“While 2020 and 2021 are considered the years of bitcoin’s institutional adoption, in a new report Fidelity Digital Assets wrote that 2022 might be the era of adoption of bitcoin by sovereigns.
As more countries adopt bitcoin, other countries will be forced to as well even if they don’t believe in the investment thesis or adoption of bitcoin.
An outright ban will be difficult to achieve at best, and if successful, will lead to a significant loss of wealth and opportunity.
We also think there is very high stakes game theory at play here, whereby if bitcoin adoption increases, the countries that secure some bitcoin today will be better off competitively than their peers.”
“While the bitcoin options market has recently shed its bearish bias, some analysts remain unconvinced about the strength of the move owing to weak institutional demand and the cryptocurrency’s sensitivity to macro factors.
A good barometer is always the asset under management and inflows into crypto exchange-traded products and ETFs. So far we have recovered only $1 billion of inflows versus $4 billion that has left these products alone in January.
Amber Group said a continued rise in real or inflation-adjusted interest rates poses the biggest downside risk to bitcoin and risk assets, in general.”
“The firm is eyeing mobile gaming as the industry’s next big area of growth, hiring Steve Cho as its latest partner to help lead the fund in the right direction. Cho joins Mechanism Capital from Apple, where he led business efforts “to better understand NFTs and blockchain gaming” for the App Store.
Originally founded with a focus on decentralized finance (DeFi) in August 2020, the firm pivoted to blockchain-based gaming after a slew of home run investments in the sector, including metaverse platform Star Atlas, play-to-earn Ember Sword and guild giant Yield Guild Games.”
“Arif Alvi, currently serving as the president of Pakistan, called for additional training in emerging technologies including blockchain, artificial intelligence and cybersecurity while meeting with a delegation of blockchain technology experts.
In a Monday announcement, Alvi said Pakistan’s talent pool should be ready to meet the needs of the Fourth Industrial Revolution, which includes utilizing blockchain technology in the public and private sectors.
Pakistan’s federal ministries of finance and law have not legislated on a potential blanket ban of cryptocurrencies in the country, but the State Bank of Pakistan has reportedly argued cryptocurrencies like Bitcoin (BTC) are illegal and cannot be used for trading.
A report released by crypto analytics firm Chainalysis in October 2021 showed that Pakistan had the third-highest rate of crypto adoption behind Vietnam and India.”
“GridPlus has developed a universal system for securely and privately transferring any cryptoasset off-chain: Phonon. Phonon is Satoshi’s “Digital Cash” vision realized. The protocol enables secure, instant, privacy-preserving cryptocurrency transactions.
With the Phonon network, any cryptocurrency gains the same properties as the cash you might now hold in your pocket.Asset transfers are instant, private, free, and secured using a peer-to-peer network of secure devices. Phonon works with any blockchain, but the token and protocol governance framework are built on Ethereum.
The initial implementation of direct P2P off-chain transactions is uniquely useful on its own, but it will be an effective foundation for more ambitious applications such as:
Instant L1← →L2 withdrawals and cross-L2 transfers. Liquidity providers with secure hardware can provide fast exits to users for a fee, without the need for challenge periods and fraud proofs. This is an ideal solution for cross-chain and cross-layer communications because it does not dilute economic security or rely upon a third-party validator set. It is hardware secured and instant.
Private, fully trustless, cross-chain DEX. Using the same approach employed for cross-layer fast exits, Phonon can provide the foundation for a privacy-preserving cross-chain DEX. There is an opportunity for the DAO to develop such a DEX on its own or integrate the technology into an existing protocol.
Integration of Phonon into Telecommunications and IoT Networks. Any device with a compatible secure chipset will be able to leverage the Phonon Protocol for fast, private, secure P2P value transfers. Future iterations of the protocol could support cellular telephones via existing networks or via a P2P mesh.
IoT Micropayments. Phonon was originally conceived to support cost efficient IoT micropayments and even the initial iteration of the protocol combined with Lattice1 hardware opens up a host of possibilities for automated pay-as-you-go payment streams.
The initial implementation of the Phonon spec is a developer-focused alpha that works with smartcards and any third party USB card reader. Github repositories for a Phonon client and the Phonon Javacard applet are now public. With these starting points, developers will be able to begin experimenting with their own implementations and uses for the protocol.”
“Celer IM fundamentally changes how multi-blockchain dApps are built and used. Instead of deploying multiple isolated copies of smart contracts on different blockchains, developers can now build inter-chain-native dApps with efficient liquidity utilization, coherent application logic, and shared states.
Users of Celer IM-enabled dApps will enjoy the benefits of a diverse multi-blockchain ecosystem with the simplicity of a single-transaction UX, without complicated manual interactions across multiple blockchains.
By making cross-chain composability possible, the Celer IM framework opens up an entire galaxy of opportunities for inter-chain-native applications. Celer IM is currently live on testnet.”
“Rollups need new token models, and currently-deployed models have shortcomings. There are many benefits to protocol tokens, e.g. they allow incentivizing liquidity, and can create an engaged community. However, they are not without downsides—and those downsides can potentially make a token worse-than-useless.
One of the key properties of rollups is trustlessness. Rollups are secured by Ethereum, not a separate miner/validator set, and this is a key distinguisher between rollups (layer-2) and normal sidechains (not layer-2). With that in mind, here are some suboptimal token models that should be avoided:
A Proof-of-Stake (PoS) token, where a majority of validators sign off on blocks. This allows a majority of validators to censor new blocks, meaning user funds can be frozen. There is no need for PoS to secure a rollup, because a rollup is secured by Ethereum.
A fee-paying token, where users must pay fees in the token. For non-sovereign layer-2 protocols (like rollups on Ethereum), this is worse-than-useless because it adds friction for users to actually use the rollup.
A governance token, where a majority of votes can upgrade the rollup contract. This allows a majority of token holders to steal all user funds.
The finite execution capacity of a rollup is scarce, and this scarcity can be tokenized. Rollups can tokenize this block space scarcity through the right to collect fees as a block producer. Just as with fee-paying tokens, increasing demand for block space increases fees which increases demand for this right to collect fees. This does not add friction to end users, since they can use the rollup without needing that token to pay fees.
This token model helps solve a major challenge in rollup design: decentralizing block production.“
“The total supply of the USDC stablecoin on the Ethereum blockchain has surpassed that of rival Tether’s (USDT) for the first time. The current total supply of USDC on Ethereum stands at 39.92 billion, whereas USDT’s total supply on the blockchain stands at 39.82 billion, according to Etherscan.
One of the main reasons for USDC’s recent growth has been its increased usage in the decentralized finance (DeFi) market. USDT’s demand is mainly driven by centralized exchange users and institutions.
Looking at the bigger picture, USDT’s total supply across blockchain continues to remain higher than that of USDC’s. The former’s current total supply stands at over 82 billion, and the latter’s stands at around 45 billion.”
“EPNS can now be accessed through app.epns.io on the Ethereum blockchain. The protocol can be used by two broad audiences: channels and subscribers.
Channels are dapps, users, and businesses that want to send notifications to others. These notifications can be sent manually, or they can be built to respond automatically to on-chain or off-chain information. For example, a media company can push out alerts for breaking news when a story is released. Or, a DeFi project can allow users to automatically receive notifications when their loans are closing in on liquidation.
Subscribers are those who wish to receive notifications from others. Subscribers can browse the live channels on EPNS through the app, and opt-in to receive notifications from any of them. Notifications are then delivered to the subscriber’s ‘inbox’.”
“As the token-economic principles behind the multibillion-dollar “Curve Wars” expand to other protocols, a cottage industry of supporting projects is beginning to flourish. On Wednesday, governance markets platform Bribe announced the close of a $4 million seed round to help build what it refers to as a Voter Extractable Value (VEV) protocol.
Bribe joins a growing number of projects attempting to build on top of decentralized finance (DeFi) governance processes, routing value to governance token holders by enabling “bribes” – payments in exchange for voting on proposals in a certain way.
As unseemly as it may sound, it’s a flourishing tech stack spurred on by the success of Convex, a protocol effectively designed to maximize the value other projects can extract from decentralized exchange Curve Finance’s governance. The “Curve Wars” refer to an escalating battle for other protocols to accumulate and control Curve’s CRV governance tokens, which can incentivize user deposits into specific trading pools.
Bribe will initially focus on an auction platform for bribing votes in Aave governance before expanding to market-making protocol Tokemak.”
“The lawsuit, filed by a software engineer named Joseph Kent, has challenged the legality of PoolTogether’s operation, saying the scheme is essentially a lottery and prohibited under New York law.
A former technology lead for Sen. Elizabeth Warren’s 2020 presidential campaign, Mr. Kent is described in his lawsuit as someone “gravely concerned” at the prospect that cryptocurrency, which consumes voluminous amounts of electricity, could contribute to climate change, besides enabling bad actors to circumvent financial sanctions.
According to legal experts, Mr. Kent’s lawsuit could be among the first to squarely address the question of who is legally accountable when a DeFi application—known as a “protocol”—is at odds with the law or causes actionable harm to a user.
It’s an open question how courts and regulators are going to respond to these unique features of DeFi.
Mr. Cusack, PoolTogether’s founder, also has defended the protocol against the lawsuit.
It’s filed by someone who works in politics. It’s clearly written by someone who doesn’t understand how protocols operate or even what PoolTogether is.”
“The mayor of Rio de Janeiro said Thursday he plans to allocate 1% of Brazil’s second-most populous city’s treasury reserves to cryptocurrencies. The Brazilian city also plans to give discounts on tax payments made with bitcoin.
We are going to launch Crypto Rio and invest 1% of the treasury in cryptocurrency.”
“After a rocky start to the year, bitcoin (BTC) appears to have stabilized this week, and some analysts are predicting that prices could be set to rise. Prices are likely to rebound from the current level around $42,000 though will remain within the $40,000-$60,000 band, said Gavin Smith, CEO of Panxora.
This would set bitcoin up for a move to new highs later in the year. We predict the catalyst for this move to be stubbornly high inflation numbers coupled with a continuation of negative real interest rates.
If bitcoin can break $45,500, we could see another sharp move higher as belief starts to grow that the worst of the rout is behind it.
[Negative real rates] – a function of ultra-loose monetary policies put in place by central banks around the world – encourages risk-taking since investors are effectively losing value by holding bonds and other fixed-income instruments.
Whether bitcoin is seen as a risk-on asset or as a clear inflation hedge is dependent on geography. In developed economies, bitcoin is very much seen as a risk-on asset and is being traded based on macroeconomic developments, such as inflation and central-bank stimulus programs. In developing economies like Turkey, Brazil and Argentina, however, there is a clear inflation-hedge play.
As a result of this, direction is not clear and we fully expect unpredictable, choppy moves in a broadly sideways range for the time being.
Looking at the price of bitcoin in the long term, Deane predicts continued growth, development and adoption on a global scale.“
“The ability to trade stock on FTX.US might be only months away, according to a tweet from the exchange’s president. Bitstamp USA has also signaled it’s looking at stocks.
Robinhood is approaching the market from the opposite direction to the two exchanges, beginning with stocks and moving into crypto. It’s been adding new features to its crypto service for some time and plans to roll out the beta version of its crypto wallet feature this month, which will enable users to withdraw cryptocurrency from the platform.”
“The coming year is likely to see crypto-related crime decrease to an ever-smaller share of the overall industry as law enforcement takes greater advantage of the transparency provided by blockchain technology, says Kim Grauer, director of research at Chainalysis.
According to a January 6 report from Chainalysis, the growth of legitimate cryptocurrency usage is “far outpacing the growth of criminal usage.” The share of cryptocurrency transaction volume associated with illicit activity has never been lower, representing just 0.15% of transaction volume in 2021.
Law enforcement wins continue to demonstrate to bad actors that cryptocurrency’s inherent transparency makes it an undesirable means for transferring illicit funds. Cash is still king when it comes to illicit finance, and that is not likely to change.”
“Philip Rosedale, founder of Linden Lab’s virtual online world Second Life, will be rejoining the project as a strategic adviser to guide its entry into the Metaverse. While he is negative on content interoperability in the Metaverse, he believes a nonfungible token (NFT)-based future is the way forward long term.
Second Life is an online social game universe that launched in 2003 when the word “metaverse” was only being used by Neal Stephenson fans. Since leaving his position as CEO of Linden Labs in 2008, Rosedale has made a name for himself in the virtual reality (VR) ecosystem. In 2013, he created the social VR company High Fidelity.”
“In a ruling that is “almost identical to the El Salvador bill,” Tongan bigwig Lord Fusitu’a anticipates that his country could adopt Bitcoin by November. Tonga is a remote island nation that relies upon remittances from countries, including Australia, New Zealand and the United States.
The remittance use case was one of the primary drivers for El Salvador adopting BTC as legal tender. According to the World Bank, Tonga’s remittance as a percentage of gross domestic product is substantially higher than El Salvador, at 39% vs. 24%, respectively.
In 2021, it was widely speculated that Tonga would become one of the next countries to adopt BTC as legal tender.”
“In a jampacked report on digital assets, Fidelity asset management theorizes that miner movements indicate the Bitcoin cycle has a lot more room to run. Key on-chain metrics indicate Bitcoin miners are in “massive” BTC accumulation mode.
As Bitcoin miners have the most financial incentive tho make the best guess as to the adoption and value of BTC (…) the current bitcoin cycle is far from over and these miners are making investments for the long haul.
We wouldn’t be surprised to see other sovereign nation-states acquire bitcoin in 2022 and perhaps even see a central bank make an acquisition.
In essence, more regulation and better products will open up the crypto space, ‘bringing a greater portion of the hundreds of trillions in traditional assets into the digital asset ecosystem.’ Combined with miners’ hodling, it could lengthen the cycle and drive BTC to new highs.“
“Customers will eventually be able to use their CBDC-linked Visa card or digital wallet anywhere that Visa is accepted globally. The payments firm said its crypto teams plan to work with central banks on pilot and prototype cases starting in the spring.
If successful, CBDC could expand access to financial services and make government disbursements more efficient, targeted and secure – that’s an attractive proposition for policy makers.”
“The Blockchain-based Service Network (BSN), a government-backed blockchain project in China, is working on infrastructure that would support businesses and individuals to build platforms and apps to manage NFTs.
Officially called the BSN-Distributed Digital Certificate (BSN-DDC), the project aims to support the deployment of non-crypto NFTs by offering application programming interfaces for the development of user portals and apps where fiat money would be the sole payment method. All the gas fees on the BSN-DDC network are paid with fiat money.
Public chains can’t be legally operated within China.”
“The consumer price index rose 7%, but many investors anticipated a steeper increase; bitcoin and ether prices notched solid gains during the U.S. trading day.
There had been fears in the market that prices might have climbed even faster, which would have put additional pressure on the Federal Reserve to move more aggressively to tighten monetary conditions and cool down the economy.
U.S. stocks closed higher, also due to cooling concerns that the Fed might get more aggressive in tackling inflation.”
“Minnesota Representative Tom Emmer has announced he will be introducing a bill intended to prevent the Federal Reserve from acting as a retail bank in the potential issuance of a digital dollar.
Emmer said the bill would prohibit the Fed from issuing a central bank digital currency, or CBDC, directly to U.S. consumers. According to the Minnesota representative, having the government entity require users to open accounts to access the benefits of a digital dollar would ‘put the Fed on an insidious path akin to China’s digital authoritarianism.’
The Fed does not, and should not, have the authority to offer retail bank accounts. Regardless, any CBDC implemented by the Fed must be open, permissionless and private. This means that any digital dollar must be accessible to all, transact on a blockchain that is transparent to all, and maintain the privacy elements of cash.”
“A group of U.S. banks plans to offer its own stablecoin, called USDF, in a move to tackle concerns about the reserves behind nonbank-issued equivalents. Founding members of the USDF Consortium include Synovus (the 48th largest bank in the U.S. by assets), New York Community Bank (No. 45), FirstBank (No. 88) and Sterling National Bank (No, 77).
The coin addresses the consumer protection and regulatory concerns of nonbank issued stablecoins.
USDF will operate on the Provenance blockchain and will be redeemable 1:1 for cash from any of the group’s members.”
“The move could open the door for Coinbase to offer crypto derivatives products in the U.S. At present, only a handful of exchanges allow U.S. investors to trade bitcoin and ether futures, with cash-settled products being both the most popular and the longest-available products.
FTX.US acquired LedgerX last August with a similar aim. Crypto.com also acquired retail derivatives platform Nadex late last year. FairX has relationships with major brokerages including TD Ameritrade, E*Trade, ABN AMRO, Wedbush, Virtu Financial and a handful of others.
The development of a transparent derivatives market is a critical inflection point for any asset class and we believe it will unlock further participation in the cryptoeconomy for retail and institutional investors alike.”
“Consumer credit reporting company TransUnion will enable consumers to give crypto lenders access to their personal credit data in a move that could greatly expand the possibilities of lending in the digital asset market.
Cryptocurrency investors could now receive better interest rates when borrowing money thanks to lenders being able to judge their risk profile based on credit data. Furthermore, lenders could now issue loans without requiring any collateral at all depending on the customer’s creditworthiness.
Users register with the digital passport to obtain anti-money laundering and know-your-customer verification that can be attached to their digital wallets.
Providing credit and identity data on-chain is a huge step towards improving the financial products available in the space.”
“The Central Bank of Iran, or CBI, and the Ministry of Trade have reached an agreement to link the CBI’s payment platform to a trade system allowing businesses to settle payments using cryptocurrencies.
This should provide new opportunities for importers and exporters to use cryptocurrencies in their international deals.
He added that the government should not be ignoring the economic and business opportunities of the crypto industry, referring to major private cryptocurrencies like Bitcoin (BTC):
All economic actors can use these cryptocurrencies. The trader takes the ruble, the rupee, the dollar, or the euro, which he can use to obtain cryptocurrencies like Bitcoin, which is a form of credit and can pass it on to the seller or importer.”
“On Tuesday, Ethereum Push Notification Service (EPNS) announced the launch of what founder Harsh Rajat calls the “Web 3 communication primitive” with a bevy of decentralized finance (DeFi) mainstays involved. Version 1 of EPNS, which is now live, is launching with MakerDAO, Aave, Uniswap and dYdX, among others.
DeFi protocols, non-fungible token (NFT) platforms and other Web 3 infrastructure providers largely lack the capacity to send these kinds of messages, leading to an informational gulf.
For example, if you’re liquidated on a lending platform you as a wallet address will not know about it, if your governance proposal passed you won’t know about it, if you’re into NFTs you have no way to reach out to someone who bought your NFTs to let them know a new collection is out.
The project attempts to solve this problem by enabling protocols to create “channels” – distribution networks that allow dapps to manually send messages or automatically send alerts based on on-chain activity. These messages will be sent directly to Ethereum addresses. The messages are largely gasless, meaning there is no transaction fee, as the notifications are sent with the EIP-712 standard, a method for off-chain data message signing.”
“Bitcoin’s Lightning Network-powered app Strike has launched its services in Argentina. The company said Tuesday that Argentines will be able to make bitcoin remittance payments, receive bitcoin tips on Twitter and use Strike’s peer-to-peer transaction services.
Argentina is one of the most exciting countries for building the Bitcoin economy, leveraging Bitcoin as both a superior asset and a superior payments network.
Argentina is the first step in a 2022 Latin American expansion that will include Brazil, Colombia and “other Latin American markets.” The company launched its payment app in El Salvador last March.”
“After months of speculation about a possible vampire attack, dominant NFT marketplace OpenSea may finally have a worthy – and more thoroughly decentralized – competitor: LooksRare. The numbers point to a searing-hot start for a day-old platform that seems to fill a clear market demand.
For months, NFT traders have clamored for OpenSea to release a token and decentralize portions of its operations. The incumbent’s policies around enforcing IP as well as delisting hacked or exploited NFTs has made it a target of critics who say it’s a rent-seeking middleman in a decentralized ecosystem. The firm was recently valued at $13.3 billion.
The question is: Will traders return to OpenSea if token incentives can’t keep them around?”
“The Federal Reserve’s highly anticipated report on cryptocurrencies and central bank digital currencies (CBDCs) – initially slated to come out last September – will be released “within weeks,” Fed Chairman Jerome Powell told a U.S. Senate committee on Tuesday.
The report is expected to focus on CBDCs. During his Senate confirmation hearing on Tuesday, the Fed chairman also said a CBDC wouldn’t necessarily lead to a ban on private stablecoins.“
“Bitcoin rose toward $43,000 on Tuesday and is up about 3% over the past 24 hours. Several alternative cryptocurrencies (altcoins) such as MATC and FTM were up about 14% over the same period, suggesting a greater appetite for risk among investors.
For now, it appears that most buyers are remaining on the sidelines, especially ahead of the U.S. consumer price index (CPI) report, which will be released on Wednesday.
The market expects the CPI to rise 7.1% for the year through December and 0.4% over the month. If the figure released is larger than expected, we can expect further sell pressure for bitcoin. Due to the selling we have seen in recent weeks, the downside for BTC is limited in the short term, even with higher-than-expected inflation data on Wednesday.
Miners appear to be unfazed by the price dip. For example, bitcoin mining firm Bitfarms purchased 1,000 bitcoins worth $43.2 million during the first week of January.”
“The move brings Citadel Securities closer to crypto, as Paradigm focuses on investing in crypto and Web 3-related firms. Pardigm was co-founded by Fred Ehrsam, a co-founder of Coinbase, and Matt Huang, who previously led crypto investments at Sequoia.
Citadel Securities handles about 27% of the shares that are traded in the U.S. stock market each day.
We look forward to partnering with the Citadel Securities team as they extend their technology and expertise to even more markets and asset classes, including crypto.”
“In two recent job postings on LinkedIn, Jack Dorsey’s Block (formerly Square) revealed the group’s plans to develop “the next generation of mining ASIC” and make a hardware wallet for the next 100 million Bitcoin (BTC) users.
The new job posting confirms that Block sets out to develop purpose-built ASICs for BTC mining. Block is the holding name for Square, CashApp, Spiral, Tidal and TBD54566975.”
“In a blog post Monday, Polygon made some audacious claims about having set new speed and scalability milestones with its “Plonky2″ technology in what may be a possible breakthrough for Ethereum throughput.
Plonky2 is a recursive SNARK that is 100x faster than existing alternatives and natively compatible with Ethereum.
Bjelic claims that one of Polygon Zero’s major breakthroughs is that it can verify complex transactions, such as Ethereum smart contract interactions. Plonky2 achieves the speed and scalability milestones by using a blend of advancements across different academic disciplines.
The team is completing work on the virtual machine for Polygon Zero, which will allow the network to process transactions, as well as other key infrastructure for an eventual launch.”
“TP ICAP, the world’s largest inter-dealer broker, has started offering clients services in crypto-linked exchange-traded products (ETPs) in another sign of the growing mainstream adoption of digital assets. The firm facilitates transactions between investment banks, hedge funds and other large financial institutions.
The broker is responding to increased demand for digital assets from institutional clients, and it’s not alone. UBS, Goldman Sachs and Bank of America are all clearing and settling cryptocurrency ETPs for hedge-fund clients in Europe.
TP ICAP plans to launch the trading of crypto-linked ETPs in the U.S. in the coming months, the broker said. Still, the focus for 2022 is on the roll-out of over-the-counter (OTC) derivative products based on digital assets.”
“Global financial markets, stocks and cryptocurrencies took a knock on Jan. 10 after rumors that the Federal Reserve may hike interest rates four times in 2022 circulated and sparked a sell-off and sent the benchmark 10-year Treasury yield briefly above 1.8%.
The Fed’s shifting monetary policy is generating significant challenges for risk-on assets but this was anticipated by analysts at Delphi Digital who noted that the headwinds facing BTC and the crypto market have more to do with “tighter liquidity conditions and heightened market volatility” than with rate hikes.
The shift away from excess liquidity and accommodative monetary conditions is a structural headwind we’ve highlighted in recent months, which now appears to be coming to a head.
Conceivably a double bottom from the September 2020 low, after retracing Q4s move up. Currently trading below the 2d 200 EMA, which has historically been a good buying opportunity.”
“Between Jan. 5 and 6, the hashrate of top mining pools fell by 11% as Kazakhstan’s internet went dark. Today, the loss had narrowed to around 2.2%.
Kazakhstan is the world’s second-largest bitcoin miner. It accounts for about one-fifth of the global total and is surpassed only by the U.S. The country has been rocked by civil unrest in the past week, set off by a spike in electricity prices.
The situation is almost resolved and crypto mining data centers are back.
Internet watchdog NetBlocks said last week that the fact that multiple providers lost connectivity simultaneously “indicates a centralized kill-switch.””
“The former all-pro wide receiver for the Dallas Cowboys is tapping oracle platform Chainlink to bring “dynamic” NFTs to Personal Corner, a platform Bryant founded to help athletes build virtual brands.
Dynamic NFTs use Chainlink data feeds to change their appearance, in this case according to player performance. So if a player reached a milestone for touchdowns or receiving yards, for example, the NFT could adapt to reflect the progress.”
“Market-beating fund manager and billionaire Bill Miller is so bullish on bitcoin that it and investments tied closely to the crypto now represent 50% of his personal assets. Miller, who gained fame for beating the S&P 500 index for a record-breaking 15 years in a row from 1991-2005 as a fund manager at Legg Mason, has previously invested heavily in bitcoin in funds that he managed, but his revelation about his personal portfolio was new.
Miller said he thinks bitcoin is best thought of as “digital gold” with a strictly limited supply and that he’s only recently allowed himself to be called a “bitcoin bull” rather than just a “bitcoin observer” because he feels that it’s now developed into a game-changing technology.
I think the average investor should ask himself or herself, what do you have in your portfolio that has that kind of track record – number one, is very, very under-penetrated; can provide a service of insurance against financial catastrophe that no one else can provide and can go up 10 times or 50 times? The answer is: nothing.”
“The near-$100 billion dollar wealth amassed by CZ (as he is known in crypto circles) doesn’t even factor in his own personal crypto holdings.
CZ’s fortune dwarfs those of many of the crypto industry’s biggest names, including FTX CEO Sam Bankman-Fried (who holds $22.5 billion according to Forbes), and Coinbase CEO Brian Armstrong (who holds $9.6 billion). Per the Bloomberg Billionaires Index, CZ’s wealth even eclipses that of Satoshi Nakamoto.
Outside the world of crypto, CZ’s peers include Tesla and SpaceX founder Elon Musk who boasts an estimated net worth of $263 billion, and Amazon founder Jeff Bezos, the founder of Amazon, whose net worth is estimated at $188.4 billion.
Coinbase might appear to be the 800-pound gorilla from a U.S. perspective, but Binance is significantly bigger.”
“The test enabled Bank ABC to settle real-time payments to Alba’s counterparts in the United States using JPM Coin, a blockchain-based payments system and stablecoin pegged to the United States dollar.
CBB governor Rasheed Al Maraj said that the trial has been crucial for the government of Bahrain to address and potentially eliminate existing inefficiencies in the traditional cross-border payments industry. The trial could potentially extend to its central bank digital currency development.
The investment bank has been actively promoting its blockchain tech for global use, partnering with Singapore’s largest bank, DBS, to pilot a blockchain payments system. JPMorgan previously provided its Liink blockchain technology to the State Bank of India to reduce transaction costs and improve cross-border payments.”
“The fundamental security limits of bridges are actually a key reason why while I am optimistic about a multi-chain blockchain ecosystem, I am pessimistic about cross-chain applications.
For example, suppose that you have 100 ETH on Ethereum, and Ethereum gets 51% attacked, so some transactions get censored and/or reverted. No matter what happens, you still have your 100 ETH. Now, imaging what happens if you move 100 ETH onto a bridge on Solana to get 100 Solana-WETH, and then Ethereum gets 51% attacked. The attacker deposited a bunch of their own ETH into Solana-WETH and then reverted that transaction on the Ethereum side as soon as the Solana side confirmed it. The Solana-WETH contract is now no longer fully backed, and perhaps your 100 Solana-WETH is now only worth 60 ETH. Even if there’s a perfect ZK-SNARK-based bridge that fully validates consensus, it’s still vulnerable to theft through 51% attacks like this.
For this reason, it’s always safer to hold Ethereum-native assets on Ethereum or Solana-native assets on Solana than it is to hold Ethereum-native assets on Solana or Solana-native assets on Ethereum. And in this context, “Ethereum” refers not just to the base chain, but also any proper L2 that is built on it. If Ethereum gets 51% attacked and reverts, Arbitrum and Optimism revert too, and so “cross-rollup” applications that hold state on Arbitrum and Optimism are guaranteed to remain consistent even if Ethereum gets 51% attacked.
The problem gets worse when you go beyond two chains. If there are 100 chains, then there will end up being dapps with many interdependencies between those chains, and 51% attacking even one chain would create a systemic contagion that threatens the economy on that entire ecosystem.
This is why I think zones of interdependency are likely to align closely to zones of sovereignty (so, lots of Ethereum-universe applications interfacing closely with each other, lots of Avax-universe applications interfacing with each other, etc etc, but NOT Ethereum-universe and Avax-universe applications interfacing closely with each other).
This incidentally is also why a rollup can’t just “go use another data layer”. If a rollup stores its data on Celestia or BCH or whatever else but deals with assets on Ethereum, if that layer gets 51% attacked you’re screwed. To be a rollup that provides security to applications using Ethereum-native assets, you have to use the Ethereum data layer (and likewise for any other ecosystem).
I don’t expect these problems to show up immediately. 51% attacking even one chain is difficult and expensive. However, the more usage of cross-chain bridges and apps there is, the worse the problem becomes. So cross-chain activity has an anti-network-effect: while there’s not much of it going on, it’s pretty safe, but the more of it is happening, the more the risks go up.“
“Crypto crosses new ATHs and the total market cap reaches $5T. The bull run is not over.
Eth2 merge happens. All the research is done, testnets are running, and it’s only a matter of debugging right now. Say goodbye to Ethereum PoW in 2022.
Bitcoin gets adopted by another nation-state. Global fiat inflation is starting to hit countries and central banks will have to look for alternatives.
Ethereum becomes a trillion-dollar network. The Merge, Proof of Stake, EIP 1559, all of this is brewing a storm for Ethereum to join Bitcoin as a trillion-dollar network.
Layer 2 reaches $25B in total value locked.
NFT sales hit $30B.
DeFi will rebound this year and replace some of the weaker projects in the top 10.
DAOs will make an 8-figure purchase for an IRL item.
GameFi builds niche. Indie games on L2 have an exceptional building year with a few notable breakouts.
“The Coming Bear Market” will be frequently discussed until it becomes a meme. The bear market will not come.“
“The ecosystem now boasts over 1,000 project integrations, with 700 oracle networks securing over $75 billion in value—up tenfold from 2020—and accessing over one billion data points. While Chainlink’s data capabilities formed the focus of its scaling efforts in 2021, the past year has also seen the oracle provider launch additional capabilities for its networks—most notably random number generation and its smart contract service Keepers, which enables the automation of increasingly complex instructions. VRF has already received over 2.5 million randomness requests.
Nazarov says the team is now finally satisfied with the security and scalability of the consensus system they’ve designed, and is now ready to launch staking this year. But he declines to specify when in the year it might launch.
Chainlink is also set to launch CCIP, its global standard for messaging and communication between blockchains. CCIP seeks to do what TCP/IP did for the internet: connect all the blockchains into one “internet of blockchains,” Nazarov says, via cross-chain smart contracts.
In 2022, Nazarov predicts many more banks, insurance providers, and other institutions will embrace DeFi, but also build out their own systems to launch their own smart contracts. Chainlink can offer those enterprises an on-ramp into DeFi without them having to integrate with protocols.”
It's important to know that many forms of organization are valid. Decentralized structures are not inherently better than centralized — they are better for *some things* and worse for others.
“The One sits on a 3.5-acre estate and boasts a 50-car garage, 10,000-bottle wine cellar, 4,000-foot square guest house and stunning views of Los Angeles below.
But the lavish project suffered after its owner defaulted on over $165 million in loans and debt, placing it into receivership. The home was previously expected to go on the market for $500 million—making it one of the most expensive properties in the world. The developer wants to save it from auction by creating a cryptocurrency, The One Coin, that represents shares in the property.
Once the tokens are created and traded, it would transfer the value of the house to the coin, making this the first-ever asset-backed coin by a one-of-a-kind piece of real estate.
Niami’s idea is to tokenize the house, sell the tokens, then rent the house out for glitzy events and give the profits back to the token-holders. (It’s worth mentioning that the SEC, based on past guidance, may think tokens tied to home rental revenues look like a security.)”
“Bloomberg first reported the news after evidence of PayPal’s exploration into building its own stablecoin was discovered in the company’s iPhone app. Hidden code and images show work on what is called a “PayPal Coin.” The code shows the coin would be backed by the U.S. dollar.
We are exploring a stablecoin; if and when we seek to move forward, we will of course, work closely with relevant regulators.
PayPal has been very active with its cryptocurrency efforts recently, increasing the amount of crypto its customers can purchase, as well as investing in educating its users on crypto and working to allow them to withdraw their crypto safely to third-party wallets.”
Bitcoin vs Ethereum: Divergent Evolution in Cryptocurrency
“The popular narrative is that Fed’s plans to shrink its balance sheet and raise rates concurrently could lead to prolonged asset price deflation. ‘It’s time to evaluate the conviction you have in whether positive interest rates could damage equity portfolio and see further global downward pressures.’
The fears of a prolonged bear market in stocks and digital assets might be overblown as historically markets have remained resilient during tightening cycles.
Indeed, bitcoin pretty much remained bid through the major part of the previous tightening cycle that began in December 2015 and ended in December 2018. Further, stock markets came under pressure in the final quarter of 2018 – after nearly two years of rate hikes.
Bloomberg Intelligence commodity strategist Mike McGlone foresees bitcoin and crypto benefitting from the tightening cycle.
Expectations for Federal Reserve rate hikes in 2022 may support a win-win scenario for Bitcoin vs. the stock market. It’s a question of bull-market duration, and we see the benchmark crypto coming out ahead.”
“Solana suffered a fourth network incident in the span of a few months. Two out of the four issues happened this week. According to Solana, this is happening because of a rise in high compute transactions.
Amid these recent events, Cyber Capital chief investment offic Justin Bons expressed his disapproval with Solana and published a series of tweets enumerating the reasons why he doesn’t support the project. Bons claims that Solana is ‘consistently displaying a pattern of bad behavior‘ and ‘prioritizing attracting ignorant investors over good blockchain design.’“
“On Friday, the venture capital firm – often called a16z for short – released a policy agenda aimed at global governments with 10 guiding principles on how to “build a better internet.” The venture capital firm has already spoken with “key leaders on every populated continent,” according to a16z’s Global Head of Policy.
a16z encourages world leaders to think proactively about Web 3 policy, starting by establishing a clear vision, providing clear and fair tax rules as they apply to digital assets, embracing multi-stakeholder governance and more.
We are seeing a growing number of governments approaching us saying that they want to be Web 3 republics.”
“In a zero-interest environment in traditional markets, banks may have a new friend in decentralized finance (DeFi). This is what institution-friendly DeFi initiative Aave Arc is offering, having now officially launched with the help of cryptocurrency custody firm Fireblocks, plus a “whitelist” of 30 licensed trading firms.
Aave Arc could usher in a new era of bank-friendly DeFi.
Looking ahead, Kulechov predicts permissioned and unpermissioned DeFi will likely exist in parallel, adding that there’s been “enormous” interest in Aave Arc from institutions, including banks. Enabling institutional access to DeFi could unlock a trillion-dollar opportunity over the next half decade.“
“Shares of GameStop (GME), the original meme stock that stoked retail investor frenzy in buying highly volatile stocks last January, surged as much as 31% in after-market trading Thursday after the Wall Street Journal reported that the company is launching a division to build a marketplace for non-fungible tokens (NFT) and to establish cryptocurrency partnerships.
GameStop’s plan calls for it to build an online hub for buying, selling and trading NFTs of virtual video-game goods such as avatar outfits and weapons. The company has hired more than 20 people for the division.
Prices for loopring (LRC), the native token of layer 2 protocol Loopring, spiked about 15% on the news. There have been rumors that Loopring is one of the crypto companies that is working with GameStop on its NFT marketplace. In October, GameStop said it was looking to build an Ethereum-based Web 3 arm.”
“Named after Samsung’s flagship 837 store in New York, the Samsung 837X virtual store will open for business for a limited time from today. Decentraland users will be invited to explore an “experiential playground” and earn NFT rewards by completing quests.
The metaverse experience will consist of three areas, the Connectivity Theater (which showcases news from Samsung’s stage at CES 2022), the Sustainability Forest, which comprises a “journey through millions of trees” to mark the company’s sustainability initiatives, and the Customization Stage.
The latter will showcase a live in-metaverse dance party hosted by DJ Gamma Vibes from the physical 837 store, with NFT badge holders entered into a raffle to win Samsung-branded swag for their Decentraland avatars.
The metaverse empowers us to transcend physical and spatial limits to create unique virtual experiences that could not happen otherwise.”
“The U.S. Congress is preparing an hearing to examine the environmental impact of crypto mining, especially on the Bitcoin network. The date and witness list for the hearing are still undetermined, but it could take place as early as the end of January.
In December, Sen. Elizabeth Warren (D-Mass.) sent a letter to New York-based miner Greenidge’s CEO, expressing concerns about the firm’s environmental impact. That was followed by a New York Times article that relayed concerns surrounding the increased mining in the state. These “recent events in New York state” have raised the alarm over crypto mining with the House Energy and Commerce Committee.”
“The crypto developer ecosystem has notched all-time highs in multiple metrics including monthly active developers and highest number of new developers in a calendar year. It’s a robust sign of health and growth for the industry as a whole.
The developer ecosystem, we’ve always thought it was the leading indicator. The engineers are closest to whether or not there’s real value, and this many people coming in, playing with it, is a good sign.
A key population leading the surge is developers working on top of smart contract platforms such as Ethereum and Solana. 65% of all developers working in Web 3 joined the ecosystem in 2021, and 2,500 developers are working on decentralized finance (DeFi) in particular.
While Ethereum comfortably leads all blockchains with 4,000 monthly active developers, Solana in particular has “broken out” with almost a 5x multiple to just under 900 monthly active developers. In total, 10 different smart contract platforms now have over 250 monthly active developers.
One of the takeaways for me is that it’s really impressive that Ethereum had this growth trajectory. The ecosystem was so much smaller – in terms of the absolute number of developers, it’s so impressive Ethereum could do this.”
“The January edition of Bloomberg’s Crypto Outlook described the Federal Reserve’s plan to raise interest rates in 2022 as a possible “win-win scenario for Bitcoin [versus] the stock market.” The reasons stem from the fact that the S&P 500 Index is currently the most overextended above its 60-month moving average in over two decades and that Bitcoin is seeing growing mainstream appeal as an inflation hedge.
Stretched markets have become common, but commodities and Bitcoin appear to be early reversion leaders. It’s a question of bull-market duration, and we see the benchmark crypto coming out ahead.
Minutes from the Federal Reserve’s December policy meeting revealed on Wednesday that central bankers are ready to aggressively curb their stimulus support more quickly than previously expected. The plan, at least for now, includes three interest rate hikes in 2022 accompanied by a reduction in the Fed’s balance sheet, which currently stands at nearly $8.3 trillion in Treasurys and mortgage-backed securities.”
“WeChat users now have the option to pay using China’s central bank digital currency (CBDC) via a new access point in the messaging app’s payment service. They must, however, have already verified their identity using the digital yuan wallet app, or “e-CNY” app.
The Tencent-developed WeChat is the dominant instant-messaging app in mainland China with over a billion users.”
The Disrupt 