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| What you need to know today in crypto and beyond March 15, 2021 Sponsored By: If you were forwarded this newsletter and would like to receive it, sign up here.
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Top Shelf Today's must-reads
INDIA RETREATING? Discussions for proposed legislation that would usher in a blanket ban on cryptocurrency use in India are in the final stages, according to an unnamed senior government official quoted by Reuters. Issuance and possession of cryptocurrencies are expected to be criminalized in India under the bill, which the official expects to pass through Prime Minister Narendra Modi’s majority-controlled parliament.
CHINESE PATENTS Chinese companies dominate a list of top blockchain patent holders. According to Clarivate’s Derwent World Patents Index, Ant Group has 2,298 blockchain patents, having added 586 in 2020, a 33% decline from the 880 filed the year before. In second place, Shenzhen-based conglomerate Ping An Group filed 1,215 patents in 2020. IBM, the only non-Chinese name in the top-10, came fourth with 647 filings.
MINERS UP Nasdaq-listed Canaan Creative says orders for its cryptocurrency mining machines are rising amid sky-high prices for bitcoin. The China-based company said in a statement that pre-sales of mining machines to the North American market have reached about 120,000 units, up 17% from mid-February.
OAKLAND B’s Fans of the Oakland A’s, a Major League Baseball team, can now rent a private, six-person suite for the cost of one bitcoin, the California club announced Sunday. But the offer ends April 1, and watch out for price movements. “The price of a season suite may fluctuate depending on when it’s purchased, which adds to the excitement,” said the A’s president, Dave Kaval.
– Ben Schiller
Sound Bite Overheard on CoinDesk TV
Clean vs. Dirty Bitcoin Not all bitcoins are created equal in the eyes of institutional investors, according to “Shark Tank” star Kevin O’Leary.
Institutions want greater transparency about where and how bitcoin is mined, raising the prospect that only some of the supply will end up in Wall Street custody, O’Leary said Monday on CoinDesk TV’s “First Mover.”
Also known as “Mr Wonderful,” O’Leary has changed his mind about bitcoin as an asset class, now weighting BTC at 3% of his personal portfolio. But he said he doesn’t want to buy bitcoin mined in a way that causes energy waste and environmental damage.
“I want to make sure my coin is mined efficiently,” he said, comparing dirty bitcoin to “blood diamonds.” That could preclude buying bitcoin mined in China, for instance, which is known for powering its mining with coal-derived electricity.
O’Leary’s comments suggest the recent influx of traditional investors to the bitcoin market could revive an old debate, if for different reasons.
For years, there has been talk of newly mined, “virgin” bitcoins fetching a premium over units that passed through multiple wallets. Supposedly, buyers wanted to avoid any taint from coins that may have been used in illicit darknet marketplaces.
If true, this would mean bitcoin is not truly fungible, or interchangeable, meaning it lacks one of the fundamental properties of money. However, evidence of virgin bitcoin premium has been largely anecdotal, and many market observers have found the idea dubious.
If O’Leary is right, however, Wall Street’s environmental conscience – or at least, its desire to project one – could lead to a new differentiation between supposedly fungible coins.
The founder of a mutual fund company, a venture capital firm and an exchange-traded fund (ETF), O’Leary noted that many institutions have two committees deciding on asset allocations these days: an investment committee and a sustainability committee.
Bitcoin needs to satisfy stakeholders on both before companies are going to jump in, he argued.
“I don’t think the community realizes how big this issue is going to become,” he added.
O’Leary said he plans to be active in the mining space, partnering with miners that want to reduce their carbon footprint.
He predicted that some institutions may want to mine their own BTC supply, to assure provenance for their clients.
On a positive note, O’Leary said only 10% of people at financial institutions who want to invest in the premier cryptocurrency have done so yet, suggesting big unmet demand and future price rises.
– B.T.S.
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Introducing The Hash, news analysis on CoinDesk TV From the world leader in crypto news and events, the all-new CoinDesk TV covers the rapidly evolving world of digital finance and its role in the global economy.
We cut through the hyperbole and confusion to explain what’s happening in this fast-changing industry and why it matters to investors, companies and governments.
On The Hash, a daily panel show, CoinDesk journalists Zack Seward, Benjamin Powers and Will Foxley choose five of the day’s big stories to hash out and analyze. With a personality-driven, fast-paced, entertaining format, it presents themes ranging from serious to fun.
Watch "The Hash" daily on YouTube or CoinDesk.com.
Off-Chain Signals What others are writing....
DC Comics, the owner of Batman and Superman, is considering getting into NFTs (Decrypt).
– B.T.S.
SPONSORED BY NEM GROUP Symbol from NEM, the next-generation public blockchain, launched March 15th, marking a milestone in NEM’s vision for a new economic and digital system. Boasting enterprise-grade security and programmability, Symbol smooths business friction and increases the flow of data to supercharge the creation, exchange and protection of assets. NEM Group - comprising NEM Software, NEM Trading, and NEM Ventures - nurtures a strong and healthy ecosystem to shape the development and future of blockchain technology for generations to come.
The Takeaway Putting the news in perspective
Crypto Doesn't Pay I like the classic definition of money, it makes sense: method of payment, way to store value and unit of account. That all seems pretty smart.
But I also like the way I defined money when I got my first wages at a southeast Kansas J.C. Penney's department store in the 1990s: Money was what my time turned into when I let someone else tell me how to use it.
Also known as a paycheck.
This is, in fact, the way I think most everyone I know in fact defines money (as we know, hardly anyone really thinks about it).
So, to me, crypto isn't really money yet because the cryptocurrency industry isn't doing a very good job paying people wages. It's barely even trying.
Buterin’s bootstrapping
In Camila Russo's readable and entertaining book on the origins of Ethereum, "The Infinite Machine," we meet a young Vitalik Buterin before he could even really code. Baby Buterin was fascinated by bitcoin and the possibility of money native to the internet, and he wanted some.
But he was so young! He didn't have money of his own to speak of and he definitely didn't have access to the fiat on-ramps of the internet, like a credit card. So, Buterin started asking around to see if there was some actual work he could do. It turned out that the best way for Vitalik to earn some BTC was to write useful explanations about the technology. Eventually this work would lead him to founding Bitcoin Magazine.
There's a larger lesson there. It's not really money until people can get it in a paycheck of some kind.
For crypto, wages would create an additional benefit: People could get into its economy and completely sidestep the traditional financial system.
Machine work A certain kind of crypto denizen will have been reading the last few paragraphs and thinking something along these lines: In its earliest days, turning work into crypto was no problem. A technically adept user could run the Bitcoin software on a PC and earn a steady stream of bitcoin. The same went for Ethereum for a long time as well. Those heady days are long past.
Others have come along to make similar promises but the facts don't live up to the hype. I recently reported that the forthcoming CHIA might be the easiest cryptocurrency for normal people to mine, but that weekend I tried to join the testnet and check out that claim. It went badly.
But honestly, mining is beside the point. Staking and mining are only "work" in the most abstract sense, not in the way that real people, people who think in paycheck terms, think about work.
Work – in the minds of enough people that it's not really worth arguing the point – is human time for hire.
Crossing the chasm If crypto wants to cross the chasm with regular folks, it needs to provide more ways for people to earn it with actual work. I'm not talking about full-on jobs. It's too soon for that. What's missing is a place for side hustles that earn crypto, like what Vitalik did in writing helpful blog posts via crowdsourced commission.
We saw some hints of that kind of economy in August when one of our contributors presented the story of Filipino grandmas playing Axie Infinity for far too many hours each day. That one was more than a little dystopian, obviously, and not, I'm pretty sure, anything Axie really had in mind when it built the game.
The blogging sites Steem, Hive and Cent have also paid creators for content to some degree, but that's also just one kind of work. More are needed.
There must be ways to connect talented people around the world with people who need work done. It's cool to see folks with skills like copyediting and design, who have time for a little side work but would rather earn their way into this economy than spend working on the crypto-powered freelancing market Fiverr folks. EthLance and FreelanceforCoins are nice starts, as well.
But it doesn't feel like these are as crypto as they could be.
One idea: What about a crowdsourced meme factory? Imagine: A founder could post a message a company wanted to get across and invite memesters to submit concepts. Each memester would have a reputation score, and everyone who submitted would get paid something for taking part, but those with better reputations would earn slightly more (and the ones with bad track records would earn nothing).
Then a few memes would get voted up by other users, earning more, until the founder picked however many the team wanted to use on Crypto Twitter or wherever, and each of those selected would get the real payday.
Boom.
An actual economy.
Side note: I'm sure everything above raises all kinds of legal and tax issues, particularly in the U.S., whose regulators are determined to keep the online world as dull as possible. No doubt, no doubt. But look, I'm a writer, not an attorney nor a founder, and those issues make me very sleepy. Regardless, the larger point stands.
Until crypto finds ways to get over any and all obstacles to regular people turning time into money, it will remain an industry that exists somewhere down the rabbit hole.
– Brady Dale
What are bitcoin and ether's value propositions for investors? A new report by CoinDesk Research explains how the two most popular cryptocurrencies by market capitalization behave in the market, how their infrastructure differs, and what on-chain metrics say about them.
Download "Bitcoin + Ether: An Investor's Perspective" from the CoinDesk Research Hub.
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