What’s “The Banker’s Coin?” Will it Help You “Make a Fortune in the New Era of Crypto?”

Looking into the first teaser pitch from Curzio's Crypto Intelligence

By Travis Johnson, Stock Gumshoe, June 11, 2018

I haven’t written about a blockchain, bitcoin or cryptocurrency teaser pitch for a while, so when the questions started piling up about the “Banker’s Coin” being teased by Barry Cohen in ads for his new Crypto Intelligence newsletter with Curzio Research, well, I thought I should at least try to get some answers for you.

To give you a quick note about my biases, I’m probably what you’d call a “crypto skeptic” — mostly because of concerns about valuation and ownership of the technology, with a side helping of likely government intervention, and took my profits on the vast majority of the speculative positions I had last year… but I do still have some small positions in a few of the bigger tokens (bitcoin, ethereum, etc.)

So what’s the deal today? Frank Curzio is pitching a cryptocurrency-focused newsletter that is helmed by Barry Cohen, who apparently comes from the hedge fund world, and it’s a premium-priced letter — so it’ll cost you $1,5000, with no refunds allowed, to sate your curiosity.

Or, of course, you can hang out here and we’ll see if the Thinkolator can tell us what “The Banker’s Coin” is, and give yourself a chance to think about it a bit before getting out your credit card. There’s a lot you can learn on your own about cryptocurrencies if you wish to make that your next hobby, and it’s always best to try to give yourself at least a little baseline knowledge before you pay someone a big chunk of money to advise you.

Here’s a little taste of the ad to give you a taste of what Cohen is talking about… it’s staged as an “interview” presentation…

“Way back when Bitcoin was first getting its legs, an independent cryptologist from Johns Hopkins was working on a piece of code to include in Bitcoin.

“Remember, Bitcoin is ‘open source.’ Any programmer can see the code and make changes to it.

“That’s simplifying it a bit, but that’s the gist.

“That’s what actually lead to the creation of hundreds of other coins and tokens.

“Ethereum, for example, is also based largely on Bitcoin code.

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“So this cryptologist presented this string of code to the early developers of Bitcoin and it was rejected.

“The idea was that it would make Bitcoin too complex… slow things down…

“… that piece of ‘rejected code,’ is poised to make some people very rich.

“And it’s not going to be the people who invest in Bitcoin.

“It’s going to be the people who invest in what I’m calling The Banker’s Coin.”

OK, so that’s the basic idea — “The Banker’s Coin” provides something new that people need in cryptocurrencies, and is an improvement on bitcoin.

Other clues in the ad? This is what we get…

“There are a finite amount of coins, just like Bitcoin.

“The coins are minable, just like Bitcoin.

“And, like Bitcoin, the Banker’s Coin can be used in virtually any type of transaction.”

“Transaction” being pretty much a theoretical concept at this point… people don’t use cryptocurrencies in transactions as a general rule, they’re still mostly terrible at that — they trade them. But yes, the future value of any cryptocurrency will have to be based on how much it improves, speeds or secures something real like transactions, so that’s why crypto traders are looking in their crystal balls to try to figure out which coins will have real-world value in the end.

I’m not smart enough to figure that out, but let’s see what other clues we get from Cohen…

“… without this code now embedded in The Banker’s Coin there’s no way Big Money moves full force into cryptos.

“In fact, a number of the biggest banks and corporations in the world are already beginning to adopt it.”

OK, so what’s this special code that makes it acceptable to institutions? More clues…

“… the reality is that every bank, every government institution, every corporation, every financial exchange – they all need this rejected code.

… Why?

“In a single word: Anonymity….

“Bitcoin is completely useless for any institution that MUST have privacy.”

Isn’t the core of most cryptocurrencies this idea of privacy and anonymity? Well, not really — the first wave of cryptocurrencies, particularly bitcoin, is fully traceable… your trades may not be tied to you as an individual, but they are open and viewable by everyone as part of the transparency that makes it possible for all the other participants in the blockchain to verify the transaction.

That brings up the problem of “front running” — the argument from Cohen here (and you’ll hear it elsewhere as well, for sure), is that institutions won’t commit to a system that leaves their trading data out there for everyone to see. In Cohen’s words…

“I can tell you that as soon as other traders get wind of a play you’re trying to make… or people start piecing together your strategy through some of the money you’re moving around… the game changes… you lose your edge.

“If I’m Morgan Stanley and I’m making a trade with Goldman Sachs, I don’t want UBS to see all the details.

“If it’s a great arbitrage play, the spread disappears.

“If you’re trying to make a move on a company, everyone else will start bidding against you.”

So that’s the basic idea… what technology can be used to verify transactions and make them secure without sharing information about the transaction with everyone?

Apparently several different folks are implementing this idea. More from the ad…

“Well, this will probably shock you a bit, but none other than J.P. Morgan itself – the world’s biggest investment bank – has already bought in.

“They’ve teamed up with the developers of The Banker’s Coin and are integrating its code into a brand-new platform.

“Ethereum, the second-largest crypto asset in the world is doing the same thing – creating a hard fork, or change, to the way Ethereum will operate going forward.

“ING has started integrating a version of this code as well.”

What Cohen is talking about here are “Zero Knowledge Proofs” — basically, a system that’s set up to let transactions be verified and proven without revealing the details (any “knowledge”) about the transaction. This concept has been batted around in cryptography for about 30 years, and it’s a little hard to get your head around — how can you prove something is true without revealing why you know it’s true?

I won’t try to run through it in great detail for you, I’m far from being an expert on cryptography, but I do like the “Where’s Waldo” example — Travis and Bob are looking at a Where’s Waldo page, and Travis says he knows where Waldo is… how can he prove that to Bob without actually showing Bob and revealing the knowledge?

One solution is to take a piece of cardboard that’s much larger than the book, cut out a tiny hole in it that’s just large enough to show enough of Waldo to prove that it’s him, and place the book behind the cardboard with the Waldo picture showing through. That doesn’t reveal where on the page he is, but it proves he’s there and proves to Bob that Travis found him.

That’s an oversimplification, of course, but you get the idea — and that’s about as far as I can go without giving us both headaches. Basically, you replace the concept of “trust through transparency” with the concept of “provers” and “witnesses” and interactive back-and-forth proofs that, if done’ often enough, get close to being 100% true and secure (nothing is 100% in crypto world, or in real life, but cryptocurrencies have to be closer and more secure than other transaction systems because they’re designed to be linear and unchangeable — you can’t roll back or undo or dispute transactions).

So what’s this Zero Knowledge Proof coin that’s about 1% the size of bitcoin? There are a couple reasonably-sized possibilities, including the fairly popular Monero, but the Thinkolator points us at Zcash, which we’re told was the first of the truly anonymous blockchains. Zcash, usually abbreviated ZEC, has a “market cap” of about $800 million, so it’s close to being in the top 20 cryptocurrencies by that measure (according to CoinMarketCap.com)… right now it’s trading at about $200 per coin, though it got as high as about $800 during the crypto mania that peaked in early January ($200 is close to the low for the past twelve months, though it spent most of the previous year in the $40-$100 range). It is available on several of the bigger exchanges, including Kraken, which seems to be the exchange that Cohen recommends, but is not available for trading on the “entry level” systems like Coinbase or Robinhood that focus on bitcoin and ethereum.

And yes, Zcash does have a deal with JPMorgan Chase to include aspects of its zero-knowledge proof cryptography in JP Morgan’s blockchain technology, called Quorum. I have no idea whether this means anything for Zcash as a currency, or is just a benefit to the developers of ZCash (The ZeroCoin Electric Coin Company). There’s another interesting short piece from Bloomberg here about it if you’d like some background on that “why this is important for Wall Street” bit.

The term used for this technology that Zcash spearheaded is zk-SNARKS, and that technology was also added to Ethereum last fall in the Byzantium software update… so this is again something where I can’t get a handle on ownership and who will be the financial beneficiary of a technology — is it the smaller Zcash network? The much more established ethereum network? The JP Morgan-controlled Quorum group that uses ethereum? Does this create value that will “trickle down” to all of the tokens in some way? I have no idea.

The technology and the coding is open source for pretty much all cryptocurrency stuff, so it has been added to other coins now as well, and has been tweaked by lots of different developer groups (there’s even a “Bitcoin Private” now, which is mentioned in this explanation fo the zk-SNARKS developments from back in January).

So yes, I remain skeptical, but I know lots of folks are enthused about all kinds of cryptocurrencies… and the hints about “The Banker’s Coin” point directly at Zcash. Whether that means Zcash will rise or fall, you’ll have to make your own call on that.

If you’ve got a take on this notion of privacy and anonymity in the blockchain, or a favorite way to bet on blockchain or the cryptocurrency markets, feel free to share your thoughts with a comment below… we won’t bite.


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heuristocrat
Irregular
👍93
heuristocrat

I’m halfway through a conference on token-based securities. Much to learn but this doesn’t sound at all like a “banker coin” based on what’s needed. Once I get through it all I can spend more time on it.

sschechter
Member
👍53
sschechter

Its a simple privacy currency – one of many

StockMidas
Member
👍255

Ian King of Banyan Hill publications is touted as the “world’s leading expert” on crypto’s by himself as well as his colleagues at Banyan Hill publications. He publishes a weekly newsletter – Ian King’s Crypto Profit Trader. I suppose if you endeavor to sell your publication at $2,000 it helps to hang the label of the world’s leading expert around your neck. He does however seem knowledgeable and appears to be ethical in his recommendations. He recently punted ZCash (ZEC) with specific reference to the zk-SNARKS technology. ZEC has retraced 50% in the past month – it may be an… Read More »

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steveflick
Irregular
👍721

I too am very skeptical of Crypto’s. I am sticking my toe in the water with Blockchain ETF’s, $1k each of BLCN, BLKCF, BLOK, KOIN.

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540
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6001
macrobody
Member
👍59
macrobody

And this is some sort of diversification? You looked at the holdings of these ETF’s?
You own the same companies multiple times.

steveflick
Irregular
👍721

Yes, I looked; I know.

jcropper
Irregular
👍10

Blockchain is now being used in big banks and multi layered blockchain is used by our milltary

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sschechter
Member
👍53
sschechter

I am a software engineer and I’ve been in bitcoin since 2013. Whether you are in crypto or not there is absolutely one coin that you must own and that is EOS. It is my core portfolio and I could really care less about the other ones I own. Forget this ZCash garbage from Jonny Come Lately newsletter writers. Its just a currency to speculate on. EOS is a platform for developers, entrepreneurs, visionaries and creatives, stripped of onerous fees and junk that suck value out of the system. Everything about EOS is so beyond what its competition is doing.… Read More »

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coffee
Guest
coffee

I like EOS as well, its exciting times right now for sure. But, I wouldn’t exactly call ZCash garbage. Its one of the most respected coins out there. Regularly spoken about as having one of the best development teams in the whole space.

http://fortune.com/2017/12/18/jp-morgan-bitcoin-zcash-wilcox/

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sschechter
Member
👍53
sschechter

Coffee you are right I will correct myself. ZCash is a respected coin with a strong team that invented its own privacy algorithm. My issue is with these newsletter writers who will overhype the coin while probably failing to mention the handful of competing forks and other privacy coins. Privacy currencies are a crowded field and there’s not much you can do with them besides speculating on price so that’s kind of boring to me. I’m more interested in the platform to launch thousands of dapps and what kind of opportunities and innovation they will bring.

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dbiggs
Member
👍4
dbiggs

what does eos stand for. would like to check it out. thanks

coffee
Member
👍6
coffee
sschechter
Member
👍53
sschechter

The team developing the EOS software has been deliberate in stating that it doesn’t stand for anything. In the true nature of open source collaboration, it is up to the individual to give it their own meaning, rather than beholden to the will of its creator

Some names repeated by the community:
Earths Operating System
Ethereum On Steriods
EOS (goddess of dawn)

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big tuna
Member
👍117

Every time I see EOS I think of John Oliver

sschechter
Member
👍53
sschechter

big tuna – Block One, the company which built EOS said when John Oliver’s people called them up about their story, they had no interest in learning about the tech and only wanted to further their comedic angle. Do your own research

big tuna
Guest
big tuna

There are 3 sides to every a story. But Brock Pierce is who the management of EOS selected to represent them. Good management decision? Cant unring that bell. Maybe BlockOne should have done a little of their own research.

jazzman777
Guest
jazzman777

what is the symbol for EOS?

coffee
Member
👍6
coffee
jcropper
Irregular
👍10

Take over and try to explain to the others i completed college before there was the first computer

hess100
Member
👍0
hess100

thanks sschechter, nice of you giving precious informations on EOS generously!!

Hugh R.
Guest
Hugh R.

The reality is JPM or any large institution can hire someone to create their own block chain system specific to their needs. That has always been my issue with the crypto types pushing one version of it over another. A very large institution or group of institutions can create their own currency and actually have some form of control over it.

coanbie
Guest
coanbie

Community is an important factor for crypto, bank could enter this via its e-money

bud reveley
Guest
bud reveley

I would run from any of Frank C’s recommendations.

Robert Schrecengost
Guest
Robert Schrecengost

My guess Ripple (XRP) Not sure of any connection to JPM but they do have several banks on board for cross border funds transfers that are already being handled with ripple. Coincidentally XRP mined coins are mostly held by banking institutions if you can believe the sector chatter

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vivian
Guest

dear Travis
the price of the new bitcoin mag is $1,5000? what’s that in real money? 15,000? 1500? makes a difference. if someone is charging 15 grand we are in a new era of crypto chutzpah

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coanbie
Guest
coanbie

ripple for sure

portland6
Member
👍16

Travis, would you be referring to JP Morgan whose leader, “Jamie Dimon infamously called BTC a fraud” last year… all the while his own people in JPM have been involved in blockchain / crypto-currency research (including BTC) for years or were you referring to another JP Morgan

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Mermer
Guest
Mermer

Maybe take a look at newly released IvyKoin (IVY) which facilitates transaction of cross border fiat and crypto. Change Financial (CCA on ASX)has a 30% stake.
https://www.ivykoin.com

Rusty Brown in Canada
Guest
Rusty Brown in Canada

I checked, and Curzio really did say: “That’s what actually lead to the creation of hundreds of other coins and tokens.”
Somebody should tell them that “lead” is a heavy metal used by plumbers and coin counterfeiters, among others, which is what led me to post this comment.

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coanbie
Guest
coanbie

After dig some more info on the net, I think, the “banker coin” = Eximchain (EXC),

just search this clue “eximchain quorum jpmorgan” on the net

rbryenton
Member
👍3

Great discussion. I still don’t “get it”. Why all the fuss about anonymity ans secrecy if transactions are open and honest? Seems a lot of dreamers think they can get rich from devious means and schemes. Am I wrong? Thx Roger

Ablbert
Guest
Ablbert

Zcash as is with all cryptocurrencies is completely unregulated by any agency so there coin price could drop to zero overnight without any regard to an explanation to it’s holders because they simply do not need to comply to anyone or anything, period! Food for thought or not.

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saint stephen
Guest
saint stephen

I listened to the new Altucher pitch yesterday. His backstory and logic are compelling, but I can’t see governments giving up their power to inflate the dollar as they go. He wants $4,000 for his latest picks, as his basic newsletter just says buy Ethereum and Bitcoin on dips. Yeah, right, those are so expensive now I wouldn’t touch them with a ten foot pole. HIs website has, like, eight different newsletters. I’m more confident in metals. Sure, if one knew which coin the government would approve of it would be a goldmine. But since there are so many and… Read More »

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johndpurple
Member
👍0
johndpurple

Altuc