November 6, 2022 | Issue 40
Elon Musk's purchase of Twitter has captured a lot of headlines. The stories highlight Elon's flip-flopping –
– I'm thinking of buying Twitter.
– No, just kidding.
– Oh wait, here's a real offer with proof of funding, let's do it, I'll sign an agreement.
– Damn, the economy changed. I'm not going ahead with the deal because my offer price is way too high and by the way, Twitter has a gazillion bots who aren't real users.
– Let's lawyer up. See you Twits in court.
– This lawsuit is stupid. Ok, I'll buy Twitter as promised.
Now that Elon's purchase is done and it's his company, the conversation has shifted to how he will transform the company.
There are concerns about one man having control of the world's public square. How will Elon, a guy who is known to be pretty filterless with his own speech, handle inflammatory, racist, or antisemitic tweets?
How will Elon transfer Twitter into a thriving business enterprise? Lots of big challenges, but Elon has an unmatched track record of solving difficult problems. Tesla – Transforming the auto industry from fossil fuel to electric vehicles. SpaceX – Modernizing and privatizing space exploration. The Boring Company – Building a transportation network underground. Neuralink – Engineering a connection between the brain and computers. This is man who should not be underestimated.
An important piece of Twitter will likely be a payments protocol that would incorporate crypto. Keep an eye on how Elon transforms Twitter.
If you want to talk crypto, reach out to me. If you want to see past issues of my crypto newsletter, go Crypto News for Realtors. Also, check out my YouTube videos and Podcast Crypto News for Realtors wherever you get your podcasts.
Have a productive week and stay crypto curious!
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▸ CHIEF TWIT ELON MUSK WILL REMAKE TWITTER
After being forced to comply with his contractual agreement to purchase Twitter for $44B, Elon Musk followed through with his stated plan to make Twitter a private company. It will be delisted from the New York Stock Exchange on November 8.
Firings started immediately with executives and the board of directors. On Friday, close to half of the employees received an email stating – "Today is your last working day at the company."
Musk's immediate focus was to cut costs and find a revenue source in addition to advertising. He announced that Twitter users could pay $8 a month for a blue check-mark that verifies the account is legitimate. This service had been free and was used by influencers, celebrities and journalists.
What's his vision for the company? During an investment conference, Musk said Twitter could become the most valuable company in the world.
One way to accomplish this would be for Musk to replicate WeChat's "super app" model and transform Twitter into an app that offers the services and features that most of us use on multiple apps. WeChat provides services to over 1.2 billion users. Some of the app services include text and voice messaging, video calls, conference calling, photo and video sharing, gaming, creating a "public account" that displays location, and digital payment services.
Given Musk's history as a PayPal founder and his interest in crypto, many crypto commentators expect that he will explore Twitter becoming a crypto payment platform.
▸ SEC Charges Trade Coin Club Founder and Promoters
The Securities & Exchange Commission brought charges against four individuals alleging that the crypto-trading membership club Trade Coin was a Ponzi scheme.
The SEC claim that the defendants enticed over 100,000 investors with false promises of making a 0.35% daily return on their investment from a trading bot. Instead, the trading club paid out returns with investor deposits.
SEC Chair Gary Gensler said, “Fraud is fraud, regardless of the types of investors you have defrauded and the types of securities used in the fraud.”
▸ NY Fed Tests Digital Currency Speed
Foreign exchange (FX) transactions take two days. In a simulation of central bank digital currency (CBDC) sending digital currencies, the process took 10 seconds.
The NY Fed's New York Innovation Center tested the speed of FX transactions using distributed ledgers.
The experiment was part of a research project looking into CBDC benefits. Michelle Neal, the head of NY Fed's market group, said, “This indicates that a modular ecosystem of ledgers has the potential for continued scalability, and that distributed ledger technology could enable settlement times well below the current industry standard of two days, with the added guarantee of atomic settlement.”
CRYPTO CLASS – Digital Asset Industry Standards – A Draft by FTX's Sam Bankman-Fried
On October 19, 2022, the CEO of FTX, Sam Bankman-Fried aka "SBF," published "Possible Digit Asset Industry Standards." It caused a lot of industry conversation because it followed news reports about Bankman-Fried meeting with key legislators on Capitol Hill.
The report discusses many important industry and regulatory issues. Here are a two of the seven standards:
● Hacks & Accountability
Hacks are an unfortunate risk to the crypto ecosystem. A common scenario is for a hacker to find a vulnerability in the computer code and steal funds from a crypto company. The hacker then communicates with the victim company (or protocol) and the parties negotiate. The protocol seeks to recover the stolen crypto and the hacker requests immunity and a reward for identifying the software vulnerability. SBF proposed an industry response:
Customers must remain whole. The hacker would not receive any money owed to customers.
The hacker agrees to cooperate and return the bulk of the assets.
The hacker gets to keep 5% or $5m, whichever is the lesser amount.
The hacker must return the funds within 24 hours.
● Tokenized Equities Blockchain technology has a lot of potential to improve traditional market infrastructure. Retail stock transactions go through a large number of entities and can take days to settle. He gave an example where there can be over 15 entities for a single investment. A settlement in USD can take months for ACH and credit cards. SBF cited an example – On January 28, 2021, retail investors bought large amounts of certain equities (GameStop and AMC) and there were billions of dollars of unsettled gains.
By contrast, digital assets can trade and settle instantly. "If Alice wants to buy SOL from Bob in return for USDC, Alice sends the USDC on-chain to Bob, Bob sends back the SOL, and a few seconds later–with just ~$0.0005 in fees–the trade has fully settled, with no outstanding settlement uncertainty or risk, and so essentially no regulatory capital necessary.
And if two platforms had a transfer or transaction between them, they could just send the appropriate asset on the blockchain to the other one, once again clearing up settlement risk in seconds.... I think that tokenizing stocks could help simplify securities settlement, providing a stronger and more equitable market structure for retail."
INFLUENCERS - People to follow
David Hoffman – @TrustlessState
Hoffman is co-founder of BanklessDao, a decentralized community with a mission to help the world be bankless. Hoffman began his professional career starting in the cryptocurrency and blockchain industry. Hoffman has been consulting and advising blockchain startups since 2017.
RESOURCES – Books, websites, podcasts, interviews, articles, videos
Most real estates and entrepreneurs know Gary Vaynerchuk (Gary Vee). One of his childhood businesses was collecting baseball cards. In 2021, when collectible NFTs became popular, he jumped into the new industry and created a line of collectible NFTs, Vee Friends.
CRYPTO WORD – Binary Code
Binary code is the most basic form of programming data that a computer can directly comprehend. It is made up of a series of 0s and 1s that is organized and structured so that it can be received and processed as part of a bigger computer application. (From CoinMarketCap)
OH, ONE MORE THING – Elon Musk tweeted on Nov 1, "Totally stole idea of charging for insults & arguments from Monty Python tbh"