Ep 28. Taproot + Texas - China = ?
Bitcoin upgrade. China cracks down on mining but Texas wants crypto
Time flies when you are having have fun. It’s been about 6 months since I wrote my first newsletter. I’ve learned a lot. I hope you have too. If there is anything that’s you on your mind - just go for it AND stick to it. Now that we have gotten the pep talk out of the way, let’s dive into key developments this week.
1. Bitcoin Taproot upgrade: More DeFi?
It’s going to be easier to build financial services on Bitcoin. Now it’s up to developers and entrepreneurs to make it happen
Right now, a lot of DeFi (decentralized finance) like lending products are based on the Ethereum blockchain. The Taproot upgrade will make Bitcoin more competitive.
This is possible because 99% of Bitcoin miners indicated support to move forward with Taproot, the upgrades are expected to take effect in November. This is a big deal! Remember this week, years down the road.
2. China is enforcing bans on bitcoin mining
China accounts for about 65% of global bitcoin mining capacity. But officials in key provinces have proposed harsh penalties for miners.
The Chinese government started a crackdown on crypto in 2017 when it banned cryptocurrency exchanges and initial coin offerings. But the government has been moving forward with field tests of its Central Bank-backed Digital Currency.
Bitcoin miners in China are under pressure. Some are selling equipment, relocating overseas or moving underground. The silver lining is that this exodus could lead to greater geographic diversification of mining and perhaps reduced reliance on high carbon emitting power sources.
3. Gov: Texas wants crypto
The windswept plains of West Texas are fertile ground for bitcoin mining. A number of renewable energy powered projects have been proposed there. Some Chinese miners are reportedly eyeing the Lone Star state.
Last week, the Governor of Texas signed law creating a master plan for expanding the blockchain and digital asset industry in Texas. There’s even rumors that the state might acquire some digital currency (likely bitcoin) on its balance sheet.
Texas wants to lead how Miami has become a magnet. But the herd is coming. 25 states are reportedly considering signing blockchain and digital currency legislation in this congressional year.
4. VC fund focused on Black & African crypto launches
Audacity Fund founded by 29-year old Erikan Obotetukudo launched on the 100th anniversary of Tulsa Race massacre. My conversation with her was one of my highlights at the Bitcoin 2021 conference.
The fund aims to invest up to $100k in up to 3 black or African crypto startups each quarter. In addition, the fund aims to deliver insights to help these companies win.
The idea is investing in crypto, culture, and community creates economic opportunities for those who are often overlooked, underbanked, and underserved. Exciting stuff! Stay tuned
5. 13-year old builds $7M crypto application
When I was 13 years old, I was thinking about school and praying for my athletic genes to kick in. Gajesh Naik built a DeFi protocol that has managed $7M worth of cryptocurrency.
This 13-year old emailed a VP at Polygon (fast-rising Indian crypto company) for guidance. Since then he has successfully built PolyGaj, a DeFi protocol inspired by Goose Chain which is built on Binance Smart Chain (PolyGaj is on Ethereum).
Gajesh, whose father studied computer science, now has 5 years experience coding. He is experienced with C, C++, JAVA, and Solidity. Very impressive, the future is bright!
1. What crypto consumers want?
I recently surveyed subscribers to learn about their attitudes towards crypto exchanges. Thanks to all who participated. Please check out the insights and results here. Let me know what you think.
2. World Economic Forum: DeFi kit
The WEF recently produced a starter kit on DeFi for policy makers around the world. Check it out here.
3. Currently reading: The Infinite Machine
This is the story about the origins of Ethereum. I’m trying to learn more about DeFi so I figured it would be helpful to learn about the history.