Author: Dale Warburton

Dale is a former attorney turned passionate Bitcoiner with an interest in investments, macro, geopolitics, innovation, tech, nature, wildlife, MMA and Bitcoin (of course).

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Crypto News NFTs

Artist Blows Up Lambo to Protest ‘Get Rich Quick’ Crypto Culture

Pseudonymous artist SHL0MS has taken an unusual approach to protesting crypto’s focus on profit by blowing up a US$250,000 Lamborghini Huracan in an undisclosed desert location for a groundbreaking NFT project.

The supercar-related memes are funny, but they also implicitly symbolise the popular association of cryptocurrency to short-sighted profit-seeking and zero-sum behaviour … this project is intended to serve as a reminder of the revolutionary potential of the underlying technology – if we wield it correctly instead of solely for personal gain.

SHLoMS

Lambo Wreck Turns into NFTs

In rotating videos, 999 fragments of the blown-up car have been categorised, documented and filmed, intending to highlight the “striking stochastically-generated abstract forms produced by the wreckage”.

The Lamborghini pre-explosion. Source: SHLoMS

Each video will then be turned into an individual NFT and sold via a unique auction, which has a mechanism designed to limit the outsized power of so-called crypto whales.

By defiling the stereotypical aspiration of the crypto world and positioning the charred wreckage as fine art, SHL0MS is said to have delivered a “smouldering critique of zero-sum, extractive practices in the crypto industry while postulating a way forward that centres around long-termism and a focus on using technology for broader societal value rather than self-enrichment”.

The Lamborghini explosion. Source: SHLoMS

SHL0MS had been plotting the project for some time, and was open about his distaste for Lamborghinis in a since deleted Tweet:

The explosive approach is no doubt novel, and quite clearly in opposition to that of the car manufacturer itself, which last year released its own NFT collection in celebration of its founder.

Potential Sales vs Initial Investment

Like most people, SHL0MS is probably not purely motivated by ideological reasons. You have to imagine that behind the scenes there was a commercial calculation examining whether the NFT sales (and ongoing royalties) plus publicity were likely to exceed the initial investment (ie, a reported total of US$1 million sourcing and blowing up a Lamborghini).

SHL0MS clearly thought that the juice was worth the squeeze. Time will tell whether the hefty upfront investment was worth it, or a costly ideological statement.

Either way, if you’re keen to participate in this unique sale, the auction kicks off February 25 on the official site.

Categories
Bitcoin Bitcoin Mining Crypto News Onchain

Bullish: 60% of BTC Hasn’t Moved in a Year, Mining Difficulty Hits All-Time High

For investors fixated on NGU (number go up) technology, the past year hasn’t been pretty, with bitcoin down 33 percent over the past 12 months. However, for long-term investors, there are several bullish indicators worth paying attention to.

BTC price over past 12 months. Source: Coinbase

Long-Term HODLers Have Conviction

When it comes to on-chain market intelligence, Glassnode’s “HODL Waves” chart provides invaluable insight as to bitcoin UTXO (unspent transaction output) age distribution. Put differently, it provides an illustration of when bitcoins were last spent, and how spending patterns change over time.

HODL waves. Source: Glassnode

According to the latest available data, 60 percent of bitcoins have not moved over the past 12 months, suggesting there is a cohort of long-term HODLers that have tremendous conviction, even when the price has collapsed 33 percent over the same period.

Mining Difficulty Hits All-Time High

In January, Bitcoin’s hashrate reached an all-time high, and as of last Friday, Bitcoin’s mining difficulty reached an all-time high of 27.97 trillion hashes.

This is the second time in three weeks that Bitcoin has reached a new all-time high, suggesting that mining is becoming increasingly competitive. To illustrate, Bitcoin’s difficulty was 13.67 in mid-July 2021, shortly after the China mining ban, and is now up 105 percent from its lows.

Bitcoin mining difficulty over past 12 months. Source: CoinWarz

In addition, Bitcoin’s hashrate continues to trend upwards:

These factors cumulatively speak to a network becoming increasingly secure and resilient – qualities integral to the success of a decentralised, unconfiscatable store of value.

Where To From Here?

On the price front, ongoing volatility should be expected, given the US Federal Reserve’s hawkish pronouncements and institutional perspective that Bitcoin is a “risk on” asset:

However, as Mark Yusko likes to remind us, “price is a liar”, and for those with a long-term horizon there are plenty of reasons to be optimistic.

If anything, current price levels are attractive and an excellent entry-point for dollar-cost averaging into the asset. If you’re ready to start stacking Sats, head over to HardBlock where you can set up your account once and then send bitcoin to your hardware wallet without lifting a finger.

Categories
Crypto News Stablecoins

New Deal Sees USDC’s ‘Circle’ Double in Value to $9 Billion

Circle, the company behind USDC, announced earlier this week that it had terminated its deal with Concord Acquisition Corp (Concord), a publicly traded special purpose acquisition company (SPAC), and signed a new agreement with it, setting Circle’s enterprise value at US$9 billion:

Circle Value Doubles in Six Months

As reported by Crypto News Australia last July, Circle planned to go public at a valuation of US$4.5 billion, as per the original deal with Concord. However, this new agreement has doubled Circle’s value from 2021, driven mostly by improvements in the firm’s financial outlook and competitive position.

Specifically, USDC has enjoyed tremendous growth over the past year, as the stablecoin’s circulation has more than doubled since the original deal was announced, reaching US$52.5 billion.

We continue to believe that Circle is one of the most interesting, innovative and exciting companies in the evolution of global finance and we believe it will have an historic impact on the global economic system.

Bob Diamond, chairman of Concord Acquisition Corp and CEO of Atlas Merchant Capital

Last year, Circle’s proof of reserves were independently audited, revealing that 60 percent was made up of cash, with the balance being held in debt securities and bonds. The incumbent, Tether (USDT), has been less transparent and perhaps this accounts for its loss of market share to USDC over the past 12 months, reflected in the chart below:

Market share of stablecoins. Source: The Block

Chairman of Concord, Bob Diamond, highlighted the importance of transparency in his comments:

Circle’s rapid growth and world-class leadership are underscored by a regulatory-first mindset fixed on building trust and transparency in global markets. We believe our new deal is attractive because it preserves the ability of Concord’s public stakeholders to participate in a transaction with this great company.


Bob Diamond, chairman of Concord Acquisition Corp and CEO of Atlas Merchant Capital

While the new transaction agreement has been approved by Concord and Circle’s board of directors, it still requires shareholder approval in both cases, in addition to any relevant regulatory approvals: 

We [Circle] have made massive strides toward transforming the global economic system through the power of digital currencies and the open internet … being a public company will further strengthen trust and confidence in Circle and is a critical milestone as we continue our mission to build a more inclusive financial ecosystem.

Jeremy Allaire, Circle co-founder and CEO

Crypto Twitter Remains Sceptical

While stablecoins no doubt have practical use cases, including swift cross-border transfers and instant settlement, scepticism remains among the crypto community.

Some have noted concerns that users could be banned (or more specifically, have their addresses blacklisted):

Others expressed a sense of distrust that Circle would be involved in the Federal Reserve’s CBDC:

Whatever benefits USDC is able to offer, sentiments such as these are largely expected, given Circle’s relationship with the World Economic Forum and Wall Street.

Categories
Bitcoin Crypto News Cryptocurrency Law

US Congressman Introduces ‘Keep Your Coins Bill’ to Prevent Government Confiscation

In the wake of mounting concerns relating to private companies and the Canadian federal government denying financial services to members of the Freedom Convoy, US Congressman Warren Davidson took to Twitter to advise followers that a “Keep Your Coins Act” (KYC) bill would soon be tabled before legislators:

Implications of the Bill

At its core, the KYC bill purports to protect investors’ ability to have self-custody of their own assets, as well as engage in peer-to-peer transactions.

If the bill were passed in its current form, it would block state and federal agencies from prohibiting or otherwise restricting “the ability of a covered user to use virtual currency or its equivalent for such user’s own purposes, such as to purchase real or virtual goods and services for the user’s own use; or conduct transactions through a self-hosted wallet”.

Protest Should Be ‘Even-Handed’

In a discussion with Bitcoin Magazine, Congressman Davidson commented that self-custody had been on his mind for some time and that whatever your views were of the Freedom Convoy:

If this [protest] happened in America [the US], some would be cheering, some would be upset. My point is that it should be even-handed. We shouldn’t use money as a way of controlling people. Of course, if there’s criminal activity you should go after that. But imagine if the same thing were done to a crowdfunded BLM movement. That wouldn’t be okay. It’s not okay with the Freedom Convoy, either.

Republican Senator Warren Davidson

Davidson’s financial services counsel, Tim Hite, echoed these sentiments:

Seemingly on a roll, he didn’t stop there, daring Twitter to ban him for posting an image of two contradictory tweets by Canadian Prime Minister Justin Trudeau:

The tweet in question. Source: Senator Davidson

There’s a whiff of freedom in the air and it appears to be gaining momentum, at least in the US. It remains to be seen how things will turn out in Canada.

Categories
Bitcoin Crypto News

Canada Invokes Emergency Act, Cuts Off Crowdfunding and Crypto for Freedom Convoy

In an attempt to cut off funding to the Canadian “Freedom Convoy”, Prime Minister Justin Trudeau has taken unprecedented steps by invoking a 1988 Emergencies Act, enabling the government to freeze bank accounts without going through the courts. As one commentator put it, a “Super Bowl ad for Bitcoin”, if ever there was one:

Canada Wades into Unchartered Territory

Despite subzero temperatures, Canada has in recent weeks experienced ongoing protests in Ontario by a loose affiliation of truckers and citizens, dubbed “Freedom Convoy”.

While initially established to protest vaccine mandates for truckers going between the US/Canada border, the group’s fundamental purpose is to force the federal government to abandon all mandates. Thus far, it seems to have worked, as numerous provinces have since dropped the more onerous restrictions.

A week ago, the government classified the protest as an “unlawful occupation”, resulting in GoFundMe withholding over US$8 million in donations to the Freedom Convoy. Now the government has gone one step further in an attempt to place a tighter squeeze on protests.

Yesterday, Canada invoked the Emergencies Act for the first time, with Deputy Prime Minister Chrystia Freeland saying: “We are broadening the scope of Canada’s anti-money laundering and anti-terrorist financial rules so they cover crowdfunding platforms and the payment providers they use.” Freeland went on to say that these actions would also cover cryptocurrencies.

Bitcoin Fixes This

Few would have predicted that Canada, a self-described Western liberal democracy with fundamental freedoms enshrined in its Canadian Charter of Rights and Freedoms, would invoke emergency powers to run roughshod over the fundamental rights of its citizens, much less confiscate the assets of those with whom it disagrees.

Arguably, there has not been a more compelling and clear use case for Bitcoin in a modern Western democracy:

Even politicians took notice, such as this US Senator, who tweeted:

Nothing makes the case for crypto more than a government freezing bank accounts to suppress free speech …

US Republican Senator Tom Emmer

El Salvador President Nayib Bukele, who is often painted by Western governments as “authoritarian”, took to Twitter himself:

Whether driven by the emergency declaration or not, Bitcoin rose around four percent overnight to trade at US$44,200 at the time of going to press.

Canadian Prime Minister Justin Trudeau. Source: Invest Answers

Watershed Moment?

As exciting as it is to have companies like Tesla buy bitcoin, or when El Salvador declares it legal tender, one could argue that it is moments like these that will be remembered in the long arc of Bitcoin’s history.

There are decades where nothing happens; and there are weeks where decades happen.

Vladimir Ilyich Lenin

Is this a point in time when decades happen within weeks? That remains to be seen, but it looks more likely now as ever.

Categories
Crypto News Privacy Tokens

Monero Mining Pool Dominance Drops Dramatically Amid Concerns of 51% Attack

With a market capitalisation of US$3.2 million, Monero (XMR) is the world’s largest privacy token, more than double that of its closest rival, Zcash (ZEC). However, as the protocol’s biggest mining pool, MineXMR, approached 50 percent of the hashrate, critics raised serious alarm bells.

Monero mining pools comparison at February 15. Source: pools.xmr.wiki

Risks of Concentrated Hashpower

Within proof-of-work blockchains such as Monero, the most valid and obvious concern relating to a mining pool’s disproportionate hash power is the theoretical risk of a “51 percent attack”.

In short, this is when a group controls more than 50 percent of a blockchain’s hash power. If successful, the group could then block new transactions from being confirmed, as well as change the ordering of new transactions. In addition, it may also be possible to effectively rewrite parts of the blockchain by reversing transactions. This fundamentally undermines the “double spend problem” that blockchains are supposed to solve. In that sense, the attackers can spend tokens, erase the transaction and then once again spend the tokens.

Aside from “51 percent attacks”, the other concern is that it undermines decentralisation, one of the other core premises of blockchains:

Monero Community Calls for Boycott

Across Twitter and Reddit, Monero supporters were vocal in their call for miners in the MineXMR pool to leave without delay:

As one Reddit user put it, MineXMR was just under 96 percent of the way to achieving the majority of hashrate:

One Reddit user highlighting the risk. Source: Reddit, SomeAncap2020

It would appear as if the calls to leave MineXMR have been somewhat heeded. Within 24 hours, the MineXMR pool went from 48 percent of the hashrate, down to 37 percent. Notwithstanding, its hashrate remains more than double the next largest pool, nanopool, at 22 percent.

Monero mining pools comparison at February 16. Source: pools.xmr.wiki

It’s been a tough past year for Monero, as lead maintainer “Fluffy Pony” was arrested, not to mention the token’s recent alert that its multi-sig wallet code had been compromised.

While the Monero community and holders are no doubt pleased that some miners have abandoned MineXMR, it remains to be seen whether long term, the miners are truly committed to decentralisation, or whether their own interests ultimately trump those of its holders.

Categories
Bitcoin Crypto News Regulation

Crypto Twitter Slams SEC Amid $100 Million BlockFi Lending Settlement

BlockFi, a crypto services provider offering credit facilities to both institutions and retail investors, has for the past year been under persistent investigation by the US Securities and Exchange Commission (SEC) for its high-yield lending product.

In a dramatic turn, BlockFi has now agreed to settle the matter for US$100 million, and crypto Twitter is having none of it:

No Stranger to Controversy

Founded in 2017, New York-based BlockFi has often been in the news, albeit for the wrong reasons. Last year, it suddenly went down and then later it credited 700 BTC to the wrong customers’ accounts.

Much of the recent controversy has surrounded its lending product, as various states issued orders preventing it from registering new customers.

For much of its history, BlockFi was a significant beneficiary of the Grayscale Bitcoin Trust (GBTC) premium – an arbitrage trade that seemingly was able to fund its business. In short, it was able to offer clients attractive yields by taking their Bitcoin deposits, putting them into GBTC for the six-month lock-up period, and then selling them on the secondary market with a premium attached.

On the back of growing competitive products tracking the spot price of BTC, the GBTC premium has since flipped negative, resulting in BlockFi dramatically reducing yields from above 6 percent to as low as 0.1 percent in some cases:

BTC yields on BlockFi as of February 1. Source: BlockFi

Understandably, few are interested in risking their stack for such paltry returns:

SEC Targets Lending Product

During 2021, BlockFi was ordered by the states of New Jersey, Texas, Kentucky, Vermont and Alabama to immediately suspend onboarding residents to its lending products.

Drawing on the weight of these orders, the SEC’s position aligns with the views espoused by the states in question, namely that BlockFi’s lending product constitutes an unregistered security.

Although the company has yet to admit as much and come out with a formal statement, insiders say that of the US$100 million settlement, half is going to the SEC, while the balance will be shared by the state regulators.

Contents of the settlement remain unclear, but it is expected that the deal included provision that no additional clients would be onboarded, and that existing account holders would be grandfathered in.

The irony of restricting users from actually generating a yield on their assets was somehow lost on the SEC, which ostensibly exists to provide protection to investors:

Commentators were quick to point out that if the SEC genuinely cared about investor wellbeing, it would instead focus its energy on leveraged products, which are widespread and offered by a majority of major exchanges:

It’s difficult to argue with that sentiment, as few things can wipe out a retail investor’s wealth better than leverage.

This, together with its refusal to approve a spot Bitcoin ETF in the US, suggests that when it comes to the SEC, there are likely other factors at play beyond “investor protection”.

Categories
Bitcoin Ethereum NFTs

‘Satoshibles’ Becomes First NFT Collection to Bridge Between ETH and BTC

As non-fungible tokens (NFTs) continue to dominate headlines, Stacks, an NFT platform leveraging the security of Bitcoin and the scalability of Ethereum, quietly made history. Its ‘Satoshibles‘ collection is officially the first to bridge between BTC and ETH.

Bitcoin-Backed NFTs

‘Satoshibles’ describes itself as the “NFT for Bitcoin” and comprises 5,000 algorithmically generated NFTs, each unique and hand illustrated. The collection is inspired by a photograph of Dorian Nakamoto, the man incorrectly alleged to be Satoshi Nakamoto in 2014.

Satoshible #1 inspired by Dorian Nakamoto. Source: Satoshibles

Satoshibles developers chose to create the collection on Stacks, saying:

It was only right to create the NFTs on a platform that honoured Satoshi’s legacy.

Brian Laughlan, creator of ‘Satoshibles’

However, in an effort not to split the crypto community, they decided to build a cross-chain bridge, StacksBridge, to allow Satoshibles holders to move NFTs between Ethereum-based platforms and Stacks.

How StacksBridge Works

To move NFTs between chains, Satoshibles NFT holders must simply connect to the bridge with a MetaMask Ethereum wallet and Hiro Stacks wallet. Thereafter, they need to pay transaction fees to execute the movement from one chain to the other.

Importantly, NFTs can only be active on one blockchain at a time, with access being locked on the other. Initially, to optimise security, the bridge is employing a model based on trust, however they are exploring a trustless version that runs on automated smart contracts.

The response to the news was overwhelmingly positive, typified by one Twitter user’s comment:

Although they’re mostly old and crusty, I think #Bitcoin investors secretly want to start dabbling in the NFT space. Love the @satoshibles vision of bringing NFTs to a space where there currently is none. First mover advantage is HUGE.

@El_Crypto_Chapo via Twitter

At the time of publication, Satoshible #4043 is the most expensive available for purchase, at 35,000 STX (approximately US$60,000).

Satoshible #4043. Source: Stacks

If you’re an NFT enthusiast keen to get involved, head over to Stacks, connect your Stacks wallet, and make your pick. Unlike CryptoPunks and Bored Apes, Satoshibles are still somewhat affordable.

Categories
Bitcoin Blockchain Crypto News Cryptocurrencies

Institutional Adoption Grows as $9.5 Trillion BlackRock Moves to Offer Crypto Trading

According to three anonymous insiders, BlackRock, the world’s largest asset manager, has plans afoot to launch a crypto trading service to its investor clients.

Not BlackRock’s First Rodeo

Unsurprisingly, the Wall Street titan is no stranger to the world of crypto. For starters, BlackRock owns 16.3 percent of MicroStrategy, whose current Bitcoin exposure is north of US$5 billion.

And then last year it started “dabbling” in Bitcoin futures and, most recently, it filed for a blockchain ETF (exchange traded fund), which purports to track the performance of companies exposed to blockchain technology within the US and abroad.

But it doesn’t end there – BlackRock is also seemingly building up internal blockchain development capacities, based on a recent job posting for its wealth management platform, Aladdin.

Crypto Trading Offering

While BlackRock has declined to comment, it has been suggested that it intends to offer its clients leveraged crypto trading through Aladdin. In other words, clients (such as pension funds and hedge funds) would be allowed to trade using borrowed funds after posting crypto as collateral.

The move is somewhat anticipated, given the perpetual growth in institutional adoption within the space. This was seemingly confirmed by one insider who referred to an internal crypto working group of approximately 20, saying: “They see all the flow that everyone else is getting and want to start making some money from this.”

Another with knowledge of the matter, commented that BlackRock was “looking to get hands-on with outright crypto” and “looking at providers in the space”. Interpret this as you will, but the subtext appears to be that BlackRock is on the acquisition trail hoping to reel in crypto native companies.

Zooming out and focusing on macro trends, it’s been a big week for crypto, and Twitter knows it:

Categories
Bitcoin Crypto News Ethereum Institutions

KPMG Canada Adds BTC and ETH to its Balance Sheet

“Big Four” accounting firm KPMG Canada has announced it has completed its first allocation of digital assets to its corporate treasury, comprising BTC and ETH.

‘Giant Melting Ice-Cube’ Behind the Decision?

Michael Saylor, the charismatic founder and CEO of MicroStrategy, first started converting the company’s cash reserves into Bitcoin in late 2020. At the time, he described his treasury as a US$500 million “giant melting ice cube”, a narrative that is seemingly gaining traction in institutional circles.

Unlike Saylor, who allocated only to Bitcoin and views cryptocurrencies other than Bitcoin as securities, KPMG has made an allocation to both Bitcoin and Ethereum.

In addition, as per its announcement, it has also made an allocation to carbon offsets to “maintain a net-zero carbon transaction to deliver on the firm’s stated environmental, social and governance (ESG) commitments”. Greenwashing much?

KPMG Canada’s managing partner, who facilitated the acquisition through the Winklevoss twins’ Gemini, added:

Cryptoassets are a maturing asset class … Investors such as hedge funds and family offices to large insurers and pension funds are increasingly gaining exposure to cryptoassets, and traditional financial services such as banks, financial advisers and brokerages are exploring offering products and services involving cryptoassets. This investment reflects our belief that institutional adoption of cryptoassets and blockchain technology will continue to grow and become a regular part of the asset mix.

Benjie Thomas, managing partner, advisory services, KPMG Canada

According to KPMG, the investment illustrates the firm’s outlook on emerging technologies underpinned by blockchain:

We’ve invested in a strong cryptoassets practice and we will continue to enhance and build on our capabilities across Decentralised Finance (DeFi), non-fungible tokens (NFTs) and the metaverse, to name a few. We expect to see a lot of growth in these areas in the years to come.

 Kareem Sadek, advisory partner, Cryptoassets and Blockchain Services co-leader, KPMG Canada

Institutional Wall of Money Still Coming?

KPMG Canada’s announcement follows that of US$2.5 billion insurance firm Lemonade, which recently added $1 million in Bitcoin to its balance sheet, as well as the City of Rio de Janeiro, which is allocating 1 percent of its treasury to Bitcoin.

However, the KPMG announcement somehow feels different. Who could have expected a global accounting firm to allocate to crypto?

One of the potential roadblocks towards institutional adoption has always been the innate conservatism of traditional finance, and who better epitomises conservatism than global accounting firms?

That said, it wouldn’t be surprising, in time, if KPMG Canada’s allocation is viewed as a watershed moment in the story of institutional adoption.