The Blockchain Association backs Telegram in its court case; Twitter CEO donates $1 billion to battle coronavirus; plus crypto art and blockchain courts.
In every person’s life comes a choice. Whether standing at a crossroads, a cliff, or next to a door, they must, at some point or other, choose—leave or stay?
Blockchain hit that point this week, when leading figures and organizations made tough decisions that revealed the true colors of crypto’s most visible personalities: a body of industry leaders asked a New York judge to get rid of an injunction against Telegram, and Twitter CEO Jack Dorsey donated $1 billion to the fight against coronavirus. Here’s how it panned out.
Industry leaders back Telegram in ICO court case
Telegram, which is responsible for the 300 million-strong messenger app and the upcoming blockchain network, Telegram Open Network, this week received support from some of the industry’s top VC funds, exchanges, and blockchain companies.
The Blockchain Association—the industry body that counts Coinbase and Kraken among members—this week asked Judge P. Kevin Castel to uphold Telegram’s appeal against a temporary injunction that is preventing it from launching its blockchain network.
Castel awarded a temporary injunction against the network after he sided with the SEC, which since October 2019 has alleged that Telegram’s $1.7 billion token sale constituted an unregistered security sale, and was thus illegal. “The court has erred,” wrote the Blockchain Association, which argues Castel, of the New York Southern District Court, made the “wrong” decision.
The advocacy group, which made a similar request back in November, came out in full support of Telegram’s argument: That the investment contract for Grams—its platform’s native token—couldn’t constitute a securities sale, because those Grams hadn’t even been minted yet.
The investment contract for Grams was a so-called Simple Agreement for Future Tokens contract, or SAFT. Investors were just buying the rights to future Grams, and “post-launch Grams did not constitute securities” either, argued the Blockchain Association.
The Blockchain Association claimed that Judge Castel “obscured that distinction by signaling that sales of post-launch Grams by SAFT investors would involve securities.” Castel bought the SEC’s argument, it argued, that saw Telegram’s ICO as one big scheme.
David Gerard, blockchain critic, isn’t convinced. “The Association asserts that the eventual Grams won’t be securities, even as it concedes that the original placement was an offering of securities – but it doesn’t address the SEC claim that the investment contract was the whole scheme, not just parts of it,” he told Decrypt.
He doesn’t think the court will be convinced either. “The Blockchain Association’s brief is frantic handwaving. I’d be surprised if the judge pays it much heed,” he said.
Jack Dorsey gives $1 billion to fight coronavirus
Jack Dorsey, who founded Twitter and Square, has given $1 billion to the fight against coronavirus. Dorsey said the money, which is around 28% of his wealth, will be put into a limited liability company called Start Small. The money will go to fighting the virus, and any cash left over after the crisis subsides will go to “girl’s health and education”, as well as “Universal Basic Income.”
I’m moving $1B of my Square equity (~28% of my wealth) to #startsmall LLC to fund global COVID-19 relief. After we disarm this pandemic, the focus will shift to girl’s health and education, and UBI. It will operate transparently, all flows tracked here: https://t.co/hVkUczDQmz
— jack (@jack) April 7, 2020
“Why UBI and girl’s health and education? I believe they represent the best long-term solutions to the existential problems facing the world,” the 43-year-old entrepreneur tweeted. Dorsey also heralds Bitcoin as a great new way to process money. Square, his mobile payments company, has adopted the technology .
Pixelate your crypto
For those visual thinkers who are desperate to see how their crypto holdings stack up without recourse to numbers and charts, help is at hand. This week saw the launch of PixelPortfolio, a “tactile way to show off your crypto assets,” as Decrypt’s own Stephen Graves reported. “The newly-launched Android app presents your holdings of cryptocurrencies—including Bitcoin, Ethereum, Monero, Chainlink and Nano—in the form of cute retro pixel art.”
— Bighands (@Bighands_dev) April 12, 2020
The software converts deposited crypto into blocky pixel art coins and ingots. Sell some of the ingots, and they’ll explode into mountains of coins, each can each be picked up and dropped, which Graves commented makes a “satisfying ‘clink’.”
Developer “Bighands” told Decrypt that he “wanted to make something for the non-trader crypto enthusiast, something that didn’t feel like a financial application. “Pixel art worked really well for giving the app that retro and special feeling,” he said. The app supports Android, with an iOS release on the cards.
A digital court for the digital age
Researchers from the University of Tokyo and the University of British Columbia this week unveiled a design for a blockchain-based “digital court”. They hope that the platform could replace traditional courts as a venue for settling disputes and enforcing contracts.
The digital court was designed by Professors Hitoshi Matsushima from the University of Tokyo’s department of economics, and Shunya Noda from the University of British Columbia’s Vancouver School of Economics.
It “identifies and punishes parties who deviate from legal obligations such as commercial activities, but could potentially be any kind of agreement,” wrote Matsushima in a working paper.
Lawyers send off their arguments to the court’s smart contracts. Its algorithms function as judge and jury when executed, and reach a conclusion without requiring a real judge. “If the digital court judges that a party violated the agreement, the party is fined by withholding a deposit made during the initial agreement,” he added.
To disincentivize lying, the court punishes jurors for submitting inconsistent reports. In a distortion of Kantian logic, it encourages “rational agents” to vote for fractional values between acquittal and conviction.
“Providing there are more honest users than dishonest ones, which fortunately in the real world does seem to be the case, then only those who violate agreements or provide false information are punished,” said Matsushima. “Honest users incur only minute costs for use of this system.” The words “seem to be the case” are doing a lot of heavy lifting, there.
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