Enigma Weekly 24/01/2019 - Grin and Bear it...

www.enigma-securities.io info@enigma-securities.io
DISCLAMER: The information contained in this note issued by Enigma Securities Limited is not intended to be advice nor a recommendation concerning cryptocurrency
investment nor an offer or solicitation to buy or sell any cryptocurrency or related financial instrument. While we provide this information in good faith it is not intended to
be relied upon by you and we accept no liability nor assume any responsibility for the consequences of any reliance that may be placed upon this note. Enigma Securities
Limited is an Appointed Representative of Makor Securities London Ltd which is authorized and regulated by the Financial Conduct Authority (625054).
7/8 Savile Row
London, W1S 3PE
U.K.
Tel: +44 207 290 5777
336 Rue Saint-Honoré
Paris, 75001
FRANCE
Tel: +33 1 42 33 02 05
Menachem Begin 11
Ramat Gan, 5268104
ISRAEL
Tel: +972 3 545 3777
24 January 2019
The Enigma Weekly
De-Coding Crypto
Our Market View
‘Grin’ and bear it…
As another slow week draws to a close, we take a look at Grin, the new cryptocurrency based on the “MimbleWimble” protocol.
In a world where tech giants such as Facebook are increasingly coming under fire for their use of customer data, privacy is one
area where crypto can differentiate itself. Grin makes use of a blockchain that was purpose-built to conceal wallet addresses and
transaction amounts. Despite poor trading performance since the launch, the technology is worth keeping an eye on.
Meanwhile, Bakkt’s launch is delayed due to the government shutdown. Nevertheless, the company is not slowing down. Recent
job posting indicate the company plans to make a number of high profile hires. We, at Enigma, view the launch delay as an
unfortunate outcome given the expectation around the start of 2019. Bakkt was supposed to kick off a better year for the crypto
market. With further delays, we feel that investors are becoming increasingly sceptical about the integrity of crypto deadlines
and launch dates. This is an added obstacle in a market that is searching for positive catalysts. We continue to wait.
In the meantime, we are encouraged to see adoption initiatives in full swing across the globe. We were lucky enough to visit the
offices of KeplerK in Paris recently. The company is behind a promising initiative to sell Bitcoin in tobacco shops across France.
Ultimately, we view crypto as an investment, not a “lottery ticket.” Yet, getting the public engaged is an important first step.
Performance Snapshot as of 10am GMT 24/01
Name Ticker Wk Close Wk Change YTD Change Record High Mkt Cap
Bitcoin BTC $3,580.020 -0.8% -7.0% $20,089.00 $62,613,984,987
Ripple XRP $0.319 -3.0% -12.9% $3.84 $12,955,186,893
Ethereum ETH $117.330 -3.7% -20.5% $1,432.88 $12,109,388,447
Bitcoin Cash BCH $128.720 0.1% -21.0% $4,355.62 $2,263,274,905
EOS EOS $2.490 2.5% -8.8% $22.89 $2,202,259,294
Tether USDT $1.010 0.0% -2.9% $1.22 $2,036,945,880
Stellar XLM $0.101 -4.4% -11.4% $0.93 $1,939,867,233
Litecoin LTC $31.580 1.5% -1.9% $375.29 $1,899,751,738
TRON TRX $0.027 9.9% 35.0% $0.30 $1,791,675,538
Bitcoin SV BSV $74.180 -3.6% -18.3% $117.52 $1,304,321,025
Cardano ADA $0.043 -1.7% 1.0% $1.32 $1,105,064,886
Binance Coin BNB $6.470 10.4% 9.7% $24.37 $836,359,592
IOTA MIOTA $0.293 -3.7% -22.2% $5.96 $813,356,713
Monero XMR $45.520 1.1% -8.0% $495.84 $762,176,181
Enigma Research
Lead Analyst: Aliya Itzkowitz
aitzkowitz@enigma-securities.io

7/8 Savile Row
London, W1S 3PE
U.K.
Tel: +44 207 290 5777
Paris, 75001
FRANCE
Tel: +33 1 42 33 02 05
Menachem Begin 11
Ramat Gan, 5268104
ISRAEL
Tel: +972 3 545 3777
Regulation Watch
The government shutdown has temporarily stalled progress in the U.S. crypto market. The SEC and CFTC are both government
organisations. As a result, any approval and launch of crypto-related products is on hold. Bakkt, which was slated to launch
tomorrow, will now delayed. As Coindesk reports, “the launch of Bakkt’s bitcoin futures market was delayed in part by the
company’s inability to secure approvals before Dec. 22, 2018, when the shutdown began.” A new launch date has yet to be
announced. The shutdown has also hampered broader conversations about crypto on Capitol Hill. As Kristin Smith of Blockchain
Association told Coindesk, “We’ve been making real progress engaging with lawmakers and regulators on the merits of the
token economy in the last several months, but the shutdown puts the handbrake on some of those conversations.”
Last week, we mentioned new Chinese regulations from the Cyberspace Administration of China. Crucially, we would highlight
that Blockchain companies are now required to register with and maintain correspondence with authorities. Why is this
important? The category of businesses that could fall within these regulations is very broad. The rules will apply to any
blockchain-based technology that is provided to the general public. Furthermore, the rules include any company offering
services to the public in China regardless of their physical locations. As one legal expert explains to us, “if a cryptocurrency
trading platform registered and operated legally in Singapore but is open to the general public in China, such Regulations shall
be applicable to this trading platform.” The new rules will come into effect starting February 19.
Grin
Why You Should Take “MimbleWimble” Seriously
Last week, on 15th January, Grin went live. You may have heard of Grin and MimbleWimble. What’s with the name? MimbleWimble
is a term from Harry Potter. In the books, MimbleWimble is a tongue-tying curse used to prevent people from spilling secrets. The
name is appropriate for a protocol designed to provide heightened privacy to blockchain users. As Arjun Balaji writes on Medium,
MimbleWimble is, “a blockchain protocol focused on fungibility, privacy, and scalability.” The protocol was initially released in the
form of a white paper by one ‘Tom Elvis Jedusor’ and was later enhanced by Andrew Poelstra. Jedusor was driven by the security
limitations he noticed in Bitcoin. The basic concept of MimbleWimble is to combine transactions so as to enhance privacy features.
MimbleWimble, a privacy-centric protocol, is named after the tongue-tying curse in Harry Potter (Source: Cointelegraph)

7/8 Savile Row
London, W1S 3PE
U.K.
Tel: +44 207 290 5777
Paris, 75001
FRANCE
Tel: +33 1 42 33 02 05
Menachem Begin 11
Ramat Gan, 5268104
ISRAEL
Tel: +972 3 545 3777
Grin is one of two coins being built on MimbleWimble. The other is called Beam. Grin has been in development since 2016 while
Beam followed in 2018. The two teams have chosen different approaches when it comes to interpreting the MimbleWimble
technology. As Coindesk puts it, Grin follows, “a highly principled, cypherpunk ideology – including no token premine or ICO, as
well as volunteer-based development.” As a results, Grin relies entirely on donations for its development.
A Rolling Stones inspired tongue-tying sticker sells on the Grin website for $13.00.
The platform relies entirely on donations. Stickers and other ‘swag’ are part of an online fundraising effort
By contrast, Beam “sought VC funding and hired a team of developers to work on the software full-time, allowing it to speed
ahead of Grin in its implementation.” While Beam has positioned itself as “user-friendly,” Grin prides itself on being an “open-
source” and “community-driven” initiative. As the Grin website states, “Grin wants to be usable by everyone, regardless of
borders, culture, skills or access.”
As Coindesk reports, “perhaps the most notable difference between the two cryptocurrencies are their economic models. In
particular, Beam sees itself as a “store of value” coin that has a fixed issuance schedule akin to bitcoin. By contrast, Grin’s monetary
policy is unfixed. Currently, a new token is issued every second. This is due to the project’s belief that sustained issuance will
stabilize the value of the currency.” A Hong Kong graphics card producer, Sapphire Technology, is launching a new line of miners
specificall targeting Grin.
Privacy is central to both coins. “So far, privacy has always been introduced at the detriment of scalability. We’re changing that,”
the pseudonymous Grin developer, known as “Ignotus Peverell”, told CoinDesk. As Conor O’Higgins explains on Medium, Bitcoin
has privacy limitations as it fails to disguise the following: “1) Sender’s address, 2) Amount of coins sent, 3) Receiver’s address.”
Instead, MimbleWimble using factorization, a process known as a Pederson commitment, to hide information and verify
ownership. As O’Higgins writes, “MimbleWimble arguably achieves Bitcoin’s goals better than Bitcoin itself (certainly if privacy is
a goal). Unlike some privacy coins, which add obfuscation on top of Bitcoin, MimbleWimble achieves it by cutting.” Mimblewimble
transactions also leverage another piece of cryptographic innovation known as CoinJoin, proposed by Gregory Maxwell.
Blockonomi explains MimbleWimble as follows, “Transactions in MimbleWimble are opaque but can still be validated
appropriately despite there being no addresses and the amounts transacted are entirely hidden. MimbleWimble relies on the
properties of Elliptic Curve Cryptography (ECC) to structure transactions based on the verification of zero sums and possession of
private keys.” MimbleWimble is not the first protocol to do this. As Blockonomi acknowledges, “The concept of validating
transactions without knowing any of the values transacted mirrors zero-knowledge proofs and RingCTs employed in ZCash and
Monero, respectively.” However, what makes MimbleWimble different is that no addresses are used at all.
Grin and MimbleWimble have become somewhat synonymous at this point. Put simply, Grin is a crypto implementation of the
MImbleWimble protocol. As Blockonomi notes, “Grin retains the privacy and fungibility features of MimbleWimble where there
are no addresses, transactions amounts, and transactions can be merged removing all intermediary information. Further, blocks
in Grin — like MimbleWimble — contain no transactions and the block just looks like one big transaction.

7/8 Savile Row
London, W1S 3PE
U.K.
Tel: +44 207 290 5777
Paris, 75001
FRANCE
Tel: +33 1 42 33 02 05
Menachem Begin 11
Ramat Gan, 5268104
ISRAEL
Tel: +972 3 545 3777
Grin Prices collapsed shortly after the launch (Source: cryptobriefing.com)
So, why should you take MimbleWimble seriously? As a purpose-built, privacy centric protocol, MimbleWimble has the potential
to scale better than many incumbent cryptos. Charlie Lee, founder of Litecoin is very bullish on Grin. He has stated that the coins
are able to, “do privacy and scalability without sacrificing anything. Nevertheless, Grin has had a rough start out of the gates. The
coin lost 97% of its value within a day of launching. According to Dovey Way, of Primitive Ventures, the problem is Grin’s early
mining model. “Grin won’t be profitable, especially early on,” she wrote. For those who are bullish on MimbleWimble’s capabilities
long-term, current prices present an attractive entry level.
Adoption Update
Bitcoin Dispensers Come to Paris
We, at Enigma, had the privilege of meeting with representatives of Keplerk in Paris recently. Keplerk, a cryptocurrency wallet
provider, is the company behind the recent roll-out of Bitcoin vendors in Tobacco shops (“tabacs”). According to sources, the
stores received regulatory approval for the cryptocurrency sales late last year. Others maintain that “French regulators remain
puzzled over the legal status of Keplerk.” At the moment, buyers can purchase vouchers for 50, 100 and 250 Euros.
Currently, Reuters reports that cryptocurrency can be purchased at six tobacco shops throughout Paris. However, French magazine
Capital has claims that there are as many as 24 shops currently participating in the experiment backed by Keplerk. The company
plans to roll out up to 6,500 Tabacs by February.
The strategy of Adil Zakhar, KeplerK’s CEO, is centred around trust. As he recently stated, “Some people find it complicated to
get bitcoins online They trust their local tobacco shop owner more than they would trust some remote anonymous website.”

7/8 Savile Row
London, W1S 3PE
U.K.
Tel: +44 207 290 5777
Paris, 75001
FRANCE
Tel: +33 1 42 33 02 05
Menachem Begin 11
Ramat Gan, 5268104
ISRAEL
Tel: +972 3 545 3777
Consumers in Paris can now buy Bitcoin at their local Tobacco shop (Source: Bitcoin.com)
Nevertheless, as Reuters reports, “Industry observers have criticized the retail initiative, saying it is cheaper and faster to buy
bitcoin online.” Still, selling Bitcoin vouchers in a similar method to lottery tickets could help normalize crypto and boost
adoption. As Coindesk notes, “There are 25,000 tobacco outlets across France, according to the tobacconist federation’s
website, potentially making bitcoin widely available if the scheme is a success.” We, at Enigma, are encouraged by any initiatives
designed to boost adoption. Crypto needs to be used in everyday life in order to survive. We are interested to see how the
initiative takes off.
Catalyst Calendar
January
*Bakkt Launch has been delayed with a new date yet to be announced
25 – CME Bitcoin Futures Last Trade Date – For January Bitcoin Futures Contracts – Settlement on 30 January
February
13 – Cboe XBT Expiration Date – Last trade date for XBTG19
20 – Blockchain Economy Summit – Conference in Instanbul – Speaker: head of Biz Dev at TRON
22 – CME Bitcoin Futures Last Trade Date – For February Bitcoin Futures Contracts – Settlement on 27 February

7/8 Savile Row
London, W1S 3PE
U.K.
Tel: +44 207 290 5777
Paris, 75001
FRANCE
Tel: +33 1 42 33 02 05
Menachem Begin 11
Ramat Gan, 5268104
ISRAEL
Tel: +972 3 545 3777
What We’re Reading
MIT and Stanford Professors Are Designing a Cryptocurrency to Top Bitcoin: Unit-e – Some of the brightest minds in America
are pooling their brain power to create a cryptocurrency that’s designed to do what Bitcoin has proved incapable of: processing
thousands of transactions a second. Professors from seven U.S. colleges including the Massachusetts Institute of Technology,
Stanford University and University of California, Berkeley have teamed up to create a digital currency that they hope can achieve
speeds Bitcoin users can only dream of without compromising on its core tenant of decentralization. The Unit-e, as the virtual
currency is called, is the first initiative of Distributed Technology Research, a non-profit foundation formed by the academics
with backing from hedge fund Pantera Capital Management LP.
The Hottest Cryptocurrency, Tron, Rekindles Memories of the Bitcoin Bubble – Like many of the startups that surged in value
before crashing during the digital-asset market bubble, the company features a young entrepreneur, questions about usage of
its main product and a lot of hype. At the center of all the excitement is Justin Sun, a 28-year-old who founded Peiwo, a popular
Snapchat-like app for China with millions of users. He then started Tron by using much of Ethereum’s computer code and using
parts of other startups’ white papers to write his own. Sun bought the popular software file sharing application BitTorrent for
$120 million last year.
What Is Plaguing The Cryptocurrency Market? – The most popular methods for making money on the crypto market – mining,
day trading, and ICO flipping – have already been exhausted. As a result, there are little to no new ways to pique the individual’s
interest in digital currencies. More importantly, people now have limited ways through which they can store and preserve their
assets. In this regard, a comprehensive solution needs to be developed if the market is to grow and achieve wider acceptance.
Goldman Sachs-Backed Startup Unveils Cold Storage Cryptocurrency Trading – Days after the cryptocurrency exchange
Cryptopia got hacked, Palo Alto-based security company, BitGo, announced that it has developed a platform allowing traders to
buy and sell digital assets right from BitGo’s cold storage custody. BitGo closed a Series B funding round in October 2018,
bringing in $58.5 million and attracting investors such as Novogratz’ Galaxy Digital Ventures and Goldman Sachs. BitGo will team
up with SEC and FINRA-regulated OTC trading platform Genesis Global Trading to establish the necessary infrastructure,
liquidity, and compliance. The move is geared toward satisfying the custodial requirements for attracting institutional investors.
Markets Going Digital? The 20 Year Old Running Wall Street's Hot Hedge Fund – Rather than equities markets whereby
representations of assets are traded, digital assets are sent, received, and confirmed through their true value within seconds.
Things like luxury cars, artifacts, or shares in art pieces can be “digitized”, a process of linking Blockchain to their intrinsic value.
Instead of volatile prices like most cryptocurrencies, some of these new assets abide by their absolute value, just in a more
reliable environment. Just recently, a Manhattan apartment was “digitized” and sold for over $30 million on the blockchain.
Banz Capital is betting that this side of technology, in accordance with quantitative trading, will prosper above all others.
How the US Government Shutdown Is Halting Crypto Progress on Wall Street –The longest government shutdown in U.S.
history is hurting the crypto industry, too. The closure of the Securities and Exchange Commission (SEC) and the Commodity
Futures Trading Commission (CFTC) has put key developments – namely, the approval and launch of products and services
involving cryptocurrencies – on hold. Notably, the launch of Bakkt’s bitcoin futures market was delayed in part by the company’s
inability to secure approvals before Dec. 22, 2018, when the shutdown began. A new launch date for the platform, which most
recently was set for Jan. 24, has yet to be announced.
Coinme and Coinstar Team to Let Shoppers Buy Bitcoin at Grocery Stores – Seattle-based cryptocurrency ATM maker Coinme
has partnered with ubiquitous supermarket coin-counter Coinstar to make bitcoin available for purchase right at the grocery
store, GeekWire reports. Coinme's new partner has so far implemented the service in Safeway and Albertsons supermarkets in
California, Washington, and Texas. The kiosks will enable the customers to purchase up to $2,500 worth of bitcoin, and only cash
is accepted.

7/8 Savile Row
London, W1S 3PE
U.K.
Tel: +44 207 290 5777
Paris, 75001
FRANCE
Tel: +33 1 42 33 02 05
Menachem Begin 11
Ramat Gan, 5268104
ISRAEL
Tel: +972 3 545 3777
Cryptocurrency Deals Can Always Be Erased, for a Price – With a blockchain, everyone has their own copy of the database.
Participants can verify account balances before accepting a payment, rendering bounced checks a thing of the past. But that’s
not as easy as it sounds. Cryptocurrencies rely on the assumption that miners append information only to the most recent block,
but a malicious miner might choose an earlier point and create an offshoot. Given enough computational power, the offshoot
could eventually outpace the original chain, thereby rewriting the most recent history.
Coinbase expands OTC and institutional trading services into Asia and Europe – Coinbase announced plan to push international
expansion of OTC desk and other professional trading services. As such, it will support fiat deposits from non U.S. bank accounts
from many regions for the first time. Coinbase, the U.S. cryptocurrency exchange, announced Tuesday a plan to push the
international expansion of its over-the-counter trading unit. The San Francisco-based firm rolled out the desk, which brings
together buyers and sellers off of its main exchange venue, in November. Now, the platform will be available to certain
customers in Asia, the UK, and Europe, according to a press release.
LSE's Technology to Power Asian Cryptocurrency Platform – London Stock Exchange Group (LSE.L) said on Tuesday Hong Kong-
based AAX would use its technology for cryptocurrency trading, allowing the British exchange operator enter a nascent yet
highly speculative industry. The deal, however, comes at a time when cryptocurrency exchanges in Asia face scrutiny and
policymakers have warned about the risks of speculative investments in cryptocurrencies.
Will People Ditch Cash for Cryptocurrency? Japan is About to Find Out – Next year, hundreds of thousands of foreign visitors—
most from countries where credit cards and digital payments are second nature—will descend on Tokyo for the Olympics.
They’re expected to spend billions of dollars during the event, and Japan’s financial system simply isn’t equipped to handle it.
Hundreds of millions could be left on the table. Prime Minister Shinzo Abe says he wants 40% of payments to be cashless by
2025.
Durov Likely to Present His TON Blockchain and GRAM Token at World Economic Forum in Davos – Pavel Durov, the creator of
a popular messenger Telegram, may use the platform of the World Economic Forum to present his blockchain-based project
Telegram Open Network (TON) and digital currency Gram to experts and businessmen. The Telegram Open Network is intended
to be a competitor to Ethereum for the launch and execution of smart contracts and decentralized applications. TON is based on
cryptographically protected distributed registries. At the core is a scalable and flexible blockchain architecture that consists of a
master chain and up to 292 accompanying blockchains.
Until next week - thank you for reading.
Please reach out to info@enigma-securities.io with any questions.

Enigma Weekly 24/01/2019 - Grin and Bear it...

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Enigma Weekly 24/01/2019 - Grin and Bear it...

Similar to Enigma Weekly 24/01/2019 - Grin and Bear it... (20)

Recently uploaded

Recently uploaded (20)

Enigma Weekly 24/01/2019 - Grin and Bear it...