Blockchain Bites: Bitcoin Crosses $11K While DOJ Takes Aim at Crypto
Ethereum's success drives imitation.
Take a look at the latest report from the crypto industry publication DappRadar: In the third quarter of 2020, Ethereum accounted for 96% of the total transaction volume via decentralized applications, including the blockchain-based trading and credit networks that have exploded in popularity in the past few months.
The prices of Ether (ETH), the native token of the Ethereum blockchain, almost tripled to around $ 350 in 2020. Such returns make the well-known Bitcoin profit of 52% since the beginning of the year appear meager.
Related: Rethinking Money: Fixing the Big Internet Mistake
CoinDesk is preparing for the invest: ethereum Economy virtual event on October 14th with a special series of newsletters covering the past, present and future of Ethereum. Every day until the event, the team behind Blockchain Bites will dive into an aspect of Ethereum that excites or confuses us. Today's introduction was written by Market Editor Bradley Keoun.
However, success has posed a number of problems such as: B. congestion on the network that has slowed transaction processing and brought average rate rates to record levels.
Ethereum's 2.0 upgrade is said to increase processing speed to 1,000-4,000 transactions per second, but there are a lot of problems right now. "Scalability was a critical issue for Ethereum," said analytics firm IntoTheBlock in a blog post this week.
All of this creates an opening for competitors who are nowhere near ready to grant Ethereum's first mover advantage as the dominant blockchain for smart contracts.
Related: First Mover: Bitcoin Reaches $ 11,000 As Square Reveals $ 2.3T Corporate Money Pot
The list of challengers is not short. In no particular order there are Tron, EOS, Neo, Polkadot, Algorand, Cardano and Avalanche, among others. According to data firm Messari, no fewer than 17 of these blockchains have tokens that are being traded, each with a market value of at least $ 100 million.
Last year, Zilliqas ZIL tokens achieved the highest return with a plus of 73% compared to ETH. At the other end of the spectrum, EOS's EOS tokens are ethereal down 56%.
Some competitors don't want to take over Ethereum per se, but want to steal lucrative parts of the franchise.
Radix DLT says it is one such company - a blockchain built with the express goal of becoming a home for the rapidly growing cryptocurrency subsector of decentralized finance (DeFi).
CEO Piers Ridyard told CoinDesk in an interview this week that Ethereum's one-size-fits-all model is unlikely to meet DeFi's unique technical requirements. This is critical if operators want to scale their platforms to make them plausible and start challenging big banks and Wall Street trading firms.
Ridyard is expected to appear on a virtual panel with Roham Gharegozlou from Dapper Labs on Thursday October 14th at the CoinDesk conference "Invest: Ethereum Economy". CoinDesk tech reporter Will Foxley is hosting. It's 5 p.m. Easter time.
Ridyard said he wasn't worried about Ethereum abandoning it. The industry still has a long way to go and there is plenty of time to catch up or overtake the market leader.
"Technology is moving at a breakneck pace and at an incredibly slow pace," said Ridyard. "Basically, we are still in the industry's concreting phase."
The fees are damn high: DeFi is pushing Ethereum to its limits
Ethereum has produced many mind-boggling innovations - some on purpose, others out of necessity. Since DeFi is driving the ecosystem, the existing infrastructure is being used to the full. Can Ethereum 2.0 address these vulnerabilities? Is this the opportunity for so-called "Eth Killers"? We are evaluating this critical fork in the road as Ethereum appears to be improving.
From 9:30 am, see ET Rune Christensen from MakerDAO, Illia Polosukhin from NEAR Protocol and Michael Anderson from Framework Ventures for a live stream.
$ 1B BTC
At invest: ethereum Economy, on October 14th, we will deal with the implications for investors, as decentralized financing is taking the crypto world by storm.
Ahead of the event, our two-part virtual miniseries CoinDesk Live: Inside the Ethereum Economy introduces trends we will break down at the main event: Why all the hype behind crop farming and food-inspired tokens? Should investors take them seriously or are they a fading trend?
Whether it's wBTC, renBTC, or tBTC, tokenized Bitcoin is the hottest thing on Ethereum right now. A phenomenon that barely existed earlier this year has brought the total value of Bitcoin to over $ 1.3 billion.
On October 12th, CoinDesk market reporter Zack Voell will discuss the phenomenon of high yield farming with Matt Luongo from Thesis, Jeff Garzik from Bloq, Loong Wang from Ren Project and Kiarash Mosayeri from BitGo.
Check out Bitcoin's $ 1 Billion Harvest: Why Hodlers Harvest Ethereum on Oct 12 and stream on CoinDesk.com, Twitter and YouTube.
Non-fungible tokens (NFTs) are the latest decentralized tools for getting the Ethereum economy at warp speed. NFTs are ways of attaching real or digital objects to a blockchain, usually Ethereum.
First made public in 2017 with the success of CryptoKitties, the sector still largely focuses on the goofy and surreal - there's a booming art world, a gaming sector, and now even a place to share your NSFW desires able to fulfill.
Brady Dale was the first to summarize why and how NFTs got involved in the decentralized financial mania.
NFTs meet DeFi
NFTs haven't caught investor attention until recently, as lending, borrowing, and risk management - as we now refer to it as DeFi - absorbed all of Ethereum's oxygen in 2020. Hence, for a while, Ethereans have largely lost interest in NFTs - and who could blame them? They could be bought and sold, and games would sometimes come together, but they seldom held gamers' attention for very long. There were more dynamic markets for games; Art is fine, but money is money.
Even if there had been buzz, some projects would only show up to fade, exposing a weakness in the NFT specification. For example, CryptoStrikers, a sports reminder project that started during the World Cup, is long gone (football-oriented Sorare emerged as a result).
Why is the marriage of non-fungible tokens (NFTs) and decentralized financing (DeFi) taking place now? It's controversial, but you can argue that it comes back to DeFi's favorite robo-advisor for income: Yearn.Finance.
When the DeFi gateway Y.Insure created a way to get KYC-free insurance for crypto assets, it used NFTs to display the policy with insurers. When the industry was reminded of the existence of ERC-721 by DeFis Top Chad, the industry ran along.
That is the short story, the long story involves the financialization of these tradable assets.
As much as people love to own expensive things in crypto, they love to own things that they can sell whenever they want (let's call it a liquidity fetish). NFTs had managed to be expensive, but they hadn't managed to be liquid until DeFi thinking intervened.
The foreign products are emerging phenomena of this financialization. Brukhman gave the example of Ark Gallery, a DAO for CryptoPunks. The punks were made before ERC-721 and have become so early, cool, and rare (there are only 10,000 such punks, each of which is completely different). Ark allows people to crowdfund a punk (which owns a fraction of the token) and then vote on whether to sell it or not when there's an offer.
If there is a successful offer, everyone gets a fair share of the payment based on how much they own. This has resulted in CryptoPunks trading at ever higher prices so that more people feel like they have a piece of it. It is clear that the volume spikes have increased significantly this year on the NFT data website NonFungible.com.
NIFTEX has pushed this even further. Launched earlier this year with funding from the Digital Currency Group (the parent company of CoinDesk), NIFTEX began creating indices for NFTs such as digital real estate or digital maps. The real innovation, however, began when the company split expensive NFTs into so-called shards (actually just ERC-20 tokens - fungible splinters of previously unique digital assets).
The shard system works similarly to Ark Gallery, except that an offer can only be made by someone who has one of the ERC-20 tokens, which represents partial ownership of an item. The offer is automatically successful if not enough objections are received within two weeks. A clever strategy has been devised to penalize low ball bids.
NIFTEX did its first fractionation in May and like Ark, the company sees a lot more liquidity. Shard owners own a fractional, extremely rare Axie Infinity card called the Almace, which had over 1,000 ETH transactions made in the first week after sharding. Joel Hubert, one of the two co-founders, estimated that his liquidity would have been closer to 300 or 400 ETH in some trades throughout the year without fragmenting.
With NonFungible, Axie Infinity shows significantly more transactions, even if the volumes are only increased slightly.
"I like where we are because Ethereum is all about experiments," said Hubert.
The bigger point in all of this is that content on the Internet finds a way to get fair compensation.
Flamingos Desai added, "When you talk about how content creators get paid, DeFi comes in. And when you start talking about creator ownership, that's all NFTs."
While NFTs are usually just written off as tokens, like all decentralized technologies, they have the ability to provide financial services to non- or under-banks. Just as technology crosses certain blockchains, it can also move across borders.
Leigh Callon Butler, a CoinDesk columnist and director of consulting firm Emfarsis, wrote about an NFT game Filipinos turned to to make money during the coronavirus shutdown. (This excerpt was first published in August.)
Fun and games
In the Philippines, a popular blockchain-based game even offers ways out of poverty and helps spread the word about novel technologies. Developed by Sky Mavis, a Vietnamese startup, Axie Infinity is a decentralized application (dapp) on the Ethereum blockchain where gamers breed, raise, fight, and trade adorable digital beings called Axies.
Ijon Inton, an Axie player from Cabanatuan City, about 100 km north of Manila in the province of Nueva Ecija, first found out about this in February this year when his friend came across an explanatory video on YouTube. Fascinated by the play to earn element of the game, he decided to give it a try.
"At first I just want to test its legitimacy, and after a week I was thrilled with my first income," said Inton, who currently makes around PHP 10,000 ($ 206) a week playing the game 24/7.
Inton soon invited his family to play too, and after a few weeks he began to tell his neighbors too. Inton has been a crypto trader since 2016 and helped his friends set up a Coins.ph account so they could buy their first ETH and get started. There are now more than 100 people in his community playing to make money with Axie, including a 66-year-old grandmother.
The COVID-19 crisis, which has confined people to their homes and limited usual income opportunities, combined with the compelling nature of the Axie game itself, has encouraged people who don't normally play with dapps to do just that.
"To a crypto investor, a monthly profit of $ 300 or $ 400 might not mean that much, but for these people it means the world," said Gabby Dizon, the Filipino co-founder of mobile apps developer Altitude Games. "There's food on the table, it's money for their families, and it saves them when they can't even leave their homes during this pandemic."
There are several ways to make money with Axies. For new players, the most common method is to earn the Small Love Potion (SLP) utility token and sell it through a liquidity pool on the Uniswap decentralized trading platform. SLP is issued as a reward when Axies win battles. It is in demand as a couple of Axies need to be put in the mood to breed.
Inton talks to me about Zoom and explains how earning SLP became his full-time job. Before COVID-19, the plan was to move to Japan and start a new career as an apprentice butcher. This is a common story for many Filipinos. In the face of a lack of job opportunities, they are forced to leave their families and look for work abroad.
Inton should fly out in May. But now, with international travel suspended, he's stranded at home in the provinces. Behind him, I can see his wife breastfeeding her baby in one arm and playing one-handed Axie on her phone in the other. Every day they play together in shifts for about 20 hours.
She does four hours in the afternoon and another six around midnight, while he plays eight hours in the morning and two more before bed. Together they can collect around 1,500 SLP per day and at the same time share the care responsibilities for their three children aged six, four and 18 months. SLP is currently trading for under PHP 2, but on June 8 it rose to PHP 11.
For experienced gamers or gamblers with a higher risk appetite, higher returns can be achieved by trading the Axies themselves. Inton has tried breeding Axies in this area and selling them for up to PHP 2,000 ($ 41). Just last week two very rare Axies were sold for 60 and 90 ETH. The highest price ever for a single Axie is currently 110 ETH.
To put this kind of money in perspective, since the first round of quarantines on the main island of Luzon, national unemployment has risen to an all-time high of 17.7% (up from 5.1% a year ago), and GDP is down 16, 5% shrunk% for the same period.
With more than 100,000 Filipino workers repatriated from overseas, the Asian Development Bank has estimated remittance losses this year at $ 31.4 billion to $ 54.3 billion. Last year remittances made up over 10% of Philippine GDP - a vital lifeline for poor families, especially during a crisis.
On the game
Back to the topic of Brad Keoun's introduction: The Competition Between Different Smart Contract Blockchains. Ethereum is certainly the dominant player, but it would be a mistake to view all of the alternative base layers as vying for the same pie.
Brady Dale reported on the preparations for the Ready Layer One conference last spring, which tried to find common ground between the base layers.
Togetherness is the message of Ready Layer One, a conference put together by the Web3 Foundation, Near, Cosmos, Tezos, Protocol Labs and Polkadot. All companies are involved in creating new blockchains that will serve as the primary tier for distributed applications. Other blockchain projects can still join.
The website describes the virtual meeting as follows: "Think of it as the interface between a hackathon, a conference, a MasterClass seminar and a vaguely anarchist festival for developers and builders of a decentralized web."
Ready Layer One reflects a great approach to blockchain gatherings, much like CoinDesk's own consensus, which is also going virtual this year. While most gatherings are more protocol-specific, Ready Layer One takes a more agnostic approach.
The event was a collaborative effort to encourage those already in the ecosystem to work together on some of their common problems. CoinDesk recently reported on the idea of blockchain interoperability as a vision in which there will be "one network, many chains".
"We view blockchain technology as a public good to build a more open and innovative world, but it is still unclear which technologies and tradeoffs really work," said Illia Polosukhin, co-founder of NEAR.
With two of the best-known interoperability projects, Cosmos and Polkadot, Ready Layer One reflects a real-life example where at least part of the industry is betting that a rising tide will raise all boats.
Chris Ghent of the marketing team at TQ, an organization working to advance the Tezos blockchain, said, "We don't need people to commit to one thing, we need to commit to blockchains [in general]."
The event is aimed at developers and is free to attend. All participants have to do is demonstrate some in-game skins, either by showing that they have already done blockchain work or by participating in test nets, hackathons, stakeout demonstrations and other open calls issued by the organization logs.
"The start-up projects all have things ready," said Zaki Manian, co-founder of a Cosmos-oriented deployment company called Iqlusion. "You can now build with it and play with it."
TQs Gent sounded similar, saying that it's really about drawing what he called "skilled hobbyists".
"If I want to build something on Cosmos and Cosmos dies, can I build something similar on NEAR?" Manian said as an example. The answer, he thinks, is yes, and if Ready Layer One can show this to developers, those developers see less risk if they choose to build on one of the Layer 1 networks.
According to Ashely Tyson, who is helping organize the event on behalf of the Near Protocol, there will also be an element of addressing cross-chain challenges.
"There are a few topics that cover all of the protocols that we will be putting together thematic workshops and talks on the main stage," Tyson said. Before the world was closed, Near had organized small meetings to discuss some of these issues, such as: B. Standards for the use of existing open source technologies (such as WebAssembly) in a blockchain context and the efficient consideration of interoperability.
There will be some updates on these topics and will encourage developers to get involved in research and development that should benefit all projects.
Blockchains have potential, but nobody denies that it's not fully realized yet.
Poloshkin spoke in frustration that technology isn't really ready to help in the current crisis. “The technologies we're all working on can help and change things in the months and years ahead. But we are still far from the state where it can be used by the mass market, ”he said.
Coinbase lost 60 employees from its 1,200 employees after an updated mission statement from CEO Brian Armstrong sparked heated debate over how companies should respond to today's charged politics. In a company-wide memo from CoinDesk, Armstrong announced to employees that 5% of the company's workforce had accepted the severance package offered last week. The deadline for employees to show interest in the package was Wednesday, and Armstrong expects the number to be higher after a "handful of other conversations" are completed.
On Thursday, US Attorney General William P. Barr announced the release of "Cryptocurrency: An Enforcement Framework," a roadmap for monitoring the cryptocurrency landscape. The framework provides a comprehensive overview of the emerging threats and enforcement issues associated with the increasing proliferation and use of cryptocurrency, Barr said. "Despite its relatively short existence, this technology already plays a role in many of the biggest criminal and national security threats our country faces," said Sujit Raman, Assistant Attorney General, chairman of the Cyber-Digital Task Force who authored the report.
Bitcoin bites back
Bitcoin broke $ 11,000 on Friday, its highest price in nearly three weeks. The increase comes a day after the payment company Square announced that it would invest 1% of its total assets by market capitalization in the largest cryptocurrency. The rally to $ 11,000 marked an upward trend from the range of around $ 10,500 and $ 10,800 in the past two weeks, a range the cryptocurrency held despite news of the KuCoin exchange hack. U.S. regulators brought criminal and civil suits against BitMEX and President Donald Trump's announcement that talks with Democratic lawmakers would end up on a new stimulus package.
CBDC Core Principles
A group of seven central banks, together with the “Central Bank for Central Banks”, published a report setting out the “core principles” of how national digital currencies can contribute to the implementation of monetary policy. Prepared by the central banks of Canada, the United Kingdom, Japan, Sweden and Switzerland, as well as the Federal Reserve, the European Central Bank and the Bank for International Settlements (BIS), the report says that CBDCs should work alongside cash and other ongoing payments, "broader Support political goals ”and“ do no harm ”to monetary and financial stability and“ promote ”innovation and efficiency. In the meantime, the Dutch central bank issued its first approval for a crypto exchange.
According to engineer Conner Fromknecht of the Lightning Network developer channel on Thursday, the Lightning Labs team was notified of a vulnerability in LND versions 0.10.x and below. In light of the disclosure, the company urges node operators to update to versions 0.11.0 or higher as soon as possible. No known exploits of the vulnerability have been found to date, but "the circumstances of the discovery resulted in a compressed schedule for disclosure," said Fromknecht. The vulnerability was "partially" exposed through a detailed publication of the results promised on October 20th.
Binance UK Director is leaving in less than 6 months (Ian Allison / CoinDesk)
Blockchain goes to college (Jeff Wilser / CoinDesk)
Brave is now the top rated browser on the Google Play Store (Will Heasman / Decrypt)
Some miners cry badly at a new Ethereum fee model: Poll (Will Foxley / CoinDesk)
CryptoKitties, NBA Top Shots switch to Coincheck exchange (Adrian Zmudzinski / Modern Consensus)
Who won #CryptoTwitter?
Blockchain Bites: Bitcoin Crosses $ 11K As DOJ Targets Crypto
Blockchain Bites: Bitcoin Crosses $ 11K As DOJ Targets Crypto
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