Thread by @ofnumbers

congrats to the @fnality and @clearmatics teams on the hard work at turning USC into its own capitalized entity:
globalcustodian.com/utility-settle…

small thread below:

i should probably put together a timeline so people could understand the significance of this development.

but in short: central bank reserves are held in a segregated account and tokenized so that they can be used for settling transactions.

this is not commercial bank money.

this puts it in a different league from faux "stablecoins" which are backed by deposits in a commercial bank and therefore take on the credit risk of those smaller banks.

here's a related article i put together on this topic last year:
fintechpolicy.org/?p=30609

another interesting characteristic of USC / Fnality is how the business, legal, economic, and technology model is tightly intertwined. because participation is P2P and requires "global state," you end up without an intermediary or a single-point-of-failure.

this is important because an actual blockchain (one with global state) is needed to prevent a Hold-Up problem created by some of the "enterprise" blockchain-ish companies:
papers.ssrn.com/sol3/papers.cf…

(tangentially discussed about 4.5 years ago too: ofnumbers.com/2015/11/02/int…)

my own little indirect history in this project was introducing @codedlogic to Hyder Jaffrey (UBS) in January 2015. later that year USC began its incubation inside Clearmatics.

(several of us joined as advisors to CM that year including @pemirdag @VitalikButerin and myself.)

unlike many other fintechs, Clearmatics (which is a client of mine at @PostOakLabs) was laser focused on creating digital cash via central banks and didn't flip-flop on its "blockchain" language.

this is important because consistency creates credibility
papers.ssrn.com/sol3/papers.cf…

for instance, it was Sams who coined the term "permissioned blockchain" in March 2015 and "DLT" in February 2016. these were precise terms at the time that have since been butchered by other fintechs and consultancies. i briefly described this last year:
diar.co/volume-2-issue…

now that the equivalent of central bank reserves are effectively on-chain, this re-opens some of the use cases that depended on cash-on-ledger which no "enterprise" company had been able to solve. some of these companies moved on to easier uses (that didn't need a blockchain?).

this touches on how the USC project has been characterized in some press as if it was "Bitcoin-like."

USC / Fnality are not attempting to redo or replicate the anarchic world of Bitcoin and its progeny, they will co-exist because of their different uses:
ofnumbers.com/2016/07/21/arc…

while most of the organizational team isn't on Twitter (they might operate illuminati lizard bots) worth following @_JohnWhelan who has played a key role in both USC as well as the @EntEthAlliance.

there are a handful of other interesting projects in development right now outside the orbit of what was described above.

when doing due diligence keep in mind that most press coverage of "blockchain" stuff is still basically Chainwashing and theatrics: ofnumbers.com/2017/02/13/cha…

if you're looking for some higher level explanations for how most "enterprise" blockchain companies are simply replacing the old boss with themselves as the key intermediary, here is a recent presentation i gave on that topic:

slideshare.net/MrCollectrix/b…

to understand a vision of how the business model of financial market infrastructures can change in the future, worth also looking @ several related articles from my colleagues regarding #dFMI
medium.com/clearmatics/df…

see also @Saronimo piece from last year diar.co/volume-2-issue…

/end shilling

this may sound like splitting hairs, but words have precise meanings otherwise it degenerates into nihilism.

if a company flip-flops around terminology in order to get invited to conferences, what else might they have flipped around and not told anyone? consistency is key.

someone emailed and asked what other projects are interesting. below are a few infrastructure ones (this is not an endorsement):

JPM coin (w/ @cmoyall's team)
@SilaMoney
@Kaleido_io
@UniswapExchange
@aztecprotocol
@ZeppelinOrg
@prylabs
@nivaura
@AccordHQ
@cosmos
@poanetwork

obviously this was a non-exhaustive list (and could include the likes of @dfinity and @PegaSysEng among others).

also, here's a recent high-level comparison between Fabric and Ethereum implementations:
kaleido.io/enterprise-blo…