Start Up: boosting bitcoin, Nintendo shuffles off VR, LG delays G7?, how to stop US gun violence, and more

One Plus says 2017 revenue passed a billion dollars. How many phones is that? Photo by Dennis Sylvester Hurd on Flickr.

A selection of 11 links for you. Not for sale in Nebraska. I’m @charlesarthur on Twitter. Observations and links welcome.

Inside Telegram’s ambitious $1.2B ICO to create the next Ethereum • TechCrunch

Jon Russell:


We have even more information about messaging app Telegram’s plans for cashing in on its popularity within the crypto community with the massive ICO for its proposed Telegram Open Network (TON) project (that we first reported), after obtaining the whitepaper and investor prospectuses in full.

From the documents, it is clear that Telegram isn’t content with sitting on a platform like Ethereum for its token sale and services, as most ICOs are. Instead, it wants to create a platform of its own to rival Ethereum for hosting a new wave of decentralized services and internet experiences tipped to emerge thanks to the blockchain.

Telegram’s ICO will be a record if all goes according to plan, but that’s only the start.

The company plans to raise a staggering $1.2 billion in total, starting with a $600 million pre-sale that’s strictly for traditional venture capital backers and those inside its executive’s close circles.


Gather round, children, and let me tell you of a man called Ponzi.
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Researchers find that one person likely drove Bitcoin from $150 to $1,000 • TechCrunch

John Biggs:


Researchers Neil Gandal, JT Hamrick, Tyler Moore, and Tali Oberman have written a fascinating paper on Bitcoin price manipulation. Entitled “Price Manipulation in the Bitcoin Ecosystem” and appearing in the recent issue of the Journal of Monetary Economics the paper describes to what degree the Bitcoin ecosystem is controlled by bad actors.

To many it’s been obvious that the Bitcoin markets are, at the very least, being manipulated by one or two big players. “This paper identifies and analyzes the impact of suspicious trading activity on the Mt. Gox Bitcoin currency exchange, in which approximately 600,000 bitcoins (BTC) valued at $188 million were fraudulently acquired,” the researchers wrote. “During both periods, the USD-BTC exchange rate rose by an average of four% on days when suspicious trades took place, compared to a slight decline on days without suspicious activity. Based on rigorous analysis with extensive robustness checks, the paper demonstrates that the suspicious trading activity likely caused the unprecedented spike in the USD-BTC exchange rate in late 2013, when the rate jumped from around $150 to more than $1,000 in two months.”

The team found that many instances of price manipulation happened simply because the market was very thin for various cryptocurrencies including early Bitcoin. “Despite the huge increase in market capitalization, similar to the bitcoin market in 2013 (the period examined), markets for these other cryptocurrencies are very thin. The number of cryptocurrencies has increased from approximately 80 during the period examined to 843 today! Many of these markets are thin and subject to price manipulation.”


Speaking of which…
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The anatomy of a pump and dump group • Bitfalls



Pump and dump (P&D) schemes are a common occurrence in the cryptocurrency world.

They most often happen in Telegram or Discord (chat programs) groups in which several thousand people buy a specific shitcoin (a crypto token without a value or future) at the same time in an attempt to artificially inflate its value. This value increase is called the pump while the selling of this now expensive token to naïve bystanders is the dump phase.

In this article, we’ll take a look at the anatomy of one such smaller P&D group…

…When the organizers buy a coin before telling everyone, that’s what’s called a pre-pump. For example, in the group we were watching for this post, the OAX coin was announced with a pump start due at 23:00. But if we look at its graph, the pre-pump is obvious:

The graph clearly shows the organizers having loaded up on the coin 20 minutes earlier. This allowed them to start dumping on their group’s members immediately on start time at 23:00. The reason they were able to move the market by themselves was because this coin had a total trading volume of 2 Eth on HitBTC, which meant even half an ether could move the needle.


Anyhow, to the moon, etc.
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This AR app teaches you how to play the piano • VRScout

Steve Ip and Sydney Wuu:


App users slip on their AR headsets and follow the instructions displayed directly on their instrument to learn how to play the piano. A virtual band accompanies the user to teach them how to improvise within a group setting. The software also includes interactive theory lessons, live practice sessions, and animated demonstrations that allow you to explore blues, rock, jazz, and classical styles.

Music Everywhere currently operates on a bidirectional MIDI-over-Bluetooth connection utilizing a Microsoft HoloLens AR device or Windows Mixed Reality immersive headset.

It has been hinted that Music Everywhere may be headed to Mira as well, a lightweight AR headset that is powered by an iPhone. Mira retails as an iPhone accessory below $200, compared to a HoloLens that can cost upwards of $3000.


From the description, you think: great! But the video is so woeful. This doesn’t teach you piano; you have to be good at playing the piano already. It’s like Wii Music, which seemed like it would be great and turned out to be appalling.

And it’s barely better than perching a tablet on the music stand. AR needs more imagination.
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Want to fix gun violence in America? Go local • The Guardian

Aliza Aufrichtig, Lois Beckett, Jan Diehm and Jamiles Lartey:


Half of America’s gun homicides in 2015 were clustered in just 127 cities and towns, according to a new geographic analysis by the Guardian, even though they contain less than a quarter of the nation’s population.

Even within those cities, violence is further concentrated in the tiny neighborhood areas that saw two or more gun homicide incidents in a single year.

Four and a half million Americans live in areas of these cities with the highest numbers of gun homicide, which are marked by intense poverty, low levels of education, and racial segregation. Geographically, these neighborhood areas are small: a total of about 1,200 neighborhood census tracts, which, laid side by side, would fit into an area just 42 miles wide by 42 miles long.

The problem they face is devastating. Though these neighborhood areas contain just 1.5% of the country’s population, they saw 26% of America’s total gun homicides.

Gun control advocates say it is unacceptable that Americans overall are “25 times more likely to be murdered with a gun than people in other developed countries”. People who live in these neighborhood areas face an average gun homicide rate about 400 times higher than the rate across those high-income countries.


Amazing piece of data journalism, digging down to the neighbourhood level: gun murder is a more common act where poverty, lack of education and racial segregation are high.
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Suspect in deadly Kansas “swatting” hoax charged with manslaughter • Ars Technica

Timothy Lee:


A Los Angeles man accused of making a hoax phone call that led to the death of an innocent man in Wichita, Kansas, has been charged with involuntary manslaughter. 25-year-old Tyler Barriss was arrested in Los Angeles late last month, and authorities there extradited him to Kansas. He made his first appearance in a Kansas courtroom on Friday, court records show.

Authorities believe that Barriss made a hoax phone call that sent police to the home of an innocent man, Andrew Finch, on December 28. Finch opened the door with his hands up. But when he briefly lowered his hands toward his waistband, a police officer shot him, believing that Finch could be reaching for a gun.

The incident appears to have originated with an online feud over a $1.50 Call of Duty bet. One of the parties to that dispute reportedly approached online user SWAuTistic, who had a reputation for initiating “swatting” pranks against online gamers. SWAuTistic called the Wichita police, pretending to be a deranged man who had already shot his father and threatened to shoot other members of his family.


Such a waste of two lives, and enabled by a militarised police force which shoots to kill.
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Nintendo doesn’t seem to be “looking into” VR very much anymore • Ars Technica

Kyle Orland:


Readers with decent memories may remember early 2016, when Nintendo President Tatsumi Kimishima said the company was looking into the virtual reality space at an investor’s briefing. Coming months before we had concrete details on the company’s upcoming Switch, the statement set off industry alarm bells about Nintendo’s potential future plans. A vague Nintendo patent for a head-mounted tablet holster that surfaced in late 2016 got the chatter going even further.

Fast forward to today, and it’s increasingly clear that Nintendo has finished “looking” and has decided VR shouldn’t be part of its plans for the time being. The latest evidence comes from a recent interview with Nintendo France General Manager Philippe Lavoué in French publication Les Numeriques. “If you look at VR headsets, I doubt they can appeal to the mainstream,” Lavoué said in a translation of that interview. “Consumers are not patient with entertainment if you’re not able to deliver an all-inclusive package.”


Remember when VR was the future? What a week that was.
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LG Electronics chief orders revision of ‘G7’ smartphone from scratch: source • Korea Herald

Song Su-hyun:


Jo Seong-jin, vice chairman and CEO of LG Electronics, has ordered a revision of the company’s upcoming premium phone, temporarily called the “G7,” further delaying its launch to April.

According to a company official who asked for anonymity, the G7 smartphone team of the company’s mobile communications business was told to halt recent work related to development of the newest phone, and to review the new product from scratch.

“Right after the vice chairman made the announcement at the Consumer Electronics Show last week, a direct order was sent down to the working-level officials to start over,” the official told The Korea Herald.

“A new decision on a possible launch date will be released around the Lunar New Year holiday next month,” he said. The smartphone was initially expected to be unveiled at the end of February and launched in March.


This could actually work in its favour (though the “from scratch” line means nothing; you don’t start phones from scratch). LG loses money every time it launches a top-end phone because it pours money into marketing, which isn’t recouped through sales. Delaying the G7 by a month or a quarter could work wonders.
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Ho, ho, ho, Xiaomi • Bloomberg Gadfly

Tim Culpan:


Xiaomi Corp. is set to pull in revenue of $17bn to $18bn this year, ahead of its own target, Reuters reported Friday, citing the company’s comments to bankers.That’s impressive, but believable. Xiaomi has had a great year.

Stretching the credibility scale, though, are estimates that net income could hit $1bn. They’re banker projections, Reuters notes, not necessarily Xiaomi’s. The company later confirmed to Bloomberg News that revenue topped $15bn within the first 10 months of 2017, without commenting on earnings.If those profit numbers are true, it would mean the smartphone and device maker will deliver a net income margin of as much as 5.9%. That’s astounding. An operating margin of 5.9% would be pretty incredible, but a net margin that high would have Xiaomi well ahead of almost everyone in the market – up with Samsung Electronics Co. and Huawei Technologies Co.

Suffice to say, Xiaomi is no Samsung. But bankers desperately want in on Xiaomi’s expected IPO, and talking up the company is a good way to endear themselves. Remember when that real estate agent told you your rundown two bedder was a treasure and guaranteed to fetch a good price? Yeah, it’s like that.

Reuters reports that bankers see Xiaomi’s earnings doubling to $2bn next year. To get there, Xiaomi would need to dramatically boost revenue and widen margins. That’s hard to do simultaneously, especially in a weakening devices market. But such lofty estimates are helping these bankers talk up a $100bn share sale, when just two weeks ago the chatter was around a $50bn listing.


Buying Xiaomi shares would be a sucker move. You can’t honestly believe that it’s going to make $100bn in its lifetime.
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Chinese smartphone maker OnePlus breaks billion-dollar sales barrier • The Telegraph

James Titcomb:


Oneplus, the cult Chinese smartphone maker, has broken the billion-dollar sales barrier for the first time and made a profit, a rare feat in the ultra-competitive mobile market.

The company’s chief executive Pete Lau told The Telegraph that its revenues last year had doubled to more than $1.4bn (£1bn) and that this had come with “healthy profits”. It comes as OnePlus plans to challenge bigger players by tying up with mobile networks in the US and Europe.

The smartphone market has been flooded by competition from Chinese upstarts in recent years, making profits rare and sending established brands like HTC and Motorola into losses. While OnePlus pales to most of its rivals in size, Mr Lau said it has eked out healthy margins by focusing only on the high-end of the market. It sells most of its mobiles directly to a core of fans online, instead of through mobile networks, although it began to distribute phones through O2 in the UK in 2016.


Some confusion between the headline, intro and second para. I think it’s that they’ve passed a billion dollars. That’s an average of $250m per quarter; at $250 per handset that would be a million per quarter, or 4m per year. At $125 per handset, it’s 8m per year. Those seem like the likely boundaries of its sales.

So that’s the good news. Now we go to the bad news…
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Some people have had their credit card numbers stolen after buying OnePlus phones online • BGR

Chris SMith:


If you purchased a OnePlus phone and paid with a credit card, you should check your account for fraudulent charges immediately. Apparently, it already happened to some OnePlus customers, who were notified about fraudulent transactions on credit cards that were used to buy OnePlus phones.

According to a poll on the company’s own forum, 69 people so far have noticed fraudulent charges after a OnePlus transaction.

OnePlus has yet to confirm a data breach that would have allowed hackers to steal user data such as credit card information. And it’s always possible that the users who were notified of fraudulent charges by their banks were hacked in some other way, and it’s all a big coincidence. But the poll, available at this link, seems to suggest there may be an issue with OnePlus, as some of the impacted customers used their cards online for little else other than to buy a OnePlus phone online…

…The company says it started investigating the issue but found no cause so far. OnePlus says that card info is “never processed or saved on our website.” Instead, the data is sent “directly to our PCI-DSS-compliant payment processing partner over an encrypted connection, and processed on their secure servers.”


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Errata, corrigenda and ai no corrida: none notified

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3 thoughts on “Start Up: boosting bitcoin, Nintendo shuffles off VR, LG delays G7?, how to stop US gun violence, and more

  1. I’m not sure what the $250 and $125 figures you’re quoting for OnePlus phones are supposed to be. Profits per phone ? OnePlus basically only sells one device, a discount flagship, at around $500.

  2. Re. Xiaomi, they *are* making a name’for themselves with non-smartphone gadgets. They’ve got a huge range of cheap stuff that is very good (routers, laptops, TV box, air purifier, scooter, shoes, smartwatch…). I’m not sure the “it’s all connected” line isn’t bunk, but they probably getting much nicer margins than on phones, and establishing a strong brand image that’s starting to sleep from the need brigade into he mainstream. Combined with physical shops, I think their strategy is a lot more convincing than the others’ I “hey, we too make smartphones”

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