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

News 'Diet'

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

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

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

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

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

Happy Bitcoin Pizza Day!

Top Shelf

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

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

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

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

Next of Kin

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

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

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

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

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

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

Weekend Reads

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

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

The Breakdown

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

Who Won #CryptoTwitter?