Crypto Weekly 31/01/2022

VIDEO OF THE WEEK

HIDDEN GEMS

CRYPTO Page 18

IS IT CRYPTO WINTER?

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WEEKLY

Metaverse Jobs

$2 cryptoweeklymag.com January 2022 | Volume 12

IRS: Lying on Your Taxes

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Crypto Crash & Regs Muddled

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Feds Open Crypto Debate

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Crypto Executive Order

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Earn Money Gaming

Page 05

Quantum Computer Danger

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Bitcoin Throws Tantrum

The Bitcoin Top 1%

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Page 20

NFT Catastrophe

Metaverse Real Estate

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Privacy Pool Can't be Stopped

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FUDDOXX INSIDER • Latest Scams | • Rugpull of the Month Page 06

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CONTENTS $2 cryptoweeklymag.com January 2022 | Volume 12

Want a Job? The Metaverse Is Hiring ���������������������������������������������������������������������������������������������������������������������02 IMF urges El Salvador to Should Ditch Bitcoin and Rethink Crypto ����������������������������������������������������������03 Thailand Regulates Cryptocurrency Payments ��������������������������������������������������������������������������������������������������03 Regulatory waters muddied by Bitcoin and crypto crash ���������������������������������������������������������������������������� 04 A Presidential Executive Order will be Issued in February Regarding Cryptocurrencies �������������������������������������������������������������������������������������������������������������05 FUDDOXX INSIDER ����������������������������������������������������������������������������������������������������������������������������������������������������� 06 What happens if you fail to disclose crypto activity this tax season ������������������������������������������������������� 09 Quantum Computers Can Break the Encryption of Bitcoin ���������������������������������������������������������������������������10 Federal Reserve Opens Debate on Digital Currencies with Long-Awaited Report ������������������������������������������������������������������������������������������������������������������� 12 Corporate buyers of Bitcoins are keeping an eye on critical BTC price levels ����������������������������������������14 NFT-Based Video Game Helps Gamers Earn Crypto While Playing Online ���������������������������������������������16 Video of the Week ���������������������������������������������������������������������������������������������������������������������������������������������������������18 Compounding Assets, Adoption Rising, and the Brilliant Mind Pushing This Daily, FOR US ALL ����������������������������������������������������������������������������������20 2022 Predicted to be a Record year for Metaverse Real Estate ������������������������������������������������������������������ 22 El Salvador adopted Bitcoin first & May also be First to Go Bankrupt �����������������������������������������������������24 Bitcoin, the Crypto-Teenager Throws Interest Rate Tantrum ������������������������������������������������������������������������26 Hidden Gems �������������������������������������������������������������������������������������������������������������������������������������������������������������������28 Metaverse Study: 70% of Virtual Store Visitors Make Purchases ����������������������������������������������������������������30 What Is a Stablecoin? ��������������������������������������������������������������������������������������������������������������������������������������������������34 No One Controls the Tornado Cash Privacy Mixer Protocol, so No Person or Government Can Stop it ������������������������������������������������������������������������������������������������������������36 Ethereum 2.0, good-bye, we barely knew you �������������������������������������������������������������������������������������������������� 40 Cryptocurrency Traders Must Report to the IRS & Here's How �������������������������������������������������������������������42 Experts Say Increased Adoption May Temper Crypto Winter Outcomes ���������������������������������������������� 44 NFT Collectors Suffer Catastrophic Losses Due to Marketplace Exploit �������������������������������������������������46

Readers get a chance to whitelist for the ambitious KAPEX project brought to you by Koda Cryptocurrency, Launch is expected next month (Feb 22) and public presale opens from 15th Feb. For more information visit https://KAPEX.me and join the conversation on telegram.

Referral code: CWEEKLY22 2 random applicants will be accepted to band A, and 10 band B. Other applicants guaranteed standard presale if before 15th Jan (up to maximum allocation).

1

EDITOR’S LETTER Welcome to Crypto Weekly W

elcome, this is the 12th issue of Crypto Weekly. We have been bringing all of you the most significant happenings from the front of the crypto revolution for three months now. What a wild ride it's been! In just a few months, we will be the first-ever mass-produced Crypto magazine available worldwide in some of the most prominent retail outlets (Walmart, Books a Million, Borders, Barnes & Noble, Tesco, W.H.Smiths, etc.). The list of retailers that want to carry our magazine grows every week. Within the next 4/6 weeks, we will start filming the first-ever mainstream crypto to show over different TV networks worldwide. Our parent company CMC (Crypto Marketing Company), has just been confirmed as the official media partner of the Dubai Crypto Exhibition in March. They will be making an announcement on their website and social media over the next 14 days! The Dubai Expo expects over 10,000 crypto investors to attend and have around 100 projects exhibited. CMC and Crypto Weekly will have a stand in a prime position at the event.

Our path to success was forged by guts and perseverance, not by allowing anyone to dictate what we did. The road we take in this life is ours alone, and we must remember that. We may be able to walk it with others, but no one can do it for us.

Accepting ourselves and our own thoughts and actions is key to moving forward with confidence with the choices we have determined are best for us. We must acknowledge our mistakes if we have offended or harmed anyone, apologize to them, and make things right if we have made mistakes. We must know our path at all times. This requires knowing ourselves inside and out, accepting our gifts and failings, and growing with integrity, compassion, faith, and brotherhood each day.

We make ourselves what we are.

Crypto Weekly will answer all of your questions. Whether you're new to crypto or have some experience, we're here to help. I hope you all have fun. Now that we have reached the end, it is time to turn the page, but let us know your thoughts. If you would like to see something featured, please get in touch with me. editor@cryptoweeklymag.com

Follow Me Robert Stone Editor

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shaketheweb

January 2022 | Volume 12

2

FEATURE Crypto Weekly

Want a Job? The Metaverse Is Hiring E

xperts say jobs in the virtual sphere will be available this year as the Metaverse continues to grow as an economic community. With the expansion of real-world and digital brands into the Metaverse, including Samsung's recent launch of a virtual flagship store on the blockchain, more companies are exploring business opportunities with "Web 3.0."

A number of job opportunities will be available within - and supporting - the Metaverse:

Developing a brand's presence in the Metaverse with marketing experts

Developers and content creators within the Metaverse

Venture capitalists specializing in metaverse investments

Gamers earning money from play

Brands will likely hire employees specializing in Metaverse activities

or hire outside firms to help with everything from marketing strategy to virtual product design and development.

If you consider the Metaverse a whole new world, companies will have to staff up to meet the increasing demand for content, products, and services.

Getting the most out of your money The trend of gaming-for-pay took off during the pandemic in the Philippines, making it another potential career path.

CNBC reported that people playing Axie Infinity, a game developed by SkyMavis, earned non-fungible tokens that they converted into cryptocurrency and then traded for cash.

Make your money work harder for you.

The idea of monetizing eSports is not new. In the U.S., a mid-to-high-tier progamer can earn between $50,000 and $75,000 per year, not counting prize money, sponsorships, revenue from streaming, and endorsement deals, according to esportsgrizzly.com.

Much like in the earlier days of Google, companies rushed to build a website and have it rank in the search engine, a presence in the Metaverse could become an expectation for major brands sooner than most would imagine. A digital version of a Gucci bag was recently sold on Roblox for more than the real thing.

The Metaverse, however, could make it easier and more accessible for anybody - not just diehard gamers - to make money in their free time.

It's not just within the Metaverse where new jobs will emerge, according to CNBC.com. The news outlet called the Metaverse "one of the world's biggest infrastructure projects." Web 3.0 will

January 2022 | Volume 12

need roughly 100X the computing power available in the world right now, Intel estimates. People will need to build that infrastructure. And chip manufacturers, already struggling to keep up with worldwide demand, may need to increase their manufacturing capacity, factories, and staff to supply the Metaverse with the processing power it requires.

Right now, according to CNBC, most brands aren't making much money on their blockchain projects. It's more about becoming early adopters and solidifying their presence.

What should we take away? During this decade, graduates entering the workforce may have more opportunities than ever before to work with their favorite brands, help create an emerging virtual world, or just earn money by playing games on their phones.  GOBankingRates

www.cryptoweeklymag.com

NEWS

3

Crypto Weekly

IMF urges El Salvador Should Ditch Bitcoin and Rethink Crypto Eric Martin

According to cryptocurrency risks

IMF poses

directors, significant

The issuance of bonds backed by Bitcoins is also risky

The board of the International Monetary Fund urged El Salvador to drop Bitcoin as legal currency due to its high risks, highlighting a major obstacle the nation faces when trying to receive a loan from the IMF. El Salvador requested an IMF loan of $1.3 billion last year, but the lender's concerns over Bitcoin stymied talks, and

any program would have to be vetted by the board.

Tuesday, the IMF's executive directors, who represent its 190 member nations, highlighted Bitcoin's potential risks to "financial stability, financial integrity, and consumer protection" and fiscal liabilities. They urged the authorities "to narrow the scope of the Bitcoin law by removing Bitcoin's legal tender status."

A few directors also expressed concerns about issuing Bitcoin-backed bonds according to the fund. The comments came in the board's discussion of the

Central American nation's annual Article IV economic evaluation.

In September, El Salvador made cryptocurrencies legal alongside the U.S. dollar, turning 40-year-old President Nayib Bukele into a crypto icon. Bitcoin has been legal tender only in El Salvador so far.  Bloomberg

Thailand Regulates Cryptocurrency Payments Fasika Zelealem

T

hailand's financial authorities are regulating the use of cryptocurrencies as a means of payment despite fears they threaten the country's financial sector.

As Thailand gains momentum in the cryptocurrency market, with retailers and real estate developers accepting digital assets as payment, regulation has become important.

In a joint release, the Bank of Thailand (BOT), Securities and Exchange Commission (SEC), and the Ministry of Finance (MOF) noted: "digital asset businesses have expanded to offer payment services using digital assets."

Thailand has looked at plans to impose a 15% capital gains tax on profits from cryptocurrency trading in response to the growth of the cryptocurrency market in the country, including plans to introduce its own utility token - the TAT coin - as part of a 'cryptourism' campaign.

Investing in the crypto market and using digital assets as a means of payment could cause risks for businesses and individuals through "cyber theft, personal data leakage, or money laundering", which is why regulators have developed strict frameworks for digital assets.

To further reduce risk to the country's financial sector, Thailand's central bank announced its intention to trial a central

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bank digital currency (CBDC) in the second quarter of 2022.

The Thai regulation.

government

focuses

on

An anonymous source inside the Finance Ministry disclosed information to The Bangkok Post which said "in 2022, all taxpayers who gained from cryptocurrencies, including investors and mining operators, are subject to a 15% withholding tax, while digital asset exchanges are exempt from such duties."  coinrivet

January 2022 | Volume 12

4

NEWS Crypto Weekly

cryptocurrency, an asset class that Securities and Exchange Commission Chair Gary Gensler calls "the Wild West."

The chairman is right: crypto's illicit and fraudulent activities have risen sharply. The Hollerith Group also reported that various scams and hacks have cost crypto investors tens of billions of dollars; meanwhile, a new crypto protocol called Tornado Cash is increasing concerns over ethereum (ETH-USD) laundering.

Regulatory waters muddied

by Bitcoin and crypto crash Javier E. David El Salvador's president is buying the Bitcoin dip — but few others are Wall Street's chaos, aided and abetted by retail investors missing the heady meme stock days of GameStop (GME) and AMC (AMC), pales in comparison to what's been afoot in the world of cryptocurrencies. It's still only January, but crypto is in the throes of a long, cold winter, irrespective of El Salvador's Bitcoin-loving president.

Over the last few weeks, Yahoo Finance's David Hollerith has been covering the carnage taking place in the market for digital coins, where bears appear to be winning. According to one analyst who spoke with Hollerith, Bitcoin (BTC-USD) could fall below $14,000 in an extreme

January 2022 | Volume 12

bear case. The grim scenario may or may not come true. However, one thing is sure: the longer this rout continues, the greater the likelihood that Washington will opt for regulatory overreach.

In a Yahoo Finance Live interview, American Express CEO Stephen Squeri celebrated after the market volatility cut Bitcoin's gains in half since its record high in November. On Tuesday, the IMF also called on Bukele to pull back on El Salvador's legal tender law regarding Bitcoin. Jennifer Schonberger of Yahoo Finance confirmed that the White House would play a more assertive role in cryptocurrency oversight conversation. In upcoming guidance from the National Security Council (NSC), agencies will be tasked with assessing the risks and opportunities crypto poses, as well as detailing a possible central bank digital currency, Schonberger reported on Tuesday. In light of last week's news that the Federal Reserve is openly considering launching its own digital currency, Schonberger added that the Biden administration will "review the impact of digital assets on financial stability and normalize crypto regulations around the world."

While they are busy fighting over just about everything, Washington's political and policy establishments are trying to determine the rules that should govern

Crypto is to steal a phrase from Gensler, a Wild West in its infancy, with few guardrails at this point. Touted as a risk-free alternative to fiat currency, crypto has seen a massive influx of small investors. While it's certainly true that digital currencies are falling prey to the same worries battering stocks, inflated as they are by years of lavish monetary and fiscal stimulus, a key difference is that equities are a heavily regulated asset class.

In Congress, various factions are forming to shape crypto regulation. Others (such as Gensler) would rather err on the side of investor protection. Ostensibly, regulators should aim to protect investors from fraud and significant losses. However, as the aftermath of the 2008 financial crisis demonstrated, it doesn't take much for Washington to pass new laws that become far more complicated than they were initially intended. Policymakers are agitated by a volatile market that hurts small investors or creates a systemic risk that threatens large ones.

If the current bear trend continues, the Great Crypto Rout of 2022 is bound to lead to unpleasant stories of retail buyers in the red or even bigger players ending up on the wrong side of the trend.

In the absence of concrete regulatory infrastructure, calls for regulators to "do something" will grow louder — and that could influence the debate in ways Bitcoin evangelists may not like (some already don't).

By Javier E. David, editor at Yahoo Finance.

www.cryptoweeklymag.com

NEWS

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Crypto Weekly

A Presidential Executive Order will be Issued in February Regarding Cryptocurrencies Sam Cooling

A

ccording to reports over the weekend, US President Biden will introduce an Executive Order on cryptocurrencies at the beginning of February. According to the order, the government plans to weigh up the advantages and disadvantages of digital assets and implement a cryptocurrency reporting system. Officials have not yet confirmed the rumor. There have been several top-level meetings with senior figures at the White House regarding the subject, and Biden is anticipated to provide more details on the subject next week.

White House pundits have suggested the directive may include a note on central bank digital currencies (CBDCs),

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in an effort to clarify the American government's position following the rapid rise of the Chinese digital Yuan.

The tumultuous passage of a tackon crypto tax to the infrastructure deal last summer has left a bad taste in the industry's mouth and created a sentiment that Democrat policymaking under Biden views crypto as a 'cash cow.'

Needless to say, many will be looking at the tone of any strategic plan put forward by Biden carefully. But things are different down on K Street this year, with the crypto lobby now awake and active – emboldened by a growing awareness and advocacy for cryptocurrencies among the public and legislators. A growing

number of crypto-related bills have already been introduced by the Hill's Blockchain Caucus in this Congress.

During a recent interview, Congressman Tom Emmer explained the ongoing work of the Congressional body. "Several key members of these committees came out in support of legislative fixes in the wake of the Infrastructure bill fiasco and the misguided crypto tax amendment," explained the congressman. Bipartisan, industry-supported proposals are on the table, but we have yet to see anything pass out of Congress and become law.

"It is more important than ever to start planning our agenda for the next term after the midterm elections."  Coin Rivet

January 2022 | Volume 12

FUDDOXX

6

Crypto Weekly

FUDDOXX INSIDER Another week has rolled by in the Crypto space and we have seen a big dip in the market. Lets have a run down of our top 3 verified project progress over the last Seven days.

PLANT TOKEN:

DIRECTDOGE FINANCE:

Plant token is the Fiverr for crypto, A hub for service providers to register their skill set for hire.

With a unique payment plugin that buys and burns the native token on every purchase DDF is sure to be a winner going forward.

Developer Alex has worked extremely hard since launch and has built a strong community of diamondhand holders.

This is a project with a great use case and a strong Developer at the helm. The recent market slump has created a great entry point at Plant token and is for sure One to watch.

The Development team are currently going through security checks with Wordpress and hope to be live in a matter of days.With Two expo’s booked for March and April this year things are about to start gathering a lot of pace.

MC:$92,865

MC:$32,196

Holders:341

Holders:223

t.me/DirectDogeFinance

t.me/PlantTOKEN

DYOR

DYOR

SCORPION FINANCE: Where do we start?

Scorpion finance has one of the most efficient development teams I think I have ever seen, With seamless integrations throughout their ecosphere including a swap, games and staking/farming they have a lot to offer. Be sure to have a look at this one.

MC:$1,345,059 Holders: 7143 t.me/scorpfin DYOR

ZAINS RUGPULL OF THE MONTH: Meta Netflix a recently launched token with huge potential rugged at a MC of $92 million.

The Developers claim to have had their website hacked but have locked their TG chat and disappeared.

In a recent statement issued to Solidproof.io the projects founder Marek Jansky claims that the team are to blame for the scam and he remains adamant that he is innocent. It has to be added at this point that Marek has indeed KYC’d and appears to be accepting that this was in fact a preconceived rugpull carried out by his team. We have reached out to Mr.Janksy for a statement also but to date we are still awaiting his response.

The community has set up social media accounts to try and gather information on the team which will lead to a successful prosecution.

January 2022 | Volume 12

www.cryptoweeklymag.com

8

FUDDOXX Crypto Weekly

LATEST NEWS L

ast week we touched on the new FUDDOXX CHARITY WALLET, lets go a little deeper into this today and how we plan to operate it.

So the charity wallet will be aimed at victims of rugpulls, We need to make it clear from the outset that the charity wallet is not designed to be a free for all or to reimburse the losses made by victims of rugpulls but more to offer the opportunity for victims to recoup some of their losses through distribution of free tokens across a number of FUDDOXX verified projects.

At the time of writing we have a total of seven partner projects signed up to donate tokens for airdrops.

The concept is simple, Once a month FUDDOXX will select a recent rugpull and will drag all of its members into a separate Telegram group.

From here our lead Developer Wick will run a spin the wheel and select a number of winning wallet address’.

Each of these wallets will be dropped a limited amount of tokens from each of the projects donating. This will be limited to a maximum value of $25 per project to avoid dumping of their charts. However with 7 projects aboard this means each selected winner will receive a total of $175 in tokens. The number of recipients will vary month to month based on the amount of tokens donated and the price of each asset at the time of the draw.

We really hope to make this a huge success and to give something back to rug victims through the generosity of our partner projects. The exact launch date for the charity wallet deployment is yet to be confirmed but we will of course keep you updated here.

(If you own a project and would be interested in verifying with us and/or donating tokens please DM @ cryptogreenwick).

WICK’s UTILITY PICK: Moonbet The online casino & sports book

T

he worlds first community driven online casino and sports betting agency in the decentralised iGaming ecosystem.

Moonbet was launched in August 2021 and since its launch the project has held its own in an ever expanding field. Not only did the team launch the casino they also have its own native token, now the uniqueness of this token is what has made it so popular amongst the average punter for nothing more than owning the Moonbet token you actually own a share of the casino.

The casino accepts both fiat and crypto options for the punters to wage their bets, which will attract any casino or sports book enthusiast. So by owning the Moonbet token you become a share holder and receive profits as you would in any other profit sharing company structure.

January 2022 | Volume 12

How much do I own you may ask? Well it's 50% of the huge revenue of the casino and sports book and divided up based on your quantity of tokens you hold, which leads to passive income for nothing more than holding your tokens.

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FEATURE

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Crypto Weekly

The gain or loss is the difference between your purchase price, known as basis, and the value when selling or exchanging, and your tax rates depend on the length of ownership.

What happens if you fail to disclose crypto activity this tax season Kate Dore 'You're playing with fire if you don't report it.'

POINTS TO NOTE

Your tax return includes a question about "virtual currency," making it clear you must report crypto activity.

If you fail to report transactions to the IRS, you may be subject to interest, penalties, or criminal charges.

If you don't report it, you're playing with fire," said David Canedo, a CPA and tax specialist product manager at Accointing.

Recent years have seen a significant expansion of the crypto ecosystem.

Institutions such as the IMF embrace its innovations, but they also warn investors to exercise caution. Experts warn that hiding taxable activity could lead to IRS trouble. It may appear less appealing to report last year's cryptocurrency profits on your tax return after recent market dips.

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Bitcoin peaked at nearly $69,000 in November 2021, and Ether grew to almost $5,000 during the same period.

While values dropped in December, many investors still had sizable gains.

And the IRS has made it clear they are watching with a yes or no question about "virtual currency" near the top of the first page of your tax return.

"That's where the hammer comes down because they can say that you lied on a government document under penalties of perjury," said Ryan Losi, a Richmond, Virginia-based CPA and executive vice president of accounting firm PIASCIK.

How crypto taxes work Cryptocurrency may be subject to capital gains when exchanged or sold at a profit. Swapping digital coins, cashing out for U.S. dollars, or even making a purchase may be taxable events, Losi explained.

If you held digital assets for more than one year, you might qualify for longterm capital gains rates of 0%, 15%, or 20%, depending on your taxable income.

However, according to a CNBC survey, many crypto investors sell or exchange more frequently, triggering short-term capital gains, levied at regular income tax rates, up to 37% for top earners.

What's worse, figuring out your basis to calculate your crypto tax bill may not be easy with limited reporting from digital currency exchanges.

What happens if you don't report taxable activity If you don't report taxable crypto activity and face an IRS audit, you may incur interest, penalties, or even criminal charges. It may be considered tax evasion or fraud, said David Canedo, a Milwaukee-based CPA and tax specialist product manager at Accointing, a crypto tracking, and tax reporting tool. While the chances of IRS scrutiny are lower with limited staffing, the agency may pursue more significant amounts of money, he said.

For example, Canedo said there's a big difference between buying Bitcoin in 2012 and cashing out millions of dollars in 2021 versus small trades for $100 profit. But you still have to disclose everything regardless.

"You're playing with fire if you don't report it," he said.

Although the IRS has a three-year lookback for errors, Canedo said there is no statute of limitations for fraud.

Another risk is whistleblowers, who can report missing activity to the IRS for a percentage of penalties collected, Losi from PIASCIK said. "The number one way the IRS finds out about tax cheats is a former business partner or former spouse," he said.  CNBC

January 2022 | Volume 12

10

FEATURE Crypto Weekly

Quantum Computers Can Break the Encryption of Bitcoin Adam Hunt

T

he size of a quantum computer required to break Bitcoin's encryption is estimated in a new study.

The research team created a tool to determine how big a quantum computer needs to be to solve two different problems: cracking the encryption of Bitcoin and simulating the molecule responsible for biological nitrogen fixation. Moreover, such a quantum computer would need to be errorcorrected, allowing more extended algorithms to be run at the expense of more qubits. These conditions are described in the journal AVS Quantum Science.

function of key hardware specifications.

To run the quantum algorithm faster, we can perform more operations in parallel with more physical qubits."

"We introduce extra qubits if needed to achieve the desired runtime, which depends on the rate of operations at the physical hardware level," said Mark Webber of the University of Sussex.

"Our tool automates the calculation of the error-correction overhead as a

RSA encryption and the elliptic curve algorithm used by Bitcoin, both widely used encryption techniques, will one day be vulnerable to quantum computers, which are exponentially more powerful than classical computers in terms of breaking encryption.

Using the window of time between the announcement of a transaction and its integration in the blockchain, estimated to be between minutes and hours, the researchers estimated the size of the quantum computer necessary to break the encryption.

January 2022 | Volume 12

"State-of-the-art quantum computers have only 50-100 qubits. Our estimated requirement of 30 [million] to 300 million physical qubits suggests Bitcoin can be considered safe from a quantum attack for now, but devices of this size are generally considered achievable, while future advancements may bring the requirements even lower," said Webber.

According to Webber, "four years ago, trapped ions would need a billion physical qubits to break RSA encryption, requiring a device with an area of 100by-100 square meters. Today, with improvements across the board, this could be reduced to 2.5-by-2.5 square meters."  tweaktown

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This Gem Won't Stay Hidden For Long

dexioprotocol.com

dexiochat

12

FEATURE Crypto Weekly

Federal Reserve Opens Debate on Digital Currencies with Long-Awaited Report Fasika Zelealem

O

n Thursday, the Federal Reserve released a report that examines the idea's potential costs and benefits and invites public comments. The news is the first step toward seriously investigating a central bank's digital currency. In the report, the Fed avoided taking sides, set out a list of arguments for and against a digital currency, and posed questions shaping the debate.

Jerome H. Powell, the Fed chair, said that the central bank would engage with the public, elected officials, and other stakeholders as it examines the advantages and disadvantages of a central bank's digital currency. Powell

January 2022 | Volume 12

had said a report would be released in May 2021.

Central banks from the Bahamas to Sweden and China are experimenting with digital currency offerings, fueling concerns on Capitol Hill that the Fed might fall behind the competition.

Breakneck innovation in the private sector has suggested that the Fed, a key financial regulator, needs to understand budding private digital payment technologies.

A central bank's digital retail currency would be electronic cash. While consumers already use digital money

when swiping a credit card or making online purchases, that money is actually backed by the banking sector. A Fed version would be backed by America's central bank, just like a U.S. dollar bill.

Given the U.S. currency's dominant position in global finance, the Fed has clearly moved slowly and carefully as it weighs a digital dollar. And officials have emphasized that they would not move forward without congressional approval.

"The Federal Reserve does not intend to proceed with the issuance of a C.B.D.C. without clear support from the executive branch and from Congress, ideally in the form of a specific authorizing

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FEATURE

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Crypto Weekly

DIgital currencies

Central bank would engage with the public, elected officials, and other stakeholders as it examines the advantages and disadvantages of a central bank's digital currency Jerome H. Powell

law," the report noted. Researchers from the central bank outlined how a digital currency could offer benefits and entail risks. Such a currency "could provide a safe, digital payment option for households and businesses as the payments system continues to evolve and may result in faster payment options between countries," the Fed release accompanying the discussion paper stated.

But the paper also noted that a central bank digital currency would raise policy questions, including its effect on the financial sector, the cost and availability of credit, the safety and stability of the financial system, and the efficacy of monetary policy.

www.cryptoweeklymag.com

The Fed paper also seemed to slam the door on several possibilities — including the idea that a central bank digital currency could be created alongside consumer bank accounts at the Fed, something Democrats and proponents of broader financial inclusion has at times suggested.

A direct Federal Reserve account for individuals would "represent a significant expansion" of the central bank's role, the paper said, suggesting that banks and other financial institutions would operate such accounts.

Commercial banks, for their part, have been worried that the creation of a

central bank digital currency and Fed accounts could take away their deposit base and upend their business model.

The paper probably does not address all their concerns but may serve to calm worries that consumers could fully leapfrog the traditional banking system.

The Fed's paper pointed out that a potential bank currency could be designed in a way that would mitigate disruption to the banking system.

"A C.B.D.C. could spur innovation by banks and other actors and would be a safer deposit substitute than many other products, including stablecoins and other types of non bank money," the paper said. "These forms of non bank money could cause a shift in deposits away from banks even without a C.B.D.C." The Fed asks for public comment on more than 20 questions about central bank digital currencies and accepts responses for the next 120 days.  New York Times

January 2022 | Volume 12

14

NEWS Crypto Weekly

Corporate buyers of Bitcoins are keeping an eye on critical BTC price levels Martin Young

O

ver the past few days, Bitcoin prices have started to consolidate, following a fall of 22.3% this year. As of the writing of this article, BTC was changing hands for $36,135 in a rare gain of 1.7% over the past 24 hours. In late trading on Monday, the asset fell to a six-month low of around $33,500 but subsequently recovered slightly.

Following the formation of a large 'double top' chart pattern, Bitcoin prices are now approaching a critical juncture.

A break below the psychological $30K barrier, where the market bounced in July 2021, could worry some big corporate investors.

intelligence company holds 124,391 BTC worth an estimated $4.5 billion at current prices.

MicroStrategy (MSTR) made its first BTC purchase in August 2020 when the asset was trading at around $11,500 but the firm has made several additional purchases in 2020 and throughout 2021.

The dollar cost average for all of its BTC is around $3.7 billion, according to BitcoinTreasuries, meaning that Saylor's firm is still up approximately 18%.

Tesla and MicroStrategy's Bitcoin profits are evaporating

Speaking to Bloomberg last week, Saylor confirmed the company's intentions to hold: "Never. No. We're not sellers," before adding, "We're only acquiring and holding Bitcoin, right? That's our strategy."

Michael Saylor's software firm MicroStrategy is the largest corporate holder of Bitcoin according to BitcoinTreasuries.

The business

Tesla (TSLA), which has seen stocks slump this week, is the second-largest corporate holder of Bitcoin with 43,200 coins worth around $1.56 billion. It got

January 2022 | Volume 12

in around the same time last year when BTC was hovering at around $32K, so profit margins there have pretty much evaporated, and the firm is closing in on a breakeven point.

El Salvador will be at a loss now; however, the pro-crypto president remains resolute and also has no plans to sell. In fact, on Jan. 23, Nayib Bukele bought the dip adding a further 410 BTC to the nation's treasury.

Market Approaching Critical Level The next market move will be crucial for crypto. A bounce off previous support at $30K could see fresh momentum and investment. However, a fall below it is likely to result in a full-blown bear market that could last a couple of years.

All other crypto assets will follow in the shadow of Big Brother Bitcoin as they have done previously.  FX Empire

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16

FEATURE Crypto Weekly

NFT-Based Video Game Helps Gamers Earn Crypto While Playing Online Fasika Zelealem

Many teenagers grow up dreaming of earning a living by making and playing video games.

With the rise of non-fungible token based online games, that dream can be a reality for many. One of the hottest cryptocurrency trends in 2020 was playing video games to earn NFTs on platforms like Axie Infinity and Animoca.

Exactly what is an NFT? Non-fungible tokens are digital assets that correlate to digital investments in art, video games, videos and music.

The market first saw NFTs in 2014, although they didn't gain popularity until the last year or so.

January 2022 | Volume 12

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FEATURE

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Crypto Weekly

An NFT Has What Purpose?

What You Need To Know

NFTs offer a way to monetize digital assets. For example, Jack Dorsey — one of Twitter's co-founders — sold the first tweet he ever wrote as an NFT and profited over $2.9 million. .

Gaming platforms that reward players often require an up-front investment to access the network. Some games cost over $1,000 before players can join. It's possible to join with less money, but a lower initial investment also lowers the profit margin of earnings within the game.

Are NFTs Cryptocurrency?

Unlike cryptocurrencies, NFTs do not exist as a currency.

Cryptocurrencies and NFTs are similar in that they both operate on digital platforms and use similar technology.

Money and cryptocurrency are "fungible" because they can be traded for one another based on a uniform price.

Building Wealth The value of NFTs is not uniform, and they cannot be traded in the same way. NFTs have unique digital signatures. The NFTs are essentially digital versions of physical collector's items. Baseball cards, art on the walls, and autographed memorabilia.

What is the role of NFTs in online gaming platforms?

Video game ownership can be decentralized using NFTs. Gamers are shareholders in the platforms, not large corporations that take all the profits. There are two ways in which NFTs work in online gaming. In the first case, the NFTs are platformspecific. In the second, NFTs are earned for playing.

NFTs that are platform-specific Each NFT has its own set of rules that outline how gamers can trade and use it. It is important to note that some gaming NFTs only exist within their platform.

For example, someone may create a character or avatar and sell or trade it to another gamer. The idea is to trade up and earn more valuable NFTs as time goes on.

The technology that regulates NFTs is called a smart contract. These are the rules for how an NFT may be used within a game. The smart contracts are then stored within a blockchain to establish a history of value and trading.

Playing video games and earning NFTs. There are also ways to earn NFTs for playing on certain online gaming platforms like Axie Infinity and Animoca Brands. The platforms reward users with tokens and NFTs for playing longer. NFTs may exist within or

outside the game in the general digital realm. Tokens are usually a more stable asset because they are easier to trade 1:1 for an enduring value, but many gamers enjoy earning NFTs, too.

Money and Cryptocurrency from NFTs Many consumers have a question: How can you turn an NFT into real dollars or cryptocurrency? Players can sell and trade assets using an online market, auction house or exchange platform. How much a player earns is based on the perceived value of the asset within its platform.

If players sell NFTs for cryptocurrency tokens, they can use the tokens in digital assets with retailers and businesses that accept cryptocurrency as payment. They can also sell cryptocurrency tokens for real money if needed.

How Do NFTs Pose Challenges?

NFTs currently appeal to a small demographic of consumers. These products are highly technical, so they present challenges to consumers who aren't as tech-savvy.

Another obstacle is that a NFT's value is implied based on how gamers and other consumers value it. In the long run, consumers may lose money on NFTs. It is also possible that some gamers will not use NFTs as intended within their digital platforms. Selling an NFT outside of its platform for profit may negatively impact gaming platforms.

Final Take Playing online games and earning NFTs may be a fun and lucrative way to earn money. The best way to cash in on NFTs safely and securely is to learn more about the rules and regulations before getting involved in trading.  GoBanking Rates

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January 2022 | Volume 12

18

Crypto Weekly

of the

week NFT

Crypto Crash IS NOT What You Think

January 2022 | Volume 12

www.cryptoweeklymag.com

agromatic

agromatic

agromatic

agromatic

20

NEWS Crypto Weekly

The Bitcoin 1% controls a disproportionate amount of wealth

By Khristopher J. Brooks

C

ryptocurrencies have been touted as a new form of digital money that a government or central bank does not control, making them free from bias and unequal distribution. A new study by the National Bureau of Economic Research suggests that Bitcoin has developed its own group of one-percenters who are likely to reap the most benefits in the coming years.

The NBER study found that the top 10,000 Bitcoin investors own a combined 5 million Bitcoins, or roughly $230 billion's worth at recent prices.

Those figures mean that, even though Bitcoin launched in 2009, "participation in Bitcoin is still very skewed toward a few top players even at the end of 2020," said finance experts Igor Makarov and Antoinette Schoar, who wrote the study.

According to the Wall Street Journal, the top players control 27% of Bitcoin, despite representing only 0.01% of Bitcoin holders. Data from the Federal Reserve indicates that the top 1% controlled 30% of total household wealth compared to the old-fashioned dollar. Makarov and Schoar state in their study that there is "significant skewness in ownership" of Bitcoin, which "implies that the majority of the benefits from further adoption will probably accrue

January 2022 | Volume 12

only to a small group of participants."

Bitcoin and other digital currencies have been at the center of many of this year's wildest financial gains and losses.

Although considered a highly unstable form of money by most financial experts, Bitcoin reached new highs earlier this year, in part because more companies are accepting it as a form of payment.

and Schoar said in their study. Makarov and Schoar collected data from Bitcoin's inception 13 years ago to the end of 2020, when roughly 15 million Bitcoin were in circulation. There are 19 million Bitcoins currently in circulation, according to Blockchain.com data. The maximum number of Bitcoins that can ever exist is 21 million.

This month, the messaging service WhatsApp began piloting a new feature it said allows U.S. users to send money without paying fees, using cryptocurrency. The new payment service marks yet another example of how digital currencies are becoming more accepted in the mainstream U.S. financial scene.

The study does not reveal the names of people who own the most Bitcoin.

As their popularity rises, digital currencies have been the target of many multimillion-dollar scams in recent history. Between January and July, crypto accounted for $681 million in scam losses, according to a report from cryptocurrency intelligence firm CipherTrace.

Despite crypto's growing popularity, relatively few people own a large chunk of Bitcoin, making the digital currency much more vulnerable to large price swings from week to week, Makarov

Still, Makarov and Schoar's work adds credibility to the lists floating around the internet of investors with the highest crypto fortunes. Matthew Roszak, chairman of blockchain company Bloq, has a crypto portfolio worth more than $1.5 billion, Forbes reported in April. The Winklevoss twins Cameron and Tyler also reportedly became billionaires from investing in Bitcoin.

"Our results suggest that despite the significant attention that Bitcoin has received over the last few years, the Bitcoin ecosystem is still dominated by large and concentrated players, be it large miners, Bitcoin holders, or exchanges," Makarov and Schoar concluded.  CBS News

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Crypto Weekly

Income Island Phase 1.5 METAVERSE January 2022

FORGET THE ROCKET, DON’T MISS THE BOAT!

incomeisland www.cryptoweeklymag.com

incomeisland

incomeisland January 2022 | Volume 12

22

FEATURE Crypto Weekly

2022 Predicted to be a Record year for Metaverse Real Estate Yaёl Bizouati-Kennedy

D

espite the general trend of cryptos going down in this new year, there is still a piece of the market that continues to thrive. Metaverse virtual real estate is still growing at a fast pace, both in terms of interest and prices, despite the impressive traction it achieved in 2021.

Despite the calamity in traditional and crypto markets, two areas have seen actual adoption: NFTs and the Metaverse, said Hayden Hugues, CEO of crypto social trading platform Alpha Impact. "What started as a small group of niche enthusiasts has now grown into a full-blown ecosystem. Currently, Sandbox and Decentraland are major hubs of transactions, and the Enjin team

January 2022 | Volume 12

is incubating and investing heavily in projects in the metaverse. The concept of intrinsic value from the real world carries over into metaverse land."

Indeed, the market opportunity for bringing any number of metaverses to life may be worth more than $1 trillion in annual revenue, according to a Grayscale report. The asset management firm estimates that revenue from virtual gaming worlds could grow to $400 billion in 2025, from $180 billion in 2020.

Data from DappRadar shows that The Sandbox - one of these virtual worlds - generated nearly $12 million in land NFT trading volume, becoming the top-

grossing virtual world based on land NFT sales Decentraland generated $6.2 million.

According to a statement, Tokens.com recently bought 116 parcels of land in Decentraland's Fashion District for $2.4 million to host "the first of its kind virtual fashion event" on March 24th to 27th, which is "expected to draw some of the biggest fashion brands in the world."

The fashion show will feature avatar models, catwalks, pop-up shops, after parties, and immersive experiences, connecting digital to physical fashion.

"The event aims to strengthen the fashion ecosystem in the metaverse,

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Crypto Weekly

"Investors should also pay attention to projects like The Sandbox, which Ethernity recently partnered with to add its library of world-class licenses to its platform, expanding the ecosystem's reach."

James Aitken, Chief Marketing Officer, Ethernity Chain

connecting communities, new designer brands, and NFT projects," according to the statement.

James Aitken, Chief Marketing Officer, Ethernity Chain — an NFT project in which auctions verified artwork — told GOBankingRates that we're in the early stages of metaverse development, similar to the Myspace days of the rise of social media platforms.

"With global companies like Samsung entering the Decentraland metaverse and using NFT-utility to monetize assets on the blockchain and enhance user interaction, a new audience will be attracted to Metaverse platforms," Aitken said. "Investors should also pay attention to projects like The Sandbox, which Ethernity recently partnered with to add its library of world-class licenses to its platform, expanding the ecosystem's reach." He added that believers in NFT utility and metaverse projects would invest throughout the coming months, as will speculative investors. "Those could very well end up being good investments, but I would temper expectations for 2022.

We should expect to see big moves

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According to a statement, Tokens.com recently bought 116 parcels of land in Decentraland's Fashion District for $2.4 million to host "the first of its kind virtual fashion event" on March 24th to 27th, which is "expected to draw some of the biggest fashion brands in the world." happening in this space in 2023 and 2024," he said.

In addition, native tokens of several metaverses are also skyrocketing: MANA, Decentraland's underlying token is up 868% in the past year, while The Sandbox's token is up 2616.6% and Axie Infinity's was up 6592.5%, according to CoinGecko. A representative of digital asset trading firm Secure Digital Markets, Zach Friedman, told

GOBankingRates that he also expects the metaverse to continue to grow in popularity this year due to big brands and tech companies noticing the space's potential.

"These groups are focused on a digital 'land grab' to position themselves for the future. Facebook's 'Meta' has been a strong catalyst for growth and development in the broader market thus far, and the sentiment is very bullish.

New projects and secondary markets are heating up significantly," Friedman said.

In terms of what investors should look at, Friedman says they should pay attention to location and functionality, similar to traditional real estate.

"Blue-chip Metaverses such as Decentraland and Sandbox have been building new districts and bringing in events such as metaverse fashion week in DCL," he said. "These companies are not just dreamers but builders, supporting their Metaverses and bringing in realworld utility and user growth."  GOBankingRates.com

January 2022 | Volume 12

24

OPINION Crypto Weekly

El Salvador adopted Bitcoin first & May also be First to Go Bankrupt Andres Oppenheimer

E

l Salvador made headlines last year when it became the first country to use Bitcoin as legal tender, enabling people to buy anything with it. However, after Bitcoin's value dropped almost 50% in recent days, the question is whether it will become the first country to go bankrupt due to cryptocurrencies.

Several big-name economists believe that is already happening.

"El Salvador's adoption of Bitcoin has been an unmitigated disaster!" tweeted Nouriel Roubini, the economist who is best known for predicting the 2008 crisis. "The country is now effectively bankrupt." El Salvador's populist president Nayib Bukele, 40, first announced his decision to adopt Bitcoin

January 2022 | Volume 12

at a Miami conference in last June.

The Bukele-controlled Congress later passed a law making Bitcoin legal tender and making it mandatory to accept payments in that crypto-currency.

However, that part of the law was never enforced.

As the price of Bitcoin fell from more than $61,000 in October to $35,000 on Jan. 23, Bukele doubled down and purchased another $15 million in Bitcoins. "Some guys are selling really cheap," he tweeted. But economists aren't amused. Alvaro Trigueros, head economist of FUSADES, one of El Salvador's best-known non-government think tanks, says that this experiment is already costing the country $200 million

in funds that don't contribute anything to our economic development. "It was a waste of money."

I was told that Trigueros' estimate of $200 million includes:

The treasury funds are used to buy Bitcoin.

The price of the government's "Chivo wallet" application to send Bitcoins. and

The cost of implementing the $30 Bitcoin giveaway that Bukele gave all Salvadorans to encourage them to use Bitcoin.

El Salvador's government now finds itself short $1.4 billion to meet its

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Crypto Weekly

domestic and foreign debts. To make things worse, the nation's "country risk" — a measure that banks use to gauge its ability to pay its debts — has soared, and the value of El Salvador's bonds has plummeted.

"We're now in a high-risk situation, in which the economy could collapse," Trigueros told me.

The El Salvadorian Bitcoin experiment was already in trouble before the latest price collapse of the cryptocurrency.

Despite the government's $30 Bitcoin gift for each person who downloads its Chivo Wallet Bitcoin app, only 10% of Salvadoran companies have made at least one Bitcoin transaction, according to a FUSADES poll. When the $30 government handout was rolled out late last year, many Salvadorans used them to make purchases and haven't used Bitcoin since.

A separate poll of 480 business people

by El Salvador's Chamber of Commerce and Industry found that only 1% of the value of their sales involved Bitcoin. The U.S. dollar, El Salvador's legal currency, continues to be used for virtually

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all commercial transactions. "The implementation of the Bitcoin wallets program was very deficient. There were all kinds of technical problems," Jorge Hasbún, president of the Chamber, told me. "Some people made purchases in Bitcoins, and the money mysteriously disappeared," Hasbún added that, because of the digital wallet's technical problems and the wild swings in the price of Bitcoin, Salvadorans have become increasingly skeptical about the crypto-currency.

About 2% of family remittances sent

by Salvadorans living in the United States to their relatives back home are being sent in Bitcoin. But, other than that, virtually no Salvadorans are using Bitcoin, Hasbún told me.

There is nothing wrong with El Salvador allowing Bitcoin for some transactions, such as family remittances from abroad, to help people reduce bank commissions.

But Bukele went too far by gambling large amounts of government funds to buy an extremely volatile currency.

To make things worse, his entire Bitcoin program has been shrouded in

"The implementation of the Bitcoin wallets program was very deficient. There were all kinds of technical problems" Jorge Hasbún

secrecy, with few details known about the government's cryptocurrency transactions. My suspicion has always been that Bukele passed his "Bitcoin Law" as a public-relations ploy to portray himself as a cool, technologically-savvy leader — and to divert public attention from international criticism over his increasingly authoritarian rule.

Now, the country may pay a heavy price for his publicity stunt.  miamiherald

January 2022 | Volume 12

26

FEATURE Crypto Weekly

Bitcoin, the CryptoTeenager Throws Interest Rate Tantrum Lisa Pauline Mattackal and Medha Singh

T

he Bitcoin community is growing up. Original cryptocurrency turns 13 this year and is showing signs of maturing as a financial asset - but beware of teenage tantrums. Due to the large bets made by institutional investors, Bitcoin has become sensitive to interest rates, fuelling a sell-off this month as investors prepare for a hawkish Federal Reserve policy meeting.

We live in a different time. A cryptocurrency, born in 2009, was still on the fringes of finance during the Fed's previous tightening cycle, from 2016 to 2019, and barely correlated

January 2022 | Volume 12

with the stock market. Bitcoin has been positively correlated with the S&P 500 index since early 2020, according to Refinitiv data, meaning they broadly move up and down together. Their correlation coefficient has risen to 0.41 from 0.1 in September, where zero means no correlation and 1 implies perfectly synchronized movement.

August 2021 on Friday, some way off its November peak of $69,000.

By contrast, that coefficient was just 0.01 in 2017-2019, according to an International Monetary Fund analysis published this month. "Now that Bitcoin is not entirely held by early adopters, it's sitting in a 60/40 type portfolio," said Ben McMillan, chief investment officer of Arizona-based IDX Digital Assets, referring to the institutional strategy of allocating 60% of a portfolio to relatively risky equities and 40% towards bonds.

"It's not surprising that it's starting to trade with a lot more sensitivity to interest rates." Bitcoin closed below the $40,000-mark for the first time since

The total assets under the management of institutionally focused crypto investment products rose in 2021 from $36 billion in January to $58 billion in December, according to data provider CryptoCompare.

HEDGE AGAINST INFLATION? The crypto market is increasingly characterized by big investors rather than the smaller retail players who drove its early movements.

On top of this, there was bumper buying from the corporate likes of Tesla and MicroStrategy, plus hedge funds adding crypto to their portfolios.

"The cryptocurrency ecosystem grew from a total market valuation of $767 billion at the start of the year to $2.22 trillion by the end of the year," CryptoCompare said.

The drift towards mainstream finance raises broader questions in 2022 and beyond about whether Bitcoin can retain

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Crypto Weekly

Kraken Intelligence, a research blog from cryptocurrency exchange Kraken, said that about 60% of all Bitcoin in circulation hadn't changed hands in over one year, the highest level since December 2020.

Meanwhile, funding rates for perpetual swaps across major exchanges indicative of sentiment among investors betting on Bitcoin's future price movements - were reasonably flat, hovering around 0.01%, as per data platform Coinglass.

its role as a diversification play and hedge against inflation. IMF researchers said that Bitcoin's increasing correlation with stocks limited its "perceived risk diversification benefits and raised the risk of contagion across financial markets."

Bitcoin is also often regarded as a hedge against inflation due to its limited supply akin to gold, the more-established store of value in an inflationary environment.

However, its correlation with stocks has seen it become increasingly roiled along with broader markets by the most

significant annual rise in U.S. inflation in nearly four decades.

"In the current case, Bitcoin is not acting as an inflation hedge. Bitcoin is acting as a risk-proxy," said Nicholas Cawley, strategist at DailyFX, based in London. Jeff Dorman, CIO at digital asset management firm Arca in Los Angeles, added: "It is also a tad ironic given that the bull case for many digital assets in spring 2020 was expectations for higher inflation. Now that we have inflation, it is weighing on prices."

Investors are displaying a notable unwillingness to spend coins, according to blockchain data provider Glassnode.

"In the face of tumultuous and unconvincing price action, this signals that this cohort of holders are patiently waiting for higher prices to spend their respective supply," it said.

Favorable rates imply that traders are bullish, as they must pay to hold a long position, while negative rates mean traders must pay to have a short position or bet on the price falling.  Reuters

Now that Bitcoin is not entirely held by early adopters, it's sitting in a 60/40 type portfolio Ben McMillan

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January 2022 | Volume 12

28

HIDDEN GEMS Crypto Weekly

PROJECT 1

FuddoxxToken

FudDoxx Token (FDOX)

FudDoxx

FudDoxx

Building on security, FudDoxx offers a wide range of services to benefit the entire crypto space. The team has compiled a list of projects that have passed their extensive verification process. FudDoxx offers doxxing services to bridge the gap between investors and developers. The doxxing info received by the team is securely stored for use in the event that a project scams, and is proven as far as possible, then that information would be released to the public and authorities. FudDoxx Audit service goes beyond the detailed analysis of solidity code. Not only tearing apart the smart contracts, but their risk assessment factors in the audited projects vision, team, maturity, funding, and community.

name a few. The simple navigation process streamlines buying and selling digital art.

The FudDoxx team has also incorporated a beautiful, userfriendly NFT marketplace in their ecosystem, (see for yourself, FudCoinNFT.com), where you will find everything from pixelated images, audio, video, and unique sports memorabilia NFT's, to

FudDoxx Token (FDOX) launched on Binance Smart Chain with a total supply of 100 trillion and has 328 holders at the time of writing. A 12% tax is attached to every transaction which breaks down to 7% LP, 3% marketing in BNB, and 2% native reflections.

PROJECT 2

dexioprotocol.com

Swap platform: Complete (Swap.FudDoxx.com) Staking and Farming platform: In development ICO launchpad: In development

With so many avenues for continual success in crypto, FudDoxx truly covers every base with their comprehensive suite of revenue-generating, and security, features.

Dexio Protocol (DEXI)

dexiochat

It’s estimated between 3-4% of the world population is engaged with cryptocurrencies or blockchain technology in some way, and that number continues to grow. Dexioprotocol plans to help that growth through a medium most of the world is familiar with: Gaming. With a complete ecosystem of play-toearn games, Dexioprotocol wants to introduce the world to the possibilities of blockchain technology. Their aim is to become the industry standard in Augmented Reality (AR) application development, in addition to revolutionizing blockchain-based gaming, launching the most user-friendly NFT platform found

January 2022 | Volume 12

Fuddoxx doesn't stop there!

dexioprotocol to-date, and developing their own blockchain network and swap exchange.

This isn’t a new project trying to build hype before delivering.

Dexioprotocol has been quietly shaking up the blockchain space and setting itself apart from the rest since May 2021. In seven short months, they have successfully released: Dexi Wallet, its digital wallet available now on the Apple App Store and Google Play

www.cryptoweeklymag.com

HIDDEN GEMS

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Crypto Weekly

PROJECT 3

incomeisland.org

Income Island

incomeisland

Income Island Token is a one-of-a-kind concept, developed to make anyone generous stable profits on a daily basis. The integrated gaming system uses blockchain technology which will allow anyone to earn a passive income whilst having fun at the same time. In addition, you may buy and own a personal mining plot and even more than one to generate an income. You may rent out your plots to other players and earn NFT’s offering extra Island Tokens every time someone sells, meaning you earn an income while you sleep.

As Warren Buffet famously said “If you don’t find a way to earn money while you sleep, you will work until you die!"

PROJECT 4

agromatic.io

Through the ongoing development, Income Island will strive to make sure that the ecosystem is a safe and friendly environment to earn a passive income for the long term. Income Island Token, is not just all about the great rewards, it also has a great, doxxed, and highly dedicated team that is supported by a steadfast and strong community. The fundamentals for the ecosystem were created through Income Island`s global team and consists of both volunteers and working professionals from all over the world with skillsets ranging from web development, marketing, Dapp creation, and many other entrepreneurs willing to deliver a stellar financial product to the Income Island community. The Income Island Token is a revolutionary coin, created to be a safe.

Agro-Matic (AMT)

agromatic

Agro-Matic is a decentralized system that aims to accelerate the adoption of cryptocurrencies in Africa while connecting the world to the various natural resources on the continent and helping generate passive income streams through Defi, Lending, Staking, and Yield Farming.

Agro-Matic is built on the Polygon (Matic) Blockchain. Polygon

www.cryptoweeklymag.com

incomeisland

agro_matic?s=09l is one of the fastest chains. Through investment in crop and livestock farming, a charity for farmers, and lots more, Agro-Matic intends to use technology to create massive job opportunities and accelerate the ease of investing in agriculture through investment in ease of access. Agro-Matic tokenomics, is made of provision for charity, development, and marketing, which work in tandem to achieve company goals.

January 2022 | Volume 10

30

FEATURE Crypto Weekly

Metaverse Study: 70% of Virtual Store Visitors Make Purchases Adriana Lee

I

n the early days of the web, fashion slept on e-commerce's promise, but it doesn't want to do the same with the Metaverse. The upcoming 3D version of the internet is causing brands to partner up, develop strategies, launch divisions, and more. According to a new survey released Tuesday, their leap of faith appears justified. The virtual e-commerce platform Obsess engaged Kantar to measure sentiment toward e-commerce in the virtual worlds. One of its surveys of 1,001 U.S. consumers

January 2022 | Volume 12

found that these types of shopping experiences inspire a great deal of enthusiasm and are likely to induce repeat purchases.

According to the report, "The Metaverse Mindset: Consumer Shopping Insights," 70 percent of those who visited virtual stores made a purchase. Millennials topped the list at 77 percent, leading to 69 percent of Gen Z and 67 percent of Gen X shoppers. The findings focused heavily on gaming. Seventy-four

percent, or nearly three-quarters, of Gen Z participants purchased digital items in games, such as avatar accessories, skins, or clothing. Sixty-two percent of players purchased something in-game, and 52 percent would pay up to $49.99 for something for their avatar.

"The numbers were higher than we had expected in some cases because the technology is still relatively new," Neha Singh, CEO of Obsess, told WWD. 60 percent of Gen Z consumers think

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Crypto Weekly

"It's actually being delivered to consumers in a way that is easy for them to access. They don't have to put on a virtual reality headset, and they won't have to download an app," she continued.

"The hardware network speed has only been strong enough in the last like two to three years for them to be able to deliver this. And then, of course, brands are actually using it." She noted that the other inflection point was the maturity of gaming platforms.

brands should sell their products on metaverse platforms - and that's not just for digital or physical products.

"It's more about the fact that they are spending so much time on Roblox and Fortnite, and the expectation of this demographic is that the brands meet them where they are." Nearly 75 percent of Gen Z consumers reported buying a digital product in a video game, and 60 percent of these young consumers believe selling on metaverse platforms is a must for brands.

from their favorite brands in video games, 51 percent of Gen Zers and 44 percent of Millennials said they would be very interested. Forty-one percent of Gen Z and 38 percent of Millennial respondents showed interest in exploring any metaverse environments from the brands.

Of that group, 54 percent said they want to be able to shop anywhere they go online; 45 percent think virtual stores should work like online shopping malls, and 41 percent want brands to set up metaverse stores because it would be convenient for buying both physical products and digital goods like NFTs. One-third of all respondents, including 40 percent of Gen Zers and 40 percent of Millennials, want to shop for real or virtual products in the Metaverse.

"In terms of actually being practical, on a mobile device, with the hardware that we have today, and network speeds that we have today, it's only been possible in the last two or three years," she said.

Singh pointed out that, while virtual experiences and 3D stores existed before, the right conditions for them have only come together recently.

In 2019, the Entertainment Software Association revealed that 65 percent of American adults spent time playing some type of video game, representing some 164 million people. The number jumped during the pandemic by roughly 30 percent in 2020, and in 2021, the U.S. hit 227 million gamers. Most stated they plan to continue, even after the pandemic is over.

"The pandemic accelerated that, with Roblox now having 45 million daily active users and Fortnite having 350 million monthly active users," Singh explained.

"So now this is a very significant group of people for these brands to reach."

Gaming is but one gateway to the Metaverse. Other companies launch their own virtual e-commerce stores, relying on tech partners like Obsess to build them. These immersive environments may seem like cuttingedge fare, but such spaces can feel more

But traction doesn't always hinge on younger shoppers. Fifty-four percent of Gen Zers who shopped in a virtual store before said they were likely to do it again, while 67 percent of Gen Xers said the same.

Marketers may want to note that the enthusiasm goes beyond shopping and transactions for some consumers.

When researchers asked participants about exploring virtual experiences

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familiar to shoppers. "It's getting closer and closer to how our brains operate, so it's straightforward for people to understand," she said.

decade — for it to arrive, the fashion sector seems sold. It doesn't want to miss out on the opportunity in this future, likely because the past haunts it.

Obsess notes that interest in its platform jumped last year, remarkably after Facebook changed its name to Meta. The company, which has created virtual online stores for Christian Dior, Ralph Lauren, Fendi, Charlotte Tilbury, Dermalogica, and others, saw a traffic boom. In contrast, average monthly inbound inquiries from brands seeking virtual stores and metaverse solutions jumped threefold. Although skeptics remain dubious about the Metaverse, and it will take years — even up to a

Brands saw the web debut as a publicly available service in the early 1990s and watched as start-ups like Amazon started selling books on the internet soon after.

By the time Gucci opened its e-commerce site in 2002, a landmark launch for luxury online shopping, Amazon had finally gotten the hang of internet retail and reported its first quarterly profit of $5 million. The e-commerce giant, which plans to launch its first brickand-mortar apparel store later this year, forecasts net sales in the fourth quarter

of 2021 in the range of $130 billion to $140 billion.

Lesson learned, and fashion is not hesitating this time with the Metaverse.

According to the Obsess/Kantar report, many consumers can't wait either — including some who don't exactly know what the Metaverse is. At 53 percent, just a little more than half of the survey participants said they are very or somewhat familiar with the term. Roughly 40 percent said it's still in the conceptual stage but know it will someday involve connected online platforms and avatars, and 27 percent think that "metaverse" refers specifically to tech owned by Facebook's Meta.

Whatever they believe it is, 38 percent overall want to shop there. Desire looked strongest among the Gen X crowd, at 56 percent, but captured fewer Millennials, at 44 percent, and Gen Z shoppers, at 42 percent. For a tech movement that hasn't yet begun in earnest, the numbers already look promising, though Obsess believes that retailers and brands will need to hone their Metaverse messaging and make the appeal clear. Many, including its clients and more, including brands such as Gucci, Nike, OTB Group, Rebecca Minkoff, and numerous others, have already started. Good thing they will have plenty of time to work on it.  WWD

January 2022 | Volume 12

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BEGINNERS GUIDE Crypto Weekly

What Is a Stablecoin?

A

stablecoin is a cryptocurrency that enjoys price stability through a reserve asset. There are several reasons stablecoins are gaining popularity:

Instant processing of cryptocurrency.

Cryptocurrency payments are secure and private.

Stable fiat currency.

Many people believe that cryptocurrencies' wild price fluctuations mean they aren't suitable for day-to-day transactions. A currency must be both an effective means of exchanging goods and services (i.e., acting as a store of value) and a reliable unit of account (i.e., having stability). Consumers will not adopt it if they do not have confidence in the future purchasing power of crypto. Cryptocurrencies must be stable enough to be used by people rather than saved.

Types of Stablecoins Because government authorities issue fiat currencies, they tend to be viewed favorably, providing price

stability for fiat currency. But this also means that most fiat currencies are controlled by their respective central banks. Stablecoins attempt to bridge this gap between fiat currencies and cryptocurrencies. Stable coins fall into one of four broad categories: fiat pegged (based on national currencies), crypto pegged (based on cryptocurrencies), non-collateralized (algorithmic), and commodity-backed.

Fiat-Collateralized Stablecoins To issue a suitable number of crypto coins, fiat-collateralized stablecoins maintain a fiat currency reserve, like the U.S. dollar. Some stablecoins are collateralized with precious metals and commodities like gold and silver, but most are collateralized with dollar reserves.

Independent custodians maintain such reserves, who are regularly audited to ensure compliance with the requirements. There are two popular fiat-collateralized stablecoins, Tether and TrueUSD, which have a value equivalent to that of a single U.S. dollar and are backed by dollar deposits.

Crypto-Collateralized Stablecoins With crypto-collateralized stablecoins, other cryptocurrencies are used as collateral. Due to the high volatility of the reserve cryptocurrency, these stablecoins are overcollateralized.

A more significant number of

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How Are Stablecoins Regulated?

Regulators continue to closely monitor stablecoins because of their $130 billion market size and the potential effect on the broader financial system. According to the International Organization of Securities Commissions (IOSCO), stablecoins should be regulated like payment systems and clearinghouses.

Stablecoins identified by regulators as disrupting payment and settlement transactions would be specifically targeted by the newly proposed rules.

cryptocurrency tokens is maintained as a reserve for issuing fewer stablecoins.

For example, 2x worth of a particular cryptocurrency's value may be held as reserves for issuing only 1x worth of crypto-backed stablecoins to account for potential price volatility. One way to contribute to price stability is by having frequent monitoring and audits.

Non-Collateralized (Algorithmic) Stablecoins In contrast, non-collateralized stablecoins do not depend on a reserve but instead rely on a mechanism, not unlike those used by a central bank to keep their price stable. Dollar-pegged base coins use a consensus mechanism to increase or decrease the supply of tokens according to demand. This is

similar to the printing of banknotes by a central bank to maintain the value of its fiat currency. The solution consists of implementing a smart contract on an autonomous decentralized platform.

These smart contracts manage the supply of tokens in circulation.

Commodity-backed Stablecoins backed by physical assets such as gold, oil, and real estate are commodity-backed stablecoins. One of the most popular commodities that can be collateralized is gold; two of the most popular stablecoins that back gold are Tether Gold and Paxos Gold. However, it is essential to remember that these commodities can, and are more likely to, fluctuate in price and, therefore, can potentially lose value.

What's Next?

As we have seen, there are a variety of different types of stablecoins. Each has its own benefits and drawbacks, but they all share one common goal--to maintain a stable price. As a primary tool for cryptocurrency adoption in loan and credit markets, stablecoins inherit many functions formerly reserved for fiat currency. In this sense, they represent a new type of digital asset, one that has been designed to fit into existing financial infrastructure.

Regulators are just starting to catch up with this new type of digital asset, and as DeFi continues to develop, stablecoins will play an increasingly important role in the broader financial system. What do you think about stablecoins? 

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FEATURE Crypto Weekly

No One Controls the Tornado Cash Privacy Mixer Protocol, so No Person or Government Can Stop it Sam Reynolds

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ollowing the revelation last week that hackers were using Tornado Cash to mix stolen ether from the digital asset exchange Crypto.com, Tornado Cash has gotten much attention. The mixer allows users to obfuscate their digital trails on the Ethereum blockchain. Ethereum's best-known coin mixing service cofounder says privacy protocols protect people's financial privacy. Co-founder Roman Semenov said the team has

January 2022 | Volume 12

little control over what its users do with the protocol as it's designed to be autonomous and outside developers' control.

"There is not much we can do in terms of helping investigations because the team doesn't have much control over the protocol," he told CoinDesk. "The Tornado Cash team mostly does research and publishes the code to GitHub. The

community makes all the deployments, protocol changes, and important decisions via Tornado Governance DAO and deployment ceremonies," an event when new code is pushed live.

The way the protocol is designed, decentralized and autonomous much like decentralized finance (DeFi) protocols, means there's nobody in charge. There's no corporate office,

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executive team, or CEO where the buck stops. Semenov said there's no backend, and the user interface comes from an Ethereum Name Service domain – a service that represents Ethereum addresses as familiar-sounding domain names.

"The protocol was specifically designed this way to be unstoppable because it wouldn't make much sense if some third party [like developers] would have control over it. This would be the same as if someone had control over Bitcoin or Ethereum," he told CoinDesk.

Do Tornado Cash's actions constitute a criminal conspiracy?

The Tornado Cash team mostly does research and publishes the code to GitHub. The community makes all the deployments, protocol changes, and important decisions via Tornado Governance DAO and deployment ceremonies

Users of Tornado Cash are not the first to be able to mix or tumble their cryptocurrencies. Since the dawn of blockchain technology, they have existed, with development efforts increasing in parallel with the ubiquity of darknet markets like Silk Road or Alpha Bay.

is now director of government affairs at the Blockchain Intelligence Group, told CoinDesk that he doesn't believe Tornado Cash is laundering money, comparing it to evading the police. However, it would be justified to investigate it as part of the scheme.

Mixers are well known to law enforcement. In a previous interview, Bill Callahan, a former DEA agent who

A mixer who knows or should have known the source of the funds and the beneficial owner, and the funds are from

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an illicit source, would be investigated as part of a money-laundering scheme.

Additionally, he said they could be charged as an accessory to the crime in a criminal conspiracy.

The Financial Crimes Enforcement Network (FinCEN) said mixers like Tornado Cash might fall under the definition of a money transmitter and therefore have "obligations" set by the Bank Secrecy Act (BSA). But it hasn't given any further guidance.

With the high-profile takedown of darknet Bitcoin mixing service Helix, then-U.S. Assistant Attorney General Brian Benczkowski said that "[obscuring] virtual currency transactions in this way is a crime."

However, Larry Dean Harmon, the service's operator, pled guilty. The prosecution never had to prove its case, meaning there isn't a precedent that can say with certainty that this is money laundering. For its part, Tornado Cash's Semenov said law enforcement hasn't been in touch.

"Law enforcement usually knows that

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FEATURE Crypto Weekly

the developers don't have any ability to assist with an investigation or change the protocol," he told CoinDesk.

protect the safety of crypto traders as the blockchain reveals everything for all to see.

"Law enforcement very rarely tries to contact us directly," he said. Instead, Semenov said law enforcement would spend its time obtaining logs from infrastructure providers like Cloudflare or Infura, as these could be tied to IP addresses. Law enforcement would also likely look at any addresses linked to a centralized crypto exchange. The wallet would have customer details linked to it via the know-your-customer (KYC) process.

"Since all their crypto portfolio is visible to the public, the holders of significant amounts of crypto are very vulnerable to becoming victims of kidnapping, torture, and blackmail," Semenov told CoinDesk in an interview. "We think that it's a grave threat, and the privacy protocols are very important to ensure their personal safety. The banks don't disclose your personal holdings to anyone who asks, and we think it should be the same way with crypto."

The privacy versus security debate

Semenov said the debate about the limits of digital privacy isn't anything new. It has always flared up any time new encryption technology has become available to retail users.

Semenov downplayed any ideas that the protocol is a tool for criminals and said it's an important mechanism to

"In the 1990s, the government claimed that no strong encryption should be available to people at all, arguing that it would help terrorism," he said. "In the late 2000s, there was a similar fight over end-to-end encryption in messengers where people were defending their right to private communication."

Now, in the 2010s and 2020s, crypto is this latest frontier, and Semenov said his efforts in defending people's right to financial privacy are the "continuation of the same story that started a long time ago." He added, "Can you imagine the world where the cypherpunks conceded from the start and we wouldn't even have HTTPS encryption of our web communications?"  Coin Desk

Since all their crypto portfolio is visible to the public, the holders of significant amounts of crypto are very vulnerable to becoming victims of kidnapping, torture, and blackmail

January 2022 | Volume 12

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Manifest Performance indicators, balance sheets and regulator guidelines are not the most appealing things to hear about in crypto, but it's necessary for us to operate correctly. Bouncing off of that, there is a certain appeal to a crypto that has its ducks in a row. Countless projects are removing general quality and value from their project and replacing it with marketing and high spirits. We are happy to get people pumped up about crypto, but it has to be done the correct way. For example, you want to tell people key things of what to look for when considering their vote of confidence in that particular crypto. Who is the team? Previous quality projects completed? Are they purely marketing? Is the use case frantically thought of or flimsy? Does the team have a vision of expansion in the future? Does the project rely on people's addiction?

Of course, this isn’t financial advice, but we feel you should have a checklist that you are checking off when you inspect a project. This can be as vast as you want it to be and ultimately can be tuned to your liking. This can be personal auditing procedures or standardized trading strategies. These steps take time to curate correctly and can benefit the user greatly. A simple checklist. Of course you can bend your own rules, but these rules protect you from overvalued and hollow projects. The goal of most of the projects we currently see is short term, under established and widely false. Crypto is fast, this doesn't mean you can forget the key factors of a trade and fundamentals of crypto. Never mistake a tax on a taxation token as a use case or utility.

All that brewing has ultimately led to the market's sour taste and low level mentality. The key to leveling the playing field is a short and sweet one, actually educating people on crypto. A lot of projects will detest what we have to say about them in a formal audit. We have decided to audit any project or firm that audits us, to help people better understand the process. As we pay for more intense auditing services, we can perform even deeper audits of these projects. Meaning, we will bring you the truth. This is going to make us naturally unpopular, we are crypto veterans, we will be alright. We buy the dip!

In summary, don't trust us, or anyone else until you know their tokenomics and team. This is the most basic level of understanding the project. Please make efforts to learn more about the cryptocurrency space overall. We will be in the telegram often to answer people's questions. We don't allow posting of other projects in the group, but if you bring your checklist to us, we can help refine that with you.

Redutoken.com Redutoken.com

40

FEATURE Crypto Weekly

Ethereum 2.0, good-bye, we barely knew you As we know it, Ethereum 2.0 is over, and that's okay.

Anders Bylund Ethereum 2.0 has been avoided by developers for several months now.

S

On the ethereum.org community portal, the name change is now official.

Names have meanings, right?

protocol started to move away from the Ethereum 2.0 name and abbreviations such as Eth1 or Eth2 in August 2021.

The legacy code branch was officially renamed "execution," while the newfangled Eth2 protocol moved into a folder called "consensus." These names more precisely reflect what each code collection actually does, as the Ethereum 2.0 update is intended to revamp the transaction consensus mechanism without affecting the way Ethereum executes its smart contracts and decentralized applications (dApps).

The

So now, the Ethereum community

top the presses! The Ethereum cryptocurrency's highly anticipated platform upgrade is no longer known as Ethereum 2.0!

All right, you can take a deep breath now. It's just that the Ethereum 2.0 rebranding effort has ended. The technology updates are still happening, and Ethereum will soon lose the stigma of being slow and expensive to maintain and use.

developers

of

the

January 2022 | Volume 12

Ethereum

Ethereum is still moving forward with all of its planned technology updates. has rolled out the same terminology updates to the ethereum.org web portal, where coders and enthusiasts come together to discuss the project's future direction. This is as close to an official name change as you'll get in a global project where policy decisions are made by popular vote among a wide range of stakeholders.

So the old Eth1 codebase is now officially known as the execution layer of Ethereum. Eth2 is now the consensus layer of the same system. The two layers are expected to merge in 2022, simplifying the system back to being

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Ethereum again, but with many essential upgrades. There will be no new token for the system formerly known as Ethereum 2.0, and Ether holders don't have to do anything different. The upgrades should be transparent for most Ether owners unless you want to participate in the new staking process.

The consensus layer would still smell as sweet under any other name.

As a reminder, here's what the technology now known as the Ethereum consensus layer actually does. First, the project added a new blockchain ledger known as the Beacon Chain. This is the backbone of the new consensus system, where new development occurs and fresh features appear first. At launch, Beacon gave the Ethereum community access to a proof-of-stake consensus system in addition to the old proof-of-work platform. Ethereum holders can now stake their ether tokens to participate in the transaction consensus process -and earn dividend-like rewards in return.

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The upcoming merge will shut down Ethereum's inefficient and powerhungry proof-of-work system, replacing it entirely with the new Beacon Chain. Buying Nvidia and Advanced Micro Devices graphics cards for the purpose of mining ether tokens won't be a thing anymore, sending mining enthusiasts over to other proof-of-work cryptocurrencies and reducing the demand for high-end graphics cards. AMD and Nvidia seem to underplay the amount of business they earn from Ethereum-mining operations. The proof will be in the pudding when the mining option goes away and leaves those cards on store shelves, where gamers and multimedia professionals can find them.

Finally, in 2023, the revamped Ethereum system -- no longer divided into separate consensus and execution networks but folded into a single cohesive system again -- will launch shard chains on top of the Beacon chain's proof-of-stake platform. Sharding will multiply the number of available consensus chains

by 64 at first and even more later on, massively amplifying Ethereum's processing speed and flexibility.

This is the part where the new version of Ethereum becomes a true competitor to the fastest of today's smart contract platforms.

The Cardano, Avalanche, and Solana developer communities aren't sitting on their hands, either, of course. But Ethereum's back-end upgrades make sure that this network and its tokens remain relevant in a rapidly evolving cryptocurrency market. The so-called Ethereum killers are really just lighting a fire under Ethereum's people to keep up the good fight.

All of these upgrades are still in the cards for Ethereum. There's just no need to think of it as Ethereum 2.0 anymore. We have twin systems under the execution and consensus brands for now, and the whole shebang will soon just be known as Ethereum again.  Motley Fool

January 2022 | Volume 12

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TAX TIME Crypto Weekly

Cryptocurrency Traders Must Report to the IRS & Here's How If you traded cryptocurrency for the first time last year, one piece of advice from professionals is to take your tax preparation seriously.

O

ver the last few years, the IRS has shown increasing interest in cryptocurrency reporting. According to Douglas Boneparth, a certified financial planner in New York City, you don't want to lose money and time reconciling your tax liability.

property, so they're taxed the same way as stocks. If all you did was purchase cryptocurrency with U.S. dollars and these assets have been sitting untouched in an exchange or your cryptocurrency wallet, you shouldn't need to file tax returns this year.

So as tax season gets into full swing, here's a quick guide to which cryptocurrency activity is reportable, how it's generally taxed and the best ways to prepare.

When certain events occur, reporting is required, most commonly:

Taxes you need to file with the IRS The IRS treats virtual currencies as

January 2022 | Volume 12

Exchanging one cryptocurrency for another.

Buying cryptocurrency with fiat dollars (government money).

Paying for goods and services with cryptocurrency (e.g., buying a cup of coffee).

The key distinction is that triggering a taxable event does not necessarily mean that you will owe taxes, said Andrew Gordon, a certified public accountant and tax attorney in Illinois. Just because you have to report a transaction doesn't mean you'll end up owing the IRS for it.

Cryptocurrency and its taxation If you sell an asset for a profit, you may be liable for capital gains tax. To

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3. Make use of tracking tools Reporting a single trade on one exchange likely won't be difficult. But a "typical taxpayer has three to five wallets and exchanges," according to Shehan Chandrasekera, CPA and head of tax strategy for CoinTracker. This makes it harder to reconcile cost basis across varying platforms. If you're an active trader, it might make sense to invest in software that can help track your transactions.

4.

determine your exact gain or loss, you'll need the date you acquired the cryptocurrency; the date you sold, exchanged, or otherwise disposed of it; and the cost basis (the amount you paid plus transaction fees).

Depending on how long you held the asset, gains are taxed at either the short- or long-term rate. Short-term gains for assets held less than a year are taxed as ordinary income, while longterm gains for assets held more than a year are generally taxed at 0%, 15%, or 20%, depending on your taxable income and filing status.

For example, say you purchased $2,000 worth of a cryptocurrency in January 2021 and sold it two months later for $5,000. That $3,000 capital gain would be subject to the short-term capital gains rate.

cryptocurrency, the IRS is signaling that those who fail to report won't be able to feign ignorance, Gordon says.

2. Make sure you have your records in order Cryptocurrency exchanges won't be required to send taxpayers 1099-B forms, also known as tax-reporting summaries, until the 2023 tax year. So the onus is on traders to keep accurate records of their transactions. Many exchanges, such as Coinbase, allow you to download your trading history, which might make it easier for you, tax software, or a tax preparer to calculate gains and losses. If you made trades offexchange, though, you might need to set aside some additional time for digging.

Consult A Professional

Consider working with a cryptocurrency-savvy tax professional if your tax situation is complex. They can guide you through the various accounting strategies the IRS permits for reconciling your gains and losses and help determine which one makes the most sense for you.

5. Make Losses Work To Your Benefit If you didn't take advantage of taxminimization strategies last year — such as tax-loss harvesting, gifting, or donating — but you realized losses, you still have a chance to lower your tax bill.

You can deduct up to $3,000 of your losses on your taxes if you sell a currency for less than what you paid for it.  CBS News

Once you've calculated your gains and losses on Form 8949, you'll need to report them on Schedule D of Form 1040.

Prepare yourself 1.

Tell The Truth

If you omit information on your taxes, there's a risk of penalties, fees, and even tax evasion charges in severe cases.

And with the revision of Form 1040, which now features a direct yes-orno question on whether you received, sold, exchanged, or disposed of

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FEATURE Crypto Weekly

Experts Say Increased Adoption May Temper Crypto Winter Outcomes Yaёl Bizouati-Kennedy

January 2022 | Volume 12

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Crypto Weekly

C

ryptos have been collapsing since the start of the year, reigniting fears of potential crypto winter. However, experts disagree with this premise and point to differences with previous crypto winters - notably, that of 2018 stating that increased adoption will help temper the current bear market.

Despite reaching an all-time high of $69,000 in November 2021, Bitcoin has suffered from one of its biggest drawdowns - the 52.3% drop from the peak thus far ranks 6th in Bitcoin's history, according to a NYDIG report.

"This is a strikingly similar decrease and duration as the drawdown exhibited over the spring of 2021, with the caveat that this drawdown could continue to grow larger. Bitcoin's largest three drawdowns were also its longest, coinciding with the end of cyclical price rises."

While many investors are reeling from their losses, not everyone agrees that the current situation can be compared to the crypto winter of 2018, when Bitcoin fell more than 75% from previous peaks, according to Barron's.

Some experts believe we already have entered another so-called crypto winter, including David Marcus, former head of Novi at Meta, who tweeted on Jan. 24 that "it's during crypto winters that the best entrepreneurs build the better companies. This is the time again to focus on solving real problems vs. pumping tokens."

It's during crypto winters that the best entrepreneurs build the better companies.

This is the time again to focus on solving real problems vs. pumping tokens

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Josh Olszewicz, head of research at Valkyrie Funds, told GOBankingRates that the drawdown in this market might be similar to the one we saw in 2018 and a correlation to the spectre of rising interest rates is notable. Still, the market is not the same as it was back then. Venture capital inflows totaled $33 billion last year, and many of these investments were directed toward building the financial system of the future, Olszewicz said. He added that El Salvador has adopted Bitcoin as legal tender, and many other countries are considering the same.

He noted that another point of difference is that there are several spot Bitcoin products trading on exchanges outside the U.S. and Bitcoin futures exchangetraded funds and other ETFs. These offer indirect exposure to Bitcoin trading in the U.S., alongside the many companies that hold Bitcoin in their treasuries, which he describes as "a massive leap forward for digital assets." "Sure, things look a bit grim right now, but the stage is hopefully set for a strong recovery, and we remain far more optimistic that this is merely a correction before the consolidation that leads to a recovery sooner than many expect," he added.

BLOCKv co-founder Reeve Collins told GOBankingRates that this time around's crypto winter will look different than the last, in part because the space has grown not just in size but also in functionality and players. Collins said that what crypto can do now -- banking without banks with DeFi, NFTs, even fun games -- is far superior to what the OGs could do in 2017-2018. "Even if we see big price drops, the development of worthwhile projects in the cryptoverse will continue apace, thereby spurring even more adoption. Most investors and most people would benefit from zooming out, not getting too worried about volatility, and focusing on quality projects. This moment, when we look back in time, will be seen as a crypto spring."

Some in the industry believe that this crash is similar to the one of last May, when prices recovered in only a few short months, including Josh Goodbody, COO of Qredo, who tells GOBankingRates that this is less likely to be a prolonged crypto winter and more likely to be a short-term bear market.

"The price action is a distraction from the fundamental mission — that we are rebuilding the financial industry and changing the way the internet works. It is going to take a lot more than a quick sell-off to take us back into a cryptowinter," Goodbody said.  GOBankingRates

January 2022 | Volume 12

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NEWS Crypto Weekly

NFT Collectors Suffer Catastrophic Losses Due to Marketplace Exploit Sean Dickens

A

PI errors on popular NFT marketplaces OpenSea and Rarible have caused NFT collectors to suffer massive losses on their prized Bored Apes and Cool Cats. The problem was caused by NFT collectors accidentally canceling their listings on OpenSea by transferring their assets to another wallet in order to avoid cancellation fees, which can reach as high as $100 depending on gas prices.

The listing was 'canceled' as it no longer appeared on the front end of OpenSea's user interface as 'listed'. Nevertheless, the listings were still available as older 'listings' on the alternative marketplace Rarible, which uses OpenSea API data to list and display NFTs. Over time, collectors began transferring their NFTs back to the original wallet.

Now, unbeknownst to them, their prized assets were again purchasable for unbelievably low prices as the listings were still 'valid' on Raible. As collectors began to transfer their NFTs back to the original wallet, the listings remained 'open' on Rarible as the blockchain still

January 2022 | Volume 12

recognized that the NFT was listed at the original listing price. Collectors lost their prized assets at unbelievably low prices, even though the listings were no longer available, as OpenSea's front end indicated that the listings had expired, meaning they were unaware their prized assets were still available, causing catastrophic losses to a select few.

The exploit started early this morning with a number of below-market-value purchases from OpenSea user' jpegdegen love 'for three Bored Apes, two Mutant Apes, a Cool Cat, and a Genesis CyberKongz NFT. It's now believed that the exploiter interacted directly with smart contracts to 'bypass' the OpenSea interface and discover the listings that were still available for purchase 'on-chain' – thus making them purchasable without the holders being aware.

OpenSea Rarible exploit hack Coin Rivet The person behind the exploit, 'jpegdegenlove,' has managed to gain around 332 ETH ($737k) following the

exploit. Following the low-ball purchases, the NFTs were then relisted at their perceived market value and instantly snapped by other collectors seeking the rarest assets available on the market.

Collectors are now being urged to cancel their older listings on Rarible to ensure that their assets are safe from the exploit. In addition, some prominent members of the Bored Ape community are planning on opening a fund to help recuperate the losses incurred by the unfortunate BAYC holders affected.

Raible moved swiftly to encourage users to cancel their older listings when the exploit was first discovered by canceling all OpenSea orders on its platform and informing users how to cancel their listings properly.

Today's exploit now provides the first stark reminder of the potential ramifications of the exploit and the costly mistakes that can be made in the unpredictable NFT space.  Coin Rivet

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