Blockchain technology is claimed to be according to blockchain proponents to be one of the most impactfull discoveries in the recent history. It is promised to have a massive potential to change how we handle online transactions. Despite some skeptics, the majority of experts agree that blockchain has the potential to disrupt the banking and financial industry, and many other ones! To put it simply, blockchain enables decentralized transactions across a P2P network. There are applications where those propertied can be very useful, but there are many cases where blockchain migh not be the best solution even though it is hyped to be solution for very many application (remember to ask Do you need a blockchain? often).
This 16 Blockchain Disruptions (Infographic) by bitfortune.net tries to help you understand how the blockchain technology can and will improve 16 different industries, from music to government.
Infographic by bitfortune.net
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Tomi Engdahl says:
Crypto broker Voyager Digital files for bankruptcy
https://techcrunch.com/2022/07/06/crypto-broker-voyager-digital-files-for-bankruptcy/?tpcc=tcplusfacebook
Voyager Digital, a high-profile crypto broker, has filed for bankruptcy, citing market volatility and the surprising collapse of Three Arrows Capital, just weeks after it suspended withdrawals, trading and deposits on its platform.
The U.S.-headquartered firm — and its two affiliates — said in a Chapter 11 bankruptcy filing in the Southern District of New York that it had between $1 billion and $10 billion in assets and over 100,000 creditors.
Tomi Engdahl says:
Voyager Seeks Bankruptcy Protection Amid Crypto Credit Crisis
The Toronto-based lender filed for Chapter 11 bankruptcy in New York late Tuesday.
https://www.coindesk.com/policy/2022/07/06/voyager-seeks-bankruptcy-protection-amid-crypto-credit-crisis/
Tomi Engdahl says:
A number of Bitcoin gauges are all flashing in similar fashion, something that rarely happens.
Bitcoin Hints at a Bottom, But It May Be Different This Time
https://www.bloomberg.com/news/articles/2022-07-04/bitcoin-hints-at-a-bottom-but-it-may-be-different-this-time?utm_medium=social&utm_campaign=socialflow-organic&utm_source=facebook&cmpid=socialflow-facebook-business&utm_content=business#xj4y7vzkg
Token’s 60% drop closed out one of worst quarters in history
AUM for crypto investment products in June reached record low
It’s a perennial exercise whenever an asset is mired in a prolonged and deep drawdown: People look at the charts, they go over this or that indicator and they get their checklists out to try to figure out when it might find a floor. For Bitcoin, there’s plenty of such action happening right now, with technical signals that in the past have suggested just such a formation.
Tomi Engdahl says:
Even with the power of 25 RTX 3080 GPUs, this Ethereum mining ASIC will soon be useless
By Chris Szewczyk published about 14 hours ago
An ASIC walks into a bar and meets the crash and the merge.
https://www.pcgamer.com/even-with-the-power-of-25-3080s-this-ethereum-mining-asic-will-soon-be-useless/?utm_campaign=socialflow&utm_medium=social&utm_source=facebook.com
Bitmain has released its Antminer E9 Ethereum miner(opens in new tab), which delivers performance that utterly destroys any GPU setup in terms of efficiency. Bitmain claims a single Antminer E9 can deliver the performance of up to 25 GeForce RTX 3080s. If I take the RTX 3060 Ti as another example, that number rises to around 40.
It’s another nail in the coffin of GPU mining which is great news for gamers.
The Antminer E9 is capable of 2,400MH/s at 1,920W. When tuned properly, an RTX 3080 can produce 100MH/s or a bit more, meaning Bitmain’s claim that the Antminer E9 produces the hash power of around 24 RTX 3080s is accurate. And when it comes to power consumption, the E9 pulls far ahead of 24 3080s. That many 3080s would consume over 5000W alone, before taking any of the other system components into consideration.
So, why is Bitmain releasing the E9 now? Actually, the E9 was teased back in April of 2021(opens in new tab), so what’s been happening in the meantime? Bitmain operates its own mining farms and you’d be crazy to assume that it hasn’t been using E9s for some time. I believe that the late release is Bitmain’s attempt to recoup some of the cost of what will soon be useless equipment
Ethereum is down 75% from its all time high. That means that mining rewards aren’t worth anywhere near as much as they were back at the peak in November 2021. The price of Eth could recover for sure, but it could take years. Too little, too late. That’s strike one.
Strike two is the fact that at this point in time there aren’t any coins that come close to the profitability of mining Ethereum. Ravencoin? Ethereum Classic? I can’t see it happening. The trend is away from energy intensive Proof of Work towards Proof of Stake.
Strike four, and the most significant of all, is that Ethereum is getting closer to the ‘merge’. The merge is when the Ethereum mainnet will merge with the testnet Beacon Chain’s PoS system. Prior to that will come the introduction of the so-called difficulty bomb. At the time of writing, the latest information is that the difficulty bomb—the code that exponentially increases mining difficulty to disincentivize mining—is set to go live around the end of September or early October. Beyond that point, known as the ‘ice age’, mining becomes completely unprofitable for ASICs and GPUs alike, and it all becomes moot.
So, go ahead Bitmain. Sell your ASICs to anyone silly enough to buy them. Big mining operators aren’t going to make GPU purchases anymore. GPU prices are rapidly falling and they’re ending up in the rigs of gamers again.
Tomi Engdahl says:
Nothing can’t resist the NFT hype, and its fans are questioning
https://techcrunch.com/2022/07/06/nothing-phone-nft/?tpcc=tcplusfacebook
Nothing, the consumer tech company started by OnePlus co-founder Carl Pei and known for its aggressive marketing, unveiled a non-fungible token project called Black Dot. Its fans are skeptical.
Black Dot is a video clip featuring a rotating, transparent cube with a black dot bouncing off the walls inside and making a crisp, metallic sound. The visual is cool and aligns with the earbud and smartphone maker’s minimalist aesthetic — kudos on that. The question is: why NFT?
Despite the hype marketing, Nothing’s wireless earbuds and upcoming Android-based phone did breathe some fresh air into the increasingly homogenous consumer tech space.
But fans seem less impressed by its NFT move. As of Wednesday, the most-liked comments on its Instagram post about Black Dot have been overwhelmingly negative. “Y’all have clearly lost the plot,”
To be fair, merging web3 functionalities and smartphone technology has been done by serious blockchain organizations. Solana, one of the most popular blockchain networks, turned some heads last month when it launched its web3-based handset, which aims to make interacting with blockchain services easier on mobile (at the moment it’s very limited).
And NFTs aren’t all driven by greed. The technology is seen as a useful way to authenticate one’s membership in a community or access to an event, which in theory helps reduce fraud.
But introducing NFTs days before Nothing’s first phone is slated to launch might turn away customers who associate NFTs with scammy, speculative behavior or exclusive social clubs, given the exorbitant price tags of some collectibles before the recent crypto crash.
Tomi Engdahl says:
Crypto assets that look like securities might be subject to EU restrictions, even before the bloc’s landmark MiCA law takes effect, Belgian regulator FSMA said in a consultation today.
Belgium Regulator Ponders Crypto as a Security
https://www.coindesk.com/policy/2022/07/06/belgium-regulator-ponders-crypto-as-a-security/
The EU’s landmark crypto law won’t take effect for a couple of years, but existing stock-trading rules may still apply, financial regulator FSMA says.
Tomi Engdahl says:
From $10 billion to zero: How a crypto hedge fund collapsed and dragged many investors down with it
https://www.cnbc.com/2022/07/11/how-the-fall-of-three-arrows-or-3ac-dragged-down-crypto-investors.html?utm_content=Main&utm_medium=Social&utm_source=Facebook#Echobox=1657569234
KEY POINTS
The bankruptcy filing from Three Arrows Capital (3AC) triggered a downward spiral that wrapped in many crypto investors.
The hedge fund failed to meet margin calls from its lenders.
“3AC was supposed to be the adult in the room,” said Nik Bhatia, professor of finance and business economics at the University of Southern California.
As recently as March, Three Arrows Capital managed about $10 billion in assets, making it one of the most prominent crypto hedge funds in the world.
Now the firm, also known as 3AC, is headed to bankruptcy court after the plunge in cryptocurrency prices and a particularly risky trading strategy combined to wipe out its assets and leave it unable to repay lenders.
The chain of pain may just be beginning. 3AC had a lengthy list of counterparties, or companies that had their money wrapped up in the firm’s ability to at least stay afloat. With the crypto market down by more than $1 trillion since April, led by the slide in bitcoin and ethereum, investors with concentrated bets on firms like 3AC are suffering the consequences.
Crypto exchange Blockchain.com reportedly faces a $270 million hit on loans to 3AC. Meanwhile, digital asset brokerage Voyager Digital filed for Chapter 11 bankruptcy protection after 3AC couldn’t pay back the roughly $670 million it had borrowed from the company. U.S.-based crypto lenders Genesis and BlockFi, crypto derivatives platform BitMEX and crypto exchange FTX are also being hit with losses.
“Credit is being destroyed and withdrawn, underwriting standards are being tightened, solvency is being tested, so everyone is withdrawing liquidity from crypto lenders,” said Nic Carter, a partner at Castle Island Ventures, which focuses on blockchain investments.
Tracing the falling dominoes
The fall of Three Arrows Capital can be traced to the collapse in May of terraUSD (UST), which had been one of the most popular U.S. dollar-pegged stablecoin projects.
The stability of UST relied on a complex set of code, with very little hard cash to back up the arrangement, despite the promise that it would keep its value regardless of the volatility in the broader crypto market. Investors were incentivized — on an accompanying lending platform called Anchor — with 20% annual yield on their UST holdings, a rate many analysts said was unsustainable.
“The risk asset correction coupled with less liquidity have exposed projects that promised high unsustainable APRs, resulting in their collapse, such as UST,” said Alkesh Shah, global crypto and digital asset strategist at Bank of America.
Panic selling associated with the fall of UST, and its sister token luna, cost investors $60 billion.
“The terraUSD and luna collapse is ground zero,”
Tomi Engdahl says:
Cryptocurrencies
‘They couldn’t even scream any more. They were just sobbing’: the amateur investors ruined by the crypto crash
The black hole of bitcoin investing
https://www.theguardian.com/technology/2022/jul/12/they-couldnt-even-scream-any-more-they-were-just-sobbing-the-amateur-investors-ruined-by-the-crypto-crash?CMP=fb_a-technology_b-gdntech
Fuelled by hype and hysteria, the market in bitcoin and other cryptocurrencies went from an obscure niche to a $3tn industry. Then the house of cards collapsed
Tomi Engdahl says:
The mania around bitcoin and other cryptocurrencies was fuelled by a social media hype machine unprecedented in the history of financial markets. Investors touted new coins that were amassing huge returns, hung off the tweets of crypto-influencers and spoke in impenetrable jargon. “Demand for bitcoin related purely to the level of interest in this new technology, and that interest was manipulated by the companies that offered different cryptocurrencies and exchanges and startups,” Yarovaya says. “All of this happened on social media, meaning that investors didn’t even know whether there was genuine interest in crypto, or lots of Twitter bots encouraging people to buy. The system wasn’t transparent.”
https://www.theguardian.com/technology/2022/jul/12/they-couldnt-even-scream-any-more-they-were-just-sobbing-the-amateur-investors-ruined-by-the-crypto-crash?CMP=fb_a-technology_b-gdntech
Tomi Engdahl says:
Sri Lanka central bank warns against use of cryptocurrency amid economic crisis
https://techcrunch.com/2022/07/13/sri-lanka-central-bank-warns-against-use-of-cryptocurrency-amid-economic-crisis/?tpcc=tcplusfacebook
Sri Lanka has warned its citizens against using cryptocurrency, which it said is “largely unregulated” amid an ongoing political chaos in the South Asian nation.
The country’s central bank, CBSL, said Tuesday it does not consider cryptocurrencies as legal tender in the country and reminded that it has not given license or other authorization to any entity to operate in the nation.
Virtual currencies are considered as “unregulated financial instruments and have no regulatory oversight or safeguards relating to their usage” in the country.
Tomi Engdahl says:
NFT marketplace OpenSea lays off 20% of its staff: ‘We have entered … crypto winter’
https://techcrunch.com/2022/07/14/nft-marketplace-opensea-lays-off-20-percent-of-its-staff-we-have-entered-crypto-winter/?tpcc=tcplusfacebook
Despite a significant depression in crypto markets, plenty of top players have been hesitant to say that the good times are over for the time being, but as NFT marketplace OpenSea announces today that its laying off around 20% of the company’s employees, the top crypto startup’s CEO isn’t mincing words.
” … [T]he reality is that we have entered an unprecedented combination of crypto winter and broad macroeconomic instability, and we need to prepare the company for the possibility of a prolonged downturn,” OpenSea CEO Devin Finzer said in a message shared with staff that he posted publicly on Twitter as well.
Tomi Engdahl says:
Bitcoin miners were already under pressure from cratering crypto prices. Now, a heat wave is pushing some of the biggest miners to pause operations.
Almost all large-scale bitcoin miners in Texas pause activity as state braces for possible rolling blackouts
https://markets.businessinsider.com/news/currencies/bitcoin-crypto-mining-heat-wave-texas-power-grid-failure-markets-2022-7?utm_medium=social&utm_campaign=sf-markets-insider&utm_source=facebook.com
Large-scale bitcoin miners are pausing activity as Texas’ power grid nears failure.
Crypto mining encompasses millions of computers that use mass amounts of energy to solve code.
Texas has become a crypto-mining darling thanks to its low energy costs.
Bitcoin mining heavyweights are pausing operations as the Texas energy grid buckles and state officials warn of rolling blackouts, Bloomberg first reported.
A heatwave in the state is pushing its power grid to a breaking point and raising conservation concerns. Companies including Riot Blockchain Inc., Argo Blockchain Plc and Core Scientific Inc flocked to Texas thanks to its low energy costs that are favorable to bitcoin miners.
https://www.bloomberg.com/news/articles/2022-07-11/bitcoin-miners-shut-off-rigs-as-texas-power-grid-nears-brink?srnd=markets-vp
Tomi Engdahl says:
Bitcoin wipes $15 billion from market cap in 10 mins as U.S. inflation data runs hot BTC
https://cryptopanic.com/news/15755611/Bitcoin-wipes-15-billion-from-market-cap-in-10-mins-as-US-inflation-data-runs-hot?utm_source=notifications&utm_medium=facebook&utm_campaign=Facebook%20Trending
Tomi Engdahl says:
This Billionaire Says Inflation Will Last ‘For Years’ And Bitcoin May Become ‘Worthless’
https://www.forbes.com/sites/johnhyatt/2022/07/14/a-vicious-cycle-why-this-billionaire-thinks-inflation-will-stick-around-for-years/?sh=104f575731d2&utm_medium=social&utm_source=ForbesMainFacebook&utm_campaign=socialflowForbesMainFB
Brokerage pioneer Thomas Peterffy spoke with Forbes about his economic outlook, and when he expects the market to bottom out.
On Wednesday, the U.S. reported consumer inflation of 9.1% for the year through June. That number, a four-decade high, rattled markets as stock indices sank.
But investors need to get used to inflation, says billionaire Thomas Peterffy, the 77-year-old founder and chairman of online trading platform Interactive Brokers.
Tomi Engdahl says:
https://techcrunch.com/2022/07/25/crypto-valuations-may-sink-until-september-as-vcs-play-a-waiting-game/
Tomi Engdahl says:
An actionable framework for founders bridging into web3
https://techcrunch.com/2022/07/25/an-actionable-framework-for-founders-bridging-into-web3/
What’s your web3 strategy?
I doubt it’s the first time you’ve been asked that question. It’s been on the lips of a growing number of investors on the hunt for disruptive opportunities blockchain-based technologies can offer.
But for founders looking to foray into the world of decentralization, it’s all too easy to become distracted from core business objectives by shiny new buzzwords emanating from the space.
FOMO is real. If everyone else is doing X, Y or Z, you wonder, then shouldn’t we?
My message here is simple: Focus on the basics, and don’t allow yourself to get distracted by the hype.
If the people who form the backbone of your community do not feel good about your project or their participation, you’re in big trouble.
I’d like to offer some insights into how to build a strong project that can tap into the enormous power and potential of web3.
If you aren’t addressing a problem, you’ve got a problem
A successful web3 company, project or DAO starts with a clear-eyed view of the use case (or cases) blockchain equips them to serve in a way that was not possible before, and how they can change the game for a problem.
Until you’re satisfied you really have identified both a well-defined pain point and a compelling solution, you’re unlikely to convince users to beat a path to your door.
Once you’ve identified the problem or need you plan to address, drill a little deeper. What is the functionality that web3 can bring to the party? Blockchain is at its most powerfully disruptive when it supplies the missing link.
Tomi Engdahl says:
Proof-of-time vs proof-of-stake: How the two algorithms compare
Blockchains use consensus algorithms to choose who gets to verify transactions on the network — what are the differences between the two?
https://cointelegraph.com/news/proof-of-time-vs-proof-of-stake-how-the-two-algorithms-compare
Tomi Engdahl says:
Blogi: Bitcoinin ja Ethereumin erot
https://www.northcrypto.com/announcement/bitcoin-ethereum-erot
Tomi Engdahl says:
Coinbase Crypto ‘Nightmare’ Is Just Beginning Amid Wild Bitcoin And Ethereum Price Swings
https://www.forbes.com/sites/billybambrough/2022/07/27/coinbase-crypto-nightmare-is-just-beginning-amid-wild-bitcoin-and-ethereum-price-swings/
Tomi Engdahl says:
Binance.US, the U.S.-based arm of the world’s largest crypto exchange, is delisting the Amp token, one of nine cryptocurrencies the U.S. Securities and Exchange Commission last month classified as unregistered securities. https://trib.al/JRG8EFA
Tomi Engdahl says:
Homeless, suicidal, down to last $1,000: Celsius investors beg bankruptcy judge for help
https://www.cnbc.com/2022/08/02/celsius-investors-owed-4point7-billion-beg-judge-to-recover-life-savings.html?utm_content=Crypto&utm_medium=Social&utm_source=Facebook#Echobox=1659472251
KEY POINTS
Some of the 1.7 million Celsius customers ensnared by the alleged fraud are now directly pleading with the Southern District of New York to help them get their money back.
It is the latest sign that bankruptcy court has become the de facto arbiter of crypto policy in the U.S.
Celsius Network, once a titan of the crypto lending world, is in bankruptcy proceedings and facing down claims that it was running a Ponzi scheme by paying early depositors with the money it got from new users. Some of the 1.7 million customers ensnared by the alleged fraud are now directly pleading with the Southern District of New York to help them get their money back.
Christian Ostheimer, a 37-year-old living in Connecticut, wrote in a letter included in court exhibits that he trusted Celsius with his retirement savings and has lost more than $30,000, which has brought him into “unsurmountable tax complications.”
Tomi Engdahl says:
Meta is expanding NFT support on Instagram to 100 countries
https://techcrunch.com/2022/08/04/meta-is-expanding-nft-support-on-instagram-to-100-countries/
Tomi Engdahl says:
Cryptocurrencies
‘They couldn’t even scream any more. They were just sobbing’: the amateur investors ruined by the crypto crash
The black hole of bitcoin investing
https://www.theguardian.com/technology/2022/jul/12/they-couldnt-even-scream-any-more-they-were-just-sobbing-the-amateur-investors-ruined-by-the-crypto-crash?utm_source=facebook&utm_medium=news_tab
Fuelled by hype and hysteria, the market in bitcoin and other cryptocurrencies went from an obscure niche to a $3tn industry. Then the house of cards collapsed
“I thought I was on top of the world,” Roy says. “Nobody could tell me anything. Money would fix every single problem I faced from now on.”
I always thought the next project would bring me back up again and I’d cash out before it crashed
Roy
Then the cryptocurrency market crashed. The price of bitcoin fell from £42,000 in May 2021 to £23,000 by the end of June. It rallied to an all-time high of £48,000 in November, before diving to £26,000 at the end of January. Since then, it has been in near-continuous freefall. At the time of writing, bitcoin is hovering at £17,000. “It felt like I had lost my life,” says Roy. “Because I had invested everything in crypto. I had built every dream I had on there. So, when it came crashing down, my whole life came crashing down.”
The cryptocurrency industry is in roiling waters. Scarcely a day seems to pass without a wave crashing across the sector. “The rollercoaster has turned and taken crypto holders on a downward spiral,” says Susannah Streeter, an analyst at Hargreaves Lansdown. “Many people have been caused serious financial pain.”
Last month, major coins including bitcoin and ethereum dropped by more than one-third in just a week. While bitcoin has tumbled significantly on several occasions, this bear run – meaning a period of declining prices – feels different. The industry is larger and more interconnected than ever, with retail and institutional investors jostling for space in what was, until last year, a $3tn market. (The crash has wiped $2tn off the market’s value.)
In May, the “stablecoin” terra/luna collapsed, prompting the Guardian’s UK technology editor, Alex Hern, to ask whether this was the industry’s “Lehman Brothers moment”. It had been marketed as a safe bet, due to the fact it was pegged to the US dollar, and promised returns of up to 20%.
The carnage prompted further sell-offs. This month, the cryptocurrency lending platform Celsius Network halted withdrawals for its 1.7 million customers, citing “extreme market conditions”. A day later, Coinbase, one of the largest cryptocurrency exchanges, announced that it was sacking 18% of its workforce. At the end of June, the hedge fund Three Arrows Capital, which was heavily leveraged in cryptocurrency and related businesses, went into liquidation.
Everywhere is panic and turmoil – and things look likely to get worse. The casualties range from ordinary retail investors to multimillionaire “whales” and celebrities – in May, the British rapper KSI tweeted that he had lost almost $3m in the terra/luna crash. There have been at least two reported suicides, in the UK and Taiwan; on the Reddit community for terra/luna investors, users share details of suicide hotlines.
Advocates argue that this is but a cryptocurrency winter, as seen in 2013 and 2018. Prices will rebound; spring will turn to summer; the bear becomes the bull. They lampoon so-called “paper-hands” investors, meaning those who abscond at the first sign of trouble, and urge each other to Hodl (“hold on for dear life”) and “buy the dip” (purchase coins when prices are low). Others are less certain. Will the frost ever thaw?
The rollercoaster has taken crypto holders on a downward spiral. Many people have been caused serious financial pain
There are eight stages of crypto-crash grief.
The industry’s enthusiasts and sceptics agree on one thing: they saw this coming.
there was a sense that the cryptocurrency bull would run out of road. The sector was too hot, too loaded with bad-faith actors, scammers, credulous investors and amateurs feigning expertise in Telegram groups, YouTube videos and Twitter threads. When internet jokes such as PooCoin and Dogecoin surged in popularity, it ought to have been apparent that a market correction was coming. Such stupidity cannot be sustained for long.
“Was it surprising?” says Dr Larisa Yarovaya, an associate professor of finance at the University of Southampton. “I think it was quite predictable.” The Bank of England has repeatedly told cryptocurrency investors to be prepared to lose all their money. Investors bought bitcoin as a speculative punt in 2020 and 2021 because interest rates were low and many had spare cash due to lockdowns and economic stimulus packages. But when interest rates and inflation began to rise, fuelled by Covid‑affected supply chains and the war in Ukraine, institutional investors preferred to put their money into safer assets.
“When people feel richer, they are more likely to spend on riskier assets, like crypto. But in times of uncertainty, investors flee to safer havens.”
The mania around bitcoin and other cryptocurrencies was fuelled by a social media hype machine unprecedented in the history of financial markets. Investors touted new coins that were amassing huge returns, hung off the tweets of crypto-influencers and spoke in impenetrable jargon. “Demand for bitcoin related purely to the level of interest in this new technology, and that interest was manipulated by the companies that offered different cryptocurrencies and exchanges and startups,” Yarovaya says. “All of this happened on social media, meaning that investors didn’t even know whether there was genuine interest in crypto, or lots of Twitter bots encouraging people to buy. The system wasn’t transparent.”
Koh got swept up in the social media frenzy. “You fall into this dream, this La-La land of thinking: I’m going to make it. It was like a whole trend, a pop culture. Now, sitting back, I think we got brainwashed.” Koh’s wife has a master’s degree in business administration and she urged him to be cautious. “She said: ‘Alex, it sounds like a Ponzi scheme … this is social media marketing to rope you in; take your liquidity and go.’” But he didn’t listen. “They call it ‘being an alpha’,” he says. “You have to be on Twitter, and follow the right people, and be in the right Discord channel. You listen to the right chatrooms. It makes you feel so special.”
At one point, says Koh, he convinced himself that terra/luna was such a great project that he “was ready to sell my house, my car, put everything in”. Now, he wouldn’t invest even £10 in cryptocurrencies. “It’s like a drug,” Koh says. “You’ve been there. You got high. And then you’re in rehab. I’m not going to go back in again.”
His greatest regret is that he encouraged others to invest in the terra/luna project.
The risk engineering professor originated the theory of the “black swan”: a hard-to-predict but seismic event, such as the 2008 financial crash, that is often rationalised after the fact with the benefit of hindsight. In 2018, Taleb wrote an essay describing bitcoin as “an excellent idea” and a possible “insurance policy against an Orwellian future”.
Last year, Taleb revised his position in a paper that described bitcoin’s value as “zero”. “This is the first time we’ve seen a financial bubble coupled with religious, cult‑like behaviour and an investment strategy not seen before in history,” he says. Many demur – and Taleb could yet be proved wrong. A common defence of bitcoin and other cryptocurrencies is that the underlying technology, blockchain, has functions not yet discovered.
Taleb says: “I would tell people who are still holding bitcoin: ask your grandmother if the idea makes sense. And if it doesn’t make sense to her, it doesn’t make sense … get out. Do something productive with your life.”
“Metals don’t need maintenance. Bitcoin requires continuous maintenance.”
It may be that future economists view the cryptocurrency boom of the early 2020s as a mass Dunning-Kruger event, fuelled by social media and facilitated by technology; an era in which amateurs took financial advice from fellow amateurs and bet the house on speculative investments. “Admitting that you know nothing just tells you that you’re lucky,” says Roy. “And my ego couldn’t handle that. I didn’t want to be lucky. I wanted to be someone who knew what they were doing. I’m smart, right? Tell me I’m smart, please? That’s how it goes. The whole community reinforced themselves, and each other.”
“I could not believe how psychopathic bitcoin people were,”
But he has compassion for the inexperienced investors who got swept up in the hype. “Lots of these kids lost everything they have,” he says. “You feel empathy for them.” The scammers, who urged others to invest in doomed projects while they were secretly cashing out? “They must be punished,” Taleb says.
But it seems likely that, just as in the 2008 financial crash, the bad-faith actors who exacerbated this meltdown will walk away unscathed.
What’s more, many of the investors who bought into the cryptocurrency boom did so to claw back security after a decade racked by recession and uncertainty.
“The whole space of crypto was about giving normal people the option to gain the upper edge in society financially. It was a beacon of hope. We could ride the next big thing. But that beacon of hope has been put out for now. The trust has been broken. Yet again, sitting here, in decade number two, the bankers have won again.”
Future generations may look back at this boom as a period of mania, when money multiplied like bacteria and a collective delusion gripped financial markets. It may seem unfathomable, but it shouldn’t. After all, who doesn’t want to be rich?
Tomi Engdahl says:
Russia is banning crypto payments
https://www.protocol.com/bulletins/russia-ban-crypto-payments
Russian President Vladimir Putin approved a law Friday prohibiting the use of digital assets as forms of payments in Russia. The legislation will reportedly prohibit the transfer or acceptance of “digital financial assets as a consideration for transferred goods, performed works, rendered services, as well as in any other way that allows one to assume payment for goods (works, services) by a digital financial asset,. except as otherwise provided by federal laws, ” effectively banning the use of crypto or NFTs as forms of payments.
Tomi Engdahl says:
Treasury Sanctions Ethereum-Based Tornado Cash For Allegedly Helping To Launder More Than $7 Billion
https://www.forbes.com/sites/jonathanponciano/2022/08/08/treasury-sanctions-ethereum-based-tornado-cash-for-allegedly-helping-to-launder-more-than-7-billion/?utm_campaign=forbes&utm_source=facebook&utm_medium=social&utm_term=Gordie
Tomi Engdahl says:
Danny Nelson / CoinDesk:
Coinbase disclosed in its latest quarterly report that the SEC is investigating its token listing processes, staking programs, and yield-generating products — The company told investors it has received “investigative subpoenas” from the Securities and Exchange Commission.
Coinbase Exchange Faces SEC Probe Over Crypto Yield, Staking Products
https://www.coindesk.com/policy/2022/08/10/coinbase-faces-sec-probe-over-crypto-yield-staking-products/
The company told investors it has received “investigative subpoenas” from the Securities and Exchange Commission.
Publicly traded crypto exchange Coinbase Global (COIN) is under investigation by U.S. securities regulators over its token listing processes as well as its staking programs and yield-generating products, the company disclosed in its most recent quarterly report.
“The Company has received investigative subpoenas and requests from the [U.S. Securities and Exchange Commission] for documents and information about certain customer programs, operations, and existing and intended future products, including the Company’s processes for listing assets, the classification of certain listed assets, its staking programs, and its stablecoin and yield-generating products,” Coinbase said in the 10-Q form.
The disclosure underscores the heat Coinbase faces as a vocal (and closely regulated) U.S. crypto business. It is under pressure on multiple fronts, including its belief that certain tokens are not securities and therefore exempt from the SEC’s purview. The SEC has taken a different stance in its ongoing case against an ex-Coinbase employee accused of insider trading.
Still, Coinbase said in the filing it believes these investigations will not “have a material adverse effect” on Coinbase’s financial condition.
Tomi Engdahl says:
Malavika Kaur Makol / Bloomberg:
India’s central bank releases guidelines for digital lending, which is projected to reach $350B in India by 2023, after complaints over harsh recovery tactics — India’s central bank released guidelines for digital lending, targeted at bringing transparency and data protection to the business …
India’s RBI Tightens Rules on Digital Lending After Complaints
https://www.bloomberg.com/news/articles/2022-08-10/india-s-rbi-tightens-rules-on-digital-lending-after-complaints
Apps offering quick, small-ticket loans boomed during pandemic
Activists have linked a host of suicides to recovery tactics
Tomi Engdahl says:
MacKenzie Sigalos / CNBC:
Elliptic: cross-chain bridge RenBridge has been used to launder $540M in crime-related crypto cash since 2020; Conti ransomware group used it to launder $53M+ — – RenBridge has been used to launder at least $540 million in crime-related crypto cash since 2020, according to new research from blockchain analytics firm Elliptic.
https://www.cnbc.com/2022/08/10/crypto-criminals-laundered-540-million-using-renbridge-elliptic-says.html
Tomi Engdahl says:
Bloomberg:
CryptoCompare: Coinbase’s market share of global spot trading volume among the top 15 crypto exchanges fell from 10.7% in January 2022 to 6.3% in July 2022 — The doubling of Coinbase Global Inc.’s stock since the end of June is masking one of the biggest concerns for investors …
https://www.bloomberg.com/news/articles/2022-08-11/coinbase-s-stock-rebound-obscures-market-share-loss-to-peers
Tomi Engdahl says:
Tornado Cash Developer Arrested After U.S. Sanctions the Cryptocurrency Mixer https://thehackernews.com/2022/08/tornado-cash-developer-arrested-after.html
Dutch authorities on Friday announced the arrest of a software developer in Amsterdam who is alleged to be working for Tornado Cash, days after the U.S. sanctioned the decentralized crypto mixing service. The 29-year-old individual is “suspected of involvement in concealing criminal financial flows and facilitating money laundering”
through the service, the Dutch Fiscal Information and Investigation Service (FIOD) said in a statement.
Tomi Engdahl says:
Monero hard fork makes hackers’ favorite coin even more private https://www.bleepingcomputer.com/news/security/monero-hard-fork-makes-hackers-favorite-coin-even-more-private/
Monero, the privacy-oriented decentralized cryptocurrency project, underwent a planned hard fork event on Saturday, introducing new features to boost its privacy and security. Completed at block 2, 688, 888, the hard fork now features a larger ring size (from 11 to 16), an improved Bulletproofs’ algorithm for faster transactions, a revamped multisig mechanism, and performance upgrades that reduce wallet sync times by 30-40%. Monero is considered to have superior privacy over other cryptocurrency projects because of its “ring signature”
transaction obfuscation mechanism. When a transaction requires signing, the user performing it has their signature merged with those of other users to create ambiguity in blockchain analysis and make trace-back practically challenging. The new Monero upgrade takes the ring size up to 16, which is the largest absolute increase in the project’s history, significantly improving the anonymity sets.
Tomi Engdahl says:
Bohemian noble family redefines modern aristocracy by selling NFTs to preserve and share a 700-year-old legacy
https://www.cnbc.com/2022/08/06/27-year-old-bohemian-prince-raises-300000-in-nfts-to-preserve-and-share-castles-and-ancient-artifacts.html#Echobox=1660164030
Tomi Engdahl says:
Ethereum’s core developers have set September 15 as the tentative date for the long-awaited proof-of-stake Merge upgrade — The core developers working on the much-anticipated software upgrade of the Ethereum blockchain firmed up Sept. 15 as the likely official date of the so-called Merge.
Ethereum Developers Back Sept. 15 Target for Blockchain Software ‘Merge’
https://www.bloomberg.com/news/articles/2022-08-18/ethereum-developers-back-sept-15-target-for-blockchain-merge#xj4y7vzkg
The ambitious software upgrade will reduce energy use
Timing of the Merge could yet change, based on mining support
Tomi Engdahl says:
Steven Zeitchik / Washington Post:
Despite huge ad campaigns by crypto companies, a Pew survey of US adults shows those trading crypto has stayed flat at 16% from September 2021 to July 2022
Crypto’s massive marketing efforts have drawn few new investors
The majority of Americans remain immune to the industry’s sales pitches, Pew survey finds
https://www.washingtonpost.com/business/2022/08/24/cryptos-massive-marketing-efforts-have-drawn-few-new-investors/
Tomi Engdahl says:
David Yaffe-Bellany / New York Times:
An overview of Ethereum’s proof-of-stake upgrade, The Merge, which is expected to cut the crypto platform’s energy use by 99%+, and some of the risks involved
The Crypto World Can’t Wait for ‘the Merge’
https://www.nytimes.com/2022/08/26/technology/crypto-ethereum-the-merge.html
Tomi Engdahl says:
”Kryptofyrkka on v***u ufoa mulle” – Andy McCoy sukelsi NFT:n maailmaan, ja siihen on yksi selkeä syy
Andy antoi Rumballe haastattelun.
https://www.rumba.fi/uutiset/kryptofyrkka-on-vu-ufoa-mulle-andy-mccoy-sukelsi-nftn-maailmaan/
Suomen yksi tunnetuimmista rokkareista, Andy McCoy, on nyt NFT- eli kryptovaluuttatekniikkaan keskittyvän yrityksen yksi omistaja ja taiteilija. Yritys 7 Seas Art Management perustettiin tänä vuonna. Sen kryptotaidesivusto Calling Earth aukeaa elokuun aikana. Aluksi myyntiin tulee Andyn tauluja ja henkilökuvia. Kaupanteko tapahtuu kryptovaluutalla julkisissa NFT-myyntipaikoissa, kuten Open Sea ja Nifty.
Tutustu
Kryptovaluuttatekniikan avulla digitaalinen taide yksilöidään tuotteeksi, johon kirjataan lohkoketjun avulla omistussuhde. Kryptotuotteina voi myydä esimerkiksi kuvia, ääniä, videoita sekä huutokaupata fyysisiä tauluja. Vaikka taiteesta tekisi kopioita muualle, ”alkuperäiseksi” yksilöinti tekee tuotteesta harvinaisen ja arvokkaan. Lisäksi alkuperäisen tuotteen omistaja saa tietyn prosentin aina, kun tuote myydään eteenpäin.
Mikä sai sinut lähtemään kryptotaiteen maailmaan?
”Kato mulla on following: faneja ympäri maailmaa. Niitä on miljoonia. Miksi ei?”
Mitä hyötyä näet kryptotaiteessa ja mitä haittaa?
”En minä tiedä. Mä haluan vaan palvella mun faneja. Annetaan niille enemmän, jos se on sitä, mitä ne haluaa. Tää kryptofyrkka on v***u ufoa mulle. Mä tuun eri maailmasta.”
Tomi Engdahl says:
Anthony Hopkins sees NFTs as ‘art in a new format’
https://techcrunch.com/2022/08/17/anthony-hopkins-sees-nfts-as-art-in-a-new-format/
As celebrities and athletes alike dip into the crypto sphere to endorse tokens or companies, others are looking to NFTs as a way to engage with fans.
NFT collections have been launched by celebrities including Paris Hilton, Snoop Dogg, Steve Aoki and The Notorious B.I.G. (posthumously).
Tomi Engdahl says:
FBI Warns Investors to Take Precautions with Decentralized Financial Platforms https://thehackernews.com/2022/08/fbi-warns-investors-to-take-precautions.html
The U.S. Federal Bureau of Investigation (FBI) on Monday warned of cyber criminals increasingly exploiting flaws in decentralized finance
(DeFi) platforms to plunder cryptocurrency.
Tomi Engdahl says:
Ivan Mehta / TechCrunch:
Live Nation’s Ticketmaster partners with Dapper Labs to issue ticket NFTs on the Flow blockchain and expands its NFL deal to give NFTs to attendees of 100 games
Ticketmaster taps the Flow blockchain to let event organizers issue NFTs tied to tickets
https://techcrunch.com/2022/08/31/ticketmaster-taps-the-flow-blockchain-to-let-event-organizers-issue-nfts-tied-to-tickets/
Ticketmaster will now let event organizers issue NFTs (non-fungible tokens) tied to tickets on Flow, a blockchain operated by a16z-backed Dapper Labs. The Live Nation subsidiary said that event organizers can make these NFTs available before, during or after the event and even enable special experiences like loyalty rewards or celebrity meet-and-greets — or simply offer memorabilia in an NFT format.
The Flow blockchain is known for enabling web3 experiences related to fantasy sports and gaming, such as NBA Top Shot.
Ticketmaster initially partnered with Ethereum-based blockchain Polygon last November, to issue virtual ticket stubs to NFL fans through the rest of the season. The ticketing giant then elected the Flow blockchain earlier this year to issue digital collectibles to over 70,000 Super Bowl LVI ticket owners. Ticketmaster is also extending its partnership with the NFL to this season, where it plans to issue NFTs to all attendees of 100 select games, including at least three home games for all 32 teams.
Tomi Engdahl says:
Jesse Hamilton / CoinDesk:
a16z releases free “Can’t Be Evil” licenses for NFTs, inspired by Creative Commons, on GitHub; NFT licensing has been attempted before, including by Dapper Labs
A16z Wants to Standardize NFTs by Giving You a License for Your Token
https://www.coindesk.com/business/2022/08/31/a16z-wants-to-standardize-nfts-by-giving-you-a-license-for-your-token/
Andreessen Horowitz’s crypto arm is releasing a free licensing system, aiming to help the NFT sector fulfill its “economic potential.”
Non-fungible tokens (NFT) have a licensing problem, and Andreessen Horowitz’s (a16z) crypto arm thinks it has an answer.
The firm wants to establish some industry standards for how NFTs can be used by offering a lawyer-vetted array of free licensing options in an approach similar to Creative Commons. Confusion abounds around intellectual property rights in these tokens.
Some issuers have already turned to Creative Commons, a nonprofit organization that set up free copyright licensing to help creators share their work, but other NFT efforts have left their status murky. As a wave of no-rights-reserved projects have emerged, a16z argues an urgent need for clarity on how owners can use NFTs and give others permission to use them.
“There is kind of a wildly broad spectrum of approaches that people are taking,” said Miles Jennings, general counsel at a16z. “Greater standardization around the industry will help unleash the economic potential of that sector of the industry.”
His firm – as explained in a Wednesday blog post from Jennings and Chris Dixon, an Andreessen Horowitz managing partner who founded its crypto arm – is releasing “a set of free, public ‘Can’t Be Evil’ licenses, designed specifically for NFTs and inspired by the work of Creative Commons.” The company hired lawyers to help outline several levels of licensing, and the language is provided on GitHub for those who want to adopt it.
The Can’t Be Evil NFT Licenses
https://a16zcrypto.com/introducing-nft-licenses/
Tomi Engdahl says:
https://techcrunch.com/2022/08/30/meta-now-lets-you-post-your-nfts-on-both-facebook-and-instagram/
Tomi Engdahl says:
Kate Park / TechCrunch:
LG launches LG Art Lab which lets US users buy, sell, and trade NFTs on its smart TVs, partners with Hedera to enable purchases via LG’s crypto wallet, Wallypto
LG Electronics launches NFT platform that lets users buy and sell digital artwork
Kate Park@kateparknews / 4:00 AM GMT+3•September 5, 2022
https://techcrunch.com/2022/09/04/lg-electronics-launches-nft-platform-that-lets-users-buy-and-sell-digital-artwork/
Tomi Engdahl says:
Noah Smith / Noahpinion:
Q&A with Vitalik Buterin on proof of work vs. proof of stake, the recent crypto crash, crypto security, decentralized governance, “startup societies”, and more — In which we talk about the big shifts in crypto. — Vitalik Buterin is one of the most well-known …
Interview: Vitalik Buterin, creator of Ethereum
In which we talk about the big shifts in crypto.
Noah Smith
Sep 2
https://noahpinion.substack.com/p/interview-vitalik-buterin-creator
Tomi Engdahl says:
Ethereum Merge may not ‘fix everything,’ but it could boost institutional adoption
https://techcrunch.com/2022/09/07/ethereum-merge-may-not-fix-everything-but-it-could-boost-institutional-adoption/?tpcc=ecfb2020
As we inch closer to a highly anticipated protocol development for Ethereum, some big institutional players may wonder what “the Merge” could mean for them.
The system upgrade, set for September 15, plans to reduce the second-largest blockchain’s energy consumption by about 99% by moving away from proof-of-work, which relies on crypto miners using tons of computing energy to validate transactions, to proof-of-stake, which uses an algorithmic lottery to determine future validators from a pool of “stakers” who lock up funds to secure the network.
After the Merge, the reward subsidy for miners will be reduced by about 90%. At the moment, about 13,000 ETH is mined a day, but after the Merge, it’s expected that only about 1,600 ETH will be issued daily, according to the Ethereum Foundation.
“I think institutional adoption is the next big wave,” Nikos Andrikogiannopoulos, CEO of Metrika, said to TechCrunch. “Back in 2018 when the previous crypto winter happened, a number of VCs were in the wave at that time, but this time financial institutions are riding the wave this crypto winter.”
Tomi Engdahl says:
Rahan oikeushistoria auttaa ymmärtämään virtuaalivaluuttoja
https://www.helsinki.fi/fi/uutiset/hyva-yhteiskunta/rahan-oikeushistoria-auttaa-ymmartamaan-virtuaalivaluuttoja?utm_source=facebook&utm_medium=social_owned&fbclid=IwAR1f7qs0LwxwTsn0Fqdz5S-xebELWQ9299Xpi9X-iNVKfRRqwgS44Jvn-tQ
Voiko virtuaalivaluutta olla rahaa? Väitöskirjatutkija Kristian Keskitalo hakee oikeushistorian menetelmin vastausta kysymykseen, miten oikeudellinen raha on muuttunut ja peilaa muutosta suhteessa virtuaalivaluuttoihin.
Tomi Engdahl says:
Michael McSweeney / The Block:
A White House report proposes outright restrictions on proof-of-work mechanisms if US crypto mining companies fail to reduce the industry’s environmental impact — – The White House encouraged a broad policy push to reduce greenhouse gas emissions and urged the use of clean energy by U.S. crypto mining companies.
White House report proposes possible restrictions on proof-of-work crypto mining
https://www.theblock.co/post/168621/white-house-report-proposes-possible-restrictions-on-proof-of-work-crypto-mining
Quick Take
The White House encouraged a broad policy push to reduce greenhouse gas emissions and urged the use of clean energy by U.S. crypto mining companies.
The report’s recommendations highlight the possible need for restrictions on “the use of high energy intensity consensus mechanisms for crypto-asset mining” if other environmental impact mitigation efforts fail.
A new White House report encouraged a broad policy push to reduce greenhouse gas emissions and urged the use of clean energy by U.S. crypto mining companies — and potentially more restrictive measures should such efforts fail to reduce the industry’s environmental impact.
A report from the White House Office of Science and Technology Policy proposed that U.S. lawmakers and policymakers consider legal limitations or outright restrictions to reduce crypto mining’s environmental impact if other strategies fail to catch on.
The report, which was mandated by executive order earlier this year, called for efforts to minimize the environmental impacts from crypto assets.
Tomi Engdahl says:
Andrew Ackerman / Wall Street Journal:
SEC Chair Gary Gensler signals he would support Congress giving the CFTC authority to oversee and regulate bitcoin and ether, if the SEC can retain its power — Former CFTC chief says he could back giving agency oversight of nonsecurity tokens — WASHINGTON—Securities …
SEC’s Gensler Signals Support for Commodities Regulator Having Bitcoin Oversight
Former CFTC chief says he could back giving agency oversight of nonsecurity tokens
https://www.wsj.com/articles/secs-gensler-supports-commodities-regulator-having-bitcoin-oversight-11662641115?mod=djemalertNEWS
WASHINGTON—Securities and Exchange Commission Chairman Gary Gensler signaled that he would support Congress handing more authority to the SEC’s sister markets regulator to oversee certain cryptocurrencies such as bitcoin.
Mr. Gensler, speaking at an industry conference, said Thursday he looked forward to working with Congress to give the Commodity Futures Trading Commission added power, to the extent the agency needs greater authority to oversee and regulate “nonsecurity tokens…and the related intermediaries.”
The remarks come amid an intensifying battle among federal agencies and congressional committees that oversee them over who will regulate crypto.
Cryptocurrencies remain largely unregulated by the federal government, leaving investors without protections from fraud and market manipulation that come with many other types of investments. The competition for jurisdiction heated up in recent months as a meltdown in crypto markets underscored the need for guardrails in the eyes of many policy makers.
Tomi Engdahl says:
Washington Post:
Sources: the US Treasury will warn the White House that cryptocurrencies pose significant financial risks that outweigh the benefits, and need major regulations
https://www.washingtonpost.com/us-policy/2022/09/08/treasury-crypto-warn-white-house/
Tomi Engdahl says:
Only the strong will survive the avalanche of bankruptcies, layoffs and volatility now cascading through the #crypto sector. Answering two key questions can help lay the groundwork.
https://tcrn.ch/3Ddmx6z
Want to survive the crypto winter? Start by inspiring regulatory confidence
https://techcrunch.com/2022/09/08/want-to-survive-the-crypto-winter-start-by-inspiring-regulatory-confidence/?guccounter=1&guce_referrer=aHR0cHM6Ly9sbS5mYWNlYm9vay5jb20v&guce_referrer_sig=AQAAAISsOLSAUqIM6U0b90Dhpl0vz0zexvTUFUt_2jTrxXKQjVy59ylLfdQFXY1SzdZW46oBXgOUFgn9WnqhNj4RlTMsq0GAhanxo0EDJLkasV5Akal7sUSKt4CI_0_rn-1xmJqWK1JYO-2TVsa3FB33UKAwb6PYXkM8wFlSJBy45TiY
Only the strong will survive the avalanche of bankruptcies, layoffs and volatility now cascading through the crypto sector.
Investors burned by flimsy promises or forced to panic-sell digital assets will want evidence that companies have undergone proper licensing and due diligence. Customers who buy, sell, borrow or loan crypto will want to rest easy knowing their assets won’t be lost. Prospective buyers, lenders, partners and employees will demand similar assurances.
The crypto winter won’t last forever, but the table stakes for market entry have changed. Federal and state agencies are ramping up their enforcement efforts, legislators are putting forth new proposals and state agencies are setting rules of their own.
To seize new opportunities and stay competitive as the seasons change, regulatory clarity will be key.
Is my digital asset going to be considered a security?
Chances are, your digital asset is one of two things: a security (i.e., a financial instrument, like a stock or bond, that represents value) or a commodity (i.e., a basic good that is interchangeable with goods of the same type).
At present, the Securities & Exchange Commission (SEC) essentially considers every digital asset aside from Bitcoin and Ethereum to be a security. Though the Commodities and Futures Trade Commission (CFTC) and many others might disagree — and proposed bipartisan legislation would effectively put most digital assets under the CFTC’s jurisdiction
Tomi Engdahl says:
‘The Price Could Skyrocket’—Here’s When Ethereum Could Flip Bitcoin
https://www.forbes.com/sites/billybambrough/2022/09/13/price-could-skyrocket-when-ethereum-could-flip-bitcoin/?sh=1c8880ab218a&utm_source=ForbesMainFacebook&utm_medium=social&utm_campaign=socialflowForbesMainFB
The bitcoin price’s mammoth 2021 bull run catapulted its market capitalization to over $1.2 trillion last year. It’s since crashed back to a mere $400 billion. Meanwhile, ethereum’s own huge price rally saw it climb to over $500 billion before dropping to just over $200 billion.
Now, some traders and investors are predicting the ethereum price will surge following its long-awaited, radical upgrade—potentially making ethereum more valuable than bitcoin for the first time, an event known as “the flippening.”
“Investor interest in ethereum has remained resilient as it nears the merge, its once-in-a-lifetime event that will see the whole network migrate onto proof-of-stake,” Gabriel Selby, lead research analyst at cryptocurrency index provider CF Benchmarks, said via Twitter. “Some have suggested it could be the catalyst for ethereum to overtake bitcoin as the world’s largest coin by market capitalization.”
This week, ethereum is expected to complete its transition from the energy-intensive proof-of-work consensus mechanism used by bitcoin to the more power-efficient proof-of-stake, removing ethereum’s reliance on miners and handing control to those that “stake” their ether on the network. The switch is expected to reduce ethereum’s carbon emissions by 99%, according to the Ethereum Foundation.
Bitcoin’s dominance, a measure of its value compared to other cryptocurrencies, has in recent weeks dipped under 40%, down from a peak of almost 50% earlier this year, according to data from CoinMarketCap. Ethereum has seen its share of the market climb to over 20%, up from lows of under 15%.
While bitcoin has developed a reputation as digital gold due to its immutability and resistance to both change and censorship, ethereum is designed to be used as the foundation of a decentralized, blockchain-based internet—an idea that’s become known as web3.
Earlier this year, ethereum cofounder and the project’s spiritual leader Vitalik Buterin revealed his plans for ethereum following the “merge” upgrade—with the “surge” next in a series of improvements designed to make the network more secure and decentralized, followed by the verge, purge and splurge upgrades.
“We believe that ethereum has great utility and once the purge phase of pruning the code starts in 2023 it will be a very good blockchain with even greater adoption,” Martin Hiesboeck, head of blockchain and crypto research at crypto trading platform Uphold, said via email, adding: “The [ethereum] price could well skyrocket.”
Over the last year, ethereum has seen a demand boom due to the soaring popularity of non-fungible tokens (NFTs), digital art and media that’s tokenized on the ethereum blockchain.