. But after the reception the game has received during its launch day, I will certainly be adding more tracks.”
It’s free, it’s dumb and it’s a fun way to waste a few minutes while you inadvertently lampoon the hubris of this rushed attempt to overthrow existing financial systems.
“I hope people find the game funny because it certainly wasn’t meant to be serious,” Fahey wrote. “It’s a bit of light-hearted fun in a somewhat serious space.”
Blockchain stuff is promising and we’ll get there eventually. But as the game seems to emphasize, it’ll probably be quite a ride.
You can download Crypto Rider for iOS or Android.
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JPMorgan’s blockchain head is leaving to start her own business
JPMorgan’s key blockchain executive is departing the bank for the world of startups, it has emerged.
Amber Baldet heads up JPMorgan’s Blockchain Center of Excellence, which explores the development of distributed ledger technology and use cases of blockchain technology across the firm’s business. A high-profile figure in the blockchain space in her own right, she is leaving to start her venture, according to Reuters.
Baldet set up JPMorgan’s blockchain strategy and headed up its enterprise-focused Quorum blockchain, which is reportedly being considered for a spinout. As Baldet’s six-year tenure at the bank ends, she will be replaced by Christine Moy, who led blockchain services across the bank’s Investor Services and Capital Markets segments, according to Fortune.
¯_(ツ)_/¯ https://t.co/5y02V30p2x
— Amber (@AmberBaldet) April 3, 2018
The exit is an example of a talent drain that is beginning to take shape in banking and financial services with engineers and business execs moving over to blockchain and crypto projects that are seen to have serious growth potential.
That’s despite a rocky year to date for crypto, at least in terms of valuations.
Bitcoin reached nearly $20,000 per coin in December but it spent much of March below $10,000. As of today, one bitcoin is worth $7,387, according to Coinmarketcap.com. Top tokens like Ethereum, Litecoin and Ripple are also down significantly on their record January-December prices.
There’s a strong case to be made that a more stable crypto market is for the best, even if there is a loss in value. High prices led to high transaction fees, which made life difficult for developers whilst also adding uncertainty for market speculators and token collectors.
Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life. (That’s definitely the case lately.)
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