Thursday, May 19, 2022

Featured Archives: Bitcoin Raises Its Profile But Investors Demand More

The Irish Times
Monday, August 4, 2014

https://www.irishtimes.com/business/bitcoin-raises-its-profile-but-investors-demand-more-1.1884918

The Bitcoin Foundation’s executive director, Jon Matonis, travels the world to promote the virtual currency as a replacement for traditional money. Some of his members want him to focus on a less lofty goal: helping them make lots of old-fashioned cash.

Matonis, a longtime advocate of what he calls “non- political money”, has built the group into a kind of a bitcoin governing body. Last week, he unveiled a website aimed at raising the virtual currency’s public profile. Some foundation members are dismayed by Matonis’ leadership and grander plans.

Investors from Silicon Valley, in particular, would like the group to focus on more technical matters, particularly fortifying the underlying bitcoin software so it can grow into a viable, large-scale payment network.

Running the foundation is like “going downhill in a go- cart trying to keep the wheels on,” Matonis said. “There are different constituencies going in different directions.”

Venture capitalists and entrepreneurs, lured by the technology’s promise, have ploughed time and money into bitcoin businesses – and they’re demanding software upgrades to develop the digital currency’s commercial potential.

“The impact of the bitcoin protocol is economic,” Jeremy Allaire, chief executive of Circle Internet Financial, a bitcoin start-up. “These are higher stakes than with other open-source software.”

The organisation, established in 2012 and modelled on the Linux Foundation, the open-source operating system created in the early 1990s, has tried to mix stewardship of the code with political advocacy.
Digital assets

Unlike Linux, bitcoin rapidly became a channel for billions of dollars in transactions, making security and capacity bottom-line issues for entrepreneurs.

Matonis said that pressure to invest more in bitcoin’s computer code reflects a “fight over who controls the policy dialogue”, and whether the group will continue to fund lobbying. “Tech investors want to make sure that all the resources in the world are there on the tech side,” he said.

Bitcoins are part of a software system that transfers digital assets from owner to owner without using a third party. Start-ups are seeking to use the innovation to disrupt the existing payment system dominated by firms such as JPMorgan Chase, Visa and Western Union.

The core software managed by the foundation contains instructions that let computers communicate with one another to verify transactions on bitcoin’s public ledger, called the blockchain.

Another program enables users to conduct those transactions. Software upgrades are made through an informal system of mostly part- time developers who communicate in internet chat rooms.

Gavin Andresen, the foundation’s chief scientist, was until May the only paid coder working on bitcoin. Online discussions sometimes devolve into virtual shouting matches, according to Andresen.

This year, the bitcoin network processed between $20 million and $580 million per day in transactions, according to the data aggregated on blockchain.info.

“This is not sustainable,” said Mike Hearn, one of bitcoin’s core developers. “You can’t have an infrastructure held together by chewing gum and sticky tape and people who work evenings and weekends.”

Software upgrades have helped ward off hacking and increased commercial utility. A change in March, for example, improved the security of transactions conducted through online merchants by adapting bitcoin software to the Internet’s existing system for authenticating websites.

That tweak pales in comparison to the “non-trivial problem” of raising the number of transactions the bitcoin network can process, Allaire said. The system can handle about nine transactions per second, far off the roughly 2,400 on Visa’s network. Investors have raised the idea of earmarking donations to the foundation for work on the software.

“A lot of people would give a million dollars if it would go solely to development,” said Brock Pierce, a venture capitalist who was recently elected to the foundation’s board. Under pressure from the entrepreneur side, the foundation has commissioned a “feasibility study” to determine whether the software development could happen as part of a partnership with a major university, Matonis said.

Digital wallets

“If we don’t have the underlying core development, it diminishes the other policy and advocacy work we do,” he said. Matonis has frequently argued that bitcoin is a political project that will displace money issued by governments, and has at times disavowed close work with regulators.

“The foundation is not pro-regulation as some have claimed, but it is pro-education,” he wrote when he became its director in 2012. He has dismissed money laundering as an overly broad category of crime, “like buying a drive-thru donut in a stolen vehicle”.

Many entrepreneurs are keen to dodge the politics that Matonis courts. Nic Cary, the chief executive officer of Blockchain, the largest website for creating digital wallets to hold bitcoins, said the group should improve software and promote consumer adoption of the virtual currency.

“What we’ve seen is a lot of mission creep,” Cary said. “We need to fund the people who are working on development.”

Matonis and the other founders of the group have rules on their side. They set up a system in which individual members elect the same number of board members – three – as do all the corporate members. That has raised the possibility, mentioned by Matonis at a meeting in Amsterdam in May, that the foundation could split. The Electronic Frontier Foundation, an early Internet advocacy group, spun out the Washington-based Center for Democracy and Technology in 1994 after similar conflicts.

Matonis told his members that he won’t go quietly if the Bitcoin Foundation cracks. “If we’re going to fracture,” Matonis said in May, “I want to make sure I’m running the one we remember.” – Bloomberg

Sunday, May 1, 2022

Featured Archives: Economic Fallacies and the Block Size Limit

By Justus Ranvier
February 9, 2015

Part 1, Scarcity: 
http://web.archive.org/web/20160423041910/https://bitcoinism.liberty.me/economic-fallacies-and-the-block-size-limit-part-1-scarcity/

Part 2, Price Discovery: 
http://web.archive.org/web/20160318120539/https://bitcoinism.liberty.me/economic-fallacies-and-the-block-size-limit-part-2-price-discovery/

The average size of a block is approaching the 1 MB protocol limit for the first time in Bitcoins history, and not everybody agrees regarding what to do about it. Many objections to raising or removing the block size limit are based on misunderstandings about the nature of economic scarcity and operation of markets in general.

ECONOMIC FALLACIES AND THE BLOCK SIZE LIMIT

This is the first article in a series about the economics of the Bitcoin protocols block size limit. This article covers scarcity. The second article covers price discovery and the third article will cover why the block reward is fundamentally different than the block size.

Production Quotas

As you may have heard, Bitcoin usage is growing. In every way, that graph represents the kind of healthy exponential adoption that we all want to see.

Unfortunately there's a problem on the horizon which threatens to stop or even reverse Bitcoin adoption.

Several years ago, Satoshi added a protocol limit to the maximum size of a Bitcoin block. Prior to this change, there was no explicit limit, just an implicit 32 megabyte maximum message size. This limit was explained as a temporary anti-spam measure, and Satoshi said at the time that it could be raised when the network needed the additional capability.

The economic effect of having a maximum block size is that of a production quota. Production quotas are tools of economic central planning that either mandate or limit the amount of production of a good or service, as opposed to allowing the production rates to be governed by supply and demand.

Production quotas are inherently harmful to an economy, as shown in the 1920 essay, Economic Calculation in the Socialist Commonwealth, and so do not represent a sustainable long term strategy for allocating the supply of Bitcoin transactions.

From the time it was implemented until now, the harm caused by the block size limit has been hypothetical rather than real since there has not yet been enough demand for Bitcoin transactions to be hampered by the limit. For the last few years, the block size limit has been like a minimum wage law that forbids salaries lower than $0.01 per year. There is no market demand for salaries that low, and so such a minimum wage law might as well not exist it has no effect on the economy. Likewise, the 1 MB block size limit has not yet had any effect on the Bitcoin economy since there has not yet been a market demand for more than 1 MB of transactions every 10 minutes.

Since its inception, Bitcoin has been operating as if there was no block size limit at all. If this limit is kept in place when the market demand for transactions rises above 1 MB/10 minutes, then suddenly Bitcoin will be in uncharted economic territory.

People will want to use Bitcoin, but they will be forbidden by protocol from doing so. No matter how much they are willing to pay, no matter how willing miners are to include their transactions in a block, no matter how willing the full node operators are to forward their transactions, they simply wont be allowed to transact.

A block size limit that is low enough to have a real effect on actual block sizes is the ultimate blacklist.

The Alternative to Central Planning

The best alternative to a production quota on Bitcoin transactions is, like in any other situation of central planning, to allow the market to decide the optimum block size.

Nobody gives McDonalds a maximum number of Big Macs they are allowed to produce each day their customers tell them how many they want to buy and McDonalds responds appropriately. At any given time, there exists a price at which the willingness of McDonalds to produce Big Macs is exactly equal to the willingness of their customers to buy them, and that determines the number that will be produced. The process of price discovery is an emergent property of the actions of millions of independent actors expressing their preferences in a competitive open market.

This is exactly how we want Bitcoin to behave. The Bitcoin network, like any other product or service in the economy, should change its production capability to respond to supply and demand.

It is not currently designed to do this, however, and one of the barriers preventing Bitcoin from being improved in this way is a series of economic fallacies or misconceptions that cause otherwise skilled people to distrust market-driven price discovery over central planning, or to assume that resource allocation in computer networks operates in a manner fundamentally different than resource allocation in any other part of the economy.

Objections to Market-Determined Block Sizes

"Transaction fees are too low and won't rise unless space in a block is scarce. We need a block size limit to ensure block space scarcity and thus price transactions."

This objection is based on a common misunderstanding of the word scarcity as it applies to economics.

In economic terms, something is scarce if people cant have an infinite amount of it at a price of zero.

On the surface of the Earth, air is not scarce. Its not scarce because every human can breathe as much as they are capable of breathing, without paying for the air, and theres still enough to go around. Because everybody can consume as much as they are capable of without reducing anyone elses ability to do the same, air does not require allocation. In practical terms, the amount of available air at a price of zero is infinite, therefore air is not scarce.

Almost everything else is scarce, certainly any services that require time and/or energy to produce.

The space in a block will always be scarce as long as our computers are still made of matter and still occupy space. Constructing a block isn't free, storing a block isn't free, and the bandwidth needed to transmit a block is not free.

There will always exist some cost to a miner to add a transaction to a block. That cost may be very small, but it will never be zero.

If transaction fees emerge from the operation of a competitive open market, then we would expect them to approach the marginal cost of production, plus a small profit margin.

What if the the market-set block size is so big that only Google can afford to run full nodes?

This is a real problem that could emerge, and is actually the reason that the block size limit was enacted in the first place.

The reason this could happen is because of poor P2P network design: miners do not need to pay the cost of relaying blocks throughout the network, therefore this cost becomes an externality which is not reflected in their marginal cost of production.

The solution to this objection is a better P2P network design, not a production quota that limits the maximum transaction rate.

A description of how to build a better P2P network will be the subject of a future article.

What if the market-set transaction fee doesn't pay enough for a hash rate that protects the network for well-funded adversaries?

If there is not enough market demand for Bitcoin transactions such to pay for sufficient hashing power to protect the network, then Bitcoin will fail.

This will happen with or without a block size limit.

Since its inception, Bitcoin has been on a collision course with extremely well funded, entitled, and politically powerful interests. Its only hope of surviving this collision is by attracting a very broad base of support.

Bitcoin needs millions, and then billions, of users who demand better money. The demand for Bitcoin must be strong enough that they will break the law if that's what it takes to obtain it.

The above strategy isn't particularly novel or extreme  this strategy has been employed in the conflict between peer-to-peer filesharing networks vs the copyright mafia, and more recently by ridesharing companies vs the taxi licensing cartels.

When a new technology has to compete against entrenched interests on a non-level political playing field, civil disobedience is a proven effective tactic.

We don't yet know whether or not Bitcoin will gain enough of the right kind of support it needs to survive.

We can say, however, that arbitrarily rationing the transaction rate is counterproductive toward achieving that end.

What if competition results in the profitability of mining being so low that it drives out smaller pools and Bitcoin mining converges to a monopoly?

This objection is a restatement of the natural monopoly argument, and is in no way specific to Bitcoin.

Natural monopoly as an economic theory has been conclusively debunked, and the same principles that explain why natural monopolies do not emerge from free market forces in classically-cited industries apply equally well to Bitcoin mining.

Rather than repeat those arguments here, anyone who is concerned about natural monopolies should read The Myth of Natural Monopoly by Thomas J. DiLorenzo.

If the market should set the block size, why shouldn't it also set the block reward?

This objection is based either on a fundamental misunderstanding on the nature of money, or else on the misconception that Bitcoins value is not derived from its monetary properties.

Exploring these misconceptions fully will be the subject of a future article.

This concludes part 1. Future articles in this series will address the subject of how to build economically-scalable P2P networks, and why the block reward is fundamentally different than the block size limit.

Tuesday, June 22, 2021

Cypherpunk Holdings Joins the Cypherpunk Guild Council

News Release

Toronto, Ontario--(Newsfile Corp. - June 22, 2021) - Cypherpunk Holdings Inc. (CSE: HODL) (OTC Pink: KHRIF) (the "Company"), a sector leader for privacy technology investments, is pleased to announce it has joined the Cypherpunk Guild Council on NEAR Protocol, which is focused on funding the deployment of the next generation of privacy solutions.

Chief Economist and director of Cypherpunk Holdings, Jon Matonis, has joined the Cypherpunk Guild Council as a representative of the Company. The Cypherpunk Guild Council is a new initiative funded entirely by the NEAR Foundation in order to support the development of privacy infrastructure on the NEAR Protocol blockchain platform and beyond, and to increase the overall deal flow for the sector.

"Cypherpunk Holdings' support for the Cypherpunk Guild Council is rooted in our belief that privacy solutions must be encouraged and actively developed across different crypto ecosystems," said Mr. Matonis. "As an organization that seeks to embody the original cypherpunk mission, we look forward to supporting a host of new privacy applications that will both strengthen the community over time and engage a new generation of users. Through its participation in the Cypherpunk Guild Council, the Company aims to benefit from early deal flow access to investment opportunities."

Seeded with 100,000 NEAR, the Cypherpunk Guild is led by second-generation cypherpunks Arto Bendiken and Frank Braun. The initiative was created to incubate a community of privacy advocates, developers and entrepreneurs interested in building robust privacy solutions on NEAR Protocol.

As a core member of the Cypherpunk Guild Council, the Company expects that Mr. Matonis will hold a direct influence and voice on the funding and resource allocation of the Guild. Since launching in early April, the Cypherpunk Guild Council has funded two projects to fully develop privacy transactions on NEAR Protocol, Suter Shield and Zecrey. Support is actively being provided to a third project: ZeroPool.

A Fund For Privacy Solutions Is Here: Submit a Proposal Today

As an experienced community of privacy advocates, the Cypherpunk Guild has emerged as one of the most popular guilds on NEAR Protocol, and one of the most serious privacy organizations in crypto. With hundreds of thousands of dollars in funding available, the Cypherpunk Guild is openly encouraging privacy-related proposals for new applications. Any project in line with the mission of NEAR Protocol is considered and evaluated after the project proposal is posted on the NEAR Governance Forum.

To join the Cypherpunk Guild community or to stay up to date with the latest updates, interested users can follow on Twitter (https://twitter.com/CypherpunkGuild) or join the community Matrix group.

About Cypherpunk Guild:

The Cypherpunk Guild is a group of privacy-minded developers, marketers and entrepreneurs, collaborating to pioneer a future built around private transactions on NEAR Protocol and the larger crypto ecosystem. Led by two second-generation cypherpunks, the Cypherpunk Guild supports the development of privacy applications on the Open Web as a means of safeguarding user privacy and freedom.

About Cypherpunk Holdings Inc.

Cypherpunk Holdings invests in companies, technologies and protocols which enhance or protect privacy. Its strategy is to make targeted investments in businesses and assets with strong privacy, often within the blockchain ecosystem, including select cryptocurrencies. Current equity investments include Samourai Wallet, Wasabi Wallet, Chia Network, NGRAVE, and Hydro 66.

Cautionary Note Regarding Forward-Looking Information

This news release contains "forward-looking information" within the meaning of applicable securities laws. Generally, any statements that are not historical facts may contain forward-looking information, and forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or indicates that certain actions, events or results "may", "could", "would", "might" or "will be" taken, "occur" or "be achieved". Forward-looking information includes, but is not limited to the Company's planned participation in the Cypherpunk Guild Council and the Company's expected benefits therefrom. There is no assurance that the Company's plans or objectives will be implemented as set out herein, or at all. Forward-looking information is based on certain factors and assumptions the Company believes to be reasonable at the time such statements are made and is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information. Such factors include the historical price volatility of bitcoin; uncertainty regarding the regulatory treatment of bitcoin under various securities, commodities, and other regulatory regimes; the potential for significant impairment charges to the Company's earnings in the event of a decrease in the price of bitcoin and resulting volatility in the Company's reported assets and earnings; the potential for security breaches or other cyberattacks that could result in a partial or total loss of the Company's bitcoin assets; and other risks detailed in the Company's disclosure documents filed under its profile on www.sedar.com. There can be no assurance that such forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by law. Investors are cautioned against attributing undue certainty to forward-looking statements.

Investor Relations Contacts:

veronika@cypherpunkholdings.com, Veronika Oswald, Investor Relations

Cypherpunk Holdings Inc.,

Office: +1 416.599.8547 & +44 (0) 20 3143 7418

Monday, March 15, 2021

The Alt-Currency Martyr

By Brian Doherty
Reason Magazine
Monday, March 15, 2021

https://reason.com/2021/03/13/the-alt-currency-martyr/












In the mid-1990s, just before the arrival of PayPal and more than a decade before bitcoin, an oncologist from Florida named Douglas Jackson created a system by which people could send each other digital payment tokens backed by gold. Jackson's e-gold became the world's first truly successful digital currency, serving over half a million customers and doing billions of dollars' worth of business.

But after a decade of success, the feds came after him, raiding his company's office, taking computers, freezing bank accounts, and ultimately extracting a guilty plea for conspiring in an "unlicensed money transmitting business." Once trailblazing, e-gold was quickly forgotten, derailed first by legal hassles and then by the tsunami of interest in blockchain technology.

Now Jackson has uncovered information that he thinks can not only overturn his conviction, and thus ease the path to him restarting his business, but help wean alt-currency from what he regards as a ruinous addiction to Satoshi Nakamoto's brainchild. While the value the markets place on cryptocurrency keeps rising precipitously and no e-currency model closely emulating e-gold has grabbed significant market share in its wake, Jackson remains convinced that if he could only get back in the game, things would be very different. The guilty plea that he now insists was squeezed from him through government trickery blocks his doing legal business in the e-currency space.

"It's as if I'm the only person in the world not allowed to go and compete in this area where I'd pioneered the industry," he says. "It's like everything came off the rails and it's been a decade of unprecedented malinvestment."


Wednesday, February 24, 2021

Cypherpunk Guild Launches on NEAR

By Cypherpunk Guild
Medium
Wednesday, February 24, 2021

https://medium.com/nearprotocol/cypherpunk-guild-launches-on-near-dd6c492038f6

Privacy Advocates, It’s Time To Pay Attention

Image for post

Privacy is a topic that has become more prominent in recent years, as awareness surrounding unwarranted data collection has increased. An entire generation of Silicon Valley products, starting with Google, inaugurated what has been aptly coined Surveillance Capitalism. These products, unlike traditional software services, offer users an experience in return for their personal data. Complex partnerships between intelligence agencies, financial institutions, and tech behemoths have resulted in a march towards dystopia that few would deny, and that Cypherpunks have long foreseen.

On the NEAR Protocol, the Cypherpunk Guild has officially launched as the largest community funded initiative to date. This launch is one of the most exciting events in all of crypto. For the first time, a group of privacy minded developers, marketers, and entrepreneurs, are jointly collaborating to pioneer a future built around private transactions on NEAR, and private applications on the Open Web. It could not be more timely, more necessary, or more in line with the original mission of Bitcoin and related cryptocurrencies.

Cypherpunks Write Code

Image for post
An excerpt from the Cypherpunk Manifesto

Cypherpunks are not well known today, because they have largely been forgotten or deplatformed. Arto Bendiken, the leading force behind the creation of the Cypherpunk Guild, explains the long and rich history of cypherpunk software contributions in the Cypherpunk Guild Proposal:

The Cypherpunk Guild is continuing that tradition today, by incubating a next-generation of privacy solutions on the Open Web.

Image for post
May/June 1993 cover of Wired (source)

When Eric Hughes wrote the Cypherpunk Manifesto, he spoke to the need for privacy in a free society:

Open-Source protocols, building in the Metaverse, are equally relevant to the same demand. If NEAR wishes to successfully birth the open, decentralized, and permissionless digital society that it aspires to create, then including privacy is a fundamental and essential component of that vision. That is why the Cypherpunk Guild matters.

The Mission and Activities of the Cypherpunk Guild

The Cypherpunk Guild has applied for funding of 100k $NEAR for the next 18 months, to start building the future of privacy on NEAR. The first, and overarching priority of the Guild, will be to Get Private Transactions built into NEAR. In parallel to completing this milestone, the Cypherpunk Guild will work to recruit the next generation of privacy minded entrepreneurs, developers and Cypherpunks to launch privacy minded and user-first solutions.

Image for post
An unencrypted transaction.
Image for post
Encrypted transaction.

What is important to note is that these initiatives come at a time when other Layer 1s are only starting to take privacy concerns seriously. As Arto writes in the proposal, launching Cypherpunk Guild today gives NEAR a first mover advantage in the space, and a high likelihood of attracting other Cypherpunks and privacy minded developers to the protocol.

In summary Cypherpunk Guild aspires to bring the following to NEAR:

  • Private Transactions to NEAR Smart Contracts.
  • Developer, Entrepreneur, and Enterprise Support for Privacy Solutions in Web3
  • A hub for new and existing Cypherpunks, at a time when privacy concerns are increasing significantly.
  • Starting new conversations, hosting events, and enabling the next-generation of Cypherpunks through meetups, forum discussions, and online events.

Who Sits on the Council of Cypherpunk Guild?

Image for post
Image source

An important indicator of the seriousness and future potential of the Cypherpunk Guild, are the founding council members involved in growing the guild over the next 18 months.

  • Arto Bendiken: An original member of the Cypherpunk movement dating back to the 1990s. Outspoken privacy advocate. Digital Nomad, Hacker, public speaker, and software engineer with more than 20 years of experience working in entrepreneurial ventures. For a general overview of Arto’s past experience and beliefs see his Humans of NEAR Interview.
  • Frank Braun: Doctor in Computer Science (PhD). Seasoned Software Engineer and Cypherpunk Activist. Host of the Cypherpunk Bitstream Podcast, featured in the Down the Deep Dark Web Documentary. For a more detailed overview of Frank’s life and previous ventures see his Humans of NEAR Interview.
  • Jon Matonis: Director and Chief Economist of Cypherpunk Holdings (the 9th largest Bitcoin wallet in the world). Founding Director of the Bitcoin Foundation. Over the course of his professional career Jon has held senior positions at Sumitomo Bank, Hushmail, VISA and VeriSign.
  • Evgeny “Eugene The Dream” Kuzyakov: ICPC gold medalist (2008). Eugene brings a career of software development experience starting at Google, moving onto Facebook, and since focused on Machine Learning and blockchain research. He currently works for NEAR.
  • Yulian Lavysh: Business Development and Marketing Expert at NEAR bringing over 5 years of experience working at high growth startups at the intersection of data, software development, marketing and business growth strategies.
  • Dani Osorio: Dani brings over 12 years of experience to high-growth startups. Previously having worked for Infura, as Director of Global Partnerships and Marketing, and ConsenSys as Executive Director of developer tools, Dani is intimately familiar with a diverse array of stakeholders across the crypto industry. She currently works on the NEAR Developer Relations team.
  • Ozymandius: Founder of 4NTS Guild, the first guild in the NEAR Ecosystem.

From what is publicly available, there is no better group of Cypherpunks and privacy advocates working jointly to advance the Cypherpunk mission in the Web3 space. From IPCC Gold Medalists, to serial entrepreneurs, monetary economists, Computer Science PhDs, and long-time business development and management experts, the Cypherpunk Guild is uniquely positioned to incubate and develop a host of privacy solutions on NEAR over the long term.

Get Involved In The Cypherpunk Guild

Image for post
Learn more about Cypherpunks on the Cypherpunk Bitstream podcast hosted by founding guild member Frank Braun

The Cypherpunk Guild is a new guild. It needs passionate and committed guild members to advance the cypherpunk mission and vision of bringing privacy and freedom to the Open Web and beyond. As Eric Hughes originally wrote:

To get involved you can join the discussion on the Cypherpunk Community Chat or follow the Cypherpunk Guild on Twitter.

“We have to make privacy profitable.” — Jon Matonis, Director and Chief Economist of Cypherpunk Holdings

Friday, January 1, 2021

Cypherpunk Holdings Inc. Invests in Next-Generation Hardware Wallet Company NGRAVE

MarketWatch
News Release
Wednesday, December 30, 2020

https://www.marketwatch.com/press-release/cypherpunk-holdings-inc-invests-in-next-generation-hardware-wallet-company-ngrave-2020-12-30

Toronto, Ontario, Dec 30, 2020 (Newsfile Corp via COMTEX) -- Toronto, Ontario--(Newsfile Corp. - December 30, 2020) - Cypherpunk Holdings Inc. (CSE: HODL) ("Cypherpunk" or the "Company") is pleased to announce that it has completed a convertible note investment in NGRAVE.IO ("NGRAVE"). NGRAVE's flagship product "ZERO" - also known as "The Coldest Wallet" - is a fully offline hardware wallet that features the world's highest security certification, EAL7, for its secure operating system.

Under the terms of the transaction, Cypherpunk Holdings invested an initial €100,000 via a convertible loan agreement which also includes the right to participate in NGRAVE's Series A financing round for an additional undisclosed amount, which is expected in first quarter 2021.

The ZERO is the most secure hardware wallet ever made, and the corner stone of NGRAVE's impenetrable security ecosystem. Conceptualised and built from scratch in close collaboration with world leading institutes in chip manufacturing, applied cryptography, and hardware security, the ZERO comes with an unparalleled level of inherent anti-tampering. The ZERO is completely offline, from secret key generation to transaction signing, keeping your holdings away from any online attack vector.

Belgium-based NGRAVE is a digital asset and blockchain security provider offering a secure and user-friendly end-to-end solution for the management of individuals' and businesses' digital assets and cryptocurrencies. Additionally, the company introduces multiple innovations with GRAPHENE, the industry's first recoverable and encrypted backup.

Commenting on the investment, Cypherpunk Holdings President and CEO, Antanas "Tony" Guoga, stated, "The NGRAVE team has a significant lead over comparable competition in the space and they provide an excellent complement to our existing portfolio of secure privacy-based wallets. This initial investment into NGRAVE sets the stage for our continued participation in the company's future growth."

As the sector leader for privacy-technology wallet investments, Cypherpunk Holdings will also contribute advice and expertise on rapid management team development and matters of corporate governance. The Cypherpunk Holdings management team is led by investor, serial poker champion and former member of European Parliament Tony Guoga as CEO, with Moe Adham serving as Chief Investment Officer and Jon Matonis serving as Chief Economist. Moe is the founder and CEO of Canadian ATM leader Bitaccess. Jon is a founding Director of the original Bitcoin Foundation and previously Head of Foreign Exchange Trading at VISA International.

NGRAVE'S CEO, Ruben Merre added, "In Cypherpunk Holdings, we believe we have found not only an investor, but a strategic partner with whom we share common interests and goals regarding privacy. Cypherpunk Holding's ticker symbol 'HODL' is an interesting word play on the most effective use case of ZERO: keeping your crypto safe for the long term. We look forward to working together as we continue to grow the business of NGRAVE."

NGRAVE previously made headlines by onboarding Jean-Jacques Quisquater, legendary cryptography professor and second reference of the bitcoin paper, to its team, as well as raising a record amount of more than 450KUSD in sales through its Indiegogo pre-order campaign in June 2020.

Cypherpunk Holdings Inc. invests in the companies, technologies and protocols which enhance or protect privacy. Its strategy is to make targeted investments in businesses and assets with strong privacy, often within the blockchain ecosystem, including select cryptocurrencies. Cypherpunk's common shares trade on the Canadian Securities Exchange under the symbol(CSE: HODL). For further information on NGRAVE, please contact investments@ngrave.io.

Cautionary Note Regarding Forward-Looking Information


This news release contains "forward-looking information" within the meaning of applicable securities laws. Generally, any statements that are not historical facts may contain forward-looking information, and forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or indicates that certain actions, events or results "may", "could", "would", "might" or "will be" taken, "occur" or "be achieved". Forward-looking information includes, but is not limited to the Company's goal of making investments in businesses and assets with strong privacy, within the blockchain ecosystem, including select cryptocurrencies, or otherwise and enhancing value. There is no assurance that the Company's plans or objectives will be implemented as set out herein, or at all. Forward-looking information is based on certain factors and assumptions the Company believes to be reasonable at the time such statements are made and is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information. There can be no assurance that such forward- looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by law. Investors are cautioned against attributing undue certainty to forward-looking statements.

Investor Relations Contact:
Veronika Oswald
veronika@cypherpunkholdings.com

Cypherpunk Holdings Inc.
130 King Street West
The Exchange Tower, Suite 3680
Toronto, ON
M5X 1B1
Telephone: 416.599.8547
Website: cypherpunkholdings.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/71177

Monday, October 19, 2020

Bitcoin Bar 'Room 77' Shuts Down

By Jeffrey Gogo
Bitcoin.com
Monday, October 19, 2020

https://news.bitcoin.com/mission-accomplished-worlds-first-bitcoin-bar-shuts-down/

Room 77, the German bar and restaurant that claims to be the first retail outfit in the world to accept bitcoin payments, has shut down. Cypherpunk Holdings chief economist Jon Matonis broke the news on Twitter. Bar owner Jorg Platzer later confirmed it on Reddit.

“Room 77 is closing for good,” Platzer revealed in a rather futuristic, celebratory post on Oct. 18. “We think our mission is accomplished and it is time to go back to our home planet. Thanks for all the fish and the generous tips!”

No official reason was given for the closure of the Berlin-based joint. But there’s suspicion this may have been related to the coronavirus pandemic. Lockdown restrictions linked to Covid-19 have hit the global hospitality industry hard.

In Berlin, strict restrictions on the sale of alcohol remain in place, with bar operators banned from selling the product from 11 p.m. to 6 a.m. The measures have badly affected profits.

Located in Kreuzberg, Berlin, Room 77 began accepting bitcoin (BTC) as a means of payment in 2011, becoming the first bar, and most likely the first private retail outlet, in the world to do so. Since then, the drinking spot has developed into something of a pilgrimage site for bitcoiners, who patronize the place for its BTC payments and more.

“Before we did that (accept BTC), all media coverage about bitcoin was about hackers stealing credit card details and selling them on the black markets,” Platzer said in a 2018 interview, highlighting how the establishment had changed media perceptions and coverage around the top cryptocurrency.

In the crypto community, people responded to Room 77’s closure with fond memories of the past.

“End of an Era: Room 77 in Berlin closes doors permanently!” tweeted Jon Matonis, the Cypherpunk Holdings chief economist. “Blame it on Covid or blame it on gentrification. Either way, this Kreuzberg landmark has served as a Bitcoin watering hole for over 10 years, with thousands making the obligatory pilgrimage. Thx for the memories, Joerg!”

Redditor @etrnetm said: “Thanks for providing the unofficial embassy of Bitcoin in Berlin to us earthlings. We shall meet again.”

In his Reddit post, Platzer concluded:
It is clear by now that nobody will stop bitcoin anymore. Sound money on a global scale will soon make it unfeasable to wage wars and it will create economic equality amongst mankind. We estimate it will take you less than another century to rise and join the intergalactic community.