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Blockchain Bites: Iran and Russia Revisit Crypto Regulations, Bitcoin Pizza Day 10 Years Later

News ‘Diet’

Laszlo Hanyecz has the honor of conducting the first commercial Bitcoin transaction: trading 10,000 bitcoin for about $30 worth of pizza.

Ten years later, those bitcoin would be worth $91 million. He apparently has no regrets. “It was a really interesting system but nobody’s using it,” Hanyecz said. “If nobody’s using it, it doesn’t matter if I have it all.” 

You’re reading Blockchain Bites, the daily roundup of the most pivotal stories in blockchain and crypto news, and why they’re significant. You can subscribe to this and all of CoinDesk’s newsletters here. Blockchain Bites will publish next on Tuesday, May 26. Happy Memorial Day to our U.S. readers.

This one transaction, conducted about a year after Bitcoin’s inception, was the proof-of-concept necessary for a whole emergent economy to blossom. Ten years – to the day – later Bitcoin is looked at as a legitimate hedge against the Fed, a means of payment and a veritable worldview

While Hanyecz has said if it wasn’t him it would have been someone else, today we recognize his sacrifice and experiment. 

Top Shelf

Iranian Crypto Mining
Iranian President Hassan Rouhani has ordered the the Central Bank of Iran (CBI), energy department and information and communication technology ministries to draft a renewed national strategy for the crypto mining industry. The news comes days after the Iranian parliament published a bill proposing to apply the country’s strict foreign exchange and currency smuggling regulation to cryptocurrencies. It’s unclear why the nation’s crypto policies are being revisited, though some speculate its to prevent value from escaping the nation’s borders.  

Tough Drafts
Harsh new rules making many uses of digital assets punishable with fines or prison might soon become law in Russia. Two draft bills setting out how Russia should regulate cryptocurrencies were sent to the country’s parliament, the State Duma, earlier this week. The first of which would prohibit the issuance and transaction of digital currencies in the nation, while the second would impose new sanctions for the illegal use of digital assets. The draft bills have not been finalized, according a high ranking official at the Duma.

Quarterly Loss
Canaan has reported a net loss of $5.6 million and shrinking cash reserves for the first quarter of 2020. Revenues are up 44% quarter over quarter after the firm slashed prices, but it also incurred $9.3 million and $5.9 million expenses in cost of goods sold and R&D, respectively. Canaan’s next generation miners will hit shelves next quarter, though the firm has not provided a business outlook citing the uncertainties of the COVID-19 pandemic and the post-Bitcoin halving.

Libra-like Stablecoin
Top Chinese political advisers have proposed a regional digital currency to facilitate regional trade that would be backed by four major Asian currencies including the Japanese yen, Korean won, Hong Kong dollar and the yuan, with the People’s Bank of China leading the proposed effort. The basket of underlying collateral would be weighted based on its nation’s economy, resembling the original vision for Facebook’s libra.

  • The kin cryptocurrency may leave its own fork of Stellar for the Solana blockchain. “The fork of Stellar enabled Kin to reach millions of consumers, but we knew it would not be a long-term solution,” a draft Kin Improvement Proposal reads. “Stellar has five-second block times, so irrespective of network load, a consumer could be seeing five-second latency on their transactions – not what we would deem a great consumer experience.” The draft proposal claims switching to Solana would lead to an 84% reduction in kin’s latency.
  • The Kin Foundation published a transparency report Thursday, laying out its structure and operations, in a partnership with Messari and its disclosure database. Notably, 28 million users have acquired kin in the last three years across more than 50 different apps, and are spending 300 million kin per day, the report claims. The foundation’s tokens are vested at a rate of 20% per year.

Blockchain Bill of Rights
The World Economic Forum revealed a “blockchain bill of rights,” to protect a crypto user’s right to “manage consent of data stored in third-party systems, port data between interoperable systems” and “revoke consent for future data collection.” Called the Presidio Principles, the document includes signatories from the Government of Colombia, Deloitte, ConsenSys, Electric Coin Company, CoinShares and the United Nations’ World Food Program, just to name a few. 

Breadcrumbs…
Anchorage now has six executives in its C-suite, hiring a head of finance and head of sales with experience in both tech and Wall Street. With the new hires, this will be the first time the custodian has employees with “this deep of a bench” running the sales and finance sides of the business, President Diogo Mónica said. “It’s pretty obvious that Anchorage has larger ambitions than its current set of services,” he said. “I think you can start following the breadcrumbs.”

ADAM Hires Blockinger
ADAM, a 15-member crypto trade group, hired Jeffrey Blockinger, a former hedge fund legal chief, as its first chief executive. The agency write codes of conduct for the industry. “I look forward to expanding our leadership role in shaping the future of the digital assets markets by building consensus for the entire industry,” Blockinger said in a statement. (The Block)

Hack Track
Whale Alert has tracked 28.3 bitcoin ($260,000) stolen in a Bitfinex hack four years ago moving to an unknown wallet. (Decrypt)

Crypto Travels
Travala, a crypto travel booking platform, has been merged with Binance’s TravelbyBit, which also provides travel services. The merged company aims to provide offerings for 2 million hotels and 600 airlines. (The Block)

Weekend Reads

Crypto ‘Gray’ Markets Could Be Unintended Consequence of FATF Travel Rule
The Financial Action Task Force’s (FATF) “Travel Rule,” an attempt to extend prescriptive banking regulations to the crypto market, may lead to a bifurcation of the market. “We are going to see white crypto; we are going to see gray crypto. And those different forms of crypto will most likely trade at different prices,” said Bakkt President Adam White at Consensus: Distributed. Other commenters noted that the rule could lead to increased use of privacy coins and regulatory arbitrage between nations that choose to turn a blind eye on exchanges ignoring this global standard.

Finance and the Real Economy Can’t Stay Out of Sync Forever
Jill Carlson, co-founder of the Open Money Initiative, argues that the imbalance between stock prices, spurred by Federal stimuli, and record-levels of unemployment will rectify sooner than later. “[W]hen I look at the impacts of COVID-19, I see as much slowing down or creaking to a halt as I see speeding up. Our way of life has slowed. Economic time has stopped. For now, financial time has carried on. But there is good reason to think that may slow soon, too, as we realize our spendthrift habits don’t always serve us well,” she said. 

The Breakdown

‘Dismantle the Euro to Save Europe’ Feat. Tuomas Malinen
Tuomas Malinen, CEO of GnS Economics, a macroeconomic advisory firm, joins NLW to discuss how the COVID-19 pandemic is putting pressure on the legitimacy of the European Union and the euro. 

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Blockchain Bites: Satoshi’s Sword of Damocles

Top Shelf

Yesterday, some of the earliest mined bitcoin moved after more than a decade of dormancy.

Whale Alert – a popular, mostly-automated Twitter account that tracks major crypto transactions – broadcast the message across the cryptoverse, saying 40 coins mined in the first month of the network’s operation had transferred from a “possible #Satoshi owned wallet,” referring to bitcoin’s long silent creator, Satoshi Nakamoto. 

This unfounded connection – based on the age of the bitcoin, and the fact they had not been moved for 11 years – caused a minor market stir.

You’re reading Blockchain Bites, the daily roundup of the most pivotal stories in blockchain and crypto news, and why they’re significant. You can subscribe to this and all of CoinDesk’s newsletters here. 

Since then, blockchain archeologists and bitcoin sleuths have poked holes in the theory the coins are Nakamoto’s, who, as far as we can tell, has never moved a single satoshi from the hoard of bitcoin he mined in the network’s early days. (Except for a test transaction sent to Hal Finney.)

Determining the sender of these coins is impossible, for now. But the occurrence is a moment to reflect on some important insights about the bitcoin community, infrastructure and market. 

Of the approximately 18.5 million coins already mined, about 2 million are dormant – either unspent because the keys have been lost, or for other personal or technological reasons. Estimates on the higher side assume as many as 4 million bitcoin are “lost forever.” Nakamoto once referred to lost coins as a “donation” to the network. The bitcoin protocol hardcaps the total supply of bitcoin at 21 million coins, but knowing that some coins have been “donated” has led some researchers to develop a new metric: Realized Capitalization. This measure discounts Bitcoin’s total supply to account for lost or otherwise inaccessible coins.

When previously inert coins move – be they Nakamoto’s or not – this should challenge the assumption that coins in deep storage are out of circulation. Unless they’ve been tossed in the bin. Therefore, a price adjustment is logical.

A partial cause for yesterday’s price movements were fears Nakamoto has returned and could potentially dump billions of dollars worth of bitcoin on the market. Nakamoto’s seemingly altruistic, or at the very least mysterious, “donation” to the bitcoin community hangs over the market like the sword of Damocles.  

Like Nakamoto’s motivations, it’s an open question as to how many coins he holds. In 2013, Sergio Lerner wrote a blog post estimating the Satoshi stockpile to be around 1 million bitcoin. Years later, derivatives exchange BitMEX recounted and found the hoard to be in the neighborhood of 700,000 coins. 

Both estimates look at a technical detail called the nonce value to determine what blocks Nakamoto was likely to have mined. It’s analysis of this same block feature that leads many to assume yesterday’s transaction did not belong to Nakamoto, but one of the dozens of other miners assumed to be live on the network at the time.

Curiously, when these bitcoin were mined, bitcoin itself had no market value. The block reward is now worth just shy of half a million dollars. There were also no CoinJoins or SegWit code updates, modern wallet features yesterday’s transaction utilized, nor a host of blockchain analyzers watching where these coins will jump to next. 

How far bitcoin has come!

Castle Island Venture’s Nic Carter, in conversation with Moneymail developer Lawson Baker, said the biggest clue into the identity of the owner of the coins could come in a couple of days. Just look at the OP_RETURN field, a place to encode permanent messages on the Bitcoin blockchain, Carter said. We’ll be watching.

Media Diet

Red Flags: Citizen, the mobile application that alerts its more than 2 million users to crime and disaster around them, has launched a contact tracing functionality, called SafeTrace, in the fight against the coronavirus. The application, which makes use of GPS and Bluetooth proximity tracking and stores data in a centralized manner, has raised alarms among privacy experts and technologists. “GPS data tracking a person’s movements is very revealing, and difficult to effectively anonymize,” said Ángel Díaz, counsel at the Liberty and National Security Program of The Brennan Center for Justice in New York.

Brazil Banks Investigated: On Wednesday, Brazil’s antitrust watchdog, the Administrative Council for Economic Defense (CADE), voted to continue its investigation of banks who denied financial services to crypto brokers in alleged violation of Brazilian competition law. CADE’s nearly two-year-old inquiry into Itaú Unibanco, Banco do Brasil, Santander, Inter, Bradesco and Sicredi now returns to the General Superintendency for further review. Those six banks, which comprise nearly 80% of Brazil’s deposit market share, could face eventual sanctions and even be forced to provide financial services to crypto brokers.

Geographic Details: Block.one, a primary EOS developer wielding about 9% of the total token supply, is about to begin voting in the ecosystem, after years of holding back its influence. In a note last Friday, the Cayman Island-based company outlined criteria it would use to decide on which block producer candidates to support and vote for, including information pertaining to the public disclosure of the “location of the node.” While Block.one representatives downplay the significance of this geographic information, other stakeholders believe it could lead to favoring specific countries. 

New Shareholder: IBM has become a shareholder in we.trade, the trade finance platform jointly owned by 12 European banks, signaling further consolidation across the enterprise blockchain space. While IBM has been a technology partner since the beginning, we.trade has always intended ween itself off the Hyperledger-based IBM Blockchain Platform and take its tech stack in-house. Ciaran McGowan, we.trade’s CEO, said this financial relationship with Big Blue will help the platform in its next phase of global expansion.

Digital Dividend: Online retailer Overstock has finally distributed its digital dividend to shareholders after a series of delays including an investor class action suit against the company and the ousting of the dividend’s brainchild former Overstock CEO Patrick Byrne. The digital security, called OSKTO, can now be freely traded on Overstock subsidiary tZERO’s blockchain-underpinned platform. Shareholders need to open a brokerage account with a broker-dealer that subscribes to the tZERO ATS to trade the securities, the firm said.

Genesis Brokerage: Genesis Global Trading is moving toward full-service prime brokerage – covering lending, trading and custody – with the acquisition of crypto custodian Vo1t.  The terms of the deal were not disclosed. “We’re coming at this after having a successful business on the trading and lending side,” said Genesis CEO Michael Moro. “The goal is for clients to be able to do any and all activities with Genesis.” Genesis is owned by CoinDesk’s parent, DCG.

Blockchain Strategy: A U.S. lawmaker introduced a bill calling on the Federal Trade Commission (FTC) to survey how blockchain technology is being used by other nations as well as outline a comprehensive blockchain strategy for the United States.

“Bloodbath”: Highly leveraged crypto hedge funds are struggling to recover from recent volatility, reports the Financial Times.

Digital Euros: Societe Generale issued €40 million worth of covered bonds as security tokens that were then settled by the Banque de France, the nation’s central bank, in blockchain-based digital euros. (The Block)

Synthetic, Priceless Token Model: The UMA Project community approved contracts that allowed creating its first token: ETHBTC. This is also the first experiment with UMA’s priceless token model, which minimizes the need for oracles, allowing for the synthetic ETHBTC token to track the relative value of ETH to BTC, without requiring users to stake either of the two cryptos.

Staking Services: Coinbase Custody now offers staking services for Cosmos and Algorand tokens. Last year the firm added staking support for Tezos tokens. (The Block)

Market Intel

Buyers Exhausted? Bitcoin prices look to be struggling with buyer exhaustion, having put in a negative performance in the last 24 hours despite positive developments on both the macro and technical fronts. Despite intimations from JPMorgan and Goldman Sachs calling upon the Federal Reserve to step up its inflationary bond purchase programs, analysts at Stack, a provider of cryptocurrency trackers and index funds, expect bitcoin to consolidate in the range of $8,000–$10,000 for some time. 

The Breakdown

Dollar’s Strength Weakens the World: Lyn Alden, founder of Lyn Alden Investment Strategy, joins The Breakdown to discuss why the U.S. dollar’s persistent hegemony is bad for everyone. 

Who Won #CryptoTwitter?

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Blockchain Bites: Bitcoin’s Difficulty Adjustment and More

Bitcoin’s network difficulty adjusted downwards today, making older mining machines profitable once again, while Tokensoft distributed $4 million in tokenized equity to investors and technology firms are calling upon the Department of Defense to invest in the blockchain arms race. Here’s the story:

You’re reading Blockchain Bites, the daily roundup of the most pivotal stories in blockchain and crypto news, and why they’re significant. You can subscribe to this and all of CoinDesk’s newsletters here. 

Top Shelf

Getting Easier
The Bitcoin network just fine-tuned a key parameter to coax back miners who quit after last week’s halving hammered their profits. Bitcoin’s mining difficulty, which measures how hard it is to compete for block rewards, decreased 6% on Wednesday, in the network’s first biweekly difficulty adjustment since the halving meant to keep the block interval at roughly every 10 minutes. This adjustment may lure less efficient miners back into the network.

Tokenized Distribution
Tokensoft, a digital securities platform for enterprises and financial institutions, has used blockchain tech to distribute equity to investors in a $4 million seed round raised in 2018. The investors, including Base10 and e.ventures, Coinbase Ventures and Fidelity affiliate Avon Ventures, received a digital representation of their investments on the Ethereum blockchain using ERC-1404 tokens.

Blockchain Arms Race
The U.S. Department of Defense can’t afford to lose the global military blockchain race to Russia and China, warns a new white paper by Amazon Web Services, IBM, Deloitte and others. “The two superpowers that pose the greatest threat to the U.S. are both heavily investing in both the research and development of blockchain technology,” the briefing said. China’s on the “economic warfare” offensive with its digital currency. Russia is on defense with a lab dedicated to blockchain cyber threat mitigation. For U.S. security interests, blockchain could assist the military in anything from “weapons release” [Ed. note: Just what bitcoin’s founders intended.] to stopping data erasure, as well as bolstering command and control mechanisms.

Elliptic Growth
Crypto sleuthing firm Elliptic has expanded its scope to cover some 97% of digital assets by trading volume – the broadest range of any crime-fighting blockchain analytics service, the company said. Announced Wednesday, Elliptic Navigator adds 87 new crypto assets to the firm’s existing purview. That said, touting just the number of coins covered can be “fairly irrelevant,” said Elliptic co-founder Tom Robinson, because analytics shops could be including many ERC-20 tokens that nobody really uses.

Flawed Code
Keep Network says a flawed code addition forced the shutdown of its bitcoin-backed Ethereum token, tBTC, just two days after it launched. The bug affected the processing of deposit redemptions (when users try to pull bitcoin out of the system), essentially due to the code’s inability to tell different types of bitcoin addresses apart. While the bug and subsequent pause have been a setback for the Thesis team, a new call out has been made to solicit help from code auditors to help track down any further issues.

Iranian Regulation
The Iranian government just made conduits to cryptocurrency markets riskier, and more confusing, than ever before. According to Iranian news outlet ArzDigital, Iran’s parliament published a proposal this week to include cryptocurrency in existing “currency smuggling” and foreign currency exchange regulations. The result of this prospective regulation is Iranian entrepreneurs face a heightened risk of being jailed by local authorities or sanctioned by Americans. 

Coinbase to Comptroller
A former top lawyer at Coinbase is about to take the top job at a major U.S. bank regulator, at least temporarily. Brian Brooks, the first deputy comptroller and chief operating officer in the Office of the Comptroller of the Currency (OCC), is poised to become acting comptroller as his boss, Joseph Otting, is planning an imminent departure.

75 Million Devices
Blockchain e-sports streaming platform THETA.tv will soon be available on Samsung’s flagship Galaxy S20 smartphones shipping to the U.S. THETA.tv runs on the Theta blockchain and pays out a native token to content streamers, and will be included in the Samsung Daily app, extending its potential reach to more than 75 million smartphones and tablets.

Atari Token
Ahead of Atari token’s September launch, the development team has partnered with the Litecoin Foundation to make litecoin an accepted form of payment for the token and across Atari’s “gaming ecosystem.” (The Block)

Opposite Editorial

Staking Will Turn Ethereum Into a Functional Store of Value
Osho Jha argues ether’s current price does not reflect the protocol’s upcoming switch from proof-of-work to proof-of-stake consensus, which would turn the cryptocurrency into a functional store of value. 

PTJ on BTC: Bitcoin Is Now the Macro Big Bet
Byrne Hobart argues that Paul Tudor Jones’ big bet on Bitcoin is a signal to other institutional and traditional investors to view bitcoin as a legitimate hedge against inflationary monetary experiments. “[A]fter careful due diligence, the famous trend-chasing macro investor ultimately treated bitcoin as a value play,” Hobart said. 

Facebook’s Toothless Oversight Board Has Lessons for Blockchain
Cathy Barrera digs into Facebook’s oversight board, which recently announced its founding members, calling the system necessarily flawed and unable to account for the myriad problems the company may generate or find itself dealing with. “Facebook’s inability to create a genuinely independent body with real control over content decisions is an essential lesson for blockchain projects,” Barrera writes. 

Market Intel

$1B in Open Interest
Open interest in options listed on the Panama-based Deribit exchange jumped to a record high of $1 billion. On Tuesday, 101,000 options contracts were open on the most popular exchange. Each option contract on Deribit represents one bitcoin. “The new record is driven by market sentiment, an increased number of diverse global participants on Deribit and the efforts made by our various partners and us to provide a premier quality market at all times with the highest capital efficiency, integrity and connectivity and trading solution,” said Luuk Strijers, Deribit’s chief compliance officer.

Bitcoin Undervalued
Bitcoin has witnessed triple-digit percentage gains over the past two months. Yet, a key measure known as the Puell Multiple suggests the currency is still undervalued. Lows in this metric, which currently sits below historic levels, have marked the beginning of fresh bull runs in bitcoin’s price. 

Mining Metrics
Bitcoin became 6% easier to mine Tuesday, a rare dip in Bitcoin’s lifetime in which difficulty has almost always trended upwards. Despite the recent adjustment, the current difficulty is still well over double what it was this time last year – a sign of just how competitive the mining business has become. Yet, according to Coin Metrics data, many formerly unprofitable machines are turning on, including Bitmain’s Antminer S9s, which saw their heyday in 2018. The halving made them less profitable, but the easing in mining difficulty should help to improve margins. 

Exchanging Out
Glassnode data suggests holders are withdrawing Bitcoin out from centralized exchanges. Beginning around March 12, when bitcoin’s price cratered, the market has entered “the largest and most prolonged BTC exchange balance downtrend in bitcoin’s history.” (Decrypt)

The Breakdown

‘Minsky Moments’ and the Financial History of Pandemics
Jamie Catherwood, of quantitative long-equity investment firm O’Shaughnessy Asset Management and Investor Amnesia, joins The Breakdown to discuss historic connections to today’s market meltdown. 

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Blockchain Bites: BlockFi Hacked, Block.one Sued, BitMEX Down

Today, BlockFi disclosed a SIM-swapping attack that revealed personal information related to a large swath of the firm’s clients. While customer funds are secure, BlockFi said, their names and addresses were compromised along with their activity histories.

This security breach comes on the heels of a cryptojacking exploit targeting European supercomputers researching COVID-19. Elsewhere, class-action lawsuits have been brought against Block.one and chip-maker Nvidia, while the little-known firm BMA is suing BitMEX for allegedly orchestrating the largest financial crime in American history. Here’s the story:

You’re reading Blockchain Bites, the daily roundup of the most pivotal stories in blockchain and crypto news, and why they’re significant. You can subscribe to this and all of CoinDesk’s newsletters here. 

Top Shelf

BlockFi Hack
BlockFi said an attacker got hold of users’ data by compromising an employee’s phone and taking control of the person’s phone number through a SIM-swap attack. The New York-based crypto lending platform announced in a memo to users on Tuesday that a hacker – whose identity remains unknown – gained access to some of its retail marketing systems for just over an hour early on May 14. The hacker accessed confidential data such as names, dates of birth, postal addresses and activity histories but was unable to withdraw user funds or access other sensitive account information including bank account details, Social Security and tax identification numbers.

BitMEX Down
The trading engine for BitMEX, formerly the largest bitcoin derivatives exchange measured by open interest, went down on Tuesday, according to the exchange’s status page. BitMEX supported roughly $2.2 billion in bitcoin futures trading volume over the last 24 hours, according to Skew, and is investigating the incident.  

RICO Violations?
BMA LLC, the Puerto Rican company that two weeks ago filed a lawsuit again Ripple, has accused the BitMEX derivatives exchange of orchestrating the largest financial crime in American history. The filing envisions a vast racketeering conspiracy designed to reap billions in illegal profit through wire fraud, money laundering, unlicensed money transmission, interstate transport of stolen property and violations of the Racketeer Influenced and Corrupt Organizations Act, or RICO.

Block.one CEO Brendan Blumer speaks at the Voice launch event, June 2019. (Photo courtesy of Block.one)
Block.one CEO Brendan Blumer speaking at the launch of the Voice social media network (Photo from CoinDesk archives)

EOS Class-Action
A cryptocurrency investment fund has launched a class-action lawsuit against Block.one and EOS’ high command, arguing the “fraudulent scheme” failed to deliver on its primary promise of decentralization. In a recent filing, plaintiffs argue CEO Brendan Blumer, CTO Dan Larimer, former Chief Strategy Officer Brock Pierce and former partner Ian Grigg purposefully misled investors and artificially inflated the EOS token price during the yearlong ICO, which raised a total of $4.1 billion between June 2017 and June 2018. Last year, Block.one reached a settlement with the Securities and Exchange Commission over running an unregistered security sale. 

Misleading Games
A recent filing shows that disgruntled investors are still pursuing action against Nvidia, the multinational chip-making giant, accused of under-reporting its sales of hardware used to mine cryptocurrency. The shareholder class-action lawsuit accuses CEO Jensen Huang, CFO Collette Kress and Jeff Fisher, senior vice president and head of gaming, of misleading investors by saying increased sales of its chips came from gamers rather than the unsustainable 2017 crypto mining boom. 

Smashing Private Keys
Tornado Cash, a privacy tool for obfuscating the history of ether transactions, is now fully permissionless. Developers used a cryptographic method known as multi-party computation (MPC), to eliminate their private keys and make the protocol completely trustless. 

vitalik-buterin-2
Vitalik Buterin photo from CoinDesk archives

Monopoly Busting Blockchain
Vitalik Buterin has called for lawmakers to be more accommodating to blockchain protocols, saying they can help antitrust agencies fight monopolies and anti-competitive behavior. Together with a Harvard economist, the creator of Ethereum argued in a newly-published paper that blockchain and antitrust agencies “share a common goal” in decentralizing economies. 

Giancarlo Joins 
Former U.S. Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo is advising a coronavirus relief effort. The Open Initiative is prepared to grant more than $200,000 to tech-driven – and preferably blockchain – solutions to the current crisis. 

Libra Hire
Libra has added a former U.S. government official as its general counsel, its second add from the Financial Crimes Enforcement Network (FinCEN). Announced by the Libra Association Tuesday, Robert Werner joins the project with “a wealth of regulatory, financial crime compliance and enforcement experience” from his previous roles as FinCEN director and director of the Office of Foreign Assets Control (OFAC).

Cryptojacking
European supercomputers programmed to search for a coronavirus vaccine were hijacked last week to mine the privacy crypto monero. The hackers had gained entry via stolen remote access credentials from individuals authorized to operate the machines, and many of the affected computers are still down pending investigation. 

Black Market Mixing
Bitfury’s crypto analytics unit Crystal Blockchain issued a report showing bitcoin mixing services are on the rise. According to the report, the share of bitcoin sent to mixers by darknet entities rose to 20% in Q1 2020 as compared to just 1% in Q1 2019, The Block reports. 

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DTCC’s Jennifer Peve, image from CoinDesk archives

Eying Blockchain
Depository Trust & Clearing Corporation (DTCC), a giant of financial markets infrastructure, is studying whether distributed ledger technology (DLT) could accelerate its processing of securities. DTCC revealed two projects Monday aimed at integrating DLT with capital markets: Ion, a proof-of-concept alternative settlement service and Whitney, a security token method of private securities issuance and exchange. The corporation handles nearly $2 quadrillion in securities every year, almost the entirety of the U.S. securities market. 

tBTC Bug
After pausing the tBTC protocol, which brought Bitcoin onto Ethereum, developer Matt Luongo clarified his decision without going into detail as to what went wrong. The Thesis team said it discovered a bug, but will not disclose details until all funds have been safely withdrawn from this iteration of tBTC. The team is helping users withdraw deposited BTC.

Proof of Societal Value
“Much ink has been spilled on the question of bitcoin’s energy footprint. But amid the clarifying details and the energy mix calculations we have lost sight of the most important questions,” CoinDesk columnist Nic Carter writes in his latest op-ed. Central to the debate are the inefficiencies baked into the global energy sector, including line-loses and the overbuilding of energy infrastructure in Chinese provinces, as well as bitcoin’s considerable consumption and CO2 externalities. Ultimately, it’s about tradeoffs. The Bitcoin network is an open system, “which is paid for,” both in fees and energy consumption. 

Market Intel

Difficult Adjustments?
Days after the biggest non-event of the year, the Bitcoin halving, holders are counting down to the next milestone on the blockchain: the latest “difficulty adjustment,” expected Tuesday around 5 p.m. ET. This automatic mechanism occurs roughly every two weeks, and is expected to make mining easier. “And like the halving, it’s expected to be uneventful,” the First Mover team said. However, it’s an essential way to regulate the network, enticing miners to stay on, reducing confirmation times and also ensuring more equitable payouts. You can get First Mover in yer mailbox here.

Bitcoin Burst
Wrapped Bitcoin on the Ethereum blockchain in the form of the WBTC ERC20 token has doubled to nearly $23 million worth in tokens in the last two weeks. This follows a vote at Maker to introduce the token as a form of collateral on the protocol. (Decrypt)

Untethered
Yesterday, Tether, the largest stablecoin tied to the U.S dollar, had fallen below par value for the longest stretch since bitcoin hit 12-month lows in March. This deviation is partially explained by increased demand for bitcoin and bitcoin futures, with investors trading in stable assets for the cryptocurrency. Tether’s dip below $1 also coincides with a brief respite of new token issuances. 

The Breakdown

Albert Wenger on World Historical Shifts
Albert Wenger is a partner at Union Square Ventures and the latest guest on The Breakdown podcast. The conversation touches on core ideas in Wenger’s “World After Capital,” an evolving digital book project that looks at a set of megatrends as the world moves between economic paradigms from the Industrial Age to the Knowledge Age. 

Who Won #CryptoTwitter?

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Blockchain Bites: a16z’s Cyclic Crypto Thinking and Grin’s Grim Outlook

FalconX raised an inflation-adjusted equivalent to Facebook’s 2005 Series A, Bakkt has unveiled $600 million in total insurance cover and Andressen Horowitz anticipates another age of growth.

Crypto trading platform FalconX closed a mult-imillion dollar seed funding round led by Accel, a venture capital firm that took a gamble by investing early in Facebook. Looking at these two raises separated by 15 years is revealing. Adjusting Facebook’s 2005 Series A to today’s terms brings it to around $17 million, or the amount FalconX was just handed.

You’re reading Blockchain Bites, the daily roundup of the most pivotal stories in blockchain and crypto news, and why they’re significant. You can subscribe to this and all of CoinDesk’s newsletters here. 

Unlike Facebook, FalconX doesn’t seem interested in mass adoption. The firm told CoinDesk it has no plans to expand its services to retail investors.

Top Shelf

Not Smiling
Grin, the privacy-centric project that garnered outsized interest in investments in 2019, is showing little signs of life. Its price has dropped 20% year to date, while the network’s hash power and mining difficulty have experienced nine consecutive months of decline. Grin launched during an “altcoin bear market,” said grin developer David Burkett. That the price has “so far only moved downward” is a “very similar movement to many coins launched at the same time.”

Bakkt’s Backing
Bakkt has onboarded more than 70 clients for its custody services and given them the option to tap more than $600 million in insurance coverage overall, the company announced Monday. The company has also completed two audits into its financial reporting and customer data protection controls by KPMG and PwC, respectively. 

FalconX’s Facebook-level Raise
FalconX, a cryptocurrency trading platform, announced it has raised a total of $17 million in a round led by Accel, with backing from Coinbase Ventures, Fenbushi Capital and Land Avon Ventures. The platform claims 100 customers as well as an AI-powered trading solution programmed to eliminate artificially inflated prices. CoinDesk’s Paddy Baker puts the raise in perspective by detailing Facebook’s  $12.7 million Series A led by Accel in 2005. “Inflation means Facebook’s raise would now be worth the same as FalconX’s; then again, a pre-seed is two or three raises behind a Series A,” he said. 

https://commons.wikimedia.org/wiki/File:Marc_Andreessen_(1).jpg
Marc Andreessen, a16z cofounder (Credit: Joi / Wikimedia Commons)

Cyclic Thinking
By monitoring 10 years of data – including from subreddits and Github – analysts at Andreessen Horowitz have found that crypto boom cycles progress in roughly five phases. 1) The price of bitcoin and other crypto assets goes up, 2) leading to new interest and social media activity, 3) leading to more people getting involved, contributing new ideas and code, 4) leading to projects and startups getting created, 5) leading to product launches that inspire more people, eventually culminating in the next cycle. With the launch of a new $515 million crypto fund, the venture firm looks bullish on the next cycle of development. 

Testing DEX
Synthetix is putting over $40,000 in crypto on the line to entice users to try out the faster beta of its decentralized exchange (DEX). The test aims to solve the “painful trade-off” between network speed and security that affects DEXs, hinting at a future where these platforms can scale. 

Crypto Long & Short
Mining derivatives are a signal of crypto’s growing sophistication, CoinDesk’s Noelle Acheson puts forward in the latest Crypto Long & Short newsletter, following up on derivatives exchange FTX recent launch of what they are calling “hashrate futures,” based on bitcoin’s difficulty level. “This particular instrument may or may not take off. Its significance is more that it could trigger a new wave of financial innovation that supports the growth and increasing sophistication of the bitcoin mining industry, which is struggling to adjust to reduced revenue and tougher competition,” she writes. 

Derivative Raises
Crypto derivatives platforms have brought in $552 million of institutional-focused capital since 2014, The Block reports. The majority of the fresh capital was raised by two deals involving Bakkt.

Spill the tBTC
A tokenized version aiming to bring Bitcoin onto Ethereum has closed down after two days, its developer Matt Luongo said. Named tBTC, the project is pausing deposits for 10 days, and its creators are helping users withdraw funds. A post-mortem, and possible resurrection, will come from Luongo once the smart contract is empty, he tweeted. (Decrypt)

Market Intel

First Mover
Bitcoin trading volumes are averaging their highest levels since last July, according to Arcane Research, while the number of open bitcoin futures contracts on the CME exchange is rocketing. Such enthusiasm contrasts markedly with the dour outlook of Federal Reserve Chair Jerome Powell and the declining returns on the benchmark S&P 500 (down 11% year to date). “For bitcoiners, the pessimism on the economy was just another reason to be bullish, since it means the Fed is likely to inject more money into the markets, strengthening the case for buying the cryptocurrency as an inflation hedge,” CoinDesk’s First Mover team said in today’s newsletter. Get it in your inbox!

Key Level
Bitcoin’s attempt to scale $10,000 looks to have stalled again. This is the third rejection to cross the psychologically important level since May 1. Dropping to $9,450 during European trading hours, the currency is trading around $9,600 at time of writing, representing a 145% increase since March lows. 

Hash Rates Spinning
Along with prices, Bitcoin’s hash rate has steadily climbed over the weekend, following a post-halving dip. On Sunday the hash rate hit highs of 107 exahashes per second, recovering from a drop to 87 on Thursday, the lowest since December. (Decrypt)

The Breakdown, Money Reimagined

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Is bitcoin the answer for a global monetary system not longer served by the dollar standard? Episode 3 of The Breakdown: Money Reimagined examines bitcoin and permissionless stablecoins – both of which are forcing the global monetary system to examine deeply ingrained beliefs. 

The Breakdown: Money Reimagined is a podcast crossover micro series exploring the battle for the future of money in the context of a post COVID-19 world. The four-part podcast features over a dozen voices including Consensus: Distributed speakers Niall Ferguson, Nic Carter and Michael Casey. New episodes air Fridays on the CoinDesk Podcast Network. Subscribe here.

Who Won #CryptoTwitter?

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Blockchain Bites: What You Need to Know About the Last Day of Consensus: Distributed

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The sun rises on the last day of Consensus: Distributed, our first foray into the world of virtual events. 

We’ve heard from former Treasury Secretary Lawrence Summers describe the current monetary system as too private, Governor Harvesh Seegolam of the Bank of Mauritius inch closer to a central bank digital currency and World Economic Forum Blockchain head Sheila Warren say digital cash might open the door for niche privacy coins. 

So where does that leave us? With a full day of programming.

This is what my colleague Leigh Cuen will track throughout the day: 

We’ve finally reached the last day of Consensus: Distributed and there’s still so much going on.

If you haven’t perused the Sponsors section of Brella and talked with companies such as eToro, CME Group and Kraken, many of which are hiring, that’s a great way to start the morning. 

Then there’s a show on cryptocurrency in Japan, starting at 11 a.m. ET with experts from the Financial Services Agency Japan, Coinbase and Soramitsu Holdings. Japan is the quiet juggernaut in Asia, home to BTCPay founder Nicolas Dorier, the Bitcoin Core contributors of DG Labs, and a careful regulatory climate ever since the infamous Mt. Gox hack. As such, the market arguably has fewer scams coupled with a robust bitcoin community. 

Japan’s cultural impact on the global crypto industry shouldn’t be underestimated. After all, Satoshi Nakamoto is a Japanese alias. 

Next, I recommend Bailey Reutzel’s show about bitcoin mining, with Edge CEO Paul Puey and Alejandro De La Torre of Poolin at 3:30 p.m. ET. It’s titled “Subsidies and Secret Messages: All About Mining.” 

Then your brain will probably need a break from all that blockchain chatter. Luckily, we’ve got an after-party led by a group including the artist Josie Bellini, Travis Blane of ConsenSys and Reckless VR founder Udi Wertheimer. Starting at 5 p.m. ET, the virtual reality meetup will open with a panel about spaces, both virtual and physical. After that there shall be much avatar revelry, merrymaking and networking. 

If you’ve got a VR headset, check it out and post your experiences on social media using the hashtag #ConsensusDistributed. 

Thanks for joining us for the first virtual New York Blockchain Week!

What to Watch

9:30 – 11:00 a.m. ET Content: Reimagined – Hosted by Davis Wright Tremaine
This workshop will explore the use of decentralized systems for media in the age of disinformation. 

12:00 – 12:30 p.m. Beyond DAOs and Foundations: The Decentralized Autonomous Association (DAA) Model
Lawyers, tax advisers and blockchain experts gather to discuss the emergent model of the decentralized autonomous association. 

1:00 – 2:00 p.m. Econometrics: Securing Your Blockchain Through Economic Analytics
Learn how real time data analytics can boost the economic security and increase the usability and functionality of your blockchain network.

3:30 – 4:00 p.m. Filecoin, IPFS, and The Future of Web3
Juan Benet’s Protocol Labs is building a better internet through decentralized systems and cryptographic hacks. In this program Benet will look into Protocol Labs two biggest projects, Filecoin and IPFS. 

5:00 – 5:30 p.m. A VR Meetup To Talk About VR Meetups
ConsenSys Travis Blane, “Crypto Twitter’s” Udi Wertheimer and CryptoMonday’s Lou Kerner are joined by the crypto artists Jin and Josie Bellini to discuss the future of conferences: VR. 

The CoinDesk 50

The CoinDesk 50 is an annual list celebrating the most important organizations in crypto. We’ve been announcing five nominees per day, and have highlighted BinanceCosmosBraveBitmainMakerDAOBesu,  Silvergate BankBitcoin and the People’s Bank of China as particularly noteworthy. Today we look at Bakkt, the first U.S. firm to offer physically settled bitcoin futures. Read about the final company here. 

coindesk 50
The CoinDesk 50 are the most innovative and influential organizations in the crypto and blockchain industry.

CoinDesk COVID Response

CoinDesk Charity, Blockchain Week, COVID

#NYBWGives
CoinDesk has joined Gitcoin, The Giving Block and Ethereal Summit to support charities helping communities in difficult times. We’re raising $100,000 and giving you a voice through the quadratic funding model. Learn how it works and how to donate.

Mr. Star City artwork
New York-based interpretive artist Mr. Star City created an original piece of artwork at Consensus: Distributed for auction to support COVID-19 relief.

In addition, New York-based abstract artist Mr. Star City created an original piece of artwork, shown above, as a part of Consensus: Distributed. The art, inspired by love, unity and technology, will be up for auction this week. Follow @coindesk on Twitter to find out how to bid — the proceeds will go to the same cause.

Consensus Magazine

Generation Crypto 
Freelance journalist Jess Klein writes about an emerging psychographic of people who see the world through the lens of decentralization. In a series of eight profiles, Klein examines “Generation Crypto,” a diffuse grouping of people of all ages, races and sexes, bound together as “children of Satoshi.” 

This excerpt examines the life of Shanga Mbuli, a father of six living in Kenya, who uses the little-known sarafu cryptocurrency in daily life. Read the full series here

Generation Crypto

A 42-year-old father of six, Shanga Mbuli lives in the small Kenyan village of Miyani, just a few kilometers from the ocean, where he catches shrimp to sell to fellow villagers. The nearest city is Mombasa, but Mbuli’s life as a rural farmer doesn’t include many visits there. Most of his buying and selling takes place among other community members. Since 2017, he’s been using a community currency, called sarafu, established by the non-profit Grassroots Economics to exchange local goods and services.

Sarafu is a digital currency built on blockchain technology so users can trade it with trust. It was designed for villages that are full of people with goods and services to offer but little government-issued currency to spend. In Mbuli’s 6,000-person community, nearly all are registered with the Sarafu Network. Mbuli accepts sarafu in exchange for shrimp he catches and maize he grows on his farm, and uses it to pay for rice and services like transportation and maize grinding. He likes sarafu because he finds it to be secure, and it makes his community “more connected,” he told me one evening in mid-March while walking to the nearby river to fetch water. Kids passing by and roosters calling sounded in the background. 

At that time, Kenya had just one confirmed case of coronavirus, in its capital city Nairobi. By the time we caught up again on Sunday, April 4, no cases had made it over to Mbuli’s rural community, but people there were preparing. City dwellers from Mombasa were returning to their families in rural villages like his in time for a shelter-in-place order to go into effect on April 11, and some could have been carrying the virus. Most in Mbuli’s village were readying to be confined to their homes for at least 21 days. Mbuli had stockpiled enough food for “at least two to three years.”

“People are now purchasing a lot of food through Sarafu so they can have a stock in their house to feed their families during the time of the virus,” Mbuli says. The day before we spoke, Mbuli sold almost 100,000 Kenya Shillings ($94) worth of maize in Sarafu, compared to the usually 15,000 or 20,000 worth he might sell daily. 

Sarafu’s user numbers have gone up, too, with the return of people from Mombasa to Mbuli’s village. “Those in Mombasa weren’t registered, so more people have been registered this week and are using more Sarafu,” he says, since the currency is local. “The more you use Sarafu, the more you save Kenya Shillings,” which are often the only currency accepted at institutions like schools.

There’s another upside to using Sarafu over Kenya Shillings during the Covid-19 outbreak – users don’t have to touch it. They can just send Sarafu through their phones, a convenience that will likely outlast its temporary usefulness during a viral outbreak.

Money Reimagined

Money Reimagined, Consensus: Distributed
Money Reimagined, Consensus: Distributed

Is bitcoin the answer for a global monetary system not longer served by the dollar standard? Airing Friday, May 15, episode 3 of The Breakdown: Money Reimagined examines bitcoin and permissionless stablecoins – both of which are forcing the global monetary system to examine deeply ingrained beliefs. 

The Breakdown: Money Reimagined is a podcast crossover micro series exploring the battle for the future of money in the context of a post COVID-19 world. The four-part podcast features over a dozen voices including Consensus: Distributed speakers Niall Ferguson, Nic Carter and Michael Casey. New episodes air Fridays on the CoinDesk Podcast Network. Subscribe here.

First Mover

Miners Hodl as Bitcoin Rallies
Bitcoin is rallying again, though new data shows mining pools are hanging onto the cryptocurrency they mine rather than sending it to exchanges for a quick sale, according to the Korean analytics firm CryptoQuant. One possibility explaining this behavior is that the miner community might be expecting a big price rally at some point down the road, said Brad Keoun in the latest First Mover newsletter. Another is that miners might be worried the market is looking weak, or thin: If they transferred their bitcoins to an exchange en route to cashing out, the heavy surge in sell orders might cause prices to collapse. You can subscribe to First Mover here

Media Diet

First State-Owned Entity Joins Libra Association
Temasek, one of Singapore’s two government-owned investment vehicles, is among the latest companies to join the Libra Association, the consortium Facebook set up to create a global digital currency. The addition may help explain why the Singapore dollar has figured prominently in Libra’s plans from the early days. In the initial vision of a new currency backed by a basket of different sovereign currencies, the “sing” was included alongside the U.S. dollar, the euro and the British pound. 

Telegram’s TON Was Built on Sand. Its Failure Isn’t All Bad For Crypto
Preston Byrne argues in a CoinDesk op-ed the SAFT structure Telegram would have used to distribute coins from its ICO, “once regarded as compliance best practice in the cryptocurrency industry, will be greatly diminished in its usefulness in the U.S.” And that’s a good thing. 

Aggrieved Investors Mull Suing Telegram Over Canceled TON Blockchain Project
Investors in Telegram’s TON project are in discussion to sue the company after it abruptly shuttered the blockchain effort earlier this week, according to four individuals familiar with the situation. 

Who’s Holding up the #Cryptoverse?

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Yeah, we’re on Insta, too.
Source: Instagram

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Blockchain Bites: Last Day of Consensus, Will Crypto Save the Internet?

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Consensus: Distributed ended on a high note with a keynote address from Juan Benet, founder of Protocol Labs, who granted a rare interview as he closed out the week-long virtual conference. 

Speaking widely on the topics of decentralization and Web 3.0, Benet said, “the internet has become dramatically more important to us.” Over a 50-year time span, computing has gone from an idea to a “species altering technology.” 

You’re reading Blockchain Bites: Consensus Edition a twice daily roundup of all the notable news out of Consensus: Distributed. You can sign up for this, and all of CoinDesk’s newsletters here.

But the internet’s present configuration is a huge problem. The underlying principles of an open and permissionless web, as originally intended, have become distorted by monolithic, centralized service providers, and given way to surveillance capitalism, data encroachment, hacking and content siloing. 

Many of these problems were examined in an earlier session dedicated to current and coming models for media distribution – from newsmaking to music. “We are all creating and consuming content at a frantic pace, and using tech all the time to do so,” Lance Koonce, the workshop’s moderator said, by way of framing the conversation. 

Different media have different revenue streams, said Chris Tse, founding director of Cardstack.
And all of them are broken. The issue at hand is technology has claimed not only the media type, but also the audience and distribution. 

Crypto and blockchain could contribute to a solution, though most of the featured guests were skeptical. 

Speaking on the topic of misinformation, Kathryn Harrison, founder of the DeepTrust Alliance, cited a recent survey that found three-quarters of adults aren’t sure they can accurately recognize fake news. And a plurality said misinformation impacts their trust in governments. 

There’s no cryptographic solution, or new law, that could fix what is essentially a human problem, said Nadine Strossen, professor at New York Law School.  But media literacy, fact checking and common sense are critical parts of any solution. 

Tech works best if it can solve a small issue first, and then scale, said GiantSteps Media’s Bill Rosenblatt. Quoting Jeffrey Moore, a tech market strategist, he said “you need to solve a niche pain point problem for someone before you can go on and boil the ocean.” 

“This ownership thing is a solution in search of a problem,” Rosenblatt said, speaking about wide-ranging identity solutions intended to revamp the web. Like Juan Benet’s.

“Web 3 is about creating a platform that is decentralized, that puts human rights foremost, and can build a much freer and open internet and lock it in place,” Benet said. 

The core principles of Web 3.0 are about ensuring freedom of speech and assembly, data ownership and self-sovereignty. If you sacrifice on these at the outset, give way just a bit on the vision, it cascades down into what will be built. 

Blockchain and cryptocurrency have already “changed the underlying guts and rails of major industries,” Benet said. For instance, fleek is allowing people to spin up decentralized websites, while Audius is reshaping music streaming while maintaining a “Web 2.0 quality user experience.” 

The idea that started with Bitcoin, of establishing financial freedoms, has extended to all kinds of other industries, reshaping the possibilities of a shared computing platform.

But there’s a lot of work left to do. 

And with that, we bid you adieu. Thanks for attending and reading. 

The CoinDesk 50

coindesk 50
The CoinDesk 50 are the most innovative and influential organizations in the crypto and blockchain industry.

The CoinDesk 50 is an annual list celebrating the most important organizations in crypto. We’ve been announcing five nominees per day, and have highlighted BinanceCosmosBraveBitmainMakerDAOBesu,  Silvergate BankBitcoin and the People’s Bank of China as particularly noteworthy. Read the full list here. 

Money Reimagined

Earlier this week Former Treasury Secretary Lawrence Summers claimed one of the problems with the current monetary system is “too much privacy,” at Consensus: Distributed. In his latest Money Reimagined newsletter, CoinDesk’s Chief Content Officer Michael Casey riffs on this theme. 

“Despite [the current] surveillance system, the U.N. Office on Drugs and Crime estimates that between $800 billion and $2 trillion, or 2%-5% of global gross domestic product, is laundered annually worldwide. The Panama Papers case shows how the rich and powerful easily use lawyers, shell companies, tax havens and transaction obfuscation to get around surveillance. The poor are just excluded from the system,” he writes. 
Central bank digital currencies (CBDCs) are likely to only exacerbate surveillance into our financial lives. Unless they’re built using protocols and cryptographic tools that enable both privacy and security. 

“Self-sovereign identity models and zero-knowledge proofs, for example, grant control over data to the individuals who generate it, allowing them to provide sufficient proof of a clean record without revealing sensitive personal information. But such innovations aren’t getting nearly enough attention,” Casey said. 

You can read his full take here, or get it in your inbox by subscribing here

Best Brella Background

Screenshot of Protocol Lab's Juan Benet's closing keynote address for Consensus: Distributed
Juan Benet, Protocol Labs

Consensus Magazine

Excerpted from The Men Who Stare at Charts, Ben Munster’s exploration of technical analysis and the people who promote it:

Charts tracking the price of bitcoin dominate six buzzing monitors in the third-floor office of a rotting, centuries-old tower block in the heart of Kiev. A pattern emerges among the shifting forms and shapes, and Brian – a 33-year-old trader who asks we use only his first name – reacts swiftly, punching his extemporaneous analysis into a chatbox on the messenger app Telegram. He has identified the distinctive downward twist of a “falling wedge formation.” To those in the know, that means: The price is going down at a diminishing rate, and should presently head moooooonwards. Get the full story

Jess Klein dives into Generation Crypto, an ageless, country-less and class-less augment cohort aligned by a belief in decentralization and skepticism of received wisdom. This excerpt from her eight part series follows Jesse Grushack – The Burner – co-founder of Ujo Music, the Ethereal festival and one of the main organizers of Node Republik, a Burning Man camp for ConsenSys workers and Ethereum enthusiasts. Read the series.

Jesse Grushack started mining bitcoin in 2010, using all of his computer power over the course of three days to come up with 1/200th of a penny. Despite the discouraging start, Grushack’s interest in cryptocurrency didn’t wane; when he learned about a company called ConsenSys in 2015 via the New York City Tech Slack channel, he got in touch and got a job. “It was just a black website with the one-line description, ‘A decentralized venture studio building applications primarily on Ethereum,’” he recalls, “and I was like, wow, that means nothing.” Read on.

Jeff Wilser profiles David Birch, in The Man Who Forecast a Currency Cold War, excerpted below.

Fintech guru David Birch, a consultant and prolific speaker on the blockchain conference circuit, wrote “The Currency Cold War: Cash and Cryptography, Hash Rates and Hegemony,” just in time for our global pandemic. He nailed the timing. For years Birch had his own pet theories about a clash of digital currencies. But “that was just me, just some guy talking about it,” he tells me in his British accent, which seems always on the verge of a sly joke. “And who cares, you know?”

Then came Jackson Hole. 

In the fall of 2019, at a Jackson Hole, Wy., event Birch describes as a “Burning Man for people who run central banks,” the Governor of the Bank of England, Mark Carney, said that perhaps it was time for some form of “synthetic hegemonic currency” to deal with what he called the “destabilizing dominance” of the U.S. dollar.

This comment seemed to galvanize Birch. “The Governor of the Bank of England is emphatically not just some guy,” Birch says. He realized the Currency Cold War was not just his own pet theory – it was imminent. It might already be happening. And it has consequences. Which currency would society choose? Would it be one or many? Read the full tale

Virtual View

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A meta-VR Meetup in VR

Media Diet

Central Banks Mull Creating a CBDC, but Not on a Blockchain: Survey
Central banks in 46 countries are considering creating a central bank digital currency (CBDC) using a constrained form of distributed ledger technology (DLT), according to a new survey. But they’re leery of blockchain. Though only one unidentified “small African central bank” would consider using a blockchain to support this digital currency “if found to be the best available platform.”

Visa Patent Filing Would Allow Central Banks to Mint Digital Fiat Currencies Using Blockchain
A new patent filing outlines a system that would be able to mint digital fiat currency and keep a tally of all issuances on the blockchain. Managed by a “central entity computer,” the system would also remove physical cash from circulation.

Bequant Launches Crypto Prime Brokerage to Compete for Institutional Money
Digital asset services firm Bequant launched a prime brokerage service for institutional clients to have easier access to liquidity, custody, lending and other products. Prime brokerage refers to a bundle of specialized services offered by investment banks and securities dealers to their hedge fund clients. Tagomi is the largest of the few prime brokers in crypto.

CZ’s Twitter Feed Swayed New CoinMarketCap Ranking That Put Binance on Top
CoinMarketCap’s new metric focuses on web traffic, and eliminates a metric tracking wash trading, and giving its parent firm a perfect score. 

J.K. Rowling Breaks #CryptoTwitter

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Blockchain Bites: Will Enterprise Blockchain Find a ‘Killer App’ or Be Killed?

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It seems like enterprise blockchain is between finding its “killer app” and being killed.

“Everyone had a killer app three years ago. That was the state of blockchain business,” Shyam Nagarajan, a director at IBM, said during a marathon session at Consensus: Distributed. “People have wisened up since then.”

There are a number of roadblocks obstructing the possibility of adoption and successful implementation of business-grade blockchain. Cited most frequently is the problem with scalability. 

It turns out, it’s difficult to get other people or competing companies to join onto someone else’s private network, CoinDesk’s Ian Allison reported Thursday

Sometimes this is the result of the market itself. Microsoft’s Riccardo Trubiani pointed out the total size of the Italian blockchain industry is 30 million euro. “Market opportunities define where people will invest,” he said. 

But enterprise blockchain isn’t dead, yet. It’s a developing industry, with a learning curve. 

Take We.Trade, the first enterprise-grade distributed trade financing platform. In a candidate appraisal of his firm’s performance, General Manager Ciaran McGowan said the firm has been going through growing pains. 

Nearly everything that could have gone wrong, did. McGowan said the firm didn’t have the right governance structure – “plenty of ideas and talk, but no action” – infrastructure, or communications initially. The firm also over engineered its platform, building “a Ferrari,” McGowan said, while underdelivering on its compliance requirements – making it impossible for merchants or banks to feel comfortable signing on. 

After a period of reorganization, (McGowan replaced the firm’s first Chief Operating Officer Roberto Mancone) We.Trade has its foundations in place, and is on the pathway to profitability, he said. 

While McGowan is comfortable with the value proposition of blockchain for trade financing, there are other industry use cases where it simply doesn’t make sense. “The less we can talk purely about blockchain and solving problems with business leaders, the better off we are,”  Linda Pawczuk, global head of blockchain and digital assets at Deloitte, said in a separate program. 

As the industry matures, it’s likely there will be greater consolidations and collaboration between former competitors. 

The CoinDesk 50

coindesk 50
The CoinDesk 50 are the most innovative and influential organizations in the crypto and blockchain industry.

The CoinDesk 50 is an annual list celebrating the most important organizations in crypto. We’ve been announcing five nominees per day, and have highlighted BinanceCosmosBraveBitmainMakerDAOBesu and the People’s Bank of China as particularly noteworthy. Today we honor Silvergate Bank. You can read the full list here.

Silvergate, the Bank That Wasn’t Afraid
Crypto’s first IPO was a 30-year-old bank. Southern California’s Silvergate Bank, which went public in November 2019, is one of just a handful in the U.S. willing to bank cryptocurrency firms. It was also one of the first, entering the space in 2013, a period when the bank was loaning more than it had on hand. Capital-rich crypto firms needing a place to deposit their fiat in some sense, saved the bank. Silvergate aims to stay ahead of its competition, which now includes JPMorgan, by creating new products and services that clients request. Its Silvergate Exchange Network allows customers to instantly move dollars between different crypto exchanges, and the bank is also piloting new features like bitcoin margin lending.

CoinDesk COVID Response

CoinDesk Charity, Blockchain Week, COVID

#NYBWGives
CoinDesk has joined Gitcoin, The Giving Block and Ethereal Summit to support charities helping communities in difficult times. We’re raising $100,000 and giving you a voice through the quadratic funding model. Learn how it works and how to donate.

Mr. Star City artwork
New York-based interpretive artist Mr. Star City created an original piece of artwork at Consensus: Distributed for auction to support COVID-19 relief.

In addition, New York-based abstract artist Mr. Star City created an original piece of artwork, shown above, as a part of Consensus: Distributed. The art, inspired by love, unity and technology, will be up for auction this week. Follow @coindesk on Twitter to find out how to bid — the proceeds will go to the same cause.

Consensus Magazine

Generation Crypto 
Freelance journalist Jess Klein writes about an emerging psychographic of people who see the world through the lens of decentralization. In a series of eight profiles, Klein examines “Generation Crypto,” a diffuse grouping of people of all ages, races and sexes, bound together as “children of Satoshi.” 

This excerpt taken from the series follows Preston Byrne, the libertarian lawyer. Read the full series here

Generation Crypto

“I’d say not all crypto people are into libertarianism, but most libertarians are into crypto,” says Preston Byrne, a conventional-looking lawyer in his thirties.

A partner at the Anderson Kill law firm as of March 1, his specialty, as it has been for years, is “understanding the nuances” of blockchain technology. He’d only just moved from Connecticut to Washington, D.C. to start at the firm on March 14 when work-from-home orders came through, so he high-tailed it back to Connecticut, where he’d already had a bunch of food stored in his mom’s freezer in case of this exact scenario.

“Those of us who were paying close attention began getting ready for this,” he says, citing a “conspiratorial” article he discovered back in February. Later banned by Twitter, the article suggested the coronavirus came from a Chinese bioweapons lab. “Is that true? I don’t know…but that was an alternative media outlet focused very, very early [on the] outbreak in China,” Byrne says.

Anti-censorship is one of the main reasons Byrne is drawn to blockchain and cryptocurrency. “Bitcoin doesn’t care what we’re using it for,” he says, pointing out it’s been a reliable alternative for those banned from establishment payment systems for political reasons, like Alex Jones and Laura Loomer. At work, he’s dealt with such cases where bitcoin has come to the aid of those “booted” from online platforms (but as an attorney, he can’t discuss them — nor can he hold cryptocurrency himself, due to potential conflicts of interest).

Since he holds no cryptocurrency, Byrne hasn’t gotten too deeply involved in any individual crypto community, but he goes to various Bitcoin and Ethereum meetups. His real “tribe,” however, is the libertarian activist members of the New Hampshire Free State Project. “They were among the earliest adopters of bitcoin at various events they held,” Byrne says. The group’s aim, as he puts it, is to overwhelm New Hampshire’s population with enough libertarians to influence the state’s politics.

Byrne’s libertarian views have only been “validated” by both the government and human response to COVID-19 in the U.S. Since the government didn’t prepare people for the pandemic in time, those who didn’t make the decision to prep for themselves were the ones standing in long lines at the grocery store and panic-buying all the toilet paper. “This really makes the libertarian case,” he says, “because our world fell apart all around us, and the only thing that really mattered was whether you yourself were ready.”

Because of the government’s poor handling of the crisis, Byrne believes more people will want to “exit the system,” he says. “I think bitcoin is one of those exit pathways.”

Money Reimagined

Money Reimagined, Consensus: Distributed
Money Reimagined, Consensus: Distributed

Is bitcoin the answer for a global monetary system not longer served by the dollar standard? Airing Friday, May 15, episode 3 of The Breakdown: Money Reimagined examines bitcoin and permissionless stablecoins – both of which are forcing the global monetary system to examine deeply ingrained beliefs. 

The Breakdown: Money Reimagined is a podcast crossover micro series exploring the battle for the future of money in the context of a post COVID-19 world. The four-part podcast features over a dozen voices including Consensus: Distributed speakers Niall Ferguson, Nic Carter and Michael Casey. New episodes air Fridays on the CoinDesk Podcast Network. Subscribe here.

Best Backgrounds at Consensus: Distributed

Jonathan “Stay Golden” Levi, of HACERA

jonathan-levi-background

Linda “Bikes to Work” Pawczuk, of Deloitte

linda-pawczuk-background

Crypto Cribs

Phil Gomes takes us on a tour of his crypto crib. This is his home office, which he’s been working from since 2018 when he joined Bloq. “Built into a former walk-in closet under the pitch of the roof. I consider myself especially fortunate to have this available to me in these current times,” he said over email. 

gomes_1

gomes_3

gomes_4

CoinDesk Confessionals

CoinDesk sent out a questionnaire meant to gauge the innermost feelings and thoughts of the crypterati. Loosely based on the “Proust Questionnaire” popular during the fin de siecle, we’re hoping their honest answers will reveal insights about our own age of transition. 

Sunny Aggarwal, a Tendermint and Cosmos developer, answered our questions.

Your favorite blockchain protocol?
Cosmos, obviously

Your # 1 favorite crypto hero?
Vitalik

Your favorite quality in an entrepreneur?
Ability to stay true to values

Your biggest fear?
(crypto specific) Crypto adoption goes nowhere and all this time and energy we’ve spent will be naught.

What would you value bitcoin at today?
$8,893.04

One word on how you got into crypto?
Doro Wat

What should crypto disrupt next?
Let’s finish disrupting money/finance first.

Public or private?
A mix realistically. Private chains that can prove particular properties publicly.

Permissioned or permissionless?
Once again a mix. Pemissioned chains in a permissionless network of blockchains.

Your best example of sovereignty?
Israel’s ability to be surrounded by “enemies” but stand its ground.  Nuclear weapons are sovereignty.

Your net worth
Enough for now.

What gets you out of bed?
My sister who wakes me up every morning cause I sleep too much

What is your motto?
“A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects.”

What would you like to be?
Impassioned

Where would you like to live?
Just moved to NYC a few months ago, but had to leave cause of covid situation. Looking forward to getting back there asap!

Your favorite television show or movie?
Mr. Robot

Your most vivid memory?
The day I joined my fraternity in college.

Your greatest achievement?
Created UC Berkeley pirate party.

What do you rely on?
Support of family and friends

What would you change about yourself?
Lose weight.

Where will you be in 10 years?
Working on solving problems in education.

Your favorite fiction character?
Captain America

How do you spend your free time?
Reading, motorcycling, watching television.

What do you want your legacy to be?
Having built something that brings people more sovereignty to their lives.

How would you like to die?
Preferably not in a motorcycle accident. My mom would kill me.

Media Diet

Binance Quashes Upbit Hackers’ Attempt to Launder Stolen Funds
Binance has frozen funds linked to the $49 million breach of the Upbit crypto exchange after hackers tried to liquidate some of their ill-gotten gains.

Overstock Files to Dismiss ‘Meritless’ Fraud Lawsuit Over Its Digital Dividend
In a filing on May 12, Overstock took aim at the two main allegations made in a class action suit: that the firm had made false declarations in 2019 about its financial future, and that it had deliberately launched the digital dividend (a tokenized security planned for listing on its affiliate company tZero’s trading platform) in order to create an artificial squeeze on short sellers.

Bequant Launches Crypto Prime Brokerage to Compete for Institutional Money
Digital asset services firm Bequant launched a prime brokerage service for institutional clients to have easier access to liquidity, custody, lending and other products, the company announced Thursday. 

Polymath Eyes June Testnet Launch for New Blockchain Designed for Security Tokens
Polymath is closing in on the launch of the first test network for its new blockchain – one designed to bring new safeguards for financial institutions working with security tokens. With the Aldebaran testnet, the security token issuer is implementing a relatively new type of protocol scheme known as nominated proof-of-stake (NPoS).

Industry Group Led by Polychain, Coinbase Seeks to Get Ahead on Staking Regulations
The Proof of Stake Alliance (POSA), an industry advocacy group, is publishing a series of recommended standards for companies participating in a proof-of-stake consensus protocol in an effort to reduce regulatory clampdowns on different networks.

Ledn Launches USDC Stablecoin Savings Accounts With Focus on Latin America
The crypto loan startup Ledn, which primarily serves users in Latin America, is now offering USDC stablecoin savings accounts through a partnership with the lending and trading conglomerate Genesis.

Who Won #CryptoTwitter?

cryptotwitter

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Blockchain Bites: The Government Won’t ‘Kill DeFi’ but FATF Might Compromise Anonymity

Top Shelf

Progress must keep pace with need. An overriding theme during day three of Consensus: Distributed was that the pace of technological development – driven by interconnected but diffuse organizations – must keep up with (or keep in mind) the needs of actual people and societies.

“To solve a problem you need to see it first,” said Tyrone V. Ross, director of community at Altruist, a platform for financial advisors. Only by working directly with communities can organizations truly come to understand their financial needs. 

There’s disagreement in and outside of crypto on how to best orient technological progress for these needs. But the fact is, the industry is hurtling towards a set of rules that will redefine the ecosystem for it. The so-called “Travel Rule,” a new set of guidelines proposed by the Financial Action Task Force last spring, will attempt to inject structure into the largely anonymized crypto economy. 

FATF’s Virtual Asset guidelines ask for exchanges and some wallet providers to maintain identifying information about the senders and receivers of crypto transactions. It’s due to become industry-standard this June, with the question remaining whether crypto is ready for it. 

“Crypto is not designed to have a Travel Rule solution,” Noah Perlman, chief compliance officer of Gemini, said at CoinDesk’s Consensus: Distributed virtual conference. While the exchange will work to comply, “it’s hard” to meet the conflicting needs of regulators and their clientele. 

“We want to help law enforcement and provide more transparency,” Coinbase’s Chief Compliance Officer Jeff Horowitz said. “It really is a conversation between privacy versus transparency.” 

Transparency in this case means righting the wrongs of unchecked technological progress. “Anonymity is a big goal for creators of this technology,” but the experiment went a different way when bad actors began exploiting the systems, said Merav Shor, counsel at eToro. “Anonymity has to be compromised to a certain degree,” she said.

Yaya Fanusie, of Cryptocurrency AML Strategies, agreed. Despite challenges with implementing it right now, these rules are “a path to scalability.” At some point, he argued, crypto needs to meet the challenges and expectations of the traditional financial system. 

While some propose that the Travel Rule, and its antecedents like the Bank Secrecy Act (enacted in 1970), are unconstitutional out of hand, many see regulation as a catalyst to mainstream adoption. 

Speaking on the DeFi Risks and Regulation Workshop, Jake Chervinsky, counsel for Compound said, “The government isn’t trying to kill DeFi.” “They understand there’s a lot of promise in this space,” with potentially huge benefits for expanding access to financial services.

He added that the government understands that this technology will be built and would prefer the innovation takes place within US borders. 

The CoinDesk 50

coindesk 50
The CoinDesk 50 are the most innovative and influential organizations in the crypto and blockchain industry.

The CoinDesk 50 is an annual list celebrating the movers and shakers of the crypto industry. We’ve already highlighted BinanceCosmosBraveBitmainMakerDAOBesu and the People’s Bank of China, and will continue to announce five new names a day until the end of Consensus: Distributed. You can read the  full list here.

Bitcoin Is Still King
Bitcoin is the reason why we’re writing these words and you’re reading them now. Its implementation 11 years ago kicked off a whole industry composed of competing forms of currencies and novel financial instruments. It got people thinking about what money is, could be and whether they should have direct control over their economic lives. But Bitcoin itself is building: A decentralized group of core developers is keeping its core spinning, while hundreds of other technologists are finding ways to improve its usability, privacy and scaling. The world’s first cryptocurrency, theorized and encoded by the long-silent Satoshi Nakamoto, still dominates this industry, in both market capitalization and brand recognition. Bitcoin is king because no one person controls it. Bitcoin is king because it grants sovereignty. Bitcoin is king because it knows it’s not wearing clothes. Full story

CoinDesk COVID Response

CoinDesk Charity, Blockchain Week, COVID
CoinDesk Charity, Blockchain Week, COVID

#NYBWGives
CoinDesk has joined Gitcoin, The Giving Block and Ethereal Summit to support charities helping communities in difficult times. We’re raising $100,000 and giving you a voice through the quadratic funding model. Learn how it works and how to donate.

Mr. Star City artwork
New York-based interpretive artist Mr. Star City created an original piece of artwork at Consensus: Distributed for auction to support COVID-19 relief.

In addition, New York-based abstract artist Mr. Star City created an original piece of artwork, shown above, as a part of Consensus: Distributed. The art, inspired by love, unity and technology, will be up for auction this week. Follow @coindesk on Twitter to find out how to bid — the proceeds will go to the same cause.

Consensus Magazine

Generation Crypto 
Freelance journalist Jess Klein writes about an emerging psychographic of people who see the world through the lens of decentralization. In a series of eight profiles, Klein examines “Generation Crypto,” a diffuse grouping of people of all ages, races and sexes, bound together as “children of Satoshi.” 

In this excerpt taken from the series, Klein profiles Tyrone Ross Jr., a financial advisor for the crypto-rich. Read the full series here

Generation Crypto
Generation Crypto

Financial advisor Tyrone Ross, Jr. ducked into a coffee shop in Midtown Manhattan wearing a checked blazer and a pocket square in February to meet with me, a simple activity that’s unimaginable now. He approached with a wide, disarming smile, and its effect was immediately clear: This is a man I would trust with my money.

Ross’s young, tech-savvy clients invest in crypto. Most of them are men, “but there’s a lot of women interest,” he says. For many, crypto was their first investment. “As a black American, someone who was trying to push black folks into stocks for a while, they would never listen,” says Ross. “But for whatever reason, a lot of people just jumped into crypto, and are now reverse-engineering getting into stocks later.”

Not much has changed for Ross’s clients because of Covid-19, at least not in terms of their investment strategies. Ross has also been working with his team virtually for the past two years, so working from home is no obstacle. And as of late March, he had yet to receive a single “panic call” from a client. “I literally had clients calling me, Are we buying here or what?” he says. At least one bought the drop.

After all, crypto investors are used to riding ups and downs in its volatile market. If anything, Ross is hoping that the Covid-19 pandemic will help reveal crypto’s virtue as an option for the un- or under-banked. 

“The best example I have of that is my own family,” he says. His parents have gone most of their lives without bank accounts, but now they have one and they’re nervous, asking Ross if they should withdraw their money. “My mom said, ‘I’m not putting my money in any bank,’ and that’s all I need to hear,” he says, to convince him that there’s not enough trust in the traditional financial system. Sure, his mom calls crypto “space money,” but Ross firmly believes that cryptocurrency’s product market fit is with those suffering most from America’s significant class divide—one that’s being blown open even further by the pandemic.

“The fall of Rome is happening,” he says. “The United States is being brought to its knees.” So he’s bullish on bitcoin, perhaps even more so than usual. While much of the world is scrambling or on pause, Ross is building a project that will allow financial advisors to seamlessly access bitcoin, and he’s confident that the smartest people in the world, now all stuck at home, are working on progressive crypto projects, too.

“Once we come out of this…the world is going to look different,” he says. “Digital everything is going to become a thing, and the only thing that’s missing right now is a true global money that’s run on the internet.”

“We have that,” he adds. “Crypto just needs its iPhone moment, and this may be it.”

Best Backgrounds at Consensus: Distributed

Auryn “Watching the World Burn” Macmillan

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Screen Shot 2020-05-13 at 4.39.21 PM

How To Use Brella

To access all of the deeper cuts available through Consensus: Distributed, you’ll need to login through Brella , our virtual conferencing platform. You can create an account through Gmail, LinkedIn, Facebook or set one up manually on Brella. Your profile will be the way you match and network with others. As soon as you’re set up, you’ll be directed to a dashboard showing other registrants.

Brella is easy to use and has a number of features to help you through this virtual experience. There are multiple tracks of simultaneous programming happening inside Brella. You’ll also be able to browse the entire agenda, bookmark sessions and build your own schedule.

Brella is a great networking tool as well, be sure to check out some of the social features available in-page, and reach out to the people and organizations that pique your interest. Celo, for one, is hiring.

CoinDesk Confidential

CoinDesk sent out a questionnaire meant to gauge the innermost feelings and thoughts of the crypterati. Loosely based on the “Proust Questionnaire” popular during the fin de siecle, we’re hoping their honest answers will reveal insights about our own age of transition

Meltem Demirors responded to our prompts with the first thought that came to mind. 

Crypto Questions

Your favorite blockchain protocol?  
Bitcoin forever and always
Your #1 favorite crypto hero? 
Satoshi
Your favorite quality in an entrepreneur? 
Curiosity – people ask “why?”
Your biggest fear? 
Loss of freedom and agency
What would you value bitcoin at today? 
$10k
One word on how you got into crypto? 
The internet
Who is your crypto hero? 
Satoshi (same as 2)
What should crypto disrupt next? 
First disrupt money, next comes the state
Public or private? 
Public, but with privacy
Permissioned or permissionless? 
Permissionless
Your best example of sovereignty? 
Running bitcoin
Your net worth?
Hah, absolutely not
What defines Satoshi? 
Spiritual leader of a social movement that will change the course of human history
Your favorite economist? 
Anna Schwartz, who co-authored the influential book “A Monetary History of the United States” with Milton Friedman which analyzed the Fed’s role in perpetuating the Great Depression, for which he received the Nobel prize, but she did not. She was a brilliant analyst of monetary policy, and very outspoken in her criticism of the Fed. Legend!
Which living person do you most despise? 
No one. I don’t have enough energy to despise other people. Indifference is more powerful than hate.
When and where were you when you first heard about BTC? 
Don’t recall, but I was working on an M&A project in China when I first started down the rabbit hole, so I was in a random hotel room somewhere in China realizing I actually did not really like my job or my life very much.
Do you mine? Would you mine? 
No and maybe, I do run a full node but mining is a specialized activity that requires scale.
Your favorite revisionist moment from crypto history? 
Everything surrounding the DAO “hack” and what happened afterwards. Even calling it a “hack” is wildly mis-leading.
Your favorite non-crypto book? 
Tie between Siddhartha by Herman Hesse and Dune by Frank Herbert
Your most visited webpage? 
Twitter, of course

Cryptic Lifestyle

What inspires you? 
Observing how little we know about the world and ourselves and how much is left to learn and understand
What is your main fault? 
Obsessive to a fault but only on the most esoteric and niche topics that are rather impractical
Your main hero characteristic? 
Competent
What is your current state of mind? 
Same as every day, excited and scared all at once
What or who do love the most? 
My tribe – my family and friends
When and where were you happiest? 
Skiing. I go into a flow state and have an out-of-body experience. Best ski season was winter 2014-15 when I moved to Breckenridge CO for six weeks and skied every day.
What gets you out of bed? 
I honestly can’t believe that I get to do things I find interesting and challenging as my job, so I don’t really have a strict boundary between “work” and “life” or “office” and “home” so I’m generally just eager to work on whatever I’m working on right now
What is your motto? 
Blowing sh** up
What would you like to be? 
Content
Where would you like to live? 
Wherever I like
Your favorite television show or movie? 
The Life Aquatic is the best film ever
Your most vivid memory? 
All I can say is it involved dancing
Your greatest achievement? 
Whatever I do today. The past is the past, and the future hasn’t arrived, so today is it!
What do you rely on? 
Caffeine and curiosity fuel me
What would you change about yourself? 
Saying no to more things, including books, ideas, thoughts, and people. I’m working on it!
Where will you be in 10 years? 
Wherever I’m supposed to be, I don’t have a “plan,” just a direction of travel
Your favorite fiction character? 
Easy – Molly Millions from the Gibson’s Sprawl trilogy. She is a trained assassin cyborg who wears leather and has mirror eyes and razorblade fingernails.
How do you spend your free time? 
Reading and being outside
What do you want your legacy to be? 
My memoir will be short and sweet – “Meltem. She had a good time.”
How would you like to die? 
In a way that gives my loved ones peace and closure

First Mover

Derivatives May Have Blunted the Halving’s Volatility Spike
There now exists a developed derivatives market in the crypto economy, a fact that may affect the calculus of a post-halving bull run. “What’s changed is the ease of going short,” CoinDesk’s First Mover team writes in their latest newsletter . “The majority of volumes this week have been in futures rather than spot,” he wrote. “We’re seeing that on the [over-the-counter] side. For example, GSR has had its biggest May ever and we’re only 12 days in.” Derivatives aid price discovery, perhaps keeping bitcoin’s price in a tighter range. 

Media Diet

Bitcoin Steady Near $9K as Trump Touts ‘Gift’ of Negative Interest Rates
Bitcoin has ended a four-day losing trend and is trading steady around $9,000 amid rising speculation the U.S. could eventually adopt negative interest rates. “As long as other countries are receiving the benefits of Negative Rates, the USA should also accept the “GIFT”. Big numbers!,” Trump tweeted Tuesday. 

Exchange Run by Ex-Morgan Stanley Team Drops Trading Fees for Subscription Model
Crypto derivatives exchange Phemex is swapping out its existing trading fee structure for a new subscription model it says will make frequent trading more accessible. The Singapore-based exchange, which only launched in November, said its new Premium subscription model would encourage clients to trade as much as they like on the platform without towering fees. 

Standard Chartered Claims First Yuan-Based Letter of Credit Issued on a Blockchain
The London-based bank says it has issued the first blockchain-based international letter of credit (LC) transaction using China’s national currency, the yuan, and R3 Corda’s trade finance network Contour. 

Investors on CoinList Pour $10M Into Celo Token Sale in Roughly 12 Hours
Silicon Valley blockchain startup cLabs just raised $10 million for the Celo project through a token sale to investors on the CoinList platform, building on $30 million in venture capital funding from firms like Polychain Capital and Andreessen Horowitz (a16z).

Who Won #CryptoTwitter?

screen-shot-2020-05-13-at-4-32-04-pm

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Blockchain Bites: FATF, Financial Inclusion and Banking Without Banks: A Look Ahead at Consensus, Day 3

Things are settling in on the third day of Blockchain Week.

Tuesday saw Nym’s Harry Halpin give an in-depth demonstration on how to shield your transactions, while Vitalik Buterin walked back a comment he made the previous day. 

Here’s what my colleague Nikhilesh De watching for throughout the day:

Good morning folks, and welcome to day three of CoinDesk’s Consensus: Distributed. There’s a lot to look forward to today, but in the interests of keeping this newsletter opening relatively short I’m going to focus on two themes I’m personally interested in: financial inclusion and the Travel Rule.

Financial inclusion is an issue that’s pretty important to me. It’s a great goal for fintech and crypto startups to target, but there are underlying issues I’ve seen few companies address, including the infrastructure concern. Even if a project is easy to use and works at scale, how are individuals with limited internet access going to use them? What are the financial and technological on- and off-ramps for these individuals? I’ve had no part in planning today’s workshop, but these are some of the questions I hope are brought up – even if a solution isn’t immediately apparent, the conversation itself is one that desperately needs to happen.

The other workshop I’m looking at today concerns the Financial Action Task Force’s Travel Rule Recommendation. A quick recap: Last year FATF, an intergovernmental standards body for financial institutions, recommended nations enforce the so-called Travel Rule on virtual asset service providers (VASPs), meaning exchanges and some wallet providers will be required to know information of recipients of fund transfers even if those recipients aren’t their own customers. Various entities have been trying to develop standards for the industry in the year since. (Check out my colleague Ian Allison’s excellent coverage in this area.) With the implementation deadline coming up next month, it’s an issue that should remain on people’s minds. (Full disclosure: I’ll be moderating one of the panels during this workshop.) 

– Nikhilesh De

What To Watch

9:00 – 10:00 a.m. ET Oxford: From Cyber Security to Cyber Future – Workshop
David Shrier, Oxford futurist, breaks down the interconnections between cyber-worlds, data privacy and crypto.

10:00 – 1:00 p.m. Is Crypto Ready for the Travel Rule?
A star-studded panel discusses the FATF’s Travel Rule, a financial regulation that could reshape the direction of the crypto industry. Amy Davine Kim of the Chamber of Digital Commerce, Noah Perlman of Gemini and Jeff Horowitz of Coinbase, among others, are scheduled to make an appearance.

11:30 – 1:00 p.m. First Principles for a Decentralized Future 
Hosted by World Economic Forum, this program featuring Clovyr’s Amber Baldet, Hyperledger’s Brian Behlendorf and the inimitable Meltem Demirors, and many more, will examine how the cryptographic tools being built today can preserve their underlying values. 

1:00 – 2:00 p.m. Financial Exclusion: Does Crypto Fix This?
One of the chief use cases of crypto is to provide financial infrastructure for emerging markets and those excluded from the banking system. Carlos Acevedo, Karen Bhatia, Susan Oh and Tyrone Ross – all currently testing blockchain for social solutions in New York City – will ask and answer the question: Can crypto bank the unbanked?

2:00 – 4:30 p.m. DeFi Risk and Regulation Workshop
Crypto lawyers, builders and founders dive into the regulatory schemes that may affect the nascent DeFi industry. 

5:00 – 5:55 p.m. Don’t Bank on the Banks: Borrowing and Saving With Crypto
Greg DiPrisco, head of business development at the Maker Foundation, will demonstrate how the interconnected world of DeFi can replace and improve upon traditional banking. 

6:00 – 7:00 p.m. Research Hub: Crypto Research Happy Hour
Join CoinDesk Research’s happy hour to close out the third full day of Consensus: Distributed. 

The CoinDesk 50

coindesk 50
The CoinDesk 50 are the most innovative and influential organizations in the crypto and blockchain industry.

The CoinDesk 50 is an annual list celebrating the movers and shakers of the crypto industry. We’ve already highlighted BinanceCosmosBraveBitmainMakerDAOBesu and the People’s Bank of China, and will continue to announce five new names a day until the end of Blockchain Week. Today we look at why Bitcoin is still king. You can read the  full list here. 

Bitcoin Is King
With so many cryptocurrencies and “blockchain solutions” it’s remarkable, yet unavoidably clear, that Bitcoin is still the most exciting project to watch in this space. This cryptocurrency project isn’t run by a group of youthful researchers publishing their homework in the hopes of stress-testing models with other people’s money. Bitcoin isn’t a lifestyle brand, even if some zealots congregate around it. It is just money, already today. It is a tool and not a promise. It’s value doesn’t rely on any single company. And that’s why, while startup dreams come and go like fashion trends, bitcoin remains resilient. Read the full story.

CoinDesk: COVID Response

CoinDesk Charity, Blockchain Week, COVID
CoinDesk Charity, Blockchain Week, COVID

#NYBWGives
CoinDesk has joined Gitcoin, The Giving Block and Ethereal Summit to support charities helping communities in difficult times. We’re raising $100,000 and giving you a voice through the quadratic funding model. Learn how it works and how to donate.

Mr. Star City artwork
New York-based interpretive artist Mr. Star City created an original piece of artwork at Consensus: Distributed for auction to support COVID-19 relief.

In addition, New York-based abstract artist Mr. Star City created an original piece of artwork, shown above, as a part of Consensus: Distributed. The art, inspired by love, unity and technology, will be up for auction this week. Follow @coindesk on Twitter to find out how to bid — the proceeds will go to the same cause.

Media Diet

IRS Solicits Contractors to Help Examine Crypto Traders’ Tax Returns
The Internal Revenue Service (IRS) is seeking third-party contractors to help it assess whether certain U.S. taxpayers have properly paid taxes on their crypto holdings.

R3 Corda Partners With Kaleido After Ethereum Startup Spins Out of ConsenSys
R3, the company behind distributed ledger technology (DLT) platform Corda, is edging ever closer to Ethereum, with news of a partnership with blockchain-in-the-cloud startup Kaleido. The announcement comes following Kaleido’s emergence as a standalone company last month. 

Telegram Abandons TON Blockchain Project After Court Fight With SEC
TON is officially dead. Telegram founder Pavel Durov wrote in his public channel Tuesday that the Telegram Open Network project would be discontinued due to the company’s ongoing legal fight with the U.S. Securities and Exchange Commission.

Stablecoin Supply Breaks $10B as Traders Demand Dollars Over Bitcoin
The value of assets for all stablecoins surpassed $10 billion Tuesday, having surged by over 70% in just two months, according to Coin Metrics. Stablecoin supply growth comes as more cryptocurrency traders choose to trade alternative cryptocurrencies (or altcoins) using dollar-backed digital tokens instead of bitcoin.

17,000 People Have Filed Claims for Refunds From QuadrigaCX, Auditor EY Says
These individual claims have been filed for the remaining assets of defunct crypto exchange QuadrigaCX, totaling anywhere from $167 million to more than $300 million depending on how the assets are valued.

The Morning After: Crypto Funds Happy Hour

last-nights-happy-hour
Last nights happy hour

Last night, the CoinDesk Research team spoke with crypto fund experts and managers about sector shifts and opportunities. CoinDesk’s Brad Keoun counted “four whiskey drinks, three beers” on the panel.

How to Use Brella

To access all of the deeper cuts available through Consensus: Distributed, you’ll need to login through Brella , our virtual conferencing platform. You can create an account through Gmail, LinkedIn, Facebook or set one up manually on Brella. Your profile will be the way you match and network with others. As soon as you’re set up, you’ll be directed to a dashboard showing other registrants.

Brella is easy to use and has a number of features to help you through this virtual experience. There are multiple tracks of simultaneous programming happening inside Brella. You’ll also be able to browse the entire agenda, bookmark sessions and build your own schedule.

Brella is a great networking tool as well, be sure to check out some of the social features available in-page, and reach out to the people and organizations that pique your interest. Celo, for one, is hiring.

Audio Lounge

Audio Lounge
Audio Lounge

The Problem With Money
Listen to former Treasury Secretary Lawrence Summers discuss why the problem with the current monetary system is “too much privacy.

Consensus Magazine

Generation Crypto

Generation Crypto 
Freelance journalist Jess Klein writes about an emerging psychographic of people who see the world through the lens of decentralization. Unset by the traditional bounds of age, country or class, Generation C is bound together by a willingness to question mainstream narratives and an unceasing desire to topple undeserving authorities. The eight-fold series of profiles of leading crypto figures -including Preston Byrne, Ameen Soleimani and Tamara Frankel – will publish at 8:00 a.m. ET.

Who Won #CryptoTwitter?

crypto-twitter-513

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Blockchain Bites: Will Crypto See Any of the CBDC Action?

Top Shelf

The world is growing more comfortable with the idea of digital assets, with several nations stepping forward today to discuss the designs of central bank digital currency (CBDC) programs. 

Speaking at Consensus: Distributed’s Future of Fiat Workshop, central bank executives sent smoke signals regarding CBDC pilot programs. Harvesh Seegolam, of the Bank of Mauritius, the world’s youngest central bank governor, said the island nation is looking to issue a retail digital asset distributed through the established banking system. 

You’re reading Blockchain Bites: Consensus Edition a twice daily roundup of all the notable news out of Consensus: Distributed. You can sign up for this, and all of CoinDesk’s newsletters here.

This could be a lobbying moment for tech firms and the crypto industry to get in on the action. But Simon Scorer, Bank of England’s Senior Fintech Specialist, said the bank will not be limited by the current crop of technological options. “We’re clear that any choice of technology around a CBDC should be led by a set of requirements and not the other way around,” he said. That is, if they move forward on a digital pound. 

Privacy advocates raised the alarm over the growing sentiment in favor of CBDCs. According to a recent poll from the Bank for International Settlements, a club for central banks, 80% of surveyed countries are in some stage of CBDC research or development. Whatever form these pilots take will walk the balance between privacy and greater visibility into the financial system. 

Sheila Warren, head of blockchain at the World Economic Forum, said CBDCs will deliver on promises of more granular financial tracking mechanisms that authorities have made no secret about wanting. But this also opens the door for privacy coins to come into fruition. 

As Elena Sofia Giralt said in None of Your Business: Why Our New Virtual Lives Need Crypto Privacy, privacy is not just a blanket release but something you should have a choice over. 

The CoinDesk 50

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Credit: Cavendish Design

Besu, the Marriage of Ethereum and Hyperledger
There have been dalliances between Hyperledger and Ethereum over the years. The latest lovechild, Besu, was designed from the ground up to let large enterprises connect to the public Ethereum blockchain. There are benefits on both sides. On the public, or permissionless, side of things, Ethereum has the largest developer community in crypto, building tools corporations may not even know they need yet. On the other, Hyperledger’s permissioned blockchain is where many of the corporations looking at this tech feel most comfortable. Ethereum’s true believers have always viewed big business using the public mainnet as a signifier for their “world computer” status. With Besu, that claim may become a reality. Read the full story here.

We’ll announce another five organizations tomorrow. You can see the full list here.

CoinDesk COVID Response

CoinDesk Charity, Blockchain Week, COVID
New York Blockchain Week Campaign

#NYBWGives
CoinDesk has joined Gitcoin, The Giving Block and Ethereal Summit to support charities helping communities in difficult times. We’re raising $100,000 and giving you a voice through the quadratic funding model. Learn how it works and how to donate.

In addition, New York-based abstract artist Mr. Star City created an original piece of artwork, shown above, as a part of Consensus: Distributed. The art, inspired by love, unity and technology, will be up for auction this week. Follow @coindesk on Twitter to find out how to bid — the proceeds will go to the same cause.

Media Diet

JPMorgan Bank Takes on Coinbase, Gemini as Its First Crypto Exchange Customers
The move by JPMorgan is notable in a nation where banking services are hard to come by for any firms dealing with cryptocurrencies, which are viewed as a high risk by the banking industry. Accounts for the two crypto firms were approved last month, the sources said, and are now in use.

US Banking Regulator Suggests Federal Licensing Framework for Crypto Firms
Brian Brooks, chief operating officer of the U.S. Office of the Comptroller of the Currency, the nation’s national bank overseer, said he believes crypto companies could fall under a federal licensing regime – if they provide what can be described as payment services. If this is true, it could help ease the hodgepodge of state laws that prohibit some companies from operating in certain jurisdictions. 

IBM Blockchain to Offer Decentralized Smart Contract Option
The blue-chip IT firm said the IBM Blockchain Platform would upgrade its system to provide a new decentralized governance option and smart contract functionality, by porting over changes made in its base layer Hyperledger Fabric 2.0.

UAE Bank Opens Bangladesh Remittance Corridor Using Ripple’s Blockchain Tech
United Arab Emirates-based retail and business bank, RAKBank, is expanding its remittance routes to Bangladesh using Ripple’s blockchain technology.

Binance Invests in Regulated Indonesian Crypto Exchange
Binance is making a bet on the potential of the Indonesian crypto market, making an undisclosed investment into the Jakarta-based and regulated exchange, Tokocrypto. There is no independent data showing just how big the local crypto market is, but sources speaking to Reuters in February put it at possibly the same size as the country’s stock market, despite rigid regulations. 

The Best Backgrounds at Consensus: Distributed

Harry “Hasta Siempre” Halpin

harrys-background

How To Use Brella

To access all of the deeper cuts available through Consensus: Distributed, you’ll need to login through Brella, our virtual conferencing platform. You can create an account through Gmail, LinkedIn, Facebook or set one up manually on Brella. Your profile will be the way you match and network with others. As soon as you’re set up, you’ll be directed to a dashboard showing other registrants.

Brella is easy to use and has a number of features to help you through this virtual experience. There are multiple tracks of simultaneous programming happening inside Brella. You’ll also be able to browse the entire agenda, bookmark sessions and build your own schedule.

Brella is a great networking tool as well, be sure to check out some of the social features available in-page, and reach out to the people and organizations that pique your interest. 

Audio Lounge

Tradable Metrics
Chainalysis Chief Economist Philip Gradwell and PwC’s Henri Arslanian sit down to discuss the tradable metrics made public on blockchains. Tune in here.

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Consensus Magazine

Today: Crypto Under Corona: From Switzerland to Liberland 
How are the united nations of crypto holding up during COVID-19? Jeff Wilser checks in with seven subcultures and finds good prepping standards. 

Tomorrow: Generation Crypto. 
Freelance journalist Jess Klein writes about an emerging psychographic of people who see the world through the lens of decentralization. Unset by the traditional bounds of age, country or class, Generation C is bound together by a willingness to question mainstream narratives and an unceasing desire to topple authorities. Check it out tomorrow.

CoinDesk Confessionals

This quixotic questionnaire is designed to reveal the respondents cryptic crypto thoughts, feelings, and insights about our industry to better understand what makes our internal hashrates spin. Loosely based on the “Proust Questionnaire” popular during the fin de siecle, we’re hoping their honest answers will reveal insights about our own age of transition. 

In our first round of CoinDesk Confessionals, Kathleen Breitman, Tezos’ co-founder, responded to our prompts with the first thought that came to mind, over email.

Crypto Questions 

Your favorite blockchain protocol? 
Tezos, of course! 
Your #1 favorite crypto hero? 
My co-founder, Arthur. 
Your favorite quality in an entrepreneur? 
Curiosity.  
Your biggest fear?
Being unlucky, timing. 
What would you value bitcoin at today?
Markets are efficient
One word on how you got into crypto? 
Camaraderie
Who is your crypto hero? 
Arthur Breitman
What should crypto disrupt next? 
Gaming, of course! 
Public or private? 
Is private still a thing? 
Permissioned or permissionless? 
As an anarchist, I can only check permissionless. 
Your best example of sovereignty?
Queen Rania of Jordan seems delightful.
Your net worth?
A lot less than the Internet would have you believe. 
What defines Satoshi?
The intelligence to remain anonymous. 
Your favorite economist?
Ronald Coase! 
Which living person do you most despise?
Kim Jung-un 
When and where were you when you first heard about BTC?
I don’t remember but it was probably in 2011. 
Do you mine? Would you mine mine?
No. 
Your favorite non-crypto book?
Right now? Harmonium, Wallace Stevens. 
Your most visited webpage?
Twitch.tv

What inspires you?
Love. 
What is your main fault?
That’s a competitive category, but let’s go with pride.
Your main hero characteristic?
Bravery. 
What is your current state of mind?
Weltschmerz 
What or who do love the most?
My family. 
When and where were you happiest?
Falling in love with my husband. 
What gets you out of bed?
Ideally? The smell of coffee.
What is your motto?
It’s not a motto in the strict sense, but I often think that “the mind is its own place and in itself, can make a Heaven of Hell, a Hell of Heaven.”
What would you like to be?
Luckier.
Where would you like to live?
Anywhere with Arthur suits me fine. 
Your favorite television show or movie?
Arrested Development seasons 1-3 shaped my sense of humor during my formative years. 
Your most vivid memory?
Big hugs.
Your greatest achievement?
Being a good partner. 
What do you rely on?
My network, my judgement of people. 
What would you change about yourself?
Sleep schedule. 
Where will you be in 10 years?
That’s 70 years in crypto, no? Hard to say.  
Your favorite fiction character?
Sherlock Holmes. 
How do you spend your free time?
Reading, bad TV. 
What do you want your legacy to be?
Bringing other people up with me. 
How would you like to die?
In a blaze of glory. 

Who Won #CryptoTwitter?

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Blockchain Bites: Your Ultimate Guide to Consensus Distributed, Day 2

As the sun rises on the second day of Consensus: Distributed, CoinDesk TV will draw to a close. We kicked off our virtual event with a 24-hour non-stop live stream featuring more than 50 programs and dozens of esteemed guests. 

But the conference is far from over. Today features just as many panels, workshops and presentations as yesterday. We’ve just decided to call it a night at 10:30 p.m. ET.

You’re reading Blockchain Bites: Consensus Edition a twice daily roundup of all the notable news out of Consensuse Distributed. You can sign up for this, and all of CoinDesk’s newsletters here.

Here’s what my colleague Christine Kim looks forward to today:

Consensus: Distributed continues today for its second full day of virtual programming. You can bet that the lineup of speakers and panelists are equally as decorated as yesterday’s. Here’s what I’ll be watching for on our livestream broadcasting and social networking platform Brella

1. What’s going on with the crypto markets in Asia and Europe? 
If you’re a night owl like I am, I highly recommend tuning into the panels about the cryptocurrency industry in China and India. It’s a perspective on bitcoin and crypto not often talked about or shared on Western media outlets. Same goes for the panel about capital controls in Europe. Take this opportunity to learn more about activity in the cryptocurrency markets happening outside of North America.

2. Care for a drink with some new and old faces? 
I’d be remiss if I didn’t put a plug here for my very own colleagues at CoinDesk Research. Noelle Acheson and Galen Moore will be hosting a virtual happy hour sessions with some of the industry’s biggest crypto funds. It’ll take place at 5:30 p.m. (ET) so after deep contemplation on the state of crypto markets beyond North America, I encourage you to swing by with a drink in hand and tune in to this panel.

3. Last but not least, am I the only one scheduling one-on-one meetings on Brella? 
I certainly hope not. One of the great benefits of attending Consensus each year, be it at a hotel in New York City or online through Brella, are the people you meet and the connections you make during the conference. So if you didn’t take advantage of the networking options available to you on Brella during the first day, don’t wait until later and schedule some meetings today. It’s not only our panelists and speakers that have great insights to share but our attendees as well, who, due to the virtual format of our event this year, are part of the most geographically distributed audience CoinDesk has ever seen at Consensus. 

I hope I’ve gotten you excited for Day Two of Consensus: Distributed. Here we go!

What to watch

10:00 a.m. – 1:30 p.m. ET The Future of Fiat: Central Bank Digital Currencies Workshop
A program dedicated to the rise of CBDCs will feature Raphael Auer, BIS’ Innovation and the Digital Economy Unit economist, Raj Dhamodharan Mastercard executive and Sheila Warren of the World Economic Forum, among many other high-profile guest speakers.

1:30 – 3:00 p.m. First Mover With Brad Keoun
This program is split into sections dedicated to the economics of mining, especially post-halving, crypto prime brokerage and market surveillance. 

2:00 – 4:30 p.m. Programmable Money and the Future of Enterprise Blockchain
A look at enterprise use cases for blockchain and cryptocurrencies with appearances by Hyperledger’s Brian Behlendorf, EY’s Paul Brody and Kaleido’s Sophia Lopez, among many, many more.

4:30 – 6:00 p.m. Complete Anonymity: An Advanced Workshop on Using Crypto for Privacy
Privacy experts with Nym walk you through how to preserve your anonymity through cryptography and best practices.

6:30 – 7:30 p.m. QuadrigaCX – Yell Into the Void and Get Some Questions Answered
The best-titled program of the bunch examines the on-going issues faced by former clients of the defunct QuadrigaCX exchange as they try to get their money back following the mysterious death of the company’s CEO, who took the keys to the vault with him. 

Bitcoin halving recap

Yesterday marked the third halving event in Bitcoin’s 11 active years. Now that the mining subsidy has been reduced to 6.25 bitcoin, it’s likely some miners will pull out of a no-longer profitable enterprise. We still don’t know the full repercussions, though some are quick to note how this halving is already subverting expectations.

screen-shot-2020-05-12-at-8-50-07-am

Price Action
Bitcoin slid about 2% Monday, the fourth straight daily decline, to about $8,600. The cryptocurrency’s price is down 14% from last week’s high of $10,000, CoinDesk’s Brad Keoun notes in the First Mover newsletter.

“The only real surprise was for anyone expecting anything different, given that prior bitcoin halvings had little immediate impact on the market price,” he said, adding: When the first halving took place, on Nov. 28, 2012, bitcoin’s price slid by 0.5%. And on July 9, 2016, the second halving, prices fell by 2.3%. 

It could take months, if ever, for the halving to catalyze a bull run. You can subscribe to First Mover here.

CoinDesk: Covid Response

Mr. Star City artwork
New York-based interpretive artist Mr. Star City created an original piece of artwork at Consensus: Distributed for auction to support COVID-19 relief.

#NYBWGives
CoinDesk has joined Gitcoin, The Giving Block and Ethereal Summit to support charities helping communities in difficult times. We’re raising $100,000 and giving you a voice through the quadratic funding model. Learn how it works and how to donate.

In addition, New York-based abstract artist Mr. Star City created an original piece of artwork, shown above, as a part of Consensus: Distributed. The art, inspired by love, unity and technology, will be up for auction this week. Follow @coindesk on Twitter to find out how to bid — the proceeds will go to the same cause.

Media diet

The Brooklyn Nets’ Spencer Dinwiddie Makes the Bull Case for Tokenizing Entertainers
Since late 2019, Spencer Dinwiddie has been looking to offer a piece of his future cash flows via a crypto token. “It’s ongoing and it’s something I’m really excited about actually,” he said. Though the deal hasn’t yet gone through, his peers are starting to ask him questions about his approach. 

Hut 8 Mining Revenue Continues Decline in Q1
Hut 8 Mining, one of Canada’s largest mining operations, saw its third consecutive quarter of revenue declines, according to its Q1 earnings report. The firm also reported a 32% decrease in the number of bitcoin mined during the quarter as the network hashrate continued to rise. This was partially offset by a 27% increase in the average price per bitcoin mined.

Trust No Dapp: Chainlink Launches Oracle for Provable Randomness
Chainlink is rolling out its Verifiable Random Function (VRF) service, where subscribers can gain access to provably random values needed for demonstrating the integrity of smart-contract-based projects such as online games. With Chainlink VRF, you know an application hasn’t been tampered with – all via the blockchain. 

The CoinDesk 50

We’ll continue to reveal our choices for CoinDesk 50, an annual list of the most influential and innovative organizations working in the crypto and blockchain space. You can read the first 30 here, with special features on BinanceCosmosBraveBitmainMakerDAO and the People’s Bank of China

The best backgrounds at Consensus: Distributed

Call him Kevin “This Is Fine” Werbach

screen-shot-2020-05-11-at-9-50-50-pm
Kevin Werbach, The Wharton School Professor

How to use Brella

To access all of the deeper cuts available through Consensus: Distributed, you’ll need to login through Brella , our virtual conferencing platform.

You can create an account through Gmail, LinkedIn, Facebook or set one up manually on Brella. Your profile will be the way you match and network with others. As soon as you’re set up, you’ll be directed to a dashboard showing other registrants.

Brella is easy to use and has a number of features to help you through this virtual experience. There are multiple tracks of simultaneous programming happening inside Brella. You’ll also be able to browse the entire agenda, bookmark sessions and build your own schedule.

Gone virtual

Yesterday some people had the unusual experience of watching a virtual conference in VR. 

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Consensus Magazine

Crypto in Corona 
Jeff Wilser has spent the past two years as a nomad. Now under quarantine, he follows up on the communities he had gotten to know during his travels, and finds that the blockchain industry, more than others, is suited to the particular challenges presented by the COVID-19 crisis. What follows is an excerpt from the story published on our site.

Bali, Indonesia
My first plunge into the crypto community came in Bali, which, back in January 2018, had a frisky blockchain ecosystem. In Ubud, which is the spiritual (and tourist) center of Bali, you could stumble into crypto traders, crypto start-ups, and crypto meet-ups galore. It seemed that crypto was everywhere. Just before it opened for business I visited the snazzy “Blockchain Zoo,” a high-end consultancy and coworking space, meeting with owner Roberto Capodieci.

The Blockchain Zoo still exists, but Capodieci tells me that the meet-up scene has all but vanished, and that happened long before COVID-19. The Indonesian government, enforcing a law meant to protect the local Rupiah, cracked down on businesses that accepted cryptocurrencies. “Two years ago I could pay for breakfast with bitcoin,” says Capodieci. “Now you can only use Rupiah. That killed a lot of initiatives,” (The price of bitcoin slumping to $3k in 2019, of course, also killed a lot of initiatives.) 

Capodieci, who has OG crypto cred – he says he received a test copy of the original bitcoin node software program – and who taught crypto courses at the University of Singapore, is a large man who wears a light beard and a Donkey Kong t-shirt. On the Zoom video he suddenly blanches, then swats his hand at something. “A mosquito just decided to die in my mouth!” He says, laughing. “And I’m not even riding a motorcycle.” (Everyone drives a moped or motorcycle in Bali, even wimps like me.)

There are now fewer mopeds in Ubud. The roads are mostly empty. The borders are closed. The tourists are gone. The few people on the streets do wear masks, says Capodieci, “And the police will stop you if you don’t have one, and give you a mask.” 

Meanwhile the Blockchain Zoo has pivoted to launching their own platform, ZooBC, which uses a Proof of Stake protocol. Capodieci says his team of 25 developers can easily work remotely, and they’re working on a beta version of ZooBC–the alpha launched in November. 

COVID-19’s impact on their efforts? The way Capodieci sees things, the pandemic is almost a positive. The downside is that he had hoped to be in Dubai and Singapore to meet with potential clients and investors, but the upside, he says, is that everyone seems extra-focused from home. And they’re using the time to add more functionality into beta, which is one of the benefits cited by that survey from Switzerland’s CV Labs. 

Capodieci’s tone is almost chipper. “This thing is going to change the way people work. I love it,” he says. “The longer it lasts, the better it is.” He quickly clarifies that he has sympathy for the local businesses, like hotels and restaurants, that are suffering. But he can compartmentalize. Focus on the silver lining. If CV19 has nudged companies to give workers a choice between at-home or in-office, he sees that as a win. “You should be working at a place you love to go to,” he says, “because that’s where you’re spending most of your life.”

Who won #CryptoTwitter?

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Blockchain Bites: Making Sense of the Halving, Consensus Distributed’s First Day

We’re not even halfway through the first full day of Consensus: Distributed, and the world may never be the same. 

The most ambitious conference of its kind kicked off with CoinDesk TV, a full 24 hours of programming featuring European central bankers, former CFTC chairmen and celebrity guests  like Akon and Michelle Phan. 

You’re reading Blockchain Bites: Consensus Edition a twice daily roundup of all the notable news out of Consensuse Distributed. You can sign up for this, and all of CoinDesk’s newsletters here.

History is being made elsewhere, too, with the Bitcoin network’s third programmable halving going off without a hitch. 

Bitcoin halved: Here’s what that means

CoinDesk’s Wolfie Zhao breaks it down

Miners racing on the network to compete for freshly minted bitcoin produced the 630,000th block at 19:23 UTC on May 11, which triggered the programmed halving event, marking the currency’s third halving in its 11-year history.

The first block in the new 6.25-bitcoin-per-block mining cycle was mined and relayed by China-based Antpool, the fourth-largest mining pool by total computing power. 

In an homage to Satoshi Nakamoto’s iconic “brink of a second bailout” message in the 2009 genesis block, f2pool, which mined the 629,999th block (the last before the halving), embedded a reference to the current financial crisis: “NYTimes 09/Apr/2020 With $2.3T Injection, Fed’s Plan Far Exceeds 2008 Rescue.”

The immediate implication after the third halving is that the newly minted bitcoin in a day will fall from 1,800 to 900 units. That would also mean mining operators will see their daily total revenue – at bitcoin’s current price of $8600 – reduced from $15 million to $8 million.

As such, it has been expected the computing power connected to the Bitcoin network will fall significantly after the halving as the revenue decrease will squeeze out those miner operators who lack efficient resources to cut their electricity costs.

Three halving-related events worth knowing about

A once-in-four-years event deserves a celebration:

The keynote

This morning we heard from influential economist Carlota Perez, who broke down her theory of tech revolutions driven by boom and bust cycles. 

screen-shot-2020-05-11-at-6-04-00-pm

She was joined by Placeholder’s Chris Burniske and they discussed automating administrative infrastructure as a way to modernize the state. 

Competing sides: The privacy of money

ECB executive Yves Mersch said Europe’s central bank is looking into CBDCs. “A retail CBDC, accessible to all, would be a game changer,” and is now a primary area of research. 

Mersch said a Eurozone CBDC could be based on a digital token circulated “in a decentralized manner,” without a central ledger. 

Other economic leaders aren’t so attracted by the possibility of taking all cash digital through the central bank. Avanti’s Caitlyn Long said CBDCs could be turned into a surveillance tool and as a way to exert undue economic pressure on citizens. 

Former U.S. Treasury Secretary Lawrence Summers, isn’t worried about a privacy-corroding CBDC proposal. He thinks there may be “too much privacy” associated with government-issued cash already. 

“In a world of inordinate tax evasion, trillions of dollars of laundered money around corruption and the drug trade, the last objective of government policy should be the promotion of anonymity with respect to large financial transactions,” Summers said. 

Inside Consensus: Distributed

Joon Wong was one of the heavy lifters that made today such a success. One of the first CoinDesk employees, back when the company was still London-based, Joon knows the crypto industry inside and out. He’s now running programming for our events. Here’s what he has to say about the first day of Consensus: Distributed:

Consensus has always been about convening the disparate fields that make up the cryptocurrency industry. The first edition of Consensus, which I started in 2015, was the first time a major global bank – Citi – got publicly involved with blockchain technologies. This sixth edition of Consensus, held virtually, was no different. 

We saw a member of the European Central Bank’s executive board announce that the institution would investigate retail digital currencies; we watched our own conference inside a virtual conference center within Decentraland; and we heard from the influential economist of technology Carlota Perez about her views on blockchain technologies for the first time. 

And that’s not to mention the slew of figures from the mainstream who have been increasingly drawn to our world: beauty mogul and YouTube pioneer Michelle Phan; NBA star Spencer Dinwiddie; electronic music sensations The Chainsmokers. 

Consensus can only convene this breadth of speakers because of the underlying robustness of this industry. And if this year’s speaker lineup is any indication, the business is in rude health.

How to use Brella

To access all of the deeper cuts available through Consensus: Distributed, you’ll need to login through Brella, our virtual conferencing platform.

You can create an account through Gmail, LinkedIn, Facebook or set one up manually on Brella. Your profile will be the way you match and network with others. As soon as you’re set up, you’ll be directed to a dashboard showing other registrants.

Brella is easy to use and has a number of features to help you through this virtual experience. There are multiple tracks of simultaneous programming happening inside Brella. You’ll also be able to browse the entire agenda, bookmark sessions and build your own schedule.

The best backgrounds of Consensus: Distributed

Wild horses are the way to go when you live in Wyoming. 

Caitlin Long, Avanti, Consensus: Distributed
Caitlin Long, CEO of Avanti Bank

Peep Erik “FIATSUX” Voorhees’ vanity plates. 

Erik Voorhees, Shapeshift, Consensus Distributed
Erik Voorhees, CEO of Shapeshift

The CoinDesk 50

26. The People’s Bank of China
China leads in the world in the development of national digital currencies. While other central banks are talking about CBDCs, the People’s Bank of China (PBoC) is already trialling its toolkit. Just recently, screenshots emerged of a “digital yuan” interface being piloted at the Agricultural Bank of China (ABC), one of four state-owned banking giants. That PBoC is first to the CBDC starting line is not surprising. It has been working on the project for six years. Meanwhile, China’s government has made blockchain a national priority in several directions, including the recently launched Blockchain Services Network (BSN), which is now being piloted in Chinese cities and along its “Digital Silk Road” trade routes. FULL STORY

The CoinDesk 50 is a selection of the most innovative and consequential projects in crypto/blockchain. See the other nominees here. We’ll announce more tomorrow.

A tour of Cryptovoxels

This afternoon I took a guided tour of crypto art hanging across galleries in Cryptovoxels. One of the most inspiring and innovative sub-economies within crypto, blockchain-based artworks are proving their value in a time when most museums are shuttered. 

Here are some of my favorite installations, and where to find them. 

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These three photos are all part of Nissla’s CryptoWiener Art Gallery found in Cryptovoxels at 304E,137N.

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Welcome to Skeenee’s Skull Gallery (202E,347S)

Media diet

Hedge Fund Pioneer Paul Tudor Jones Says He Holds 1%-2% of Assets in Bitcoin
Speaking to CNBC in an interview on Monday, Paul Tudor Jones II expressed some concerns with bitcoin, but he still praised its potential, when confirming his allocation in crypto. “There’s very little trust in it [bitcoin],” he said. However, “we’re watching the birthing of a store of value, and whether that succeeds or not only time will tell.” 

Vitalik Buterin Says Much-Delayed Ethereum 2.0 Still on Track for July Launch
Ethereum’s creator said the Ethereum 2.0 protocol upgrade, which will change the consensus mechanism to proof-of-stake (PoS), is well on its way to launching sometime in July. Sometimes known as Serenity, the update has long been subject to delays, with July a target date for developers since the beginning of the year. 

Ashton Kutcher and Michelle Phan Invest in Lolli’s $3M Seed Round
The $3 million seed round with Phan and Ashton Kutcher’s VC firm, Sound Ventures, marks roughly $5.4 million in total capital raised by Lolli so far. Pathfinder, the early-stage investment arm of Peter Thiel’s Founders Fund, led this recent round with participation from Bain Capital Ventures, Craft Ventures and Digital Currency Group, CoinDesk’s parent company.

Zcash Alliance Aims to Bring Privacy Tech to Bitcoin, Cosmos and Ethereum
The Electric Coin Company (ECC) announced Monday the launch of the Zcash Developers Alliance (ZDA), an invite-only working group that includes the Lightning Network startup Bolt Labs, the cross-chain technology startup Thesis, the Ethereum conglomerate ConsenSys and two leading startups working on the Cosmos project, Agoric and Iqlusion, just to name a few. 

Binance.US Launches OTC Trading Desk for Large Trades
The feature will allow users of Binance’s US affiliate to process orders worth $10,000 or more directly between customers, off of the normal exchange’s order book. Catherine Coley, CEO of Binance America, said the launch comes at an opportune time for large value traders given increasing interest in bitcoin from well-known investors, such as hedge fund pioneer Paul Tudor Jones II.

ErisX Announces Launch of First U.S. Ether Futures Contracts
The new contracts, the first futures contracts for the second-largest cryptocurrency by market cap in the U.S., will begin trading effective immediately, ErisX announced. The move comes a few days after ErisX announced it had received a virtual currency license from the New York Department of Financial Services, and would begin offering trading services in what is the nation’s most stringent regulatory regime.

Crypto.com Lands Record $360M Insurance Cover for Offline Bitcoin Vaults
The crypto finance platform accessed the cover through institutional custody provider Ledger Vault, which offers $150 million of pooled insurance cover to clients, and Lloyd’s of London underwriter Arch Insurance.

CME Says Volume Surge Shows Strong Institutional Interest Before Bitcoin Halving
In a note sent out late on Sunday, the derivatives exchange said a strong “ramp up” in volumes over the past week showed institutional investors were getting exposure to bitcoin, most likely in preparation ahead of the supply-cutting event. CME said 844 unique accounts have begun trading bitcoin derivatives since the start of 2020 – more than double the number of new market entrants compared to the same period last year.

Who Won #CryptoTwitter?

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Blockchain Bites: Paul Tudor Jones, Open Options and Why Bitcoin Looks Strong Heading to the Halving

Bixin is launching a $66M fund, Massive Adoption’s Jacob Kostecki is getting sued and Filecoin is delivering physical hard drives.

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Blockchain Bites: Coinbase and BlockFi Do Some Major Hiring, Tron Gets Coronavirus Relief

Justin Sun’s Tron platform successfully applied for a $2 million pandemic relief loan intended for small businesses. Coinbase has scooped up employees from the now-defunct TokenAnylist startup while BlockFi has poached two executives from Credit Suisse and American Express to join its lending firm. Here’s the story:

You’re reading Blockchain Bites, the daily roundup of the most pivotal stories in blockchain and crypto news, and why they’re significant. You can subscribe to this and all of CoinDesk’s newsletters here. 

Top Shelf

Transaction Throttling 
BitMEX’s daily broadcast of transactions may be spiking Bitcoin fees. The exchange broadcasts thousands of transactions at once around 13:08 UTC (9:08 a.m. ET), leading to a fee increase every day, pseudonymous Bitcoin researcher 0xb10c contends.

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Hip-hop artist Akon is the latest celebrity to join the cryptocurrency industry, setting his sights on Africa with his Akoin token project. (Credit: Shutterstock)

Crypto Across Emerging Markets: Africa
Binance, Akon and other crypto pioneers are placing bets the future of money will be defined by African markets, where cryptocurrency awareness and usage surged dramatically over the past year. Exchange volume has steadily increased on the continent, with a notable spike during the COVID-19 crisis. 

Comply or Die
Dutch crypto companies must register with the Netherlands’ central bank by May 18 or cease operations immediately, the monetary authority said Monday. De Nederlandsche Bank is moving quickly to enforce Dutch anti-money laundering laws, which passed the Dutch Parliament last month.

Trouble Down Under
The CEO of fintech firm iSignthis has accused the Australian Securities Exchange (ASX) of abusing its market-leader position by trying to delay the launch of ClearPay, a blockchain-based trading system on the rival National Stock Exchange of Australia (NSX).

Movers & Shakers

  • Nervos Incubator Nervos has launched CK Labs, a virtual incubator, for early-stage startups building decentralized applications (dapps) on its public blockchain platform. The platform is headed up by Ben Morris, veteran of Status, an Ethereum-based messaging platform.
  • Coinbase Consolidation Crypto intelligence firm TokenAnalyst has shut down after nearly three years in business. Several employees have been scooped up by Coinbase, a representative confirmed. 
  • Traditional Hires Crypto lender BlockFi is adding two traditional finance executives to help the firm roll out new products and expand into new markets. Former American Express executive Wittney Rachlin will join as chief growth officer and former Credit Suisse executive David Olsson as global managing director of the European and Asian markets. 

All But Omni
Tether growth is hitting all-time highs across multiple blockchains, but the first protocol to support Tether is being left behind. Omni Layer, built on Bitcoin, has suffered negative growth in Tether transactions for the last 12 consecutive months. 

Bitfinex Flex
Bitfinex saw revenues of $21.4 million in Q1 of 2020. This represents a near doubling of revenues from last year’s first quarter. (The Block

Land Records
Swedish startup ChromaWay aims to make land ownership in Bolivia, Peru and Paraguay more transparent by putting records on a blockchain. The company announced its LAC PropertyChain pilot on Tuesday.

Tron CEO Justin Sun speaks at Consensus 2019, photo via CoinDesk archives
Justin Sun
Source: CoinDesk archives

Tron’s Relief?
Justin Sun’s blockchain platform Tron will receive $2 million in U.S. coronavirus relief intended for salary protection. (Decrypt)

Seed Capital 
Bitcoin mining firm VBit DC brought in a $1.1 million seed funding round to build a mining operation in Alberta, Canada. (The Block)

Power to Burn
Ukraine’s energy minister has advised the country’s state-owned nuclear power operator to consider using excess electricity for mining cryptocurrencies. Last week, a Chinese city asked blockchain firms to sop up extra hydropower produced during the upcoming rainy season. (The Block

Privacy Deep Dive
As the coronavirus crisis puts pressure on tech startups, privacy-focused firms are poised to last. A reliance on privacy intrusive contact tracing and “identity passports” to combat the viral spread is leading to a conscious effort to prevent data fragmentation and privacy leaks. “The move to remote working and widespread use of shadow IT devices has multiplied cybersecurity risks,” creating a huge opportunity for security-focused companies, said Radoslav Dragov, the Blockchain Lead for Europe at IDC.

CoinDesk Live: Lockdown Edition

CoinDesk Live: Lockdown Edition continues its popular twice-weekly virtual chats via Zoom and Twitter, giving you a preview of what’s to come at Consensus: Distributed, our first fully virtual - and fully free - big-tent conference May 11-15. 

Register to join our seventh and final session Thursday, May 7, with speaker Felipe Duarte from DAOCanvas to show you how to roll your own DAO, hosted by Consensus organizer Bailey Reutzel. Zoom participants can ask questions directly to our guests.

CoinDesk Live: Lockdown Edition continues its popular twice-weekly virtual chats via Zoom and Twitter, giving you a preview of what’s to come at Consensus: Distributed, our first fully virtual – and fully free – big-tent conference May 11-15. 

Register to join our seventh and final session Thursday, May 7, with speaker Felipe Duarte from DAOCanvas to show you how to roll your own DAO, hosted by Consensus organizer Bailey Reutzel. Zoom participants can ask questions directly to our guests. 

Market Intel

Daily Gains
Bitcoin jumped to a high of $9,220 at 10:20 UTC on Wednesday, having settled above $9,000 the day prior to register its first close above that psychological support in two months. Open interest – or the number of futures contracts outstanding on the CME – also rose to $351 million on Tuesday, the highest level since July 10, 2019.

Shorting Bitcoin
A new token lets traders make gains whenever bitcoin’s price falls. Swiss fintech firm Amun launched its BTCSHORT (BTCS) daily inverse token Wednesday, which returns a gain based on bitcoin’s (BTC) inverse price movements in a given 24-hour period. 

CoinDesk Monthly Review: April 2020

CoinDesk Research's monthly review of crypto markets overviews returns, volatility and correlations of bitcoin, ether and other crypto assets - all in a macro context. Plus, we track growth in stablecoins and look at what past halvings can tell us about the upcoming one. The report is free to download.

CoinDesk Monthly Review: April 2020

CoinDesk Research’s monthly review of crypto markets overviews returns, volatility and correlations of bitcoin, ether and other crypto assets – all in a macro context. Plus, we track growth in stablecoins and look at what past halvings can tell us about the upcoming one. The report is free to download.

CoinDesk Podcast Network

The Breakdown
Why crypto matters for financial inclusion, featuring Celo’s Marek Olszewski.

Who Won #CryptoTwitter?

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Disclosure Read More

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.



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