Blockchain Bites: Libra’s Future, Elrond’s ‘Trial by Fire’ and LocalBitcoins’ Volume

News

10 June 2020

An unknown wallet holder mistakenly, it seems, sent a $2 million transaction fee on the Ethereum blockchain, Elrond is testing its network in a “trial by fire” and Libra’s Dante Disparte thinks governments entering the stablecoin race is good for Libra. Here’s the story:

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Top shelf

Libra’s Future
Libra’s initial prospectus and subsequent redesign has left its imprint on the world. Some 70% of central banks are researching a national digital currency, a fact that Dante Disparte, head of policy and communications at the Libra Association, thinks is good for the Libra project and its mission. “I think there would be nothing better for the world and for poverty alleviation if, in fact, we started to trigger a bit of a space race on compliance to address the 1.7 billion people who are unbanked and underbanked,” he said. “So from my point of view, there is no monopoly on this work. Let others enter this process and let the race begin.” CoinDesk’s Ian Allison takes a deep dive into where Libra stands in midst of the “digital dollar space race.”

Institutional Investors
Fidelity Digital Assets found the number of U.S. institutional investors buying crypto derivative products jumped significantly in 2020. In a survey the subsidiary found “22% of U.S. respondents invested in digital assets have exposure via futures, which is a substantial increase relative to 9% of U.S. investors surveyed in 2019,” while 80% of investors surveyed have found “something appealing about the asset class.” Separately, Bakkt and Galaxy Digital plan to partner to offer a “white glove” trading and custody solution targeting institutional investors this year. Galaxy will provide all the trading services and functionalities, while Bakkt will repurpose part of its Bakkt Warehouse as the service’s custody solution.

Building Blocks
Elrond, a proof-of-stake blockchain, is offering up to $60,000 to node-runners and white-hat hackers to find bugs and vulnerabilities in a trial-by-fire test of the network. Separately, Band Protocol 2.0 launched Wednesday with its mainnet oracle solution, BandChain, leveraging the Cosmos SDK. The project’s revamp comes 10 months after listing as an initial exchange offering (IEO) on Binance Launchpad and a $3 million 2019 seed round led by Sequoia India.

Investments
Hacker Noon, a tech publication with 4 million monthly readers, has closed a $1 million strategic investment from micropayments firm Coil, a blockchain-agnostic product built on the Interledger protocol and headed by former Ripple CTO Stefan Thomas. The publication will integrate Coil’s Web Monetization technology to pay Hacker Noon writers based on their screen time.

Financial Products
London-based investment firm ETC Group plans to list a bitcoin-backed exchange-traded product (ETP), called the Bitcoin Exchange Traded Crypto (BTCE), on Deutsche Borse’s Xetra market. This would be the world’s first centrally cleared derivative crypto asset. Meanwhile, Bitwage, a crypto payroll provider, has added USDC support to its platform.

Ill-Gotten Gains?
Just before 10:00 UTC Wednesday, an unknown wallet holder sent 0.55 ether (around $133) with a 10,666 ETH transaction fee – currently worth just under $2.6 million. The fee went to Chinese mining group Spark Pool – which ordinarily would have averaged around $0.50 – that now says it has frozen the payout to miners in its pool. Elsewhere, a 20-year old California resident was charged Monday by the U.S. Department of Justice with allegedly participating in a SIM-swapping scam that defrauded Apple and stole an unknown amount of cryptocurrency from one victim.

Movers & Shakers
Brian Brooks sold $4.6 million Coinbase stock options when he left the exchange to become interim head at the Office of the Comptroller of the Currency (OCC). Since taking office Brooks has already publicly suggested a federal payments charter for fintech companies, asked state and local governments to consider lifting COVID-19 lockdowns to protect the banking system and published a request for public input on how banks look at crypto. In an interview with CoinDesk’s Nikhilesh De, Brooks said, “My job here is not to protect incumbents, and it’s not to preserve the status quo.” He also thinks DeFi is the most exciting corner of crypto today.

Blockchain Voting
Residents of Moscow will have the option to cast votes electronically in Russia’s upcoming national referendum on its constitution, and have their votes recorded on Bitfury’s open-source enterprise blockchain, Exonum. Sources close to the matter say Moscow’s Department of Information Technologies tapped Kaspersky Lab, an anti-virus software vendor turned blockchain consultant, to build this technical solution.

Opinion

The Crypto Community Needs to Stand Up and Fight Racism
Robert Greenfield, CEO of Emerging Impact, takes a moment to reflect on the crypto industry’s response to the death of George Floyd and subsequent protests around the country. Whereas other corporations and public figures working in the broader tech industry have taken a stance against police brutality and economic injustice, the crypto community has been mostly silent. “The crypto community is conveniently selective about what aspects of society it wants to change,” Greenfield said.

Bitcoin Doesn’t Take Sides: Why Apolitical Solutions Are the Internet’s Future
Preston Byrne, partner in Anderson Kill and a CoinDesk columnist, sees another side of the culture war. In an op-ed examining censorship and the future of Section 230, Byrne thinks the winners will likely be apolitical. “Companies that build politics-free solutions will be the future of the internet. Not because such products have the right opinions about their users, but because they have no opinions at all,” he said.

Market intel

Profitable Coins
Over 16 million BTC out of the total circulating supply of 18.4 million, or 87%, is currently making gains. The metric, an obscure data point called percentage of bitcoin’s circulating supply in profit, is calculated by looking at the ratio of coins with a value that is higher now than when they were last moved, and signals a coming bull run. “Historically, levels of 90% and higher have clearly marked pronounced bull markets,” Glassnode said in a weekly report.

Playing it Loose
Officials in the U.K., Europe and New Zealand may push interest rates below zero as a form of economic stimulus. And bitcoin might be a beneficiary of looser monetary policy outside the U.S., even if the Federal Reserve never joins its foreign counterparts. While central banks’ dalliances with negative interest rates in the mid-2010s didn’t seem to affect bitcoin’s price, a current market capitalization roughly 20 times levels in 2014 and an increasing correlation with the broader market may see people turning to bitcoin as a hedge against increasing consumer prices. Get the full First Mover analysis in your inbox.

Strictly Not Stifled
LocalBitcoins’ ban on cash transactions and stricter identity verification has not appeared to stifle the peer-to-peer exchange’s business. LocalBitcoins’ volume is down 27% over the past 12 months and up almost 40% for the year to date. Compared to reported volumes of 12 months ago, OKEx and Coinbase have seen volume drop by approximately 30% and 45%, respectively, according to data from Nomics. Since January, however, the two exchanges’ volumes have grown by roughly 2,500% and 800%, respectively.

The Breakdown

What the Stock Market’s ‘Robinhood Rally’ Means for Bitcoin
The largest 50-day rally in stock market history and even shares of bankrupt companies are up more than 100%. NLW asks and answers: What is going on?