Saturday, January 22, 2022
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Bitcoin Slips Below $42,000; Fall of Altcoins

Bitcoin continued to slide, falling below $42,000. The largest cryptocurrency by market capitalization languishes well past last week’s high as investors fret over challenging macro conditions, including supply chain issues, the ongoing coronavirus pandemic, rising inflation and the collapse of technology markets.

Support for Bitcoin Holding above $40,000; Facing resistance at $43,000-$45,000

bitcoin (BTC) continues to hold support above $40,000 as momentum improves on the intraday charts.

The cryptocurrency is down around 4% over the past week, although several oversold readings suggest buyers may remain active heading into the trading day in Asia. At press time on Wednesday, bitcoin was changing hands at $41,822.

Still, the upside appears to be limited towards the $43,000-$45,000 resistance zone. And $48,000 could present another hurdle for buyers given the string of higher prices since November.

The relative strength index (IRS) on the four-hour chart approached an oversold level on Tuesday, similar to what happened on Jan. 5, which preceded a nearly 10% price rebound a few days later.

On the daily chart, the RSI has been in the oversold/neutral territory for about a month, which is common during a downward price trend.

Ethereum is no longer a single-chain ecosystem

As a technology, Ethereum and other smart contract chains have proven to be an exciting and profitable platform for creators and developers to build and share their work. DeFi developers have created billions of dollars of value by creating financial products that are open and accessible to the world, and artists have seen incredible success by creating digital and liquid art in the form of NFTs. That being said, Ethereum’s “builder economy” competes with top platforms like YouTube, Spotify, and OnlyFans, delivering $3.5 billion in revenue to those who build on top of the network.

The house takes a look at the energy impact of Crypto

A House committee will examine crypto and its energy needs this week. This is another congressional look at crypto.

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Yet another crypto audience

The narrator

Crypto’s power consumption has been under scrutiny for some time. On Thursday, we’ll hear from U.S. lawmakers on the issue for the first time in years, when the House Energy and Commerce Committee holds a hearing titled “Cleansing Cryptocurrency: The Energy Impacts of Blockchains.”

why is it important

Lawmakers have spoken about energy and environmental concerns related to crypto mining.

break it down

So, full disclosure: I used to cover climate and climate issues. Climate change is certainly real. We can see that in the polar vortices years past, in the disintegration of sea ice in Antarctica, in derechos in the American Midwest.

Environmental concerns around crypto are nothing new. The University of Cambridge’s Bitcoin Electricity Consumption Index estimates that the Bitcoin network is currently using around 15.7 gigawatts (or approximately 12 Time-Traveling DeLoreans) (1 gigawatt = 1 billion watts). For comparison, my laptop draws about 65 watts.

And a reminder that this is just bitcoin (BTC). There are many thousands of other cryptocurrencies with their own varying energy needs.

Part of the audience seems likely to focus on the environmental impact of exploiting all these miners.

“According to research on the carbon footprint of PoW cryptocurrencies in 2020, only one [ether] transaction added over 90 pounds of CO2 to the atmosphere, while a single BTC transaction added over 1,000 pounds of CO2 to the atmosphere. Based on 2021 emissions estimates, ETH mining emitted over 22 million tonnes of CO2 and BTC mining emitted over 56.8 million tonnes of CO2. To put that into perspective, the 2021 global CO2 emissions from ETH and BTC mining is equivalent to the tailpipe emissions of over 15.5 million gasoline-powered cars on the road every year. Other estimates place these numbers much higher,” the hearing memo reads.

The memo cites Digiconomist and Statista to determine these numbers, though crypto advocates argue that per-transaction energy estimates are misleading because transactions don’t really work that way.

Yet the general point is clear: lawmakers will question these emissions and, in turn, the mining facilities used to power these networks.

“The profitability of mining and the increase in the value of [proof-of-work] cryptocurrencies over time support massive investments in mining facilities, which require ever-increasing amounts of energy to power and cool the machines,” the hearing memo reads.

We are also likely to see a focus on consumer impact. One of Thursday’s witnesses is Steve Wright, the former chief executive of the Chelan County utility district in Washington state, once a popular destination for crypto mining firms.

The entire Board of Commissioners then voted to stop considering applications for new miners due to concerns about the amount of energy these miners were using and the possibility of them catching fire or otherwise harming the local community.

At least one local bitcoin mining company based in the region has also declared bankruptcy.

Other witnesses include Brian Brooks, the former acting comptroller who currently runs crypto-mining firm BitFury; micro data center chief John Belizaire; Gregory Zerzan, shareholder of Jordan Ramis PC and former government official; and Cornell Professor Ari Juels.

To be honest, I don’t have a clear idea yet of how this hearing will go. The seeds are here for substantive conversation, however, and I have suspected for a year now that climate and energy issues will play out in the crypto world, so now is definitely the time.

Biden’s Rule

Changing of the guard

Legend: (nom.) = nominee, (rum.) = rumored, (act.) = acting, (inc.) = incumbent (no replacement planned)

President Joe Biden appointed Sarah Bloom Raskin to serve as the Federal Reserve’s Vice Chair for Oversight, as well as Lisa Cook and Philip Jefferson to serve as Governors on the Fed’s Board of Directors. Fed Chairman Jerome Powell and Governor Lael Brainard also attended their nomination hearings last week, where they were asked about a number of issues ranging from inflation to central bank digital currencies.

Sen. Cynthia Lummis (R-Wyo.) also asked about the Fed’s lack of response so far to Wyoming’s request that its state-licensed special purpose depository institutions be given access to accounts. principals of the Fed. It remains unclear when or if the Fed might make a decision.

Somewhere else:

Outside of CoinDesk:

  • (Bloomberg) Russian law enforcement officials shut down the REvil ransomware group, seized various currencies (including an unspecified amount of cryptocurrency), and arrested ransomware attackers, including a suspect suspected of involvement in the attack on the Colonial Pipeline last year, reports Bloomberg.
  • (The Washington Post) The Washington Post spoke to aspiring Democratic lawmakers about their work with crypto in the run-up to this year’s looming election.

If you have any ideas or questions about what I should be discussing next week or any other feedback you’d like to share, please feel free to email me at or find me on Twitter @nikhileshde.

You can also join the group chat on Telegram.

See you next week !

SoFi can launch a bank provided it does not touch crypto

Student loan and financial services provider Social Finance Inc. (SoFi) has received conditional approval from the Office of the Comptroller of the Currency (OCC) to establish a full-service national bank, on the condition that the new entity “not engage in any crypto-asset business or service,” the OCC announced on Tuesday .

Bitcoin Miner Margins Still ‘Pretty Healthy’ Even After Recent Selloff: DA Davidson

Bitcoin miners are still generating good profits, despite the brutal sale crypto prices and an increase in the network’s hashrate, Wall Street investment firm DA Davidson analyst wrote on Tuesday.

  • “Since the peak in late October, hash price ($/TH/day) is down from over $0.40 to just $0.22 today, but gross margins remain fairly healthy, around 85% vs. 91% at the peak,” analyst Christopher wrote. Brandler.
  • He also noted that the gross margin figures are based on “industry standard” S19 Pro mining machine specs. When a more efficient minor, the S19 XP, goes live, margins would jump to over 90% at today’s hash price.
  • Brendler noted that the sell-off in mining stocks was due to a combination of falling bitcoin prices and the sudden change in investors’ risk appetite.
  • However, Brendler is still bullish on miners, as he believes their valuations have overcorrected while their fundamentals remain “excellent”. He thinks the weak bitcoin price should force inefficient miners out of the market.
  • On Jan. 10, Jefferies said bitcoin’s price drop from November’s all-time high was hurting stocks of crypto mining companies, but could nevertheless be positive for them as it will deter new entrants into the space.

Read more: Miners Go Public Amid Bitcoin’s Collapse Faces Tough Months Ahead

Silvergate Bank’s quarterly net income drops 9% to $21.4 million

Crypto-focused Silvergate Bank’s net profit fell nearly 9% to $21.4 million from $23.5 million in the third quarter.

  • The bank’s digital currency customers increased to 1,381 at the end of December from 1,305 at the end of September, according to an announcement on Tuesday.
  • Average digital currency customer deposits also increased from $11.2 billion to $13.3 billion.
  • Meanwhile, the bank’s on-ramp for bitcoin markets, known as the Silvergate Exchange Network (SEN), processed transfers worth $219.2 billion, down from $162 billion. dollars in the last quarter.
  • Shares of the bank’s parent company, Silvergate Capital Corporation, were down 13.41% pre-market on the New York Stock Exchange.
  • Based in La Jolla, Calif., Silvergate’s clients include crypto exchanges such as Coinbase, Gemini, and Kraken and stablecoin issuer Circle.

Read more: Silvergate Bank seeks to raise $461 million in public equity offering

European VC Blossom Capital Raises $432M for Tech and Crypto Investments: Report

London-based venture capital (VC) firm Blossom Capital has raised $432 million to invest in early-stage tech startups in Europe, including crypto, according to a Bloomberg report published Tuesday.

  • The VC earmarked a third of the funding for investing in crypto, according to the report.
  • “We are not just looking to invest in crypto assets, we are also considering stakes in start-up companies developing crypto infrastructure,” said founder Ophelia Brown.
  • One of Blossom Capital’s most notable crypto investments is payments infrastructure company Moonpay. In November, Moonpay raised $555 million at a valuation of $3.4 billion.
  • The round was led by Coatue and Tiger Global with participation from Blossom Capital, Paradigm, NEA and Thrive.
  • The VC has also invested in video scaling platform, automation company Aurelia and payment portal, according to its website.
  • Blossom Capital did not immediately respond to a request for comment.

Read more: Payments infrastructure company MoonPay raises $555m at $3.4bn valuation

Bitcoin is disabled during the holidays in the United States and could fall further

Pankaj Balani, CEO of crypto derivatives exchange Delta Exchange, said bitcoin is likely to fall further as buying demand is absent. “We don’t see any bottom fishing at these levels, and the interest in owning bitcoin risk around $40,000 remains low,” Balani told CoinDesk’s Omkar Godbole in a WhatsApp chat. “We could retest $40,000 and if that breaks, we may see a new round of selling materialize.”

What you own when you own an NFT

I don’t know who needs to hear this, but owning an NFT is not the same as owning the copyright or intellectual property of a project. This is the first point I would like to emphasize.

An NFT, or non-fungible token, is a type of digital asset that lives on a blockchain. It has monetary value and is useful for authenticating and tracking the provenance of other digital media. This can be JPEG files but also music files, or really anything that can be saved on a hard drive. But an NFT is not the underlying media itself. This is the second point.

This article is excerpted from The Node, CoinDesk’s daily roundup of the most crucial stories in blockchain and crypto news. You can subscribe to take full advantage newsletter here.

Spending any amount of money, be it $5 or $40 million, on anything auctioned or traded as NFTs does not give you legal ownership of the underlying media associated with that token . What you own when you buy an NFT are the keys to a non-fungible – possibly unique – token. This token is yours to redeem, keep, or view in Decentraland. But the digital file associated with an NFT is just as easy to copy, paste and download as any other – the third point.

Consider this a public service announcement. The relationship between NFTs and digital works is nuanced. There is often confusion wherever crypto rubs shoulders with the real world. And while NFTs fit nicely into existing copyright law, it’s possible that these new technologies will change existing IP protection standards for the better.

None of this is quite obvious when looking at platforms like OpenSea or when you enter NFT Twitter. That’s why I wanted to clarify. Non-fungible tokens are often promoted as a way to bring “scarcity” and “permanence” to infinitely repeatable digital objects. In a way, this view is correct. NFTs bring scarcity to digital goods, but that scarcity is limited to the blockchain-based token itself.

It also seems reasonable to think that if you buy a Bored Ape NFT, that ape is yours. As mentioned, the underlying intellectual property belongs to the creators of Bored Ape Yacht Club (who have Hollywood representation for their work), but the buyer might have a close emotional connection to “his” character. This might explain why people use Bored Apes characters as profile pictures on Twitter and LinkedIn.

things get spicy

This weekend, NFT critics drew an analogy and their anger to a recent successful auction of a rare copy of the classic sci-fi novel “Dune.” In December, SpiceDAO, a decentralized autonomous organization, paid $3 million to buy Alejandro Jodorowsky’s unpublished manuscript for an unrealized film adaptation of Frank Herbert’s 400-page odyssey at a Christie’s auction.

This weekend, a month after the hammer fell, the DAO tweeted out their plans for the storyboard. They wanted to “release the book to the public (to the extent permitted by law)”, “produce an original animated limited series inspired by the book and sell it to a streaming service”, and “support community spin-off projects”.

See also: Rare manuscript “Dune” bought on behalf of DAO for $3 million, but only fetched $700,000

Upon seeing this tweet — of a plan that was essentially known when SpiceDAO originally funded $11.8 million — Wikipedia contributor and Web 3 reviewer Molly White posted a story on her blog. “Web 3 is doing very well” titled “SpiceDAO Wins $3 Million Auction to Buy Extremely Rare Dune Storyboard Book, Only to Learn Owning Book Doesn’t Give Them Copyright.” other media organizations jumped occasionally.

“[SpiceDAO] were quickly informed that purchasing the physical book did not in any way give them copyright or license (just as buying an NFT does not automatically give you the rights to the underlying work!). You would think they might have checked that out first,” White wrote.

Others have joined a Twitter stack on. Some have noted that buying a rare book is not the same as owning its contents. Others have incorrectly suggested that the DAO purchased an NFT of the manuscript, which, of course, would also not confer ownership of the Dune IP. There are no NFTs or plans for one as far as I know.

Also called “Jodorowsky’s Bible”, the work is a collection of writings and prints that have historical significance. Making it as public as possible seems like the right thing to do. Many noted that the book’s content is already hosted online (on Google Photos, for example), but the DAO wanted to make public ownership a little more durable because Google can delete the file at any time.

See also: Google bans crypto mining apps from Play Store

DAO members also wanted to treat the work with the proper respect. A crowdfunding was just a way to show how important it is to the public. Creating derivative works by highly motivated fans is another.

SpiceDAO is apparently aware of what they bought and the legal considerations of their plans. After winning the auction, DAO co-founder Soban Saqib told Buzzfeed he was in the process of transferring ownership for permanent storage and determining how to handle the multiple copyrights for Bible content that artists and their estates may claim.

Frank Herbert’s “Dune” won’t enter the public domain until 2060 in the US and 2054 in the EU, but there are still things the DAO can do. The laws around fan fiction are a bit more flexible, and the “fair use” exemption gives some leeway.

Although the DAO has a governance token (“SPICE”) that trades on the open market, it is not clear that the group aims to profit from its efforts. This could clash with securities rules. And having been forced to rebrand from DuneDAO, due to copyright complaints, you can be sure they are aware of some limitations.

What does this mean for NFTs?

The larger plans of NFTs and DAOs are framed by law as they stand and are relatively simple things technologically speaking. NFTs are provenance tokens. This makes it easier to assign value to numeric items. DAOs are a way to organize people, share funds, and execute plans. There are many promises, but many limitations. The law is not necessarily one.

NFTs and DAOs are part of a sea change in the way people think about the web and digital property. It’s a public good mindset, an overriding belief that people should be able to get more out of their work and collaborate more effectively.

See also: NFT Artist Brian Frye Wants You To Steal This Item

There is a legal status that already corresponds to this attitude: open copyright. NFT creators are increasingly releasing their projects as CCOs – the least restrictive copyright – so anyone can download, remix, transform and profit from these digital assets. Tokens will always have an owner, but the work belongs to everyone.

In the United States, there is a policy that any media – a song, a picture, a three-hour blockbuster movie – is your default property as long as you created the work. On Twitter, you post a post and you technically own the intellectual property behind it. You and you alone own this tweet. Ditto for blog posts. Or upload photos. By default, you own this work.

Frank Herbet’s estate may wish to continue to benefit from Herbert’s “Dune”, which is within their rights. It’s entirely possible that the next great work of literary significance will be funded by a DAO or an NFT. Hope it really belongs to the world.