Crypto News Recap - Why ‘Bitcoin Has Never Been Healthier’ - October 2 - October 9 2020

Transcript

[Music] hi everyone thanks for tuning in to this week's news recap first headline square purchases 50 million dollars in bitcoin jack dorsey square has become the second publicly listed company to invest in bitcoin purchasing 4709 bitcoin for a total of 50 million dollars the move follows microstrategy's announcement in august that the company had allocated 90 of its assets to the cryptocurrency square said in its statement that quote cryptocurrency is an instrument of economic empowerment and provides a way to participate in a global monetary system which aligns with the company's purpose square's cfo amrita ahuja said almost in a side eye moment at coinbase ceo brian armstrong

quote for a company that is building products based on a more inclusive future this investment is a step on that journey square also published a bitcoin investment white paper in which it open sourced the process behind its purchase to help others considering doing something similar in it the company describes using an over-the-counter bitcoin liquidity provider so as to maintain privacy and not have the price slip with its large trade it also points to an open source documentation for its bitcoin cold storage and explains its crime insurance policy among other things these investments in bitcoin by two publicly traded companies come at a time when a traditional 60 40 portfolio is in jeopardy of not providing

sufficient returns writes steve erlick the new director of research at forbes crypto however he says bitcoin may increasingly help diversify portfolios especially as he says quote bitcoin has never been healthier he notes the 180-day volatility reached a 23-month low and quote says it has been a record 74 days since bitcoin closed below ten thousand dollars he notes this is especially impressive considering these feats occurred despite the bad news of the third largest crypto exchange hack in history and the indictment of the executives of top derivatives exchange bitmex next headline leadership changes at as bit max battles fallout from charges

bitmex ceo arthur hayes and three other defendants named in lawsuits by the commodities future training commission and the us department of justice have stepped away from their executive roles at crypto derivatives exchange bitmex vivian coo chief operating officer of 100x group the parent company of bit max has been made interim ceo despite an exodus of nearly 30 percent of all bitcoin on the exchange and a high risk warning issued by chain alice's a spokesperson for bit max insists that quote it is business as usual for the bitmex platform coindesk reports the exchange's own insurance fund remains the largest such fund of any cryptocurrency derivatives exchange

nonetheless future and historical transfers from bitmex will now trigger alerts in the chain analysis transaction monitoring tool kyt concerning the warning chain analysis said quote we consider an entity to be high risk if criminal charges have been brought against the entity or its owners slash operators slash leadership the high risk label by chainalysis has been called a death knell for the exchange since charges were brought against bit max more than 41 000 bitcoin has been withdrawn from bitmax nearly half of that btc has migrated to binance with the rest moving mostly to gemini and a smaller amount of kraken

which disclosure is a previous sponsor of my show delphi digital partner jose maria macedo made an interesting assertion about what the bitmex charges could mean for crypto in a twitter thread mercedes suggests that while historically anonymous teams in crypto are viewed as a risk he says that now identity is an attack vector and that the future lies in embracing decentralization and pseudonymous on-chain reputation without relying on the legal system and social capital next headline 60 employees have taken coinbase's severance package so far in a blog post published thursday coinbase ceo brian armstrong revealed

that five percent of coinbase's 1200 employees had so far accepted the severance package offered to those who disagreed with his recently updated mission statement that coinbase was an a political company although the deadline to take the severance was wednesday armstrong said the number would be higher after the company completes several other conversations he wrote it was reassuring to see that people from underrepresented groups of coinbase have not taken the exit passage in numbers disproportionate to the overall population an employee told coindesk that those choosing to leave are mainly engineers as opposed to customer support staff armstrong attempted to clarify that the company's new stance does not mean employees have to quote pretend politics

doesn't exist still it remains unclear to many inside the company what counts as political versus apolitical armstrong admitted that what could be considered as politics is a blurry line jill carlson an investor at slow ventures wrote in a coindesk column that the real message armstrong is sending is quote if you want to push a progressive social agenda in the workplace this company is not for you next headline not ethereum 2.0 but ethereum 1.5 and a post on the fellowship of ethereum magicians forum ethereum creator vitalik buterin noted that ethereum may scale in an unexpected way

according to the ethereum 2.0 roadmap scaling for applications is still years away however scaling is already in test net for a number of layer 2 scaling options such as roll-ups plasma and state channels making those a more viable near and mid-term solution this leads him to say that some popular apps use data and applications live entirely on layer 1 such as the ethereum name system should be adapted to have their data such as accounts balances and assets move to layer 2. his conclusion is that if everyone moves to roll-ups then that makes phase two of the transition to ethereum 2.0 obsolete and so ethereum may instead be a quote single high

single high security execution shard that everyone processes plus a scalable data availability layer he writes quote this implies a phase 1.5 and done approach to eth2 as quote by that point it will be easier to continue down that path than to try to bring everyone back to the base chain for no clear benefit and a 20 to 100x reduction in scalability whether or not ethereum goes down this path remains to be seen but one other interesting comment he made in his somewhat technical post is that focusing on rollups will leave more space for layer 2 protocols that can fund their own development with their own tokens

next headline doj publishes cryptocurrency enforcement framework on thursday the department of justice published an 83-page cryptocurrency enforcement framework detailing how it looks at cryptocurrency crimes defy and its enforcement strategies it categorizes illicit uses of crypto three ways as one financial transactions that commission crimes two money laundering and shielding transactions from tax reporting and other label legal obligations and three hacks or theft of cryptocurrency particularly at exchanges the agency indicated it also has its eye on d5 saying quote the ico boom from a few years ago has given way to the

exponential growth of decentralized finance markets in recent months months with all the associated complexities and difficulties for enforcers seeking to stay ahead of the curve and keep investors safe next headline what the future may hold for crypto market structure arjun biology of paradigm wrote an overview of the past and future of crypto market structure recounting the 1.0 phase from 2010 to 2017 in which peer-to-peer training emerged from bitcoin talk mount cox temporarily reigned and otc desks launched to serve some early institutional investors he then covers how phase 2.0 from 2018 to now

has seen derivatives eclipse spot trading otc desks go electronic lending firms firms emerge to provide two billion dollars of bitcoin and stable coins on loan and stable coins function as reserve assets he then says that we're already in the early stages of moving to phase 3.0 which he believes will be more capital efficient bridging centralized markets with the ever-growing number of d5 markets he says that d phi is disrupting centralized exchanges but that throughput and high gas fees remain barriers to full-blown defy adoption he believes that as layer 2 solutions come to fruition we can expect to see the convergence of decentralized and

centralized finance this intersection of d5 and c5 will result in better d5 interfaces institutional support and an attempt by major centralized exchanges to capitalize on cd5 or centralized decentralized finance next headline the growth in d5 in charts the block research has compiled 37 different charts that analyze various metrics across d5 projects the total value locked in defy has now surpassed 11 billion dollars with the three largest protocols by value locked being in order uniswap maker dow and ave and on average around 4 000 new

addresses interact with d5 protocols every day although many users have multiple addresses the trend towards defy is growing with total dex volumes in september passing 23 billion dollars which is a 74 increase over the previous 30-day period for the first time the most popular decks uniswap surpassed coinbase in trading volume one standout among the graphs was the surge in the trading volume of nfts or non-functional tokens such as collectibles with wearable showing the most consistent volume as new platforms are continuing to be launched fun bits live premiere of new documentary crypto startup school

as of this writing we've only had a chance to view the enticing trailer but thursday night andreessen horowitz presented the new documentary crypto startup school the film follows the seven week program of the same name announced earlier this year during the program experts in the crypto field offered talented technologists assistance in building crypto companies by the time this video is live the 30 well the video that i'm recording is live the 30 minute behind the scenes look at the program should be available to view on a16z's youtube page all right well thanks for tuning in to learn more about chris and justin sun be sure to check out the links in the show notes of this episode don't forget you can now watch video

recordings of the show on the unchained youtube channel go to youtube.com c unchained podcast and subscribe today unconfirmed is produced by me laura shin with help from anthony yoon daniel ness bossie baker shashank venkat and the team at clk transcription thanks for listening you