Vol 3・13th July 2018
Welcome to the third edition of the HAT Newsletter! The beginning of Q3 marks a giant milestone for the team and the community as we proudly announce the release of HAT.Exchange Beta. With the Exchange in the final testing phase before going live, the company can begin a new phase, with an increased focus on marketing, expansion, and growth.
We will be actively seeking utility tokens from promising projects for our first listings, working on brand awareness to attract new users, and listening closely to the community’s feedback so we can improve the usability of our apps and roll out new features. All of us on the HAT team would like to extend our sincerest gratitude to everyone in the community who believed in and supported us from the beginning. The best is yet to come.
Tether May Have Been Used To Manipulate The Market
In our last issue we discussed the institutional and regulatory forces that we believe have pushed crypto’s market capitalization solidly into “bear” territory. One month later, prices and volume remain depressed, with Bitcoin continuing its downward slide to new lows for the year, standing at $6364 as of this writing. Ethereum is holding up only slightly better, staying above its 2018 low of $400 in April, at $437.
Over the past couple of weeks the crypto news sphere has been abuzz with speculation about the role the manipulation of Tether (USDT) may have played in Bitcoin’s rising price and subsequent fall. John M. Griffin and Amin Shams of the University of Texas, Department of Finance released a paper describing their findings, based on blockchain analysis:
“Using algorithms to analyze the blockchain data, we find that purchases with Tether are timed following market downturns and result in sizable increases in Bitcoin prices. Less than 1% of hours with such heavy Tether transactions are associated with 50% of the meteoric rise in Bitcoin and 64% of other top cryptocurrencies. The flow clusters below round prices, induces asymmetric auto-correlations in Bitcoin, and suggests incomplete Tether backing before month-ends.
These patterns cannot be explained by investor demand proxies but are most
consistent with the supply-based hypothesis where Tether is used to provide price support and manipulate cryptocurrency prices.”
(the research paper can be downloaded here:
Possible price manipulation of Bitcoin and the entire market by powerful crypto “institutions,” such as Tether issuer BitFinex, only underscores the need to strike a balance between innovation and enhanced government regulation. Virtually unregulated, yet tightly centralized markets are a recipe for corruption, encouraging activities that can lead to massive losses for smaller investors. In our opinion, allowing the cryptocurrency and blockchain space to become corrupted by the same behavior that caused the last global financial crisis is, simply put, a very bad idea.
It also highlights the importance of HAT’s vision of building a fully decentralized, peer-to-peer marketplace: resistance to global price manipulation is a basic property of the system’s architecture. There will likely always be a centralized aspect to cryptocurrency trading and management, but it’s our hope that HAT.Exchange sets the standard for the p2p transaction model, freeing our user base from the constraints and high fees of the traditional banking system.
How Will You Use HAT ?
When new and exciting technologies appear, threatening to disrupt long-held assumptions about how we conduct business, it’s often difficult to imagine how things will be in the future once these innovations become commonplace.
In 1994, most people took it for granted that written communication with friends and family in distant places required a pen and paper or a typewriter, an envelope, a stamp, a trip to the post office, and many days or weeks of waiting to receive a reply.
A mere ten years later, a person in New York City with a Blackberry smartphone could send a message to someone anywhere in the world while waiting to hail a taxi on the street, but the idea that they could use a smartphone to request a private driver, broadcast their exact location and final destination, pay the fare, tip for good service, and write a review of their experience would have been nearly unimaginable.
Disruptive business models like Uber gain traction and replace outdated business models through a process called “disintermediation.” Disintermediation is essentially a process of “removing the middleman,” such as taxi and limousine commissions, wholesalers, publishers, and brick and mortar stores. The result is often lower prices, reduced fees, more consumer choice, and new income streams for providers of goods and services.
Initially, HAT.Exchange aims to provide a lower cost, more efficient, and borderless alternative to the banking system and money transfer services around the world. Let’s look at a few real-world use cases for HAT’s platform:
With fiat support on HAT.Exchange it will be possible to both buy and sell listed tokens on the fiat pair, with the ability to cash out, transfer, or spend both cryptocurrencies and fiat directly from your HAT Wallet.
Transfer Of Funds To Family And Friends Anywhere In The World
Alice’s nephew Charles is vacationing in the Philippines, and calls to tell her that his wallet has been stolen. Luckily, they both have HAT.Exchange installed on their smartphones. Alice stops by the nearest supermarket, purchases a HAT cash card using her local currency, scans a code on the card to activate the balance, and within minutes has transferred the funds to Charles.
Alternately, if Alice can transmit the QR code to Charles via another method, such as email, he can scan the code directly into the HAT app and avoid transaction fees entirely.
Buy And Sell Goods And Services In The HAT Marketplace
The World Cup is on, and Bill has a small apparel business that sells player jerseys. By posting his inventory to the HAT.Exchange marketplace, he can sell directly to fans in his local area or around the world, avoiding the fees he would pay if he used services like eBay or Amazon. Unlike those services, sellers can choose to accept any token supported by the exchange as payment, which can then be immediately redeemed for USD or exchanged for other cryptocurrencies.
Another scenario is booking and payment of services, for example, home improvement contractor, lawn mowing, plumber, auto mechanic, etc. In this case the HAT application serves as an added layer of security for in-person transactions, as well as a place to collect customer reviews and feedback. It’s also a great opportunity for small businesses to advertise their services within a local area.
For Businesses: Cryptocurrency Payment Integration Via The HAT API
William has an online store built in WordPress where he sells and ships framed prints of his landscape photography. He accepts major credit cards and PayPal now, but thinks he could expand his customer base significantly by accepting payments in cryptocurrency. He would also like to offer gift cards that can be redeemed in his store.
He purchases a commercial license to install and use the WordPress HAT API plugin to easily integrate crypto and custom gift card payments into his store’s shopping cart.
Development Recap And News
Since development is moving at an accelerated pace, please check the Announcements section on the HAT.Exchange website, Telegram pinned message, or Twitter feed for the latest news about the beta release, testing, HAT Marketplace, airdrops, bounties, and bonuses.
This concludes the third installment of the HAT.Exchange Newsletter. See you next month!