I remember very well the moment when I first learned about cryptocurrencies. Not even about the blockchain, but about the “bit coin”. I was visiting a friend and he told me that you can earn money simply with your laptop. The main thing is to find the right site with a “faucet” from which the treasured money drips. But - my friend immediately cut off my dreams of easy money - the train left. Cunning people have already filled entire hangars in Africa with their equipment with might and main, and it makes no sense to compete with them in production.
It was… 2012 😅 I didn’t even know that this process has a name “mining”, I only knew that the “money” that you get is called “bitcoins”. One bitcoin then cost about 10 bucks. And I, having estimated that the profit from the costs of competing with the “African cryptobarons” is insignificant, I forgot about it and about the crypt in general until the summer of 2016 ... However, something pulled me into the past.
But this is not surprising. The past week has been saturated with nostalgic feelings. And that's why.
On November 15, a resident of the oldest cryptoform Bitkointalk under the nickname casinotester0001 published a post in which he asked other participants to share the oldest signatures for mined BTC blocks.
After 11 days, a user with the nickname OneSignature shared a signature tied to block number 1018! Its extraction is dated January 19, 2009. This means that the block was found just 16 days after the launch of the Bitcoin network!
Naturally, many immediately wanted to deceive themselves with a new fairy tale that this OneSignature is not just anyone, but Satoshi Nakamoto himself! But some facts say otherwise.
In the first days after the launch of bitcoin, a certain miner, considered the “Keeper of Bitcoin”, known under the nickname Patoshi, mined 1,125,150 BTC. This was done, as it is believed, in order to protect the coin network from a 51% attack.
Many believe that it was SN itself!
The blocks supposedly mined by him are called "patoshi". The OneSignature block, as members of the crypto community found out, is not associated with them. Therefore, the announced miner, netizens are sure, is not the creator of bitcoin.
Sergio Lerner, in his research, claims that the one who mined the Patoshi used modified software and regulated the block time. Mining speed was maintained at 0.6 blocks every 10 minutes.
It is believed that Satoshi (whoever he was) stopped his mining at block 54,316 when the network became decentralized enough. At the same time, the assumption is also made that it is very unlikely that the same network member will want to sell his bitcoin holdings, thereby making the most powerful dump in the market. (Personally, by the way, I think that nothing is impossible). According to analysts, Patoshi's actions were carefully thought out and aimed at protecting the network during its formation, although now the global bitcoin hashrate has reached unprecedented heights.
“The timing of the exit from mining, the desire to regulate the speed of block mining, and the fact that he did not spend coins indicate that Satoshi was only interested in growing and protecting the young network. The bitcoins mined by Patoshi were probably just a by-product of these efforts. It is unlikely that this remainder will ever be spent, although the question remains why Satoshi did not simply burn these coins” - quote from a recent study by Whale Alert.
But the company Riot Blockchain, which was not scared by my friend "African cryptobarons", became the largest public miner in the United States by capitalization! At the same time, it takes the 6th place in terms of the number of bitcoins, very much inferior to Microstrategy. It is worth noting that everyone is far behind the brainchild of Michael Saylor.
In second place is Marathon Digital, which, by the way, this week announced that it would not buy the bankrupt mining company Compute North.
3rd place - Tesla, 4th place - Square (the company of the creator and former owner of Twitter Jack Dorsey), 5th place - Canadian mining company Hut 8.
Meanwhile, the long-suffering Ripple has made it to the top 10 most valuable US startups! In the first place, Space X rushes into space, but the second line is occupied by Stripe. And a little more about it. Recall that at the beginning of 2018, Stripe refused to support bitcoin due to strong price fluctuations and long confirmation of transactions. Later company president John Collison did not rule out returning the option in the future.
And just this week it became known that the company launched a fiat-to-cryptocurrency payment product for Web3, which can be directly embedded into DEX, NFT platforms, wallets or decentralized applications.
At the same time, news indirectly related to Ripple itself is no less significant. According to recent events, one of the strong partners of Ripple Labs in the UAE, Al Fardan Exchange LLC, merged with banking giant JPMorgan on December 6. Al Fardan is one of the leading licensed and regulated platforms in the UAE for money transfers and currency exchange.
Ripple's XRP standard is one of the most sought-after solutions used by global banking institutions in cross-border settlements. Recently, Australia's largest financial conglomerate, CommBank, said it would use Ripple's XRP and the ISO 20022 standard for cross-border payments.
Adding to the spice is the fact that JPMorgan has its own blockchain platform that facilitates cross-border transactions using native JPMCoin. Thus, their ability to use Ripple's XRP standard will definitely be limited.
However, the CEO of JPMorgan himself recently compared cryptocurrencies to “pet stones,” hinting at a fad in the mid-1970s when Gary Ross Dahl sold boxed stones and made a fortune from it.
"Crypto is a complete sideshow. You guys spend too much time on it. Tokens are like pet rocks."
Despite these statements, Jamie Dimon continues to believe that blockchain and smart contracts are really useful technologies. And here Senator Cynthia Lamis bursts into the article, who will tell us how the Bitcoin blockchain differs from Ethereum smart contracts. In her opinion, she is increasingly asserting that only BTC can be considered a commodity. But ETH can be classified as a security due to the recent transition to PoS.
As JPMorgan previously noted, staking today brings the crypto industry about $9 billion in revenue per year. Ethereum’s transition to PoS will encourage the adoption of an alternative consensus mechanism and could lead to an increase in industry staking revenue to $20bn per quarter and up to $40bn by 2025.
Meanwhile, Staking Rewards reports that Cardano has become the second largest staking network ($8B) behind Ethereum ($21B)!
And the Chainlink decentralized oracle network team launched the LINK staking service on the Ethereum mainnet.
Initially, the mechanism is open to users who meet the early access criteria. From December 8, all network members will have the opportunity to stake 7000 LINK to one address. The total volume of the v0.1 pool will be 25 million tokens, of which 2.5 million LINKs are reserved for node operators.
Recall that Bank of America called Chainlink the driver of the inflow of funds into the DeFi sector. It is also interesting that SP Global, which released its macro review of the banking industry for 2023, included DeFi for the first time in the context of global banking. And on December 19, CME Group and CF Benchmarks will launch new DeFi staking benchmarks and DeFi indices.
Meanwhile, Ultrasoundmoney’s research confirms that ETH has returned to inflation again - the token supply exceeded the burn volume for the first time since the beginning of November.
At the same time, Vitalik himself said that stablecoins have proven their worth as a means of payment, combining digitalization, privacy and the functionality of a fiat currency. However, the co-founder of Ethereum believes that centralized stablecoins are not a long-term solution to protect against government control and believes in the future development of decentralized stablecoins.
And now our nostalgic article bursts into our nostalgic article no less rapidly than Senator Lamis - Nouriel Roubini, a longtime critic of the blockchain in general and BTC mega-critic in particular. An American economist has announced his plans to launch a very interesting tokenized asset.
The new token will address growing concerns about the US dollar's status as the world's reserve currency. (Why these fears are quite justified, I told in each of the past issues). In this case, the token will be backed by real assets.
"We see that the position of the US dollar as a reserve currency may be in jeopardy and we are working on creating a new instrument that, in fact, will be a more reliable dollar," Roubini said.
It is planned that the token will be backed by a basket of short-term US bonds, gold and US real estate in the form of investment trusts. The product will be offered in the form of a tokenized security.
At one time Roubini made very interesting statements about cryptocurrencies, and I would like to build the next part of the article, putting the professor's statements in the headlines to describe the current situation in world markets.
… global crypto regulation will gain momentum …
It's hard to argue with this. Especially after what happened this year with Terra / LUNA / UST and FTX (by the way, there is a connection between these events, of course, but we might talk about this some other time).
The Chairman of the Commodity Futures Trading Commission (CFTC) of the United States, Rostin Binam, called for the transfer of authority to regulate the cryptocurrency market to his office as soon as possible in order to avoid stories like the collapse of FTX in the future.
Meanwhile, the head of the SEC (he himself is quite heavily involved in the FTX scandal) reports the following theses:
- crypto intermediaries, also known as crypto casinos, must comply with the law;
- The cryptocurrency space will not last long outside the norms of public policy.
Also in the new guidance, the SEC required public companies to disclose to investors information about business risks or damage caused by turbulence in the cryptocurrency market.
And US senators introduced a bill on environmental transparency of crypto assets, according to which miners using more than 5 MW of electricity are required to report greenhouse gas emissions.
In turn, Britain will introduce a new set of measures to regulate the cryptocurrency industry, including restrictions on the sale of cryptocurrencies to foreign companies, instructions in case of collapse of crypto firms and advertising restrictions.
The Bank of England also pointed to the risks of the DeFi sector:
“From the point of view of the financial stability authority and the regulator, I am not yet convinced that the inherent risks of finance can be effectively managed in this way,” said John Cunliffe.
At the same time, he questioned the degree of decentralization of projects (and I personally share his opinion):
“Behind these protocols there are usually firms and stakeholders who receive income from their activities. Moreover, it is often not clear who controls protocol management in practice.”
The government of Uzbekistan in its own way solved the problem of controlling crypto assets and approved their rules for issuing and circulation in the country. The National Agency for Advanced Projects (NAPP) drew the attention of industry participants that the nominal value of tokens can only be expressed in the national currency - Uzbek soms.
And on December 7, the Mazhilis of Kazakhstan approved the bill “On Digital Assets” and four related regulations on the regulation of mining.
Japan plans to completely ban algorithmic stablecoins in the country. The reason for considering the ban was the collapse of Terra, which led to the collapse of the crypto market.
Meanwhile, the Chinese court has indicated that NFT digital collections have the characteristics of value, rarity, and are online virtual property that should be protected by Chinese law. However, we will talk about the Middle Kingdom in more detail at the end of the article, but for now, news from the former British colony.
The Hong Kong authorities have adopted a new amendment, according to which virtual asset service providers are legally equal to traditional financial institutions.
It will establish a new licensing regime for such companies to comply with AML regulations.* The law will come into force on June 1, 2023.
*Money Laundering Law
By the way, Bill Ackman, who continues to short the Hong Kong dollar, admits that Sam Bankman-Fried's recent excuses may be true. The latter stated that he was not a fraudster, but simply did not know what he was doing.
As for the regulation of cryptocurrencies, Ackman said: “I'm not sure we need new rules. Much of the scam that occurs is old-fashioned pump and dump schemes and the inability of custodians to protect clients' assets. I suspect that existing anti-fraud and other laws already regulate these violations. We just need more enforcement.
... as a result - the crypt can sink …
This week, Morgan Stanley reported that the current decline in the price of bitcoin is similar to the fall in 2017-2018. However, the leverage of the crypto market in this cycle is greater than in the previous one. This is probably due to the fact that cryptocurrency institutions such as market makers, companies and investors have become the dominant traders in the market, while in 2017-2018. dominated by retail.
According to representatives of the corporation, in the future, cryptography and blockchain will be increasingly used for trading financial assets, attention is still paid to creating an infrastructure for digital assets.
According to Reuters: Goldman Sachs plans to spend tens of millions of dollars investing and buying crypto companies after the FTX crash hit valuations in the segment and dampened investor interest.
Net inflows into regulated ETFs/ETPs were just $88 million in 2022, up from $10 billion last year.
At the same time, ECB spokesman Villeroy said that the crypto industry is still small enough to lead to a significant risk of a domino effect in the financial industry.
Standard Chartered notes that demand could switch from bitcoin, which is perceived by the market as a digital version of gold, to a real asset, which will lead to a 30% increase in the price of the precious metal. However, we will talk about gold in more detail a little later.
… I don’t think private crypto will die at all…
This week has been rich in news about the collaboration of time-tested companies looking to ride the blockchain wave. The word "metaverse" has become the second most popular word in 2022 according to the Oxford Dictionary.
It has lost first place to “goblin mode” (lazy, untidy: what characterizes the type of human behavior during covid restrictions). The voting results were determined for the first time by a public poll among native English speakers.
And if the real estate market in England itself is flying in a certain direction, then, for example, in the universe of Decentraland, virtual land rent has become available!
In new sneakers from Nike in collaboration with RTFKT called CryptoKicks, you can walk to the Starbucks coffee shop, which has launched a beta NFT-based loyalty program on the Polygon network. The Nifty Gateway marketplace acted as a partner of the initiative.
To purchase CryptoKicks, you will need NFT, which can be exchanged for real smart sneakers. Yes, yes, the same ones, like Marty McFly, with auto-lacing. Well, such nonsense as Bluetooth, wireless charging, USB-C connector, NFC module (how to use it? 😅) and step counting.
Later, the "Move to Earn" mode will be enabled. The party is limited - only 19,000 pairs at the price from $450 to $1333.
Don't like walking? German car manufacturer Porsche will launch its own NFT collection in January 2023. It will include 7500 NFTs.
The series is based on the classic Porsche 911 model. The first Porsche NFT collection was created by Hamburg-based designer and 3D artist Patrick Vogel.
What to do on the road? It's over, surf our beloved, growing Web3.0! Opera will add a drag-and-drop NFT creation tool to the browser in early 2023. And Yahoo can launch crypto trading from the site!
At the same time, according to Dune, the volume of issued NFTs (based on the same Polygon) on the Reddit platform continues to break records. The volume is already more than 4.4 million tokens!
What's on Twitter? When asked if Twitter plans to accept crypto payments, the new owner of the social network, Elon Musk, answered briefly "DOGE to the Moon". Mem-coin reacted accordingly. Musk has previously said that he is considering introducing DOGE payments on Twitter if he buys the social network.
And the well-known tech blogger Jane Manchun Wong launched a flash mob on Twitter, posting the Twitter Coin emblem (something between the Doga and Twitter logo). DOGE continued to rise. Jane previously noted that Twitter is developing a prototype crypto wallet that supports deposits and withdrawals.
And the manufacturer of hardware wallets Ledger (I talked about the demand for which after the collapse of FTX in a special issue) introduced a new device - Stax. Tony Fadell, former head of Apple's iPod development and release department, participated in its creation.
Ledger CEO Pascal Gauthier expressed hope that Tony Fadell's experience in creating devices for the mass market will help popularize cold wallets. The latter, he said, used to be more like USB sticks. However, Stax is set to change that by becoming the "Web3 device of the future."
“First you choose the iPod, then the iPod Touch, and then you end up with the iPhone. And it takes several years. Now we at Ledger are very close to the iPod in the form of Stax,” Gauthier drew an analogy.
And now about the music itself (and about Polygon, where without it). Web3 music platform LGND Music has partnered with Warner Music Group and blockchain project Polygon. The parties will promote music NFTs on the MATIC infrastructure.
Olds here? Good old Winamp decided to also be in trend and added support for NFTs on Polygon and Ethereum. Now the service supports playback of audio and video NFT standards ERC-721 and ERC-1155 after connecting the MetaMask wallet.
And music and podcast startup Wavlake has gone even further. It will integrate the Lightning network and start paying performers in BTC! And the Strike payment service began to position itself as a digital platform, also built on the basis of the Lightning Network.
… private crypto will last another 5-10 years from the moment the state crypto enters the mainstream…
Strike is also notable this week by announcing its "Send Globally" feature, enabling instant, low-cost payments in Africa. The Strike "Send Globally" feature is available to all Strike users in the US starting in December, and is rolling out initially to Nigeria, Kenya, and Ghana.
A very interesting set of countries, since Ghana is known to us from the last issue by the fact that it switched from dollars to gold in payment for oil.
According to a bill submitted to the Kenyan Parliament in November, citizens who make transactions with digital currencies will pay taxes to the budget. According to the UN, 8.5% of Kenya's population (4.25 million people) own crypto. According to this indicator, the country ranks 5th in the ranking of states. And even ahead of the United States, where 8.3% of residents have invested in digital assets.
But most of the trio surprised Nigeria. She limited ATM withdrawals to over $225 per week to force the public to use CBDC!
As the head of the Bank for International Settlements noted earlier, “cash is evil, we cannot trace its use. And with government scripts, we will have full control.”
But about CBDC a little later, but now let's get back to other payment giants. Mastercard this week warned that there would be a reset in the crypto industry following the FTX crash.
Visa has launched Binance physical card payment in Italy and France.
And PayPal is launching crypto services in Luxembourg.
France & Luxembourg together took part in the latest series of tests of tokenized financial markets. They tested the CBDC to settle bonds worth 100 million euros.
“Dubbed 'Venus', this initiative is a prime example of how digital assets can be issued, distributed and settled in the Eurozone in one day. It is also confirmation that a well-designed CBDC can help develop tokenized assets in Europe, said Nathalie Ofovre, CEO of Banc de France, France's central bank.
The initiative also includes Goldman Sachs, Santander and Societe Generale.
Let me remind you that in past issues I have already talked about the fact that the European Union recently passed a law on testing blockchain-based securities trading.
Meanwhile, the launch of a CBDC in Pakistan is planned for 2025, the local central bank said this week. At the same time, it is worth noting that the ties between Pakistan and Russia are much larger than they seem. The country's government approved the purchase of 450,000 tons of grain from Russia. Thus, Russia has become the largest grain exporter to the country with a volume of 750 thousand tons!
The trade turnover between Brazil and Russia set a record, exceeding $8 billion. Let me remind you that in Brazil last week, the parliament approved the regulation of cryptocurrencies.
Iran and Russia will soon sign a comprehensive cooperation agreement. Who missed - in August of this year, Iran made the first official order for the import of goods worth $10 million in cryptocurrency. This approach will bypass US sanctions that damage the state's economy.
Indonesia, which last week announced plans to launch a CBDC, announced that it is looking for investors to build a new nuclear power plant. Guess who could be? In addition, the Eurasian Economic Union (EAEU, it includes Russia, Kazakhstan, Belarus, Armenia and Kyrgyzstan) and Indonesia agreed to start negotiations on an agreement on the creation of a free trade zone.
But the latest news of these days sounds more grandiose: China and the countries of the Persian Gulf are discussing the possibility of creating a common free trade zone!
For those who have not guessed which country can help Indonesia with nuclear power plants, I give a hint from Oleg Deripaska:
"Nuclear energy, despite adversity, got a new start. We see it all over the world"
The Russian state company Rosatom is negotiating with representatives of the Indian authorities on the construction of six nuclear power units.
Also, the Indian authorities have asked state-owned companies to increase imports of natural gas in the event of an increase in demand for electricity next summer. And Apple seems to be hinting at this demand and is considering a partial transfer of iPad production to India, as US-China relations are deteriorating, and anti-COVID restrictions in China are disrupting supply chains.
It is also interesting that the world's first ATM selling gold coins was launched in the Indian city of Hyderabad. The machine dispenses coins weighing 0.5-100 grams.
“We are proud to announce that we have successfully launched the Golden ATM! We hope that with this achievement, India will again become a bird with golden feathers,” Goldikka company representatives noted on Twitter.
Meanwhile, China reported an increase in gold reserves for the first time since 2019. In October, Russia delivered 2.156 tons of gold to China for a record amount of $124.588 million. Deliveries doubled compared to October 2021. China is buying gold at the fastest pace since the 1960s!
According to the results of 11 months of 2022, the trade turnover between Russia and China increased by 32% and amounted to a record $172.406 billion.
Well, the icing on the cake is the following news. In Russia, a bill on payment for export deliveries in cryptocurrency can be adopted before the end of January! Also next week, a bill on the digital ruble will be submitted to the State Duma!
Let's end this block of news with the words of Bill Gates: "CBDC is the future of money."
Meanwhile, Tether launched the CNH₮ stablecoin on the Tron network, pegged to the offshore yuan. A small educational program:
China has a single currency - Renminbi (RMB), which is divided into 2 rates with tickers CNY (onshore or domestic) and CNH (offshore or foreign exchange).
- The onshore yuan (CNY) is traded within mainland China, while the offshore yuan (CNH) is traded outside of mainland China;
- The exchange rate of CNY is controlled by the People's Bank of China, the base rate is published every morning, transactions in mainland China can be made within 2% of this rate, and CNH is regulated by the Hong Kong Monetary Authority, but the exchange rate is more free, the value fluctuates depending on the volume purchases and sales in the international currency market;
- There may be discrepancies between exchange rates when exchanging for foreign currency, this is due to the varying degree of influence of market forces and the Central Bank on exchange rates.
In turn, Tron-Master Justin Sun continues to talk more and more about China and the future of the crypt. He believes that China will be one of the main drivers in the next bull market, as it was in 2013 and 2017.
Unpopular prediction: Next crypto bull market will depend on the Chinese rather than the Americans: 2013🇨🇳，2017🇨🇳，2021🇺🇸，202X🇨🇳?
Earlier, Arthur Hayes (who, by the way, it was Roubini who caught that the BitMex exchange was engaged in illegal activities) noted that the intention of Hong Kong, as an intermediary between China and the rest of the world, to legalize cryptocurrencies could be the beginning of a new bull market.
Justin Sun also believes that in a rapidly changing world, the chances of a loud return of the crypt to China are growing.
However, remember, I started the article with a user who shared the signature of the found block from 2009? So, netstalkers found a Twitter account of the same name, also registered in 2009. OneSignature user's avatar proudly flaunts the inscription: “Don’t trust anyone” 😈