First Mover Asia: Bitcoin Rally Stalls After US Central Bank Chair’s Comments; Ether Rises

Good morning. Here’s what’s happening this morning:

Market moves: Bitcoin dropped on U.S. Fed Chair Powell’s comment, while ether gained more market share.

Technician’s take: Support levels remain intact, which could establish a tight trading range between $55,000-$60,000 BTC into the Asian trading day.

Catch the latest episodes of CoinDesk TV for insightful interviews with crypto industry leaders and analysis.


Bitcoin (BTC): $57,157 -1.3%

Ether (ETH): $4,642 +4.4%


S&P 500: $4,567 -1.9%

Dow Jones Industrial Average: $34,483 -1.8%

Nasdaq: $15,537 -1.5%

Gold: $1,772 -.80%

Market moves

Bitcoin’s price sank after U.S. Federal Reserve Chair Jerome Powell warned Tuesday that the risk of higher inflation has “increased,” signaling the central bank would consider fastening the reduction of its asset purchase policies that have boosted the markets for risky assets.

“A faster Fed taper and increased [interest] rate hike expectations was bad news for bitcoin,” Edward Moya, senior market analyst at foreign-exchange broker Oanda, wrote in a market commentary. “Bitcoin is trading more like a risky asset than an inflation hedge.”

On the other hand, ether, the second-largest cryptocurrency by market capitalization, ended Tuesday with its fourth straight day of gains, trading above $4,600, according to CoinDesk’s data.

“Ethereum is still the favorite crypto bet for most traders and seems like it will make another run towards $5000 once risk appetite returns,” Moya added.

Ether’s growing market dominance is also reflected on the ether-bitcoin (ETH/BTC) chart: The ETH/BTC daily chart on crypto exchange Binance was up by more than 5.2%, at the time of writing, according to TradingView.

ETH/BTC daily chart on Binance (TradingView)

Other layer 1 blockchain-associated tokens also posted gains on Tuesday, led by Terra blockchain’s LUNA token, which logged a new record high price.

Read More: UST Stablecoin Demand, DeFi Incentives Drive Terra’s LUNA to New All-Time High

Technician’s take

Bitcoin Declined Below $58K; Support Between $53K-$55K

Bitcoin four-hour price chart shows support/resistance levels (Damanick Dantes/CoinDesk, TradingView)

Bitcoin (BTC) buyers failed to sustain Monday’s price bounce, although support around $53,000-$55,000 could stabilize the current pullback.

The cryptocurrency is down about 2% over the past 24 hours and is roughly flat over the past week.

The downward-sloping, 100-day moving average on the four-hour chart indicates a short-term downtrend. This means buyers have consistently taken some profit on rallies over the past month.

Recently, the $60,000 resistance level has been a key hurdle for buyers despite oversold readings on the charts. So far, support levels remain intact, which could establish a tight trading range between $55,000-$60,000 into the Asian trading day. BTC was trading around $57,800 at press time.

Important events

8:30 a.m. HKT/SGT (12:30 a.m. UTC): Jibun Bank Manufacturing purchasing managers’ index (Nov.)

8:30 a.m. HKT/SGT (12:30 a.m. UTC): Australia gross domestic product (Q3/YoY/QoQ)

9:45 a.m. HKT/SGT (1:45 a.m. UTC): Caixin China purchasing managers’ index (Nov.)

3 p.m. HKT/SGT (7 a.m. UTC): Germany retail sales (Oct. YoY/MoM)

CoinDesk TV

In case you missed it, here are the most recent episodes of “First Mover” on CoinDesk TV:

Jack Dorsey’s Plan After Resigning as Twitter CEO, Hedera Hashgraph CEO on Real-time Intercontinental Settlement Using Stablecoins

“First Mover” hosts spoke with Blockchain Association Executive Director Kristin Smith as her organization raised $4 million to expand its presence on Capitol Hill. WisdomTree Head of Digital Assets Jason Guthrie shared insights into crypto markets as bitcoin six-month “put-call skew” flipped bearish for the first time since May. Plus, Hedera Hashgraph co-founder and CEO Mance Harmon explained the new partnership with South Korea’s Shihan Bank and multinational Standard Bank on stablecoins.

Latest headlines

Borderless Capital Launches $500M Algorand-Focused Fund

Indian Finance Minister Says Monitoring Crypto Ads; Not Weighing Ban

A16z Leads $28M Round for Privacy Coin Iron Fish

Avalanche, Layer 1 Tokens Soared in November as Ethereum Fees Drove Competition

Kleiman v. Wright: Jury Deliberations Continue in Week 2

Longer reads

The Future of Money: A History: Accounting has defined civilization for centuries. And, now thanks to crypto, we’re going to see accounting 3.0. This essay is part of CoinDesk’s Future of Money Week.

Who Sets the Rules of Bitcoin as Nation-States and Corps Roll In: Can a small team of Core developers protect bitcoin’s integrity now it’s a matter of geopolitical relevance?

Today’s crypto explainer: Is Bitcoin Legal?

Source: Coindesk
Original Post: First Mover Asia: Bitcoin Rally Stalls After US Central Bank Chair’s Comments; Ether Rises

What Is CityCoins and How Does It Work?

CityCoins describes itself as an avenue for citizens to generate crypto-based revenue for themselves and the cities where they live. Think of it as a system that allows users to contribute crypto funds to their home city, or support other cities, in exchange for rewards.

Users of the CityCoins platform have already begun to issue tokens for a handful of major cities, designed to help improve the lives of people living in them. Interestingly, the project has opted to base its operation on a bitcoin-powered ecosystem such that users and cities can potentially earn bitcoin.

Miami and New York have emerged as the first two cities where CityCoins have been launched. There is also the opportunity for citizens to introduce CityCoins for their cities inside and beyond the borders of the United States of America.

How do CityCoins work?

How to create a CityCoin

At a glance, it might seem like the creation and management of CityCoins is carried out by the project’s team. However, the process is actually completely in the hands of individual users. The project simply provides the infrastructure to support each CityCoin’s deployment.

So how do you go about creating a CityCoin for your own City? It’s a four-part process. First off, the crypto community can vote on which city they’d like to launch a CityCoin for next by completing a survey on the website. Once a particular city is narrowed down, it’s important that the chosen city’s mayor supports the proposal and agrees to claim the city wallet (see below).

Then, anyone can initiate the deployment of a new CityCoin by launching a smart contract (a software program running on a blockchain that takes certain actions when predetermined conditions are met) on the Stacks mainnet, or live version.

To do this, you’ll need to:

Finally, a minimum of 20 individuals are then required to send an amount of STX – the native cryptocurrency of Stacks – to the newly created smart contract to activate the mining process. It’s worth noting, however, once a CityCoin smart contract is activated miners must wait 24 hours before being able to mine the newly created CityCoins.

What is Stacks?

Simply put, CityCoins uses a decentralized protocol powered by smart contracts to generate value for participants and their respective cities. The goal is to enable a system that will reward users’ efforts to keep the system afloat and, in the process, generate funds for developing selected cities. Unlike most crypto projects, CityCoins has opted for multiple token systems. This framework allows it to create a unique token for each supported city.

At this juncture, you may be wondering, how does CityCoins utilize smart contracts-enabled transactions on a bitcoin-based infrastructure, considering that the Bitcoin network does not support smart contracts? This is where a technology called “Stacks” enters the fray.

All of City Coins’ bitcoin-powered implementations exist thanks to Stacks, a blockchain infrastructure built on top of the Bitcoin network to enable smart contract applications. CityCoins can capitalize on smart contract technology and still utilize Bitcoin’s security fabric because it operates on Stacks blockchain, which is technically an extension of the Bitcoin blockchain that provides smart contract functionalities.

Notably, the entire CityCoin ecosystem relies on two core processes. The first is called mining, while the other is stacking.

How CityCoins mining works

CityCoins miners deposit STX into the CityCoins smart contract for a chance of earning CityCoins tokens – such as MiamiCoin or NYCCoin, for example. This process, known as bidding, takes place on the Stacks blockchain and involves a winning miner being selected and rewarded with CityCoins tokens each time a new block is discovered (approximately every 10 minutes, similar to Bitcoin’s block discovery time).

Note that the probability of emerging as a successful miner depends on the number of STX each miner bids (deposits into the smart contract) relative to the total amount deposited by competing miners.

For instance, if your share of the STX forwarded to CityCoins smart contract is 50%, you have a 50% chance of emerging as the miner eligible to claim the CityCoin token-denominated rewards allocated for that specific block. Miners can choose whether to bid for a single block, or up to 30 blocks at a time.

It’s important to note that depositing STX into a particular CityCoins smart contract is a one-way process. In other words, you permanently lose access to the STX tokens forwarded to the protocol’s smart contract, even if you emerge as a winning miner or not. Seventy percent of all STX tokens deposited into the smart contract is distributed among stackers, while the remaining 30% is sent to the city’s wallet.

It’s also worth noting, when mining is first activated for a new CityCoin 100% of STX tokens deposited into the mining smart contract are sent to the city’s wallet during the first reward cycle phase. Each cycle lasts 2,100 Stack blocks (approximately two weeks.)

In the event there aren’t any users stacking, all STX tokens are sent to the corresponding city’s wallet.

CityCoin mining rewards operate in a similar fashion to Bitcoin’s issuance schedule, where rewards are halved systematically every four years. During the first 10,000 blocks, winning miners receive 250,000 CityCoins per block. Rewards are then reduced to 100,000 coins per block for the next 200,000 Stacks blocks (approximately four years.) From there, rewards are halved every 210,000 blocks until Stack block 1,050,000 is reached, upon which a fixed amount of 3,125 CityCoins will be released per block in perpetuity.

Stacks issuance schedule (Stacks)

How CityCoins stacking works

Stacking is very similar to Ethereum staking and requires participants to lock up digital assets in a smart contract for a voluntary period to earn rewards. The only difference is that the earnings are denominated in a different cryptocurrency. When you stake ether – the native cryptocurrency of Ethereum – you earn more ether as a reward. In contrast, CityCoin holders stack their CityCoins tokens to earn STX. The STX they earn comes from the portion of STX tokens deposited by miners, as previously described.

At this early stage, you can only receive CityCoins like MiamiCoin through mining. However, there are plans to list these tokens on exchanges in the near future.

In addition to earning STX tokens, people who stack their CityCoins can also generate bitcoin – providing a dual yield on their assets.

Like the mining process defined above, stacking occurs via the Stacks blockchain protocol.

What is a city wallet?

Each city where CityCoins has been launched has a special wallet called a City Wallet. This effectively acts as the city’s crypto treasury and is where 30% of all miners’ STX bids are sent.

The mayors of these cities can claim the funds in the City Wallet at any time and use the capital generated by cashing out of the tokens to improve the lives of their constituents. Better still, they can further stack the STX tokens accrued in the City Wallet to earn bitcoin.

What is MiamiCoin and NYCCoin?

Already, two cities in the United States of America have started accruing STX in their respective city wallets. These cities are Miami and New York City. CityCoins users have issued native tokens for each city:

In just under three months since MiamiCoinCoin went live, the protocol’s contribution to the city has grown to $20 million worth of STX tokens. It is worth mentioning that the city’s leadership has since gained control over this wallet.

Upcoming CityCoins

Austin, Texas has been touted as the next frontier for CityCoins, with plans to launch AustinCoin ATX seemingly in its final stages. However, unlike MiamiCoin and NewYorkCoin, the mayor of Austin, Steve Adler, has yet to endorse the ATX token launch.

Source: Coindesk
Original Post: What Is CityCoins and How Does It Work?

The Transhumanist Case for Crypto

If you want to live forever, you need a money fit for purpose. Bitcoin, for many, is the ticket. It’s the first, largest and most decentralized cryptocurrency. It’s widely adopted – from retail investors to pension funds to nation-states. It has a durable brand. There’s a case to be made that it’s the most recent “Lindy” invention, the idea that ancient phenomena are less perishable by virtue of being around the longest.

But who would want to live forever? As a historical fact, it turns out, many early adopters of cryptocurrency, that’s who! How fitting! Transhumanists, a broad category of people who want to improve the human condition – extending life or extinguishing death, spreading happiness and eradicating suffering through technology – looked at bitcoin as a powerful tool in their arsenal.

This article, part of CoinDesk’s Future of Money Week, is excerpted from The Node newsletter, CoinDesk’s daily roundup of blockchain and crypto news. You can subscribe to get the full newsletter here.

It’s not necessary to name names here, but many of crypto’s earliest advocates had ties to the transhumanist movement. Many influential “crypto natives” still do. There are many flavors of transhumanism: Posthuman, cyborgism, immoralism, biohackers, the singularity are all close cognates. The overriding idea is simply that individual human potential isn’t constrained by our bodies, our biology or even the evolutionary process of natural selection. There’s a pill for that!

Nanotechnology, biotechnology, information technology and cognitive science – sometimes abbreviated NBIC – are at the frontier of scientific advancement, pushing the limits of what’s physically and mentally possible. One day, we might have brain-computer interfaces, blending artificial and natural intelligence, perfecting our memories and infinitely expanding the scope of our knowledge. We might have pills to induce a state of bliss. Who knows?

“The purely technical obstacles to transhumanism I’d say are diminishing,” David Pearce, co-founder of the World Transhumanist Association (WTA), now known as Humanity+, has said. He’s right, to an extent. Using a mix of technologies, human beings are already overcoming their natural limits. Death may be a condition for all living beings now, but maybe not for the creatures we may become – or create.

Already, there are several for-profit corporations and nonprofit organizations that freeze human cadavers, of once-living people who hope to rise again in the near future when science has found a solution for disease, depression and death. New York University scholar of digital culture Finn Brunton called these people “extropians,” and chronicled the associations between cryptogenics and crypto.

More from Future of Money Week:

7 Wild Scenarios for the Future of Money - Jeff Wilser

The Downside of Programmable Money - Marc Hochstein

Ethereum in 2022: What Is Money in the Metaverse? - Edward Oosterbaan

The Future of Money: A History - Dan Jeffries

Who Sets the Rules of Bitcoin as Nation-States and Corps Roll In - David Z. Morris

Not able to know the state of the world they’d be born into, the “temporarily” dead need money that could outlast banks and even governments. Many were of a libertarian bent and thought the U.S. dollar was due to collapse. But you don’t need to be a futurist to think bitcoin will persist as long as the internet does. Sufficiently decentralized, bitcoin isn’t a hedge against inflation but societal collapse (in theory).

All of this seems like a gamble. But stay with me, and hold the ethical phone.

Transhumanism – literally “beyond human” – is as focused on setting artificial limits around the human condition as it is about additive technologies. Pearce, for one, looks to genetics as the realm for creating perfect human subjects. He notes that when he founded the WTA, the human genome wasn’t even decoded. Every year since then we’ve learned more about the basic building blocks of life – and eventually will be able to arrange them how we please. And why wouldn’t we choose perfection?

The “morphological freedom” to design babies to have favorable traits – to be smarter, more athletic, more outgoing than their peers – means identifying and dismantling bad genes. It’s literally artificial selection. In a similar way, Bitcoin founder Satoshi Nakamoto imposed an arbitrary limit around his monetary creation – 21 million BTC.

Some maximalists envision a world where all economic activity flows through the Bitcoin network, which would outcompete other currencies. Bitcoin has some advantages over the fiat system: It’s borderless, censorship-resistant and has settlement finality. It’s only grown in value since being released to the world. And, more importantly, it’s bigger than any government can control.

See also: The World Bitcoin Will Build | Cory Klippsten

In both instances of transhumanism and hyperbitcoinization, a tiny elite would rule. Bitcoin scarcity means that not everyone can share equally in the wealth, and its deflationary attributes reward the earliest adopters. Meanwhile, although Pearce and many transhumanists are broadly utilitarian and advocate for whatever would create the happiest humans (sometimes animals) in the future, he’s not a redistributionist.

In his book, “The Hedonistic Imperative,” Pearce argues that the world would be better if everyone was more like Microsoft co-founder Bill Gates, rich and blessed with good genes. Whatever Gates-like post-human comes next, which we will create using the most transformative technologies, would mean the rest of humanity is obsolete – unable to compete.

Not every bitcoiner is a transhumanist, and not every transhumanist is a eugenicist, but it’s worth looking at how the movements relate and speak to each other. One lesson from a decade of crypto innovation isn’t whether something is technologically possible – but whether there is the social and cultural will. What might be most Lindy of all is knowing that technology – always an extension of the self – may always escape our control.

Source: Coindesk
Original Post: The Transhumanist Case for Crypto

Powell and Yellen Talk Stablecoins, Inflation and Debt

This episode is sponsored by NYDIG.

Download this episode

On today’s episode of “The Breakdown,” NLW follows up on Twitter’s leadership change, covering a new privacy policy that some are saying has big implications for the platform. He also looks at Sen. Sherrod Brown’s letter to stablecoin issuers from last week and discusses Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell’s testimony before the Senate today.

See also: Bitcoin Turns Lower as Fed Chair Suggests Inflation No Longer ‘Transitory’

“The Breakdown” is written, produced by and features Nathaniel Whittemore aka NLW, with editing by Rob Mitchell, research by Scott Hill and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Dark Crazed Cap” by Isaac Joel. Image credit: Alex Wong/Getty Images News, modified by CoinDesk.

Source: Coindesk
Original Post: Powell and Yellen Talk Stablecoins, Inflation and Debt

Market Wrap: Bitcoin Underperforms as Ether and Other Altcoins Rise

Bitcoin was roughly flat on Tuesday while alternative cryptocurrencies such as ether and Solana’s SOL token were up about 5% over the past 24 hours. LUNA, the native token of the Terra blockchain, rallied about 13% as traders chased incentive programs.

Overall, trading conditions were choppy across global markets after the U.S. Federal Reserve Chair Jerome Powell suggested that monetary policy could tighten faster than expected – potentially a negative for speculative assets, including cryptocurrencies and equities.

Despite short-term price swings, some analysts remain bullish on bitcoin.

Latest prices

“As BTC is looking good to close November below the expected target of $60,000, investors are optimistic that the cryptocurrency will repeat its historic trend of ending the year on a stellar bullish note,” Nikita Rudenia, co-founder of asset management firm 8848 Invest, wrote in an email to CoinDesk. Rudenia has a $70,000 BTC price target by the end of this year.

Other analysts pointed to bearish bitcoin options activity as a point of concern. “Puts are getting more expensive as market participants turn their focus towards hedging spot [positions] or speculating on further downside. In a recent tweet, Genesis Volatility themselves noted a large amount of short-term put purchases,” Delphi Digital wrote in a Tuesday blog post.

Bitcoin dominance falls

Bitcoin’s market capitalization relative to the total crypto market capitalization, or dominance ratio, has declined about 10% over the past two months to the lowest level since September. The decline in BTC’s dominance reflects the recent outperformance of alternative cryptocurrencies (altcoins).

Some analysts view the rotation from bitcoin to altcoins as an indicator of greater appetite for risk among investors.

Bitcoin dominance ratio (CoinDesk, TradingView)

Ether outperforms

Ether, the world’s second-largest cryptocurrency by market capitalization, was approaching $4,800, near its all-time high, and was up about 5% over the past 24 hours. BTC was roughly flat over the same period. Technical indicators suggest further upside is likely for ether relative to bitcoin.

The chart below shows the ETH/BTC ratio, which is attempting to break above a five-month trading range. Two consecutive daily closes above 0.080 could yield further upside in ETH/BTC.

ETH/BTC ratio (Damanick Dantes/CoinDesk, TradingView)

Altcoin roundup

Relevant news

Other markets

Most digital assets in the CoinDesk 20 ended the day higher.

Notable winners as of 21:00 UTC (4:00 p.m. ET):

Notable losers:

Source: Coindesk
Original Post: Market Wrap: Bitcoin Underperforms as Ether and Other Altcoins Rise

Note to Brands: Crypto Isn’t Funny Money. It’s Community

In a mysterious message over Thanksgiving weekend, the Bored Ape Yacht Club tweeted out an image of a 3D-rendered shadowy Ape, wearing pink sunglasses and a green tracksuit. It was an Adidas track suit to be specific, with a BAYC logo on the left breast.

Another popular collection, PunksComic, whose derivative comic series that comes with fractional ownership rights to 16 CryptoPunks and whose initial non-fungible token (NFT) issue sells for over $27,000 at the time of this writing shared a similar image with one of their characters.

Sam Ewen, head of CoinDesk Studios, has spent over two decades in the technology, innovation and creativity marketing industry while working with many of the top brands in the world.

Another popular NFT collector/creator named GMoney also posted an image with his trademark silhouette wearing a hoodie and a crypto wallet address printed adjacent to the Adidas trefoil icon on the garment. All tweets had the simple text “/// 👀” next to them.

This all comes after a busy past few weeks for Adidas and its full-on jump into Web 3 with a land purchase/partnership in metaverse project The Sandbox and also announcing a collaboration with Coinbase with a simple tweet using the Web 3 crypto slang phrase, “Probably nothing.” Brands fail to understand that Web 3 is about community-based ecosystems, not just financial ones. And they are talking directly to the communities and influencers, not their wallets.

Read more: Facebook Steals Another Crypto Idea for Its Nonsensical Rebrand

When AMC cinemas announced that it was starting to accept crypto for ticket sales and concessions, with a specific shoutout to dogecoin holders that it is the next crypto on the list, it got some great press and some supportive comments. However, the movie theater chain seems to have done little to build a toolset to support crypto, nor does it seem to be an active participant in being part of the larger crypto conversation. AMC did it for the eyeballs.

It is not alone. Burger King offered a rewards contest to win either one of 20 bitcoin, one of 200 ether or 1 of 2 million dogecoin, but you needed a RobinHood account to claim the rewards (a marketing partnership at its purest), and it was not very decentralized. Even when Visa bought CryptoPunk 7610 for about $150,000 in August, it barely did much with it beyond a blog post and changing its public relations Twitter handle’s profile picture for one day to the punk avatar. With the CryptoPunk floor now at over $383,000, it may be one of the few brand moves where a marketing purchase gained value after launch.

What AMC, Visa, Burger King and many others (looking at you Arizona Iced Tea, Coca-Cola, Nissan) are missing is that the true value in crypto, and especially Web 3, isn’t in purchasing a funny type of money. It’s about the community itself.

Crypto enthusiasts have always wanted to get others into the ecosystem. In 2015, I gave my daughter and nephew paper wallets with $50 in BTC on them for a Christmas gift, less because I wanted them to trade it in for cash but because I wanted them to start to see how the foundational theories around money were changing and that they could be a part of the movement, too. Brands should be looking at participation in the communities as much as they want people to participate and engage with their brands.

Whether an owner of a Bored Ape, involved in a DeFi liquidity pool or a contributor to ConstitutionDAO, people want others to “ape-in” to the projects not just because it may pump their holdings, but because they get to spend time with a larger and larger group of like-minded collectors and investors and meet others who are “in the club.”

Spend time on Discord channels and users are talking about the project details. But many are also talking about where to vacation, what books to read, cars to check out and which shows they are watching. Just like anyone who has been holding bitcoin, ether or Cardano’s ADA for a few years, when you find your people you talk crypto. But you also talk about life just as much and how this movement is changing us as individuals and as a collective.

Read more: The Bored Ape Founders Haven’t Yet Joined the Yacht Club - Jeff Wilser

What mainstream brands are also not understanding is that the creators, influencers and entrepreneurs of the future are hanging out in these communities on Discord, Telegram, Twitter and other emerging Web 3 platforms. The more the brands engage these people now, the easier it will be to know them and work with them on future brand initiatives.

A few companies seem to be approaching it the right way.

Time Magazine has truly committed to its Web 3 initiative with an active Discord channel of over 8,000 subscribers, art drops with established and emerging artists, Twitter conversations and even a kids animated series based on an NFT artists’ collection. Anheuser-Busch seems to be taking the same route with its Discord server, having almost 5,500 users and a supposed Budweiser NFT drop to come soon.

Read more: Planet of the Bored Apes - Will Gottsegen

It’s a start, but just a start. These communities are full of smart, driven, generous people and ones that brands should authentically access and connect with now or pay exponentially later.

Back in 2016 when I owned a creative marketing agency, if I had told a brand that I could introduce it to a large group of hyperconnected people who are affluent, diverse, world travelers and who want nothing more than to align themselves with each other and the brands that support their ethos, lifestyle and journey with little more than a small financial investment and some spot-on community involvement, they all would have been ready to jump in.

Well, here they are and we are. Will brands take the plunge?

Source: Coindesk
Original Post: Note to Brands: Crypto Isn’t Funny Money. It’s Community

A16z Leads $28M Round for Privacy Coin Iron Fish

Iron Fish, a decentralized blockchain network that aims to create a cryptocurrency as private as cash, has raised $27.7 million in a Series A round led by Andreessen Horowitz (a16z) ahead of the network’s Dec. 1 testnet launch.

“While a number of Web 3 teams are now building developer-oriented privacy tools for blockchains, there’s also a need for mainstream privacy solutions that are accessible for everyday users,” wrote a16z general partner Ali Yahya, deal analyst Elena Burger and crypto partner Guy Wuollet in a blog post. ”That’s why we’re thrilled to invest in Iron Fish, a decentralized blockchain network using zero-knowledge proofs to create a user-friendly, private cryptocurrency.”

Other investors in the round included Sequoia, Electric Capital, MetaStable, Arrington XRP, Terra co-founder Do Kwon, Thesis CEO Matt Luongo and Anchorage co-founder Nathan McCauley.

San Francisco-based Iron Fish launched its first testnet in April and says it has since attracted nearly 2,000 self-identified miners to its community. A testnet is an alternative blockchain used for experimentation and testing, while a mainnet is used for real transactions.

Read more: New Privacy Coin Iron Fish Launches Testnet With $5.3M in Funding

The company is now launching an incentivized testnet that will reward member participation with leadership points that will lead to future mainnet Iron Fish coins.

The Iron Fish roadmap starts with the proof-of-work blockchain with native cryptocurrency and will then extend to include more assets, stablecoins and cross-chain bridges, including layer 2 support.

“Iron Fish is working toward becoming a universal privacy layer for all chains, unlocking a critical need that has previously been missing in the Web 3 ecosystem,” wrote a16z in its blog post.

Iron Fish was founded in 2018 by Elena Nadolinski, a former software engineer at Microsoft and Airbnb.

Source: Coindesk
Original Post: A16z Leads M Round for Privacy Coin Iron Fish

A New Asset Class: NFTs Set to Take Off

The history of alternative assets goes something like this: Someone creates something useful and then people realize these can be invested. Commodity futures, for instance, were invented as a way for farmers to lock in prices ahead of a harvest; 70 years later, the global derivatives market is worth hundreds of trillions of dollars. Musicians’ royalties were initially just a legal way for performers to ensure they got paid whenever their recorded music was played; now investment funds like Hipgnosis buy these royalty streams for hundreds of millions of dollars.

This dynamic repeats itself over and over again, from baseball card collecting to sports betting. The latest alternative asset class to emerge is non-fungible tokens (NFTs) and the wider GameFi ecosystem.

What perhaps makes the emergence of NFTs more profound than other alternative asset classes is the timing. The world is still gripped by volatility, uncertainty, complexity and ambiguity. A fourth wave of COVID is spreading around the world, bringing with it more economic disruption. Energy prices are spiraling and clogged up shipping is leading to an acute shortage of goods, all while companies report increasing rates of resignation and nobody to fill the subsequent vacancies. Interest rates are still at rock bottom despite galloping inflation.

In times of crisis, new asset classes emerge, forged on the anvil of necessity. Now, the nascent ecosystem around gaming NFTs is growing rapidly. What makes it so interesting is that it reflects the historical pattern of innovation-then-investment that leads to a new asset class. The innovation has come with the creation of blockchain-based gaming, with the play-to-earn model rapidly replacing the pay-to-play model. The gaming assets that then get created have a real and tangible value, despite only existing intangibly. Why? Because people want them to play games with.

Where are the games?

But something curious is also going on. While there are numerous blockchain and crypto game developers, very few of them actually have a game. X World Games (XWG) not only has a game out but has also made it available across platforms. Available on both web (blockchain) and mobile platforms, Dream Card is the first game that bridges Web 2.0 and Web 3.0. Moreover, Dream Card 1.0 and Dream Card 2.0 cover both player vs. player (PvP) and player vs. environment (PvE) modes as well as mobile and PC ends while remaining coherent with all in-game assets being transferrable. Dream Card is free to play, unlike other games that force a deposit of a rather large figure to join the fun. Players of Dream Card 2.0 play to earn, creating value in the process.

New ways of play-to-earn via NFTs

With its products already shaping up its metaverse and ecosystem, XWG’s user stats are soaring. It saw a 428% surge in active users after introducing NFT staking and is now one of the top 10 Binance Smart Chain (BSC) games according to data from DappRadar.

Dream Card 2.0 will feature 22 new Heroes in five roles, adding on top of the pre-existing 40 Heroes in Dream Card 1.0. Moreover, players will get to experience Dream Card 2.0 with enhanced gameplay and earning mechanisms: Players can now purchase NFT assets according to their preferences – could be a monster, a piece of land or even a set piece in the plot. Such purchases would in turn benefit players with lasting revenues generated by and in positive correlation with the game plots playing volume. On top of that, participating in each and every level of game plot will generate and reward the player a lottery ticket that’s designed for getting a chance to win their share at the Prize Pool.

Size and liquidity are important, as with any alternative asset class; the number of holders/buyers are always key factors for value.

As with any alternative asset class, it makes the most sense to own the infrastructure that supports it, as well as the assets – for example, commodity exchanges as well as the derivatives they host. XWG’s platform and its native token, along with the NFTs on its games, are the same: three different but complementary aspects of the whole ecosystem. Taken together they form the basis of a whole new asset class that’s bound to take off – again and always – first come, first served.

Source: Coindesk
Original Post: A New Asset Class: NFTs Set to Take Off

Bitcoin Declined Below $58K; Support Between $53K-$55K

Bitcoin (BTC) buyers failed to sustain Monday’s price bounce, although support around $53,000-$55,000 could stabilize the current pullback.

The cryptocurrency is down about 2% over the past 24 hours and is roughly flat over the past week.

The downward-sloping, 100-day moving average on the four-hour chart indicates a short-term downtrend. This means buyers have consistently taken some profit on rallies over the past month.

Recently, the $60,000 resistance level has been a key hurdle for buyers despite oversold readings on the charts. So far, support levels remain intact, which could establish a tight trading range between $55,000-$60,000 into the Asian trading day. BTC was trading around $57,800 at press time.

Source: Coindesk
Original Post: Bitcoin Declined Below K; Support Between K-K

Borderless Capital Launches $500M Algorand-Focused Fund

Borderless Capital is launching a $500 million ALGO Fund II to help develop projects built on the Algorand blockchain.

Read more: Citi Veteran Launches $1.5B Crypto Fund With Algorand as Strategic Partner

Source: Coindesk
Original Post: Borderless Capital Launches 0M Algorand-Focused Fund

Avalanche, Layer 1 Tokens Soared in November as Ethereum Fees Drove Competition

Interest in so-called layer 1 tokens heated up during November as several top blockchain protocols pushed incentive programs, while gas fees on Ethereum network remained near all-time highs.

“Layer 1″ refers to blockchains that run independently of other blockchains – as contrasted with “layer 2″ solutions that aim to speed up transactions on existing blockchains like Ethereum.

One such blockchain, Avalanche, saw its AVAX token rise 70% in November, the top performing layer 1 platform with a market capitalization of $10 billion or greater, according to data from Messari. Among the largest cryptocurrencies, AVAX was the second-biggest gainer overall, behind’s CRO token, which more than tripled in price during the month.

AVAX reached an all-time high in mid-November just after announcing a partnership deal with Deloitte to build more efficient disaster-relief platforms using the Avalanche blockchain.

The platform has also announced more than $600 million of marketing initiatives and incentives recently to spur growth on the network, possibly another factor in the price uptick.

Terra’s LUNA token price

Another alternative blockchain, Terra, saw its LUNA token rise 28% on the month, followed by Solana’s SOL, which rose about 5%. Notably, the gains came during a month when bitcoin, the largest cryptocurrency, slid 4.5%. Ethereum’s native cryptocurrency, ether (ETH), rose 7%.

“AVAX, SOL and LUNA are rallying along with other layer 1 protocol tokens, which have made huge gains as fees on the Ethereum network remain near all time highs,” said Clara Medalie, research lead at Kaiko, a market data provider.

Research from IntoTheBlock shows that transaction fees on Ethereum have continued to increase and are around $43 as of Nov. 27. Just a year ago, fees were around $1.15.

Ethereum gas fees (IntoTheBlock)Ethereum gas fees (IntoTheBlock)

With transaction fees continuing to increase on Ethereum, users have had to explore alternative blockchains with lower costs, according to Matthew Dibb, Stack Funds’ chief operating officer and co-founder.

Anto Paroian, chief operating officer at ARK36, a cryptocurrency investment fund, said blockchains like Solana are getting a boost because the market is betting on the gaming and play-to-earn sector to keep growing. Play-to-earn refers to video games where users can earn cryptocurrencies as rewards.

The metaverse

The Sandbox, a virtual world where players can build, own and monetize their gaming experiences using non-fungible tokens (NFTs), has seen its SAND token rise 236% on the month, while MANA, the token of virtual reality platform Decentraland, is up 65%.

Play-to-earn platform Axie Infinity was down on the month by 0.41%.

“That’s why blockchains that support these coins and ecosystems - such as Solana - are seeing so much uptrend,” Paroian said.

“The amount of hype, as well as projects being built in the metaverse, gaming and NFT spaces, is bullish for these blockchains that are designed to build dapps on top of,” said Alexandre Lores, an analyst at Quantum Economics. NFT refers to non-fungible tokens, which can represent interest in property, clothing, weapons or other items within games and virtual-reality worlds. A dapp is a decentralized application built atop a blockchain, such as automated cryptocurrency lending and trading platforms.

“These spaces are poised for 10x growth in the next few years regardless of BTC price action,” he added.

Paroian said neither Solana nor Avalanche are likely to dethrone Ethereum anytime soon, but “if ETH doesn’t take care of its gas fees problem, it is running the risk of becoming less and less competitive.”

Juan Pellicer, an analyst at IntoTheBlock, noted that the market capitalization of these coins is still relatively small compared to Ethereum’s $526 billion.

Stack Funds’ Dibb expects any further downside in BTC could lead to selling pressure for AVAX and SOL, especially since they’ve been bid up so aggressively in recent months.

Polkadot’s DOT token underperforms

While most layer 1 platforms saw gains over November, polkadot (DOT), saw a steep loss of 24%.

According to Pellicer, the reasons for polkadot’s underperformance aren’t clear.

Polkadot recently launched its first parachain auctions, which saw almost $3.5 billion collected by 10 hopefuls. The first coveted Polkadot parachain slot was won by decentralized finance (DeFi) platform Acala, which edged out Moonbeam for the first slot. Parachains are the individual layer 1 blockchains that run in parallel on Polkadot.

“A reason might be that now that their parachains are released, they are gaining gaining traction slower than traders’ expectations, since they are still lacking the volume and liquidity that other blockchains are currently seeing,” said Pellicer.

Edward Moya, senior analyst at the foreign-exchange broker Oanda, noted in an interview with CoinDesk that Cardano, which underwent a major upgrade in September known as the Alonzo hard fork, has struggled to attract massive projects, and its ADA token is down 16% on the month.

“Altcoins will have a tight leash on their trades while bets on bitcoin and ethereum should remain key holdings for most crypto investors,” said Moya.

Source: Coindesk
Original Post: Avalanche, Layer 1 Tokens Soared in November as Ethereum Fees Drove Competition

Libra Creator David Marcus Says He’s Leaving Facebook at Year’s End

David Marcus is leaving Facebook (now Meta) with the company’s libra (now diem) stablecoin yet to be fully launched.

He said Tuesday on Twitter he was stepping down as Meta’s crypto lead and leaving the company, suggesting he’d return to his “entrepreneurial” roots.

Marcus leaves the Diem project, first announced in June 2019, as it continues to face stiff regulatory headwinds.

Marcus, a former president of PayPal, first joined Facebook as the vice president of the company’s Messenger division. He was tapped to lead Facebook’s blockchain efforts in mid-2018.

Libra, initially an ambitious plan to make sending money across borders as easy as sending a text, was immediately met with scrutiny following its 2019 announcement. Marcus was the face of Facebook on Capitol Hill as the company sought the blessing of U.S. regulators before launching.

Plans for Libra were scaled back through a series of cuts and the exodus of key corporate backers before being rebranded as Diem. Last month, Novi, the Meta-owned crypto wallet subsidiary, launched a pilot project that relied on the Paxos-administered USDP stablecoin instead of diem. Even this scaled-down pilot was met with hostility from lawmakers.

A Meta spokesperson confirmed that Stephane Kasriel, another PayPal alum, will be the new head of Novi.

Source: Coindesk
Original Post: Libra Creator David Marcus Says He’s Leaving Facebook at Year’s End

7 Wild Scenarios for the Future of Money

Some predictions about the future of money are cautious, sensible, sober and grounded. These are not. To open our minds as to what the future might bring, we chucked the usual concepts like “most likely” or “bet on this.” Instead we wondered, what are some dark horse scenarios that maybe, just maybe, could revolutionize the way we think about money?

Here the focus is more on fun than functional, more possible than probable. Then again, we now live in a world where cartoon apes sell for $2.6 million, memes about dogs are worth billions, and a sovereign nation accepts bitcoin as legal tender.

This article is part of Future of Money Week, a series exploring the varied (and sometimes weird) ways value will move in the future.

1. Risk becomes tokenized

What if we could tokenize risk? If we do this in a clever way, we could reduce the overall risk in the system and avoid meltdowns like the financial crisis of 2008, says Ashleigh Schap, a decentralized finance (DeFi) investor and adviser at Uniswap, a decentralized trading platform.

Here’s how to think about it. Imagine if you, as an individual, have tokens that represent each of your risks and liabilities. A token for your car loan. A token for your home mortgage. A token for your leveraged margin trading account. If you roll up all of your individual risk tokens, that would give you a sense of your total risk.

Now zoom out the lens. Imagine aggregating all of the risk tokens by each person in the community, and then an entire industry, or even the entire economy. Because these tokens are all smart contracts – programmable money – this would let you “build risk into the system in a more fundamental way,” says Schap.

She contrasts this to the constraints of traditional finance, most famously in the collapse of 2008, where each company had its own siloed view of risk but they lacked a holistic picture of the overall risk to the system. By tokenizing risk? You can snap all the puzzle pieces together, and “smart contracts can basically assess the entire picture.”

Read more: The Future of Money: 20 Predictions

2. Cars spend money and buy their own insurance

Way back in February of this year, Elizabeth Stark, head of Lightning Labs, gave me this prediction: “Machines will pay machines, natively, instantly … Teslas will pay for charging with Lightning!”

That’s just one example. The possibilities are endless. “Imagine a machine at a factory, if it runs out of ink, it can order more,” says Schap. She then gives a spicier scenario. “Maybe you have a car or a truck that’s able to buy its own insurance,” she says. Perhaps the car has the ability to assess risk and make smart decisions. “If it’s raining, it buys a little more insurance,” says Schap.

She notes that in our current world, whenever you buy car insurance, “you’re paying for the insurance every day, even when you’re not driving the car.” You have a busy life. You don’t have time to deal with insurance companies every month, much less every day. But imagine if the car could constantly survey the risks – weather, traffic conditions, even neighborhood – and make constant tweaks to your insurance? (Just before it becomes fully sentient and dominates the world.)

3. You will pay for things without thinking about it at all

This could be here sooner than you think. A couple of weeks ago, I went to a Denver Broncos football game. The stadium had a beer stand that looks teleported from the future: First you scan your credit card, then you go through a turnstile to enter a room full of coolers. You take whatever beer you want, then you leave. No scanning of UPC codes. No interacting with any humans. As the attendant explained to me, an elaborate network of cameras and GPS micro-sensors ensures that you are charged for the correct number of beers.

Tarun Chitra, CEO and co-founder of Gauntlet and General Partner at Robot Ventures, imagines a shopping experience like this in the future but without credit cards, wallets or even phones. It will be driven by cryptocurrency and stablecoins – not a centralized player like Amazon – and somehow it protects privacy. “You go pick up your items and walk out,” says Chitra. You have an agreement with the grocery store, for example, where “you can automatically charge me if it’s less than $100.”

Read more: The Future of Money: A History - Dan Jeffries

4. The price of your dinner will be in sats

The idea of “buying a coffee with bitcoin” is now something of a punchline, at least in developed economies like the United States. But it will happen eventually, says Cory Klippsten, founder of Swan Bitcoin (and author of an op-ed for this “Future of Money” series). “The medium of exchange for bitcoin will not take off,” says Klippsten, “until a lot of people hold the majority of their net worth in bitcoin.” His logic? It makes no sense to spend your bitcoin “unless you have nothing else to spend.” And he thinks this scenario is inevitable.

“Nobody wants to spend bitcoin. It’s the best risk-to-reward bet in history,” says Klippsten. And yet. As a bit of foreshadowing for what the mainstream world could look like, he points to the precedent of OG bitcoiners who have the majority of their assets in BTC. They got rich off bitcoin. They HODLed their bitcoin. But at some point, inevitably, when push comes to shove, they need to spend at least some of their BTC to do things like buy a car or a yacht.

Klippsten predicts that bitcoin as a store of value will become so widespread, and so ubiquitous, that eventually people will need to spend their assets. He imagines a chart with two “S curves”: one for the adoption of bitcoin as a store of value and then one with bitcoin as medium of exchange. (S curve: It starts out gradual and flat, then dramatically shoots up, then goes flat again.) “We’re still on the flat part of the S curve for store of value,” he says, and when that skyrockets, people will then hop over to the medium of exchange S curve. He scribbles out a quick drawing on our call, and literally two hours after we spoke, he formalized the graphic and tweeted the following:

The upshot of all this? “By 2035, most goods and services in most places in the world will be denominated in Satoshis,” says Klippsten. He clarifies that the dollar and other fiat currencies will still likely exist, which means that you might see multiple prices on items, just like you do at international airports. The implication, of course, is that the price of BTC would soar in value. Klippsten’s guess: “The chance of bitcoin being less than $1 million in nine years is infinitesimally small.”

5. Tokens make cash go away

First, imagine a world where tokens are ubiquitous. As Jeff Dorman, chief investment officer at Arca, envisions in CoinDesk’s 20 Predictions, “I believe every company in the world will have a token in its capital structure in the next five-to-ten years.” These tokens are hybrids. They’re part quasi-equity, part loyalty program, and they’ll grow in value if the company becomes more valuable.

Then he takes the logic one step further. “We’ll also begin to see the digitization of illiquid real-world assets, like your home equity, your car, and your jewelry, as well as tokens that represent future liabilities like university tuition tokens and health care tokens.”

Here’s the kicker. Once every asset becomes digitized and liquid, says Dorman, “You’ll never need to own cash ever again. You’ll be able to stay 100% invested at all times, borrow against your assets as needed, and pay for common goods using your investments since they will be spendable blockchain-based assets. By bridging the gap between investment vehicle and payment vehicle, digital assets will ultimately eliminate the need for an asset that functions purely as money.”

Read more: Who Sets the Rules of Bitcoin as Nation-States and Corps Roll In - David Z. Morris

6. Your house is a bank

This is an offshoot of the “cars can buy insurance” scenario, with a twist. If you’ve been in crypto for more than five minutes, you’ve heard the phrase “be your own bank.” But Chitra wonders, what if your house could be its own bank? Or your car? He notes that in the crypto world, thanks to the magic of liquidity pools in DeFi, “everyone can be a lender if they want to be.”

Not only could everyone be a lender but potentially everything. “It could be the IoT [Internet of Things] device, it could be your car, whatever, it could be a building.” In today’s world, using something like a Real Estate Investment Trust (REIT) to borrow against your building is a manual, tedious, torturous process that involves lots of banking. “That will become almost instant,” says Chitra, “as every building can become its own bank.”

And in the true spirit of this exercise, Chitra lobs another thought experiment: “The richest entity of the world becomes a broken Tesla.” The Tesla breaks, it can’t work and it can’t earn fees in the future where it gets paid for being an Uber. In the process, the Tesla somehow realizes that “the only thing it can do with its money is trade.” Because the broken Tesla can’t do anything else, it slowly learns to trade, it excels, it becomes a super trader, and “you have this rags to riches story.”

Think that scenario is out there? Buckle up for the final one.

7. Money goes intergalactic

“Galaxy Brain” doesn’t do this scenario justice. It is literally inter-galaxy brain. Schap clarifies that this scenario is far, far, far out in the future, but thinks that “assuming we continue to develop technologically, and if we manage to become space navigators – and we’re headed in that direction – money will need to change, because time will change.” She then suggests an idea inspired by the sci-fi novel “Neptune’s Brood,” from Charles Stross.

If we’re trying to travel to another galaxy that’s 400 light years away, as Schap explains, “money will mean something very different when you get to that very faraway place.” Decades, centuries, or millennia might pass while you make the journey from Earth to another corner of the universe. What if money could somehow incorporate properties that would account for these dramatic changes in time?

“I think you’ll have difference classes of money,” says Schap. “You’ll have immediate money that you’ll spend on a planet.” Then there’s “medium-term” money, which would be “useful somewhere in our galaxy.” The final class is what Schap calls long-term “slow money,” which “is much more valuable, but the reason is slow is that it has to move across space and time in an interesting way.”

Coming soon, on Coinbase.

More from Future of Money Week

Money at the Speed of Thought: How ‘Fast Money’ Will Shape the Future - David Z. Morris

Universal Stablecoins, the End of Cash and CBDCs: 5 Predictions for the Future of Money – J.P. Koning

Money for Everything: A Future Where Every Inch of Culture Is Monetized – Will Gottsegen

Miami’s Multiple Money Visions – Michael Casey

Shiba Inu: Memes Are the Future of Money - David Z. Morris

7 Wild Scenarios for the Future of Money - Jeff Wilser

The Downside of Programmable Money - Marc Hochstein

Ethereum in 2022: What Is Money in the Metaverse? - Edward Oosterbaan

The Future of Money: A History - Dan Jeffries

Who Sets the Rules of Bitcoin as Nation-States and Corps Roll In - David Z. Morris

The World Bitcoin Will Build - Cory Klippsten

The Big Miss in the Biden Administration’s Stablecoin Report – Tom Brown

The Radical Pluralism of Money – Matthew Prewitt

Aligning Social and Financial Capital to Create Better Money – Imran Ahmed

The Transhumanist Case for Crypto – Daniel Kuhn

Let the Market Come Up With Better Money Tech - Jim Dorn

Stablecoins’ Tenuous Relationships With Banks - Steven Kelly

(Kevin Ross/CoinDesk)
Source: Coindesk
Original Post: 7 Wild Scenarios for the Future of Money

The Downside of Programmable Money

If smart contracts, the self-executing financial agreements that have drawn hundreds of billions of dollars in investment to blockchain networks, seem magical, then maybe it’s time to rewatch “The Sorcerer’s Apprentice.”

In the iconic segment of Disney’s 1940 animated film “Fantasia,” Mickey Mouse plays the titular character who learns a hard lesson about the dangers of automation. To avoid the drudgery of carrying buckets of water down castle stairs to fill a cauldron, Mickey dons his master’s magic hat and animates a broom to do his chore for him. The rodent dozes off, then awakens to find the anthropomorphic broom has been following his instructions all too literally, with disastrous results.

This article is part of Future of Money Week, a series exploring the varied (and sometimes weird) ways value will move in the future.

Skeptics of the idea of programmable money see similar risks in entrusting financial activities to code.

For one thing, hackers have drained some $685 million from various decentralized finance (DeFi) systems over the last 18 months, according to The Block, showing that at a minimum code needs to be thoroughly inspected before deployment.

Yet, to Steven Kelly, a research associate at the Yale Program on Financial Stability, software bugs aren’t the half of it.

While cryptocurrency was born partly as a rebellion against the bailouts that followed the financial crisis of 2008, Kelly sees the ultimate lesson of that era as the need for the discretion that smart contracts remove.

Read more: Who Sets the Rules of Bitcoin as Nation-States and Corps Roll In - David Z. Morris

CoinDesk recently chatted with Kelly about why he thinks programmable money is a boon during normal times, why it could create problems in market calamities and the difficulty of creating “kill switches’' for when things go awry. A lightly edited transcript of that conversation follows.

CoinDesk: When you consider the idea of programmable money, contracts that are set out in code rather than executed by humans, what do you see as the potential benefits? And what do you see as the downsides?

Steven Kelly: It’s sort of my natural inclination to split things into peacetime versus crisis time.

In peacetime, this is an unequivocal good. You’re just talking about faster, cheaper payments [and] less discretion, which means less room for human biases, less room for human error. Of course, this introduces all the [risk] of coding errors and protocol vulnerabilities, but since we’re talking about the future of money, we’re kind of assuming that gets worked out. And so you have the potential to streamline things, have payments happen when they’re supposed to happen, as opposed to “after forms get filled out and people press buttons and so-and-so gets back from vacation and remembers to return your call” and things like that.

There’s a huge potential in financial markets, as well. For instance, part of the disruption of March 2020 was literally people just going into their home offices where it’s a different phone number, and the trades just weren’t happening as quickly because people literally weren’t answering phones. Those kinds of things can happen in peacetime, too, because somebody’s on vacation or just because legacy systems are slower. [Processes] can be quickened and made more efficient, and you reduce the cost, basically, of the float.

But in crisis time, I get nervous. I get nervous about this idea because I’m dubious of the notion that you can pre-program all the exigencies that may occur in a crisis cycle.

In my Twitter thread from Sept. 21 on the systemic risk of smart contracts, for instance, some of the pushback [amounted to], “We in crypto, we programmers, we’re thinking about this, and we know that we need central actors, sometimes, in crisis. We can code in certain contingencies when certain things happen in the market, outside of, you know, x range or whatever.”

And I just don’t buy that at all. I believe what they’re saying. I don’t believe it’s enough.

Read more: The Future of Money: 20 Predictions

The stock market peak in 2007 was after the failure of the Bear Stearns hedge funds [one of the earliest signs that the U.S. subprime mortgage market was unraveling]. You just can’t program in, “OK, if the market’s doing this, then this is going to happen.” You can, to some degree, but you’re always going to miss the next crisis. You can’t preprogram the exigencies of a crisis.

We as a society have decided, when it’s war time we sort of let these failures slide, they sort of have a public good purpose. Like I had mentioned in my thread, banks used to just stop giving you your money back in a crisis. You’d go to get your deposit and they would say, “sorry.” That was not legal. It was never legal. And when this went to court [for example, in 1857, in the case of Livingston v. Bank of New York], the courts basically just said, “Well, if everybody’s doing it, then we’re not going to let one bank be charged for this.” Because basically the courts understood the exigencies of a crisis. And we sort of let illegal things happen for the greater systemic good. And that’s the kind of discretion that is sort of antithetical to smart contracts and programmable money.

Read more: The Future of Money: A History - Dan Jeffries

Yet, if these exigencies aren’t programmed in, and people get their money out, doesn’t that get us through the crisis faster? Wouldn’t it be better to just force us to rip the Band-Aid off?

No, that’s just incredibly costly. There are incredible costs to financial crises and bankruptcies and disruptions to the financial system functioning. Because we can say, “This is a bad bank, we want it to go away, we want a good bank to come up in its place.” But in the time between a good bank, with lots of information about customers, failing, and a new bank arising, and re-gathering all that information about those customers and they can then make loans ... that’s incredibly damaging [to have a lapse in lending activity]. So we want to let those banks fail if they’re insolvent, but we don’t want to do that like that [snaps fingers]. If Lehman could have failed over the course of a year, that would have been great. At least in isolation, it would have calmed [the markets].

That being said, I think there is some nuance to this. Because another thing that happens in a crisis is that once an institution is stigmatized, or maybe they’re the main focus of the media as an institution that’s going to falter, they start getting collateral calls. Let’s say you’re Bear Stearns and you’re in the news now and your liquidity is in question. If I’m a counterparty to Bear Stearns, nothing has necessarily changed in the market other than I’m hearing this news about Bear Stearns. I’m going to go to Bear Stearns and say, “Hey, you know what? I don’t like your marks. Now I want a little bit more collateral.” And if you’re Bear Stearns and you refuse, well, then the next headline is “BEAR STEARNS CAN’T MAKE COLLATERAL CALL.”

And the news story will cite “people familiar with the situation.”

Right! [Laughs] So there’s an advantage to smart contracts here. This is the other side of it. Bear can say, “Well, our smart contract’s handling that. Nothing has changed in the market, our [credit default swap] is here, and the collateral is here, so this is what the margin call is, and you can’t refute that.” So there’s this sort of give-and-take, because as soon as a player is weak, markets will say, “Okay, let’s get some collateral from them, because we know they can’t refuse. And let’s stop paying our margin calls on our other trades with them [where] we owe them some collateral, and let’s conserve our collateral. And let’s just start making calls and make sure they can still meet those calls.”

Is there any kind of a hybrid model that you could foresee where you would get these benefits in normal times, while mitigating the downsides in times of stress?

You know, it’s really hard because, like I said, none of this is formalized. We sort of let illegal things happen. No one is going to formalize, “when [Federal Reserve Chairman Jerome] Powell says it’s okay to do illegal things, you can do illegal things”! So it’s very hard to formalize ex ante. So I just worry that [a crisis involving smart contracts] will unfold too fast, ex post [facto], before we can be ready for it.

I don’t want to stifle this innovation either. And I think there are huge benefits to be had. I want the central bank and others to be able to keep up, and these financial institutions. That’s the other thing: It’s not just crisis-fighter discretion. It’s crisis fighters within private institutions. It’s Goldman Sachs who gets to choose to ignore emails and not answer phone calls. And we kind of like that as a society.

A lot of the conversation now with programmability has to do with central bank digital currencies (CBDC). Couldn’t presumably a central bank have some kind of a kill switch, so contracts would be automated but there would be a “break the glass” option?

This is another thing that comes up even from DeFi folks. They say, “we have some sort of centralization in a crisis. Put in somebody who’s operating a kill switch, and they only get this discretion in a crisis.” But the problem, and this is a little bit of an irony, is that you need some decentralization. Yes, you can give that kill switch to the Fed. But Goldman is never going to go to the Fed and say, “Hey, we really can’t make a margin call today. Can you flip the kill switch on Citigroup for 48 hours and buy us some time?” That’s never going to happen. But if Goldman does it, then we all just kind of look the other way. And, and we say, “oh, you know, the marks were bad.”

Even accounting itself can be complicated, because stuff that’s marked to market all the time, it’s been marked to the price it’s trading at, in a crisis, all of a sudden [the banks holding the assets] will say, “You know? We’re not going to mark this to market any more, we’re going to re-evaluate this.” We see huge chunks of assets move from the trading book to the held-to-maturity book, which are accounted for differently. Another thing we see is [assets classified as] Level 1, which is “we take a market price, and that’s how we keep it on our books,” move it into Level 3, which is like mark-to-model. “We decided that the prices aren’t representative and we want to mark [the asset] to our model.”

The other thing that happens is the FASB [Financial Accounting Standards Board] comes out and says, “You know what? You guys don’t have to mark it to market so much. Don’t worry about it. If it’s illiquid, we’re going to change our standards. Here’s some new guidance.” And all that gets lost, you know, if it’s all pre-programmed.

Like I said, even in a crisis, there are pros and cons to this. Because in a purely programmed world you can’t prey on the weak advantageously as a counterparty, but also the strong can’t further draw a moat around themselves.

UPDATE (Dec. 1, 18:52 UTC): Fixes typo in sixteenth paragraph.

(Kevin Ross/CoinDesk)
Source: Coindesk
Original Post: The Downside of Programmable Money

Ethereum in 2022: What Is Money in the Metaverse?

Ethereum is a smart-contract blockchain focused on building a secure, decentralized environment to host applications of all types. The past year, decentralized finance (DeFi) and non-fungible tokens (NFT) have taken the stage to show the world the possibilities that can arise from blockchain technology. However, scalability products that can increase performance in response to changes in processing demands are starting to unlock the vast potential Ethereum holds, and its co-creator, Vitalik Buterin, has his eyes set on decentralizing social media, gaming, governance and more.

In its infancy, Ethereum has largely become host to marketplaces for trading and lending crypto assets (Uniswap and Aave) and buying or selling digital art (OpenSea). The introduction of second-layer platforms built on top of Ethereum, like Arbitrum and Optimism, and technological solutions like ZK rollups, will drag down transaction fees and open Ethereum to decentralized social media platforms like Reddit.

This article is part of Future of Money Week, a series exploring the varied (and sometimes weird) ways value will move in the future.

The common theme among all use cases will be the need for users to own and spend Ethereum’s native asset, ether.

Ether is the key to unlocking blockspace on the Ethereum network, whether that includes deploying new applications, using existing applications or sending tokens between different wallets. The native asset is to the network what gas is to a car. Post-EIP 1559, blockspace consumers buy and burn the asset to participate in the digital economy. In the near future, ether will also be used to stake and secure the network.

Read More: The Evolution of Ethereum’s Monetary Policy

Arising from its usefulness as gas, ether has become a unit of account and the most common pairing on decentralized exchanges (DEX).

What is money in the metaverse?

If Ethereum, alternative base layer protocols (i.e., Solana and Avalanche) and “the metaverse” are ultimately successful, the definition of money will become much broader than its fiat limitation today. We are already seeing protocols raising capital, and investors measuring their portfolios against ether instead of dollars or even stablecoins (tokens pegged to the value of a fiat currency). However, the use of ether as money does not discredit fiat, stablecoins and other stores of value. It is simply a complement – and one that could potentially become a currency of the metaverse.

Read More: A Crypto Guide to the Metaverse

Crypto assets, including ether, are still much more reflexive to demand than stablecoins and dollars, making them a better investment than a currency (for now). However, the larger the Ethereum ecosystem grows, the better the currency ether becomes.

Currently, speculators far outweigh actual blockchain users, but a blossoming ecosystem is changing that as ether can be used for DeFi, NFTs, validation, social media and more. In fact, in Coinbase’s Q3 earnings report, the company highlighted that it has seen a major shift toward people actually making use of blockchain technology by taking their tokens off exchanges.

The chart below shows how on-chain users have grown alongside new Coinbase accounts, signaling users are genuinely interested in interacting with applications on Ethereum. Cheaper alternatives to the Ethereum mainnet, or live version, have gained even more traction, with Polygon flipping mainnet in active users for a single day early in October. Additionally, Arbitrum has onboarded 275,000 users looking for cheaper blockchain interactions.

Coinbase verified users and active on-chain users grow simultaneously. (Coinbase)

Tokenization of assets and composability between DeFi applications are just beginning to create open, tradable markets for assets that were once illiquid. Assets that can be traded against each other, used as collateral or sent to any part of the world in an instant, start to behave a lot more like money than property or stores of value.

According to Julien Bouteloup, founder of Stake Capital and core developer at decentralized exchange Curve, the Web 3 workforce has shown significant interest in being paid in token equity over stablecoins. While this could be a side effect of the bull market and rising valuations, employees are likely genuinely interested in being an owner of the projects on which they work.

What’s next for the value of ether?

Play-to-earn gaming has likely just started, and Ronin-based NFT game Axie Infinity is already generating billions of dollars in annualized revenue. Users throughout the world are living off income from the game, with revenue making up a notable piece of the Philippines’ gross domestic product. The connection between gaming and finance is growing closer, highlighting just one aspect of a more digitalized world.

Read more from “Future of Money Week”: Who Sets the Rules for Bitcoin as Nation-States and Corps Roll In - David Z Morris

If today’s trends are carried into tomorrow’s future, the world will be more financialized than ever. It’s too early to tell whether this will be a net positive for humanity, but crypto and DeFi have given a glimpse into the good and bad that come with tokenization.

Airdrops and equity distribution (when done correctly) have distributed wealth much more freely and fairly than corporations have done, historically. However, the other side is equally true as scams and exploits show how greed can be magnified through tokenization and the anonymous economy.

For good or bad, the definition of money will continue to become murkier as the digital economy grows, just as it did with the creation of credit cards and online payments and the move away from paper money. This fits perfectly with the narrative of the metaverse, where the line between the digital world and real life becomes thinner and thinner.

More from Future of Money Week

Money at the Speed of Thought: How ‘Fast Money’ Will Shape the Future - David Z. Morris

Universal Stablecoins, the End of Cash and CBDCs: 5 Predictions for the Future of Money – J.P. Koning

Money for Everything: A Future Where Every Inch of Culture Is Monetized – Will Gottsegen

Miami’s Multiple Money Visions – Michael Casey

Shiba Inu: Memes Are the Future of Money - David Z. Morris

7 Wild Scenarios for the Future of Money - Jeff Wilser

The Downside of Programmable Money - Marc Hochstein

Ethereum in 2022: What Is Money in the Metaverse? - Edward Oosterbaan

The Future of Money: A History - Dan Jeffries

Who Sets the Rules of Bitcoin as Nation-States and Corps Roll In - David Z. Morris

The World Bitcoin Will Build - Cory Klippsten

The Big Miss in the Biden Administration’s Stablecoin Report – Tom Brown

The Radical Pluralism of Money – Matthew Prewitt

Aligning Social and Financial Capital to Create Better Money – Imran Ahmed

The Transhumanist Case for Crypto – Daniel Kuhn

Let the Market Come Up With Better Money Tech - Jim Dorn

Stablecoins’ Tenuous Relationships With Banks - Steven Kelly

(Kevin Ross/CoinDesk)
Source: Coindesk
Original Post: Ethereum in 2022: What Is Money in the Metaverse?

Let the Market Come Up With Better Money Tech

Twenty-five years ago, in the dawn of electronic money, Federal Reserve Board Chairman Alan Greenspan presented a paper at the U.S. Treasury conference on “Electronic Money and Banking: The Role of Government,” where he argued that the future of e-cash will depend on the private sector’s “flexibility to experiment, without broad interference by government.” The COVID-19 pandemic has hastened the transition from paper currency to e-cash. People still want cash, but increasingly in digital form stored on mobile wallets rather than in bill folds.

China has already closed the door on private, market-based cryptocurrencies to protect the state’s stake in creating a central bank digital currency (CBDC). There is little doubt that eventually all major central banks will create their own digital currencies. The question is whether governments will allow private digital currencies to emerge and compete with these official digital media of exchange, or follow in China’s footsteps by banning private, market-based substitutes.

This article is part of Future of Money Week, a series exploring the varied (and sometimes weird) ways value will move in the future. James A. Dorn is vice president for monetary studies at the Cato Institute and editor of the Cato Journal.

In thinking about the future of money, it is critical to get the relationship right when it comes to money, the market and the state. There would be gains from allowing a parallel private system for digital currency beside CBDCs, and letting people be free to choose. The market discovery process could then help determine the future of money, rather than give the state the upper hand.

Private monies emerged far before central banks via decentralized decisions by a network of traders to adopt a widely accepted good to act as a medium of exchange. Over time, gold and silver coins replaced cowrie shells and other crude forms of money. Money became more abstract with the introduction of paper currencies and checks, and it became centralized.

By and large, today, currency is a pure fiat money. Its value is solely dependent on keeping its supply in line with demand. The official money network is not easy to compete with; governments are not eager to have their currency monopolies disturbed by private entrepreneurs offering superior alternatives.

Yet, there is no reason to fear the spontaneous development of alternatives to discretionary government fiat money. Allowing free competition within a genuine rule of law that safeguards property rights – including the right to a sound currency – is the best way to encourage innovation and progress. A monetary system based on trust is an important foundation for economic and social harmony. Allowing a free market in ideas and experimentation, whether it be for money or other institutions, generates new information that is lost when the state bans competition, which is best understood as a Hayekian discovery process.

The new frontier of cybercurrency and blockchain should not be restricted by overreaching government bureaucrats who want to protect their turf and maintain the status quo, or by bankers who don’t want competition in the delivery of financial services. If we are to gain the benefits of fintech and the information revolution, doors to an innovative and more adaptive monetary system must remain open while maintaining sufficient regulation to ensure a transparent and orderly payments system.

See also: Gary Gensler Says Crypto Is a ‘Wild West.’ Others See Pure Capitalism | Opinion

The right balance between state and market, therefore, is essential in providing an institutional environment that promotes freedom and responsibility – and extends the range of choices open to people. Tilting that balance toward the private sector will more likely develop a robust monetary system than placing a heavier load on discretionary central banks issuing fiat money, whether paper currency or digital cash.

That idea is reflected in a recent study from the Bank for International Settlements, in which the virtues of CBDCs are noted while recognizing the risks from a lack of private alternatives:

The ultimate benefits of adopting a new payment technology will depend on the competitive structure of the underlying payment system and data governance arrangements. The same technology that can encourage a virtuous circle of greater access, lower costs and better services might equally induce a vicious circle of data silos, market power and anti-competitive practices. CBDCs and open platforms are the most conducive to a virtuous circle.

Instead of following China’s practice of cracking down on cryptocurrencies, the United States and other open societies should follow the market and see whether it can offer better alternatives than another government fiat money unconstrained by any monetary rule.

More from Future of Money Week

Money at the Speed of Thought: How ‘Fast Money’ Will Shape the Future - David Z. Morris

Universal Stablecoins, the End of Cash and CBDCs: 5 Predictions for the Future of Money – J.P. Koning

Money for Everything: A Future Where Every Inch of Culture Is Monetized – Will Gottsegen

Miami’s Multiple Money Visions – Michael Casey

Shiba Inu: Memes Are the Future of Money - David Z. Morris

7 Wild Scenarios for the Future of Money - Jeff Wilser

The Downside of Programmable Money - Marc Hochstein

Ethereum in 2022: What Is Money in the Metaverse? - Edward Oosterbaan

The Future of Money: A History - Dan Jeffries

Who Sets the Rules of Bitcoin as Nation-States and Corps Roll In - David Z. Morris

The World Bitcoin Will Build - Cory Klippsten

The Big Miss in the Biden Administration’s Stablecoin Report – Tom Brown

The Radical Pluralism of Money – Matthew Prewitt

Aligning Social and Financial Capital to Create Better Money – Imran Ahmed

The Transhumanist Case for Crypto – Daniel Kuhn

Let the Market Come Up With Better Money Tech - Jim Dorn

Stablecoins’ Tenuous Relationships With Banks - Steven Kelly

Source: Coindesk
Original Post: Let the Market Come Up With Better Money Tech

Consensus 2022 - Events Page

Consensus 2022

June 10-12, 2022

Consensus will return to an in-person format and be held in Austin, Texas, for the first time ever. Since 2015, Consensus has been recognized as the most influential event in cryptocurrency and blockchain. Consensus will bring together thousands of attendees to hear from the most sought-after thought leaders and experience a wide range of keynotes, exclusive panels, workshops, and networking opportunities. The festival-style event will be held June 10th - 12th, 2022, with the Austin Convention Center as its hub, while other locations throughout the city will host a variety of additional programming from CoinDesk, the World Economic Forum, Coin Center and other partner organizations.

Source: Coindesk
Original Post: Consensus 2022 - Events Page

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Bitcoin Rebound, Shiba Inu Explodes, Buying 7,000 BTC, Shiba New Egg, Invesco BTC ETN & Uhhh....Ok

Source: YouTube: The Modern Investor
Original Post: Bitcoin Rebound, Shiba Inu Explodes, Buying 7,000 BTC, Shiba New Egg, Invesco BTC ETN & Uhhh....Ok

Indian Finance Minister Says Monitoring Crypto Ads; Not Weighing Ban

The Indian government is closely monitoring crypto advertisements, but is not weighting a ban on crypto ads at the moment, Finance Minister Nirmala Sitharaman said on Tuesday.

Read more: India Has No Plans to Recognize Bitcoin as Currency; RBI Working on CBDC Rollout: Reports

Source: Coindesk
Original Post: Indian Finance Minister Says Monitoring Crypto Ads; Not Weighing Ban