When the CEO of one of the biggest and most respected financial services companies in the world says that a new form of currency, in this case bitcoin – which is in the larger class of cryptocurrencies, is a fraud, people will listen.  So when Jamie Dimon, the often polarizing CEO of JPMorgan Chase said it – a lot of people started talking.   This piece from CNBC covers the key points.

https://www.cnbc.com/2017/09/12/jpmorgan-ceo-jamie-dimon-raises-flag-on-trading-revenue-sees-20-percent-fall-for-the-third-quarter.html

Why did he say it?  Well, for one thing, when his child invested in something and got a cartoonish return, better than anything he could deliver, in a way they didn’t really understand and can’t explain – it invites a lot of skepticism.  It is an extremely risky and volatile market – and the trend has been that most people have made a lot of money so far.

 

A number of things are going on here:

• There is a cryptocurrency bubble at the moment. The frenzy around cryptocurrencies and “Initial Coin Offerings” or ICOs has many similarities to the internet bubble that burst in March of 2000. ICOs are strange because most of them are not selling stock/equity in companies, they more closely resemble Kickstarter efforts where people are pre-buying a product before it is available (a digital token that unlike a stock certificate can actually be used to do something) that can increase in value.  There is a bubble because many of the ICOs are just clear fraud (which is why China banned them entirely last week), and many are great ideas in the hands of totally inexperienced teams – so they are as likely to fail as most dot com companies in 2000.
• Like most bubbles, this will burst, but what survives will grow back even stronger (like a forest fire). Some think it is already happening, but the fact is that it is going to burst just like the internet bubble burst.  But just like as the internet is alive and well today (just ask dot com bubble bursting survivor Jeff Bezos who is now the wealthiest person on earth).  The bursting killed the businesses that should have died – as well as some that probably should not have.
• There is (almost) zero regulation – so Jamie Dimon CAN’T get into this even if he wanted to. The SEC issued a statement about ICOs that makes it very clear, using something called the Howey Test, which ICOs are, and are not, securities – and the ones that are will be regulated by the SEC.  This is a $100 billion market right now, so it’s driving the banks crazy that they can’t get a piece of it (it’s rumored Goldman Sachs has figured out a way) – banks are like big sharks and this ICOs money is blood in the water to them.
• This is a HUGE threat to banks. Blockchain and cryptocurrencies are actually still pretty complicated.  William Mougayar’s The Business Blockchain is a very dense but thorough explanation of why blockchain is so different, so important, and thus so valuable an innovation.  Two of the core elements of blockchain are that it is distributed and decentralized – big banks are all about centralization.  On page 14 Mougayar, talking about banks says “When you open a bank account, you have really abdicated authority to your bank on that ‘account’.  In reality they provided you the illusion of access and activity visibility on it.  Every time you want to move money, pay someone, or deposit money, the bank is giving you explicit access because you gave them the implicit trust over your affairs.  But that ‘access’ is another illusion.  It is really an access to a data base record that says you have such amount of money.  Again, they fooled you by giving you the illusion that you ‘own’ that money.”  In short – blockchain gives users back trust and this most basic control and this seemingly simple change in structure is set to totally transform most industries, including healthcare and financial services.
• For it to become sane, more regulation is needed. One of the reasons there is so much risk and volatility in the market is that the participants in blockchain are totally anonymous.  And one of the reasons banks and healthcare companies can’t touch these things is because they have to know who their customers are (Know Your Customer – KYC is a specific set of rules they have to comply with) and they need to have some trust in where their money came from (AML is the Anti-Money Laundering rule behind that).  Healthcare has HIPAA which is similarly motivated – though more for protection of the patient.  When you have a distributed/decentralized model in blockchain people could be anywhere on earth where they can get an internet connection – it’s hard for someone to show you a government ID like a driver’s license or passport (which is how banks start the KYC process when they are face-to-face today) and trust that they are who they say they are.  Civic is one company that is aiming to help banks solve part of this problem – and AuthenticID is going the farthest to do all of the KYC/AML process in under 10 seconds.  Civic already had a hugely successful ICO and AuthenticID has a token offering that starts next month and it’s looking as though once those offerings are live – this whole thing can take a much more stable pace.

 

Some people are saying Jamie Dimon is crazy for saying bitcoin is a fraud.  He’s not.  He’s just as smart as he has always been.  So once you understand what’s going on right now – you could say that someone in his position would be crazy not to say what he said given that there is so much money flowing right now and he can’t get his hands on any of that money (and it probably drives him nuts that his kid got a 300% return on it).

 

AuthenticID is positioned to be the game changer in all of this.  See below for more information.

 

On Steemit – it’s authenticid

Visit the Reddit Site – https://www.reddit.com/r/AuthenticID/

Token Sale Site – http://tokens.authenticid.co

 

 

The new iPhone was just launched and there was a lot of fanfare about the facial recognition software it has (there was this moment when it didn’t work as well as they expected – http://www.telegraph.co.uk/technology/2017/09/12/apple-suffers-embarrassing-demo-faceid-fail-iphone-x-launch/

).  One of the things that’s a big deal about this is that the key elements of this new security feature are in the secure enclave – which means that unlike the fingerprint biometric that has historically been at the software layer (and thus very hackable) – this is in a layer that cannot be hacked.

But a number of people misunderstand what this does.

It is NOT an identity authentication solution.

All they are doing is confirming that it’s the same face that owns/controls that phone.

What people need increasingly is something to assess a face with a government issued ID like a passport or driver’s license and make sure that’s the same person – and that the ID is real, and present, and not tampered with.

Once you do that – then the face can be associated with the identity.  Then once you have that, you can use it as a tool for everything from enrolling new customers in an app, to making it effortless to login.  This can even be used for some of the complex Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations that banks have to adhere to.  KYC and AML are two of the big reasons banks and healthcare providers have not adopted blockchain – because there is no reliable way to verify identities.

Until now.

There are some companies that do this with humans in a far away land manually checking the photo with the identity in a slow process.   But AuthenticID is the only one that uses over 90 algorithms with a library of government documents spanning over 190 countries that can complete the identity authentication automatically in under 10 seconds.

Apple added a great new feature.

AuthenticID allows businesses to turn that feature into a solution.

 

 

Visit the Reddit Site – https://www.reddit.com/r/AuthenticID/

Token Sale Site – http://tokens.authenticid.co

 

 

 

There is so much going on with ICOs and token sales that is nonsense, we felt it would be useful to build a tool to help people decide more easily if an ICO or token offering makes any sense.  So we started with these ten questions and mocked this up t be a tool you can use.

 

It is going to allow you to fill in answers to some pretty basic Yes/No questions, and based on that it will tally them and provide you with a pass or a fail using conditional formatting in Excel.  If you want this Pass Fail meter tool, please contact me at ric at authenticid dot co – we think it will be ready by Friday.  It has a couple of example companies pre-populated.  AuthenticID is launching a token offering next month – and you can assess whether you think that offering will be a good one as well next week after their ATHAU token site goes live.

But we are getting ahead of ourselves.  Not so long ago, the author of The Business Blockchain, William Mougayar, posted this piece on what Tokenomics is.

https://medium.com/@wmougayar/tokenomics-a-business-guide-to-token-usage-utility-and-value-b19242053416.  The article is clear and sound, but it’s complicated.  We thought that some of us need a simpler meter for assessing whether an ICO makes sense to pursue.

One thing we have learned on sites like TokenMarket and Smithandcrown is that it can be very time consuming to stay on top of all of the offerings that are popping up.

If you have filled out the Smithandcrown survey for getting on their web site for an offering, they ask the following question about the tokens:

Again – token offerings can be really complex – which makes sense for people who need those details.  But many aren’t going to want to get to this level of understanding about a token to decide if the offering is on the right path.

For some of the mass adoption a lot of us want for the blockchain – it has to get simplified.

We think this Tokenomics Pass/Fail meter will help.

So have a look and let us know if you have feedback on the format and the questions.

Most people paying attention understand that blockchain, especially with the advent of smart contracts, are ushering in a new era of the same magnitude of what we experienced with the Internet.

But at the same time – anyone who is paying attention and understands it has also spent a lot of time explaining it to other people because it’s complicated.  From the hash, to the nonce, to the block, to why decentralization is so valuable, to byzantine fault tolerance, to non-repudiation,  and so on – there’s a lot.  This YouTube video is very helpful for 101 level discussion.

So while some companies like AuthenticID are focused on helping trust and security on the blockchain – which is going to fill a big hole for industries like financial services and healthcare.  There have been a number of blogs about that subject on this site recently.

What’s going to happen is that adoption will continue at a certain pace for many applications – which is slow but still good.  The other thing that is going to happen – is the companies are going to figure out how to simplify blockchain for specific use cases (where people don’t care about blockchain but want its benefits) and that’s going to put adoption in those areas at comparative warp speed.

Wyre is one such company.  It’s no secret that wire transfers are slow and expensive when you are moving money between countries or currencies.  Wyre is very fast and inexpensive compared to traditional models.  That’s what their customers really care about.

Do they use blockchain for this? Yes

Do they support transfer of cryptocurrencies for this? Yes

Do they include countries like China for transfers? Yes

Do they support Know Your Customer (KYC) and Anti-Money Laundering (AML) Requirements?  I think so.  It’s not as obvious from their web site but I am pretty sure they are doing that, and it might not yet be as fast as it can be with a service like AuthenticID – because it’s faster and cheaper than the alternative – their customers don’t really care.  And they shouldn’t.

This is a watershed moment for the blockchain because smart companies are figuring out that people want to accomplish some outcomes without caring about how they get done – known as the “how trap” to regular readers of this blog.  Getting out of the how trap is crucial for a lot of the long term success in the blockchain and it’s great to see a company like WYRE leading the way.

So most of us know about Airbnb and VRBO by now, where people rent out rooms, or entire apartments/houses so people have another option than hotels/motels.

Pretty interesting and strange story (that included their own cereal boxes – REALLY) about how they became as big as they are today.

But the thing about it is – they are usually renting to total strangers.  For the most part it has worked out – but it seems inevitable that they will partner with someone like AuthenticID to offer some level of authentication service to help the renter know they can trust the person who will be sleeping in their bed and eating from their dishes.  This chart helps illustrate some off the cool identity authentication services AuthenticID offers for everything from fraud prevention to increased customer enrollment/conversion rtes (because it’s so fast).

The chart is aimed more for the world of blockchain – but you get the idea.

So that’s going to happen.

What hasn’t happened yet – that seems a little like a Reese’s Peanut Butter Cup moment of combining two things that didn’t seem obvious to combine – is real estate.

Any time we buy a car – we test drive it – and while when people buy a home they probably use Zillow or Redfin to find it these days, and you can walk around in it to see if you like it.  But if you are going to pay five or ten times what you make in a year for a house, shouldn’t you spend a night there before you buy it?  There could be street noise or raccoons or maybe the kids get scared or who knows what.  Now Airbnb could partner with a big real estate company like Windermere or Zillow, but it seems like there’s an opportunity in here – once we get beyond the authentication of the identity of the person.

Don’t you think?

There are lots of sites out there that list ICOs and token offerings like TokenMarket and Smithandcrown, but they are really lists more than anything and while they have some documentation on their sites, including white papers and videos, there’s not a lot of rigor or structure to them.

That’s why it’s so refreshing to see the latest efforts from William Mougayar of Ethereum fame, who also wrote the best selling book The Business Blockchain.  It’s called Token Filings and it has some of the things that other sites are missing.

Now it’s not finished by any stretch as William’s latest blog will tell you, but it is clearly headed in the right direction and is filling a much needed hole for both supply and demand side of ICOs and token sales.

DEMAND SIDE

There’s still a feeding frenzy around ICOs and token sales but for the outsider, it’s not always obvious which programs are just a good idea, and which are real businesses who understand how to build a product and run a business.  So whereas an offering like Uport is an interesting and useful idea for managing “identity” with public and private key management – AuthenticID has a comprehensive plan to manage identity authentication in a variety of ways that can comply with rules and regulations around the world.  Token Filings looks like it’s heading down the path of helping the demand side with more structure around the profile, market, and docs segment of their site.  As more people pay attention to this – more people on Wall Street are starting to assess these so it was time for some rigor, discipline, and maturity in organizing what’s going on.

 

SUPPLY SIDE

On the supply side of things, there’s a real frenzy of activity and it’s pretty clear from reading some of the white papers out on TokenMarket that people are rushing their ICOs out the door without dotting i’s and crossing t’s, both literally and figuratively, and that creates risk for them and for their investors.  So for example, – Tokenomics in the new Token Filings site helps companies figure out how to talk about how to define the value of how they are selling what they are selling – whether it’s the promise of a future product or whether the product already exists and it’s being mapped into the world of blockchain (UNIKRN is a great example of that).

 

So take a look and keep an eye on this site – it promises to be of great value to all of us paying attention to blockchains and cryptocurrencies.