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Welcome to The Node! This is Marc Hochstein to take you through the latest crypto news. In today's news: Influential Ethereum researcher proposes dramatic redesign of network; bitcoin "shrimps" are buying as whales sell; crypto AML specialist Notabene raises $14.5M; AI firm Genius Group adopts bitcoin as primary treasury asset. The Takeaway: Ethereum creator Vitalik Buterin says Polymarket's breakout success points the way to a new era of "info finance." I've excerpted a few salient passages from his fascinating blog post below.👇 |
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Ethereum Researcher Floats Big Redesign |
At Ethereum's Devcon conference in Bangkok on Tuesday, Ethereum Foundation researcher Justin Drake revealed his proposal for a major redesign of Ethereum's consensus layer called "Beam Chain." Beam Chain is "a proposed redesign of the consensus layer that incorporates all of the latest and greatest ideas from the Ethereum roadmap," Drake said in a speech at Bangkok's Queen Sirikit National Convention Centre. Drake's presentation was highly anticipated, coming after months of speculation online and in crypto forums that the influential Ethereum researcher, who was instrumental to the 2022 Merge upgrade, was working on something major. Drake delivered his remarks to a packed convention hall, with onlookers spilling out into the hallway outside of the event's main stage. The Beam Chain won't entail any immediate changes to Ethereum, or even anything radically different from what's already on the chain's roadmap. It does, however, propose a major change to how Ethereum's future upgrades are organized. |
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Bitcoin 'Shrimps' Buy as Whales Sell |
Bitcoin's (BTC) blockchain data reveals that small addresses continue to accumulate BTC, even as whales stick to their "sell on rise" strategy. BTC, the leading cryptocurrency by market value, nearly tested the $90,000 threshold early Tuesday and has since pulled back to trade near $87,400 at press time, still up 27% on a seven-day basis, according to CoinDesk data. The 40,000-foot view tells us that the recent buying pressure has largely originated from the Nasdaq-listed Coinbase (COIN) exchange, often considered a proxy for the stateside institutional activity. However, granular data reveals that small addresses, often referred to as "shrimps," are actively boosting their coin stash as they chase the ongoing price rally. |
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Crypto AML Specialist Raises $14.5M |
Notabene, a startup that helps cryptocurrency trading firms comply with anti-money laundering (AML) rules, has raised $14.5 million Series B funding led by DRW Venture Capital, with participation from funds managed by Apollo, Nextblock, ParaFi Capital and Wintermute. Bringing crypto into line with the rest of the financial world, global AML watchdog the Financial Action Task Force (FATF) has set out recommendations for regulators, known as the “Travel Rule,” that requires crypto companies like exchanges, wallet providers, and payment processors to securely exchange information about sender and receiver of transactions. Aiming to be a kind of Swift for crypto transactions, Notabene’s network effect is growing with 165 companies using the platform, including some of the largest virtual asset service providers (VASPs) globally such as Copper, OKX, and Ramp. The platform’s CEO, Pelle Braendgaard, expects an increase in transaction volume on Notabene (around $2 billion worth of daily transactions on average), as a deadline looms at the end of this year for firms to comply with Europe’s update of its Transfer of Funds Regulation (TFR) to include crypto transactions. |
Is This a 'Genius' Move? Only Time Will Tell |
Artificial intelligence company Genius Group (GNS) has adopted bitcoin (BTC) as its primary treasury asset, committing 90% of its current and future reserves to be held in bitcoin, according to a press release. Shares in the Singapore-based company rose as much as 50% in premarket trading before giving up much of the move. They remain 10% higher than Monday's close, at $0.70 per share. The company said it plans to acquire an initial $120 million worth of bitcoin — about 1,380 BTC at current prices — that will be held for the long term. It will also enable bitcoin payments for its Edtech platform. The decision follows a restructuring of the company's board to include several people with backgrounds in crypto and Web3 technologies. Genius follows a path set by Michael Saylor-led software developer MicroStrategy, which now holds 279,420 BTC ($24 billion) after adopting a strategy of acquiring bitcoin in 2020 as a hedge against inflation. |
The Takeaway: Vitalik on 'Info Finance' |
The following passages are excerpted from a tantailizing blog post by Vitalik Buterin, the creator of Ethereum, entitled "From prediction markets to info finance" and published on his website on Nov. 9, four days after the U.S. election results vindicated Polymarket and prediction markets broadly. -- M.H. ON THE INFORMATIONAL VALUE OF PREDICTION MARKETS: "You should never trust the charts entirely: if everyone trusts the charts, then anyone with money can manipulate the charts and no one will dare to bet against them. On the other hand, trusting the news entirely is also a bad idea. News has an incentive to be sensational, and play up the consequences of anything for clicks. Sometimes, this is justified, sometimes it's not. If you see a sensational article, but then you go to the market and you see that probabilities on relevant events have not changed at all, it makes sense to be suspicious. Alternatively, if you see an unexpectedly high or low probability on the market, or an unexpectedly sudden change, that's a signal to read through the news and see what might have caused it. Conclusion: you can be more informed by reading the news and the charts, than by reading either one alone. "Let's recap [w]hat's going on here. If you are a bettor, then you can deposit to Polymarket, and for you it's a betting site. If you are not a bettor, then you can read the charts, and for you it's a news site. You should never trust the charts entirely, but I personally have already incorporated reading the charts as one step in my information-gathering workflow (alongside traditional media and social media), and it has helped me become more informed more efficiently. ON 'INFO FINANCE': "Now, we get to the important part: predicting the election is just the first app. The broader concept is that you can use finance as a way to align incentives in order to provide viewers with valuable information. ... "[I]nfo finance is a discipline where you (i) start from a fact that you want to know, and then (ii) deliberately design a market to optimally elicit that information from market participants. ... ON LONG-TAIL INFORMATIONAL MARKETS: "One technology that I expect will turbocharge info finance in the next decade is AI (whether LLMs or some future technology). This is because many of the most interesting applications of info finance are on 'micro' questions: millions of mini-markets for decisions that individually have relatively low consequence. In practice, markets with low volume often do not work effectively: it does not make sense for a sophisticated participant to spend the time to make a detailed analysis just for the sake of a few hundred dollars of profit, and many have even argued that without subsidies such markets won't work at all because on all but the most large and sensational questions, there are not enough naive traders for sophisticated traders to take profit from. AI changes that equation completely, and means that we could potentially get reasonably high-quality info elicited even on markets with $10 of volume. Even if subsidies are required, the size of the subsidy per question becomes extremely affordable. ... " Read the whole thing |
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