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Googles blanket ban of cryptocurrency ads ends next month

Google is rolling back its ban on cryptocurrency advertisements – following a similar move made by Facebook earlier this summer, CNBC reports. Google in March was among the first of the major platforms to announce it would no longer run ban cryptocurrency ads, due to an abundance of caution around an industry where there’s so much potential for consumer harm.

Facebook, Twitter, and even Snapchat had also banned cryptocurrency ads, for similar reasons.

But Facebook moved away from its blanket ban this June, when it said it would no longer ban all cryptocurrency ads, but would rather allow those from “pre-approved advertisers” instead. It excluded ads that promoted binary options and initial coin offerings (ICOs), however.

Google is now following suit with its own policy change. The update was announced today, we’ve confirmed.

Google’s policy still bans ICOs, wallets and trading advice, CNBC reports, citing Google’s updated policy page which points to a list of banned products.

But the October 2018 policy update says that “regulated cryptocurrency exchanges” will be allowed to advertise in the U.S. and Japan.

To do so, advertisers will have to be certified with Google for the specific country where their ads will run, a process that begins in October. The policy will apply to all accounts that advertise these types of financial products, Google says.

Banning cryptocurrency ads on the part of the major platforms was a good step in terms of consumer protection, due to the amount of fraud and spam in the industry. According to the FTC, consumers lost $532 million to cryptocurrency-related scams in the first two months of 2018. An agency official also warned that consumers could lose more than $3 billion by the end of the year, because of these problems.

But for ad-dependent platforms like Facebook and Google, there’s so much money to be made here. It’s clear they wanted to find a way to let some of these advertisers back in. Google parent Alphabet makes around 86% of its total revenue from ads, CNBC noted, and booked over $54 billion in ad revenue in the first half of the year.

Google has not yet responded to a request for comment.

RIP crypto

RIP “crypto”. You had a good run.

This week veteran cryptographer Matt Blaze, finally gave in — to what must have been a near-constant, low-level drone of ‘CAn Buy Crypto.com???$$$$!’ spam — and sold the pithy domain name he registered in 1993, in the midst of the PC era crypto wars, to use as an encryption policy resource, to Monaco, a Zug, Switzerland-based payments and cryptocurrency platform startup whose self-styled mission is “accelerating the world’s transition to cryptocurrency”, positioning itself at the nexus of the current crypto craze.

So crypto.com now points to cryptocurrencies.

Which seems a fitting moment to say RIP “crypto” as shorthand terminology for an entire domain of cryptographic work that underpins so many more things than just Bitcoin or Ether or Ripple or Litecoin or Zcash — or any of the myriad digital coins that have winked (and more recently minted) into virtual existence over the last decade or so, hoping to hit the crypto jackpot.

Frankly this is not at all fair. But, linguistically, so it goes. Languages live or they die. And to live in linguistic terms means to shift your meaning as word usage ebbs and flows.

The sale of crypto.com tells us not so much that money talks, though clearly there’s that too — domain sellers were speculating that the price for crypto.com could have been a cool $5M-$10M, per this Verge report from March; though the actual price-tag paid by Monaco has not been disclosed.

Mostly it underlines that trying to push as an individual against a surging tide is hopeless. Principled, one-man-stands of linguistic resistance against the crypto(currency) craze are futile at this particular juncture of its technological development. Spam with no end in sight would worry the will of anyone.

So apologies also to the few folks who have written to complain about incorrect use of “crypto” in TC headlines. Using “cryptocurrency” is indeed more accurate if that’s what the story is about. But as a term it’s headline-unfriendly as well as being really quite a horrible mouthful.

And, well, “coin” is too generic unless you’re coin trade press.

Alternative linguistic confections — anyone for ‘cryptoc’? — were never going to fly. So cryptocurrency colloquially colonizing “crypto” was really only a matter of time, given how many joules of attention-energy are being claimed and drained in its name.

Turns out language change can have plenty to do with the price of Bitcoin.

On the flip side, any craze can be a fleeting thing, and it’s entirely possible that, in time, “crypto” could revert to its proper meaning of cryptography should the cryptocurrency hype die back, as hype is wont to do when people get bored — because something that was new and novel becomes properly understood and adopted (and thus less of a conversation starter).

Sustained acceptance can make tongue-tripping nicknames less necessary, and reset the linguistic order.

Equally, though, a nickname can stubbornly stick around for ages — outlasting any nonprofessional understanding of the logic underlying its coinage.

Or at least until evolving usage causes another terminology shift. Think, for example, of the rhythmic swings of “telephone” -> “phone” -> “mobile phone” -> “mobile”.

Crypto(currency) could ultimately even lose the ‘crypto’ prefix should the technology end up becoming so ubiquitous as to be considered synonymous with the generic term “currency”, and usurp/displace that word, sinking back into the accepted conceptual morass that envelopes the idea of money.

Of course the crypto(graphy) community have not been at all happy about the linguistic sands shifting treacherously under their foundational field.

And they do have a point, given that without their founding crypto there could be no, er, ‘crypto’…

“”Crypto” could mean encryption, cryptography, or cryptology, but never cryptocurrency,” one computing academic tells us, adding: “I’ve heard plenty of whinging about the changed meaning of “crypto” and I don’t expect a dignified fall-back.”

“Normal usage says “encryption” is only one application of “cryptography” (building schemes for encryption and similar apps) which together with “cryptanalysis” (trying to break such schemes) makes up “cryptology”,” he adds.

Certainly, don’t expect the original crypto community to migrate to alternative terminology — not willingly, and not anytime soon. Which will probably make for some confused messaging at times. But technology applying pressure points to human communications is just par for the course.

As recently as last month the content on Blaze’s (now former) website included the express declaration that: “This site does not trade in or provide services related to cryptocurrencies. It is concerned with cryptography, computer and network security, and technology policy research.”

It further capped that caveat with an explicit disclaimer — writing: “Warning: Many cryptocurrencies are scams, and I strongly advise against their use as investment vehicles.”

Visitors to crypto.com now will not encounter any such caveats. But most of these folks probably weren’t headed there looking for cautionary tales. Nor seeking Blaze’s contact details. So you really can’t blame him for moving with the times.

For the original crypto community, playing the long game and waiting for the upstart crypto usurper to get linguistically cut back down to size seems the best option.

Sure, they’ve lost this “crypto” war — but many more important crypto wars remain to be fought and (hopefully) won.

And of course, in the far-flung future, who knows how 2018’s crypto craze will be viewed? Perhaps as the pinnacle of a hype-cycle that didn’t end in the wholesale reconfiguration of business and society that the crypto oracles promise, even if they managed to shift the conversation of a certain IT crowd for a while.

On another level, given rising levels of tech-fueled disruptive uncertainty crisscrossing so many facets of life, perhaps it’s fitting for “crypto” to become something of a cipher itself, devoid of fixed meaning.

“Encryption technology is the key to the future of the information revolution,” wrote Blaze in 1996. “It allows businesses and individuals to communicate securely over any inexpensive communication platform without fear of eavesdropping.”

That sentiment at least remains constant.

VC firm SparkLabs launches a security token to let anyone invest in its accelerator programs

Ardent crypto enthusiasts believe ICOs and cryptocurrencies will replace venture capital, but what if VC investors absorb crypto into their existing operations?

That’s the thesis that SparkLabs, a U.S.-Korean firm that runs multiple global funds and early-stage accelerator programs, is putting to the test with the introduction of a security token today. The firm said it is aiming to “democratize” investment opportunities by essentially allowing anyone to buy into two of their accelerator program via the token, which will essentially let them become LP-like investors.

SparkLabs’ team’s past successes include Siri (sold to Apple) and DeepMind (sold to Google), and it claims a portfolio of over 160 startups from more than 60 countries. Its accelerator program has graduated over 80 companies, 80 percent of which the firm said have gone on to raise funding at an average of $3.5 million.

The experiment covers two of SparkLab’s new accelerator programs: a six month IOT-focused initiative in Korean smart city Songdo and Cultiv8, an accelerator for agriculture and food tech in Australia.

The firm has already raised capital for both initiatives — $5.6 million for Cultiv8 and $500,000 for the IOT program — but it is aiming to bring in at least $6 million from the token. That’s the minimum sale, while the hard cap is $30 million.

SparkLabs is working with two crypto platforms to handle the token sale in terms of KYC, operations and tapping into audiences. They are Argon Group, which has a community of crypto investors, and Swarm, a platform that connects retail investors with crypto opportunities in PE and VC funds.

ICOs and tokens are in a precarious position in the U.S. while the SEC conducts an investigation into companies that raised money via ICOs and investors who backed them. Wary of that, SparkLabs is primarily targeted non-U.S.-based investors, but it said that the token is open to accredited investors in the U.S..

Unlike traditional LPs, who wait on the fund’s lifecycle to see financial returns unless they can sneak a secondary share sale, SparkLabs plans to introduce liquidity by listing the token on security exchanges in the future. That’ll make it tradeable. But the firm doesn’t advise U.S.-based investors to trade it since that is almost certain to violate the law.

Despite the legal grey areas, the firm is keen to experiment with a token, having backed a number of crypto-based companies via traditional equity investments since 2014 and also launched its SparkChain fund.

“We think the ICO market is here to stay, it’s an avenue for fundraising [that] we think will be complementary to Series B and Series C rounds,” SparkLabs co-founder and partner Jimmy Kim told TechCrunch in an interview. “As a fund, we believe in this space, and we thought we might as well dip our toes into the water and test it out.”

A number of 500 Startups’ recent batch of companies banded together to offer their own security token earlier this year, but SparkLabs may be the first established firm to adopt the strategy officially. Already it is seeing strong interest from crypto hedge funds and individuals who are looking to diversify their crypto assets, Kim said, but the theory is fairly untested so it will be interesting to see how it is received by the wider market.

Certainly, it could be the first of many.

“We’re opening the doors to investors that we wouldn’t usually reach out to,” Kim explained. “If it works out well, we’ll obviously do it with other funds in the future.”

Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

Crypto author Paul Vigna talks about the future of token sales

Paul Vigna, along with his writing partner Michael Casey, are crypto gurus. A crypto critic and Wall Street Journal reporter, Vigna sees through the hype and looks for the value inherent in the crypto system.

Vigna and I spoke during this, the 100th episode of Technotopia. Vigna has a lot to say about the market and feels that his new book, the Truth Machine, picks up where his and Casey’s first book, The Age of Cryptocurrency left off. Now that some of the bloom has gone off the crypto rose, Vigna says things are getting more serious and far more interesting.

Technotopia is a podcast by John Biggs about a better future. You can subscribe in Stitcher, RSS, or iTunes and listen the MP3 here.

Telegram has raised an initial $850M for its billion-dollar ICO

It looks like Telegram’s billion-dollar ICO has reached its first milestone after the chat app company raised an initial $850 million, according to a filing.

A document submitted to the SEC earlier this week states that the money was raised “for the development of the TON Blockchain, the development and maintenance of Telegram Messenger and the other purposes.” The security is described as “purchase agreements for cryptocurrency” and the filing is signed by Telegram CEO Pavel Durov.

Read our earlier story for full details from Telegram’s TON white paper.

This initial sum is most likely the pre-sale stage of the ICO which, as TechCrunch reported on extensively and in detail last month, was targeted at venture capital firms and top figures in the investment community who were given deep discounts to buy Telegram’s Gram token. The pre-sale was originally targeted at raising $600 million, but demand pushed the figure up to $850 million, according to a Bloomberg report.

Telegram initially planned to raise a further $600 million to develop its TON project via a public sale that starts in March, according to documents seen by TechCrunch, but it remains to be seen whether that figure will be adjusted. Bloomberg previously suggested the public sale component would expand to $1.15 billion, bringing the total raised to nearly $2 billion if successful.

Telegram CEO Durov did not reply to an emailed request for comment at the time of writing.

Either way, the sale promises to be the largest ICO seen to date. The pre-sale figure alone tops all other ICOs held by some margin.

The sale represents the first outside investment in Telegram, which has been self-funded by Durov and his older brother Nikolai, who founded VKontakte, the social networking site often referred to as ‘Russia’s Facebook.’ The duo fled Russia in 2014 after a fall-out with investors, who they claim had links to the government, and they later set up Telegram.

Demand around the token sale has been unprecedented, primarily because of Telegram’s unique position within the crypto community. Its messaging app is used by the majority of ICO projects, with its group feature particularly popular among crypto watchers — that includes more shady elements such as ‘pump and dump’ scammers.

Quartz recently reported that pre-sale investors are selling their allocation for upwards of double the price, while others had stayed away from the sale out of caution. There has certainly been hype, with a bevy scammers setting up fake websites and campaigns to cash in on the interest, as TechCrunch wrote last month.

As for the project itself, Telegram is aiming to develop a series of services alongside its messaging app, including:

  • Distributed file storage akin to services like Dropcoin and ICO company Filecoin
  • A proxy service for creating decentralized VPN services and TOR-like secure browsing environments based on the blockchain
  • Services for decentralized apps, smart contracts and decentralized web browsing experiences
  • Payments for micropayments and peer-to-peer transactions

An early ‘MVP’ version of TON is scheduled for release in Q2 2018 with the Telegram wallet service penciled for the final quarter of the year. Beyond that, its TON services are planned to launch in 2019 but Telegram is still to develop the underlying technology that it claims will enable them.

Despite that, it has been busy shipping new products this year.

Earlier this month, Telegram introduced new versions of its messaging apps for Android and iOS, although its apps were briefly removed for download by Apple after some users were found to be sharing child pornography on them. The company also released a web plug-in allowing businesses to connect with users via the messaging app.

Note: The author owns a small amount of cryptocurrency.

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