Weekly rant: Is Bitcoin religion?
The crescent moon was spotted. Ramadan is here.
This is a particularly holy time for the 4.5 billion Muslims, Jews and Christians around the world. Muslims are fasting from sunrise to sunset for a month. Jews are preparing for Passover. Catholics are giving up vices to observe Lent as all Christians gear up for Easter.
But the world is losing religion. Mosque, synagogue and church attendance have been falling in the West. Is Bitcoin the new religion?
The similarities are eerie.
Bitcoin maxis seek to evangelize and orange-pill non-believers much in the same way a missionary might seek to convert a pagan. The Bitcoin crowd flocks to Twitter Bitcoin celebrities like the faithful grasp on to every word uttered by televangelists. The plebs tweeting condemnation at Ethereum enthusiasts are reminiscent of the fundamentalist ferociously yelling that all sinners are going to hell. Some tout Bitcoin as the solution to all the sorts of problems just as the devout look to God. But I guess the difference is that we have not had any Bitcoin holy wars….so much blood has been shed in the name of religion. Hopefully Bitcoin does not add to the tally.
This week, Miami will host Bitcoin 2022 - the single largest crypto conference in the world. Brace yourself. It’s going to be an eventful week. Many of the speeches will likely be a rehash of content one can already find online but I expect some major announcements. Controversially, President Bukele of El Salvador is set to give a speech. I have mixed feelings about him. On the one hand, I admire a technology-forward leader. At the same time, I’m disturbed by reports of human rights abuses and corruption. Sigh. This reminds me of the early days when Bitcoin was adopted by Silk Road and other unsavory characters. I hope mass media focuses on the underlying technology not the cast of early adopters. The reality is that savvy criminals adopt new technology to evade police tactics. This is not new. Don’t throw the baby away with the bath water.
NEWS 🖨📜
1. Cross River raises $620M Series D
Full disclaimer: I joined Cross River’s Crypto team at the end of last year. We are hiring 😁
Funds were raised from an enviable set of investors including Andreessen Horowitz and T Rowe Price. Cross River cut it’s teeth by providing infrastructure for the FinTech revolution. The next phase of growth will come from doubling down, expanding internationally and developing new crypto solutions.
Now that we have raised more resources, it’s time to execute. Come build with us. For more info - check out this Tech Crunch article and our website. DM me with questions.
2. Bitcoin Miner goes public via SPAC 📈
PrimeBlock, a US-based Bitcoin miner, plans to go public through a merger with a special purpose acquisition company (SPAC) for an estimated enterprise value of $1.25B
PrimeBlock has over 110 MW of installed data center capacity across 12 facilities in North America. It sources ~60% of it’s power from non-carbon emitting sources. In Q4 2021, it generated about $25M revenue in Q4 2021.
Some investors unwilling or unable to directly purchase Bitcoin have gotten exposure by purchasing shares of publicly traded Bitcoin mining companies like RIOT Blockchain. Shares of Bitcoin miners tends to move in sync with the price of Bitcoin. See below:
Personally, I prefer to hold the real thing rather than a proxy. Do your own research!
3. Axie Infinity: Hackers steal $600M😱😳🥴
I’m a bullish about play-to-earn games. I think there’s tremendous opportunities for them to grow in developing countries with high unemployment and young populations. Axie Infinity is the darling of play-to-earn….this makes the news of this hack all the more devastating.
Here’s what I have gathered: Hackers used social engineering and took advantage of a human error to get away with $600M worth of Ethereum and USDC in the Ronin bridge. The bridge is kinda like a bank for the game. For context, Axie Infinity allows players to trade characters and win earnings which can then be exchanged for ETH or USDC and withdrawn for use in the real world.
The impact was swift: 34% drop in volume of trading in the Axie Marketplace within a day (according to DappRadar). But many Axie players while frustrated, have continued to play on.
Investors in SkyMavis, the owners of Axie Infinity, include Mark Cuban, Alexis Ohanian, and Animoca Brands. SkyMavis said that they will make impacted players whole. Gosh…I hope they have insurance for that….I doubt it.
Unfortunately, this hack is not an isolated incident. Over the past year, hackers have exploited weaknesses in Ronin bridges to steal over $1B.
The Philippines is the biggest market for the game where there are over 2.5 million players. The road to Axie Infinity growing 10x to 25 million players will be paved with tougher security.
4. US crypto policy debate heating up💵🏛
President Biden’s executive order on crypto intensified ongoing debates around how to regulate crypto
This week, Sen Elizabeth Warren (D) once again voiced her support for the US to issue a Central Bank-backed Digital Currency (CBDC). She thinks a well designed CBDC could drive out private digital currencies like Bitcoin and improve safety and efficiency of the market. Opponents fear the CBDC would give the US government unprecedented surveillance over citizens. Additionally they fear that a CBDC which the Federal Reserve could issue at will would not be sound hard money. Rather, an extension of the current system where the US government printed printed billions of dollars over the past 2 years whereas Bitcoin is a deflationary store of value by design. There will only be 21 million Bitcoin.
Sen Cynthia Lummis (R) is working on a new bill that would propose rules to clarify the role of the SEC and other agencies and provide definitions that would classify many popular tokens as securities.
The definition of whether a token is a security is key. If tokens like Solana are deemed to be securities then they would need to be registered with the SEC, crypto exchanges would need to delist them or become broker-dealers…and a host of other adjustments. The net effect is that they would likely increase the cost of serving the customer. That said, there may be some consumer benefits. I need to dig more into this.
That’s all folks!
I hope you have a great week ahead.
Thank you
Afo
Ep 47. Is Bitcoin religion?