Crypto Weekly 11/04/2022

Page 1

HIDDEN GEMS

BEGINNERS GUIDE

CRYPTO Page 15

REAL ESTATE INVESTING MADE EASY WITH ESTATEX Page 22

NFT CRAZE "BONKERS" Page 05

WORLD CRYPTO CAPITAL Page 06

IS WEB3.0 MAINSTREAM?

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VIDEO OF THE WEEK

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WEEKLY $2 cryptoweeklymag.com April 2022 | Volume 22

BITCOIN & NATIONAL SECURITY Page 16

A LIVING WITH NFT GAMING Page 20

UK PLANS CRYPTO LEADERSHIP Page 28

BTC 99% MORE EFFICIENT? Page 30

Page 07

MIAMI BITCOIN CONFERENCE Page 10

THE ETHEREUM MERGE Page 14

STATELESS MONEY FANTASY Page 35


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CONTENTS $2 cryptoweeklymag.com April 2022 | Volume 22

05

"The NFT Craze is Bonkers," says Binance Founder

06

"Crypto Capital of the World" Status Planned for Dubai

07

Web3.0 Going Mainstream? "Maybe not," Some Experts Say

08

Media Coverage of Decentralized Autonomous Organizations is Lacking

08

Offsetting Losses on One Crypto with Profits on Another Will Not be Allowed in India

09

EU Finance Ministers Say Privacy Safeguards Will be Built Into the Digital Euro

09

Tornado Cash Receives Nearly $7M of Hacked Ronin Funds

10

The Crypto Craze is in High Gear at the Miami Bitcoin Conference

12

An Analysis Found Nearly Half of Crypto Owners Bought Digital assets for the First Time in 2021

14

Mark Cuban Optimistic about the Coming "Ethereum Merge." Calls it "Significant"

15

Hidden Gems

16

The National Security Implications of Bitcoin Mining

20

Earn a Living in Gaming Using NFTs

22

Real Estate Investing Made Easy with EstateX

26

Media Coverage of Decentralized Autonomous Organizations is Lacking

27

The United Kingdom Plans to Become a CryptoTech Leader of the World

30

A Bitcoin Billionaire and Greenpeace have Developed a Simple Way to Lower Bitcoin's Energy Consumption by 99%

34

Investors Say New York has Surpassed Silicon Valley and Hong Kong as the Nation's Crypto Capital

35

War in Ukraine Disturbs Crypto's Fantasy of Stateless Money

36

How are Your Crypto Assets Handled When You Die?

38

Video of the Week

40

Expert Explains How to Report Crypto, NFTs to IRS


CRYPTOWEEKLY CEO | Nathan Hill

LETTER FROM

THE EDITOR

nathan@cryptoweeklymag.com Publisher | Colin Woolley colin@cryptoweeklymag.com Editor | Robert Stone

Welcome to Crypto Weekly

editor@cryptoweeklymag.com Editorial | Anthony Burton editorial@cryptoweeklymag.com Features | Thomas Stokes tom@cryptoweeklymag.com Advertising | Philip Greenwood philip@cryptoweeklymag.com Design | Dilin Divan dilin@cryptoweeklymag.com

Hello, and a warm welcome to the 22nd issue of Crypto Weekly. Crypto Weekly is the brainchild of the guys at CMC, and I am Rob Stone, Editor, and I hope to bring you an informative read on everything crypto, every week of the year.

Crypto Weekly Magazine is published by the Crypto Marketing Company 71-75 Shelton Street, Covent Garden, London, United Kingdom, WC2H 9JQ

Another week has gone by and this is our twenty-second issue of Crypto Weekly. I have been mining the search engines for the best stories in the news, current happenings, and the ideas the world is excited about in the cryptosphere. At times it is overwhelming, all the work, curating and writing, that goes into the next issues. But, I am also caught up in the excitement of the crypto revolution and everything I come across that I want to share with all of you on these pages. The hours that my work entails pass so quickly that I don’t have time to feel daunted by it. I can only wish they could pass more slowly so I might be able to make the next edition even richer. As usual, a lot of stuff has happened in the last week because the music never stops in the crypto sphere and the time keeps rolling on. I hope you all enjoy what we have brought together for you this week. Please let us know your thoughts, and if you would like to see something featured, please do get in touch.

editor@cryptoweeklymag.com

Follow Us Stay Connected Robert Stone Editor

cryptoweeklymag


NEWS

5

Crypto Weekly

"The NFT Craze is Bonkers," says Binance Founder

A

JPG sold for $69.3 million almost exactly a year ago. JPGs are digital files; owners will never be able to touch, hold, or hang them except on a screen—basically a string of zeros and ones. Indeed, the image was beautiful - a neon mosaic of 5,000 digital art pieces, each equally impressive, intricate, and unique. Even if its buyer was crazy— after all, he founded Binance, the world's largest trading platform for invisible (read: crypto) currencies. The owner of a non-fungible token is the only owner of the digital asset. You can use it as a certificate of authenticity for artwork, music, videos, and tweets. “The NFT craze may have caused people to lose their minds,” said Zhao recently. With Bored Ape Yacht Club, an Ethereum blockchain collection of thousands of digital ape illustrations, NFTs are available for individual purchase or as a collection. Members who purchase an ape graphic as an NFT are enrolled in an exclusive club with members-only perks, such as access to "the Bathroom," a member-only online graffiti board. The Bored Ape NFTs are currently being used by celebrities such as comedian

www.cryptoweeklymag.com

Jimmy Fallon and producer Timbaland as their Twitter profile pictures. "Some guy in Singapore can buy your art for $169 million." That "guy" was MetaKovan (real name Vignesh Sundaresan) and Twobadour (Anand Venkateswaran), coowners of NFT-focused investment fund Metapurse. According to their blog post following the sale, the two wished to add "a dash of mahogany" to investors, financiers, and collectors' typically monochrome...color schemes. Zhao said NFTs have a definite plus: they "allow artists to monetize their work globally once again...and reach a much broader audience." Mike Winkelmann, a real-life Beeple, is concerned about the NFT art market being in a bubble. He said the internet was also a bubble at its birth and it eventually burst on Fox News Sunday last year. Our work aimed to show Indians and people of color that crypto could equalize the world and that the global south was rising. Despite his views regarding the fragility of the market, Zhao points out that he is not an art collector. He explained, "Nothing's worth

that much," about Beeple's unbelievable sale. "But if you only had one person willing to pay for it, and that person suddenly changed their mind, it's no longer valuable." "But it didn't kill the internet," he added. According to Zhao, there is a market for people regularly paying for NFTs and art. Guess what? Now more artists are entering the NFT market. With more artists coming in, the quality improves." 

April 2022 | Volume 22


6

NEWS Crypto Weekly

"Crypto Capital of the World" Status Planned for Dubai Dubai wants to be the crypto capital of the world as well as a haven for wealthy Russians wanting to escape Western sanctions, and so far, it is paying off.

B

ybit announced Monday it is moving its headquarters to Dubai from Singapore and could start operations as soon as April. A second Singapore-based exchange, Crypto. com, announced it would open a regional hub in Dubai and begin hiring in the coming months. It boasts 10 million customers across 90 countries. According to Thani Al Zeyoudi, UAE minister of state for foreign trade and minister in charge of talent attraction and retention, Bybit's decision to open its global headquarters in Dubai is a milestone in positioning the UAE as a global digital hub. “We are creating a business-friendly ecosystem with robust regulations to attract, retain, and enable high-growth companies." Both exchanges are the latest to join the growing list of crypto-related companies stepping up operations in Dubai, one of seven emirates that constitute the United Arab Emirates. Dubai has been courting crypto exchanges since regulations in other countries are hostile or unclear. Dubai has

April 2022 | Volume 22

not only targeted crypto companies, rather than imposing sanctions designed to harm the Russian economy and its oligarchs, Dubai has opened its doors to wealthy Russian investors. The increase in sanctions has led to a rise in Russian interest in buying property in Dubai. According to the New York Times, in the emirate, at least 38 businessmen linked to Russian President Vladimir Putin own villas worth more than $314 million. Additionally, the emirate granted virtual asset licenses to Binance, the world's largest crypto exchange, and FTX Europe, the European subsidiary of the Bahamas-based cryptocurrency exchange. As a result of the license, they can now conduct business in Dubai. FTX Europe established a regional headquarters in Dubai on March 15. Dubai passed legislation in March that will likely help it attract crypto companies. The Dubai government has established the Virtual Asset Regulatory Authority to oversee virtual assets. Other countries, like

Singapore, have tried to curb some aspects of the crypto industry in recent months. Bybit was headquartered in Singapore, which issued guidelines prohibiting crypto companies from advertising publicly, saying crypto was "extremely risky and not suitable" for the general public. Since sanctions on Russia were tightened, Western countries, like the U.S., have been wary of the Russians' ties to crypto assets. Since cryptocurrencies can be traded somewhat anonymously and can be mainly exchanged without banks and other third parties, Western governments have claimed that they can be used to avoid sanctions. Still, industry leaders, such as Binance founder Changpeng Zhao, have denied these claims. In an interview with CNBC on Tuesday, Wally Adeyemo, the deputy U.S. Treasury secretary, warned crypto companies were helping Russians avoid sanctions. “We will hold individual crypto exchanges accountable for assisting Russia in evading sanctions,” Adeyemo said. 

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NEWS

7

Crypto Weekly

Web3.0 Going Mainstream? "Maybe not," Some Experts Say

W

eb3's ideal of being truly decentralized doesn't work in practice, say Web3 skeptics. According to Dan Hughes of the UK, Web3 may be too risky or difficult for people to use, which is one of the biggest obstacles to reaching the mainstream. Investors, and the tech industry, have been fascinated by the concept of Web3 for more than a year. The Web3 platform is, in some ways, a re-branding of blockchain technology, a similarly hot trend that attracted growing venture capital investments until 2018, when funding stalled. In 2021, all that changed. According to startup market intelligence firm Pitchbook, investment in Web3 startups soared to $23.7 billion, and celebrities and musical artists lined up to back crypto startups.

to take risks. When you're talking to Bill the plumber in the local pub, he doesn't really care about all the technical complexity that is required to make this stuff work. I don't want to risk losing my keys or it being stolen," he explained. “Also, there were regulations to consider,” he said. “A regulation that goes too far could be the

final nail in the coffin. In response to the question, ‘Do you think Web 3 will become mainstream?’ I think the mainstream will be a billion users in five to 10 years. I've been involved in a lot of cutting-edge technologies over the years, and this is by far the fastest-moving space. A year here is like 10 years everywhere else." 

What would it take for Web3 to become mainstream? The founder of Web3 startup Radix DLT, a cryptographer who spent years alone designing his own version of blockchain technology, discussed the technical challenges of Web3 and predicted that it could take up to a decade for it to gain mainstream acceptance. According to Hughes, one of the biggest barriers to Web3 becoming mainstream is that it is too "difficult or risky to use,” which may deter many users from using it. “Most of the people involved in this space at the moment are tech-savvy and willing

www.cryptoweeklymag.com

April 2022 | Volume 22


8

NEWS Crypto Weekly

Media Coverage of Decentralized Autonomous Organizations is Lacking by Bailey. In November, during an address at Cambridge University, he expressed concern about El Salvador adopting Bitcoin as its national currency. “Do the citizens of El Salvador understand the nature and volatility of their currency? This is what worries me most." Bailey's comments came as the British financial watchdog, the Financial Conduct Authority, considered the applications of crypto firms seeking to register with them. Under money laundering regulations, crypto firms operating in the country must register with the FCA.

T

he Bank of England's governor said today that scammers and criminals have used crypto despite its advantages in financial services. The most common payment method used by ransomware attackers

is Bitcoin. During a conference on antiscamming organized by the central bank of England, Governor Andrew Bailey said, “Crypto is the solution.” Cryptocurrencies were previously viewed with skepticism

Since 2020, more than 100 crypto firms have applied. The number of fully registered banks in the country has risen to 33, but only 33 have met the anti-money laundering standards to continue operating after April 1. 

Offsetting Losses on One Crypto with Profits on Another Will Not be Allowed in India

I

n India, the proposed taxation law for virtual digital assets will not allow individuals to offset losses on one asset against profits on another, the Ministry of Finance said Monday, a move the head of the nation's largest cryptocurrency exchange called "detrimental" and "regressive." The Ministryan government proposed taxing virtual currencies in February of this year. In order to capture all such crypto transactions, New Delhi proposed a 1% tax deduction at source for payments made for the purchase of virtual assets. Transfers of virtual assets would be taxed at 30%. In its announcement, the Ministry of Finance said it would tax digital assets individually, a departure from how the nation regulates stock market transactions, punishing an industry already burdened with some of the highest taxes on earth. Many members of the crypto community in India expressed

April 2022 | Volume 22

disappointment with the announcement. In his response, Ashish Singhal, CEO of Andreessen Horowitz-backed CoinSwitch Kuber, calls Monday's move "detrimental to the Indian crypto industry and its millions of investors." Singhal added, “A tax of this nature could drive users to underground peer-to-peer markets, where they are not required to confirm their identity, defeating

the purpose of the tax. According to the federal budget earlier this year, virtual digital assets were recognized as an emerging asset class, so bringing regulations in line with other asset classes would have been natural. Instead, we have taken a step backwards. If such a provision were applied to stocks, it would have discouraged retail investors. 

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NEWS

9

Crypto Weekly

EU Finance Ministers Say Privacy Safeguards Will be Built Into the Digital Euro digital euro and private cryptocurrencies like Bitcoin. According to Paschal Donohoe, Ireland's finance minister, the new format for the euro should "accommodate privacy concerns," while new rules will also "counteract the misuse of digital euros." "A risk-based approach may allow for more privacy in less risky and smaller transactions and vice versa," said Donohoe, who chairs the Eurogroup. Using offline payment methods for low-value purchases made within physical proximity, such as in stores and among friends, will help include people cut off from the financial system, supporting recent proposals from the European Central Bank's Fabio Panetta.

T

he new digital euro will give less privacy to smaller transactions, but not complete anonymity, officials said after a meeting of the currency bloc's finance ministers. Although no formal decision has been made regarding issuing the central bank digital currency (CBDC), the European Union is already considering how to tie payment innovations to anti-money laundering rules, both for the

According to Gentiloni, an anonymous digital euro would be undesirable. In contrast, an unduly centralized system could result in mass surveillance and be a "honeypot" for spies. The European Commission will soon launch a consultation on any necessary legislation for the new digital euro. Last week, the European Parliament passed controversial new anti-money laundering rules that would mandate the identification of anyone involved in cryptocurrency transactions, which industry watchers say would invade privacy and stifle innovation. 

Tornado Cash Receives Nearly $7M of Hacked Ronin Funds

A

ccording to Etherscan data, the hacker who stole $622 million from Axie Infinity developer Sky Mavis moved millions of the hacked funds today. Some twenty transfers were made to the same Tornado wallet over the last eight hours according to the transaction history. Over 100 Ethereum were sent with each transfer, or about $345,500 at the current price. Tornado Cash is a privacy tool that can obfuscate the source of cryptocurrencies. It acts as an intermediary, breaking the on-chain link between the source of the funds and their destination. The combined total of money moved to Tornado is 2,000 ETH, or roughly $6.9 million. The only money left in the attacker's wallet is a little over 0.1 ETH, or $376.73.

Ronin Hack Repercussions On March 23, the Ronin bridge exploit occurred, but it wasn't discovered until March 29. According to a Ronin blog post, the hacker accessed the funds via "hacked private keys." Shortly after the discovery, Axie Infinity's in-game tokens AXS and SLP lost value. Over the last 24 hours, AXS has lost nearly 4% of its value and now trades at $63.66. 

www.cryptoweeklymag.com

April 2022 | Volume 22


10

NEWS Crypto Weekly

The Crypto Craze is in High Gear at the Miami Bitcoin Conference

M

iami is attracting thousands of cryptocurrency enthusiasts, as the city continues to build a reputation as a critical location to develop blockchain technology, despite its underdog status. ‘Bitcoin 2022’ is being used as a networking venue, a place to pitch ideas, and a venue to announce products and services from dozens of companies. Silicon Valley and New York City raised the most funds for blockchain startups in 2021, with $3.9 billion and $6.5 billion, respectively. In 2022, according to CB Insights, Miami and Los Angeles are tied for the most funding at $760 million. The NBA arena in downtown Miami is now named FTX, replacing American Airlines. Blockchain.com, the largest crypto company to move to Miami so far, will be based in Wynwood, a hip district where

April 2022 | Volume 22

similar tech companies are also setting up shop. Peter Smith, CEO, and co-founder of Blockchain.com, said, “Wynwood had the kind of spirit you want in a new tech sector.” Local officials cultivate an environment that attracts tech investment, in particular, Miami Mayor Francis Suarez, who has become one of America's most crypto-friendly mayors. Some point out that both, Miami and Florida, are business-friendly and remained open during the pandemic, making them more attractive as a location. TradeStation, a multi asset broker based in Plantation, Florida, CEO John Bartleman said: "This is an amazing opportunity for companies to build out their crypto projects here." Bartleman's company commissioned an 11-foot (3-meter) robotlike sculpture meant to honor Wall Street's "Charging Bull." Suarez unveiled the bull

sculpture Wednesday to a joyful crowd at the conference in Miami Beach. "Welcome to the future of finance," said the mayor. Bitcoin's own rough year stands in sharp contrast to all this enthusiasm. In November, the cryptocurrency topped out at $67,553.95 before plunging by almost half by the end of January. Bitcoin remains roughly 30% below its November peak. Many of the hottest trends in crypto, including non-fungible tokens, or NFTs, do not have Ethereum as a component. The criticism of crypto technology has more broadly focused on the assumptions underlying its claimed value and utility. Some critics have compared the hype surrounding blockchain technologies with a Ponzi scheme that benefits the early adopters but leaves the rest behind.

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NEWS Crypto Weekly

11

Kathy Kraninger manages regulatory affairs for Solidus Labs, which monitors digital assets. Previously, the Bureau of Consumer Financial Protection director claimed the sector isn't the Wild West, but there are still challenges. “In order to protect investors and build smartly, it is time for the industry to come up with technical standards," she said. Adding that, “30 companies are participating in an initiative to train people on best practices, identify manipulative activities, and figure out what can be done to prevent crypto market abuse.” At least 75 companies will make announcements at Bitcoin 2022 as Miami aims to attract more investment. El Salvador's President Nayib Bukele made international news at the event last year when he announced by video that his country would become the first to make cryptocurrency legal tender. This year's conference was supposed to feature Bukele, but he canceled due to dozens of killings and 6,000 arrests of suspected gang members over the past week. It is expected that Jack Mallers, the 27-year-old CEO of Bitcoin payment app Strike, who worked with Bukele's government to launch Bitcoin, will make a big announcement. Furthermore, Mallers worked with Twitter to integrate his app with the social network and allow users to send "tips" without requiring a bank account like Cash App or PayPal. On video, he showed how he sent $10 to a Starbucks customer in El Salvador. Hopefully, this effort will lead to positive results in the future. Between July 2020 and July 2021, South Florida's population declined by over 18,000 people. Moreover, critics worry the city lacks a high-ranking university that could help build the workforce needed by companies to thrive, just like the Bay Area and New York. Nevertheless, Miami businessman Josip Rupena, who will speak at the conference about his startup, said to give the effort a few years. In order to become a lender for people with considerable digital wealth, Rupena's company, called Milo, has received $24 million in venture funding from investors. "For the first time, I think we have a platform - and a national platform to speak of how many smart and capable people there are here," Rupena said. 

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April 2022 | Volume 22


12

NEWS Crypto Weekly

An Analysis Found Nearly Half of Crypto Owners Bought Digital assets for the First Time in 2021

I

n 2021, more than half of cryptocurrency owners acquired digital assets for the first time, according to a study by U.S. cryptocurrency exchange Gemini. Nearly 30,000 people in 20 countries were polled between November 2021 and February 2022, and the study found that 2021 was a blockbuster year for crypto. The study found that inflation, especially in countries that have experienced currency devaluations, prompted adoption. In Brazil and Indonesia, 41% of people own crypto, compared with 20% in the U.S. and 18% in the U.K. Gemini found that 79% of people who owned cryptocurrencies last year chose to do so because they were looking for long-term investment opportunities. Crypto owners in countries with devalued currencies, compared with the dollar, are five times more likely to plan to buy it to hedge against inflation in the future. Since 2011, the rupee has lost 17.5% of its value against the dollar, while the rupiah has lost 50%. The United States and Europe accounted for only 16% and 15% of respondents who said cryptocurrencies were hedging against inflation, while Indonesia and India accounted for 64%. Europeans reported only 17% owning

April 2022 | Volume 22

digital assets in 2021, and only 7% of those who do not currently own crypto said they planned to buy it in the future. If the adoption momentum continues, it will be interesting to see if it can keep pace this year. Bitcoin, the most popular cryptocurrency, hit an all-time high of more than $68,000 in November, boosting the value of the cryptocurrency market beyond $3 trillion, according to CoinGecko. However, it has traded in a narrow range of $34,000-$44,000 for most of 2022. 

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14

FEATURE Crypto Weekly

Mark Cuban Optimistic about the Coming "Ethereum Merge." Calls it "Significant"

G

lobal investors await an upgrade to the world's most-used blockchain that will change its infrastructure and make it more eco-friendly. Mark Cuban is one such investor. Ethereum will transition from a proof-ofwork to a proof-of-stake model as part of the "merge." No specific timeframe has been given, but developers expect the switch to occur this summer. As a result of merging, Ethereum's crypto mining would become obsolete, resulting in a significant reduction in its environmental impact. The supply of new Ether will also decrease since fewer coins are expected to be issued. Blockchain security should also be enhanced in order to prevent attacks. Institutional investment is expected to increase in the Ethereum network as well. According to the CEO of America Online, the merger will bring "very positive changes."

Following the merger, Cuban highlights two critical updates. In Cuban's view, the merger is primarily motivated by two factors. “Ethereum must go to proof-of-stake,” he said. To validate transactions, Ethereum uses a method known as proof-of-work, in which miners must solve complex puzzles. Often criticized for its environmental impact, this process requires computer power. After proof-of-stake is upgraded, users will be able to validate transactions based on how many coins they stake. It is more likely that those who stake more coins will be chosen to validate transactions on the network and receive rewards. Ethereum runs both proof-of-work and proof-of-stake chains simultaneously. However, only the proof-of-work chain processes transactions. Upon completion of the merger, Ethereum's

April 2022 | Volume 22

blockchain will become a proof-of-stake chain called the Beacon Chain, rendering mining obsolete. This will cut Ethereum's energy consumption by 99%. Furthermore, Cuban said that he was interested in decreased Ether issuance, since "that may be deflationary." This refers to the fact that the supply of Ether is expected to shrink post-merger, as fewer coins will be issued. According to blockchain analytics firm IntoTheBlock, after the merger, the amount of ETH issued is projected to drop by 90%, leading to a reduction of Ether's supply by 5% per year.

“With smart contracts came DeFi [decentralized finance] and NFTs [non-fungible tokens]. This changed the game. I was excited. That's why it's similar to the internet."

Cryptocurrencies like Bitcoin are already regarded as safe havens. Ether's price may increase if demand increases as supply declines. Although, it's impossible to predict the future price of any asset. However, some think Ether may become a deflationary asset, resulting in a store of value after the merger. Despite owning Ether and Ethereum-based non-fungible tokens (NFTs), Cuban said he does not have any money invested in Beacon Chain. He has also invested in companies built on Ethereum, scaled it, or interacted with it. Since Cuban is a self-proclaimed Ethereum maximalist, he has often talked about why he loves the blockchain. For him, it's primarily due to Ethereum's smart contracts or collections of code that run on the blockchain and execute agreements. “Smart contracts changed everything,” he said in March 2021. “With smart contracts came DeFi [decentralized finance] and NFTs [non-fungible tokens]. This changed the game. I was excited. That's why it's similar to the internet." 

www.cryptoweeklymag.com


HIDDEN GEMS

15

Crypto Weekly

PROJECT 1

estatex.eu

Estatex

EstateX enables the tokenization of real estate through new and highly advanced blockchain solutions. With this, anyone can get into real estate with as little as $100. Using these solutions, EstateX is able to trade real estate security tokens on their secondary market 24/7 without financial, or country, barriers. The advantage of fractional ownership is that it removes entry barriers and lowers entry and exit costs. Previously, non-accredited individuals could not participate in the real estate market due to restrictions and limitations. By using smart contracts, blockchain offers safe, secure, and transparent transactions that are not controlled by humans, preventing human error and wasting time. It is now possible to buy a fraction of a property and enjoy

PROJECT 2

catcoincrypto.me

perpetual returns, without the need to maintain the property. We all know that the old-fashioned system is in need of an update. And that update seems to be coming; EstateX offers good, realistic solutions to open up this market. Although it seems that the big players and banks don’t like to see this system change, it’s a matter of adapting or giving up for these parties. Blockchain, which is going to be as big as the rise of the Internet, will bring about this revolution. EstateX is acting smartly and is one of the first parties to offer a new way of investing. The only question that arises isn’t or but when will the big banks, real estate parties and investors join the queue behind EstateX

Catcoin

catcoin_bsc

CatCoin was launched on November 26, 2021 by Miaoshi Nekomoto (Satoshi Nakamoto's Cat) as a community-influenced project with big goals but little funding. Renounced by Miaoshi shortly after launch, CatCoin is now completely owned and run by its amazing community. Catcoin is a community-influenced project that connects the crypto world with social media. Catcoin is the first crypto-related project to offer a 24/7 live stream on Twitch.tv, allowing the community

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estatexeu

estatexofficial

catcoinbsc

to share their thoughts on Catcoin at any time. Catcoin values a friendly and caring community. Anyone can be a part of the Catfamily. In addition, Catcoin's development is primarily focused on the Catnip project, which will be developed and released by mid-2022 at the latest and implemented into the Metaverse (Catverse) at the request of the community.

April 2022 | Volume 22


16

FEATURE Crypto Weekly

The National

Security

Implications of Bitcoin Mining

April 2022 | Volume 22

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FEATURE

17

Crypto Weekly

A

simple fact to start with: Buying and holding Bitcoin (BTC), the asset, does not give people power over the Bitcoin network. However, the network's security, integrity, and evolution is the responsibility of coders, miners, and the thousands of individual nodes that continually monitor the blockchain. Therefore, rather than holding Bitcoin as shares, influence comes from owning a stake in the network itself - most importantly, as a miner. By owning Bitcoin, you can benefit from the network's adoption and growth (expressed through price appreciation), and you can own a scarce bearer asset that can be traded quickly, cheaply, and without the involvement of any third parties. Controlling a global network should be obvious. It's evident how well-positioned stakeholders can leverage their measure of control over a network to exert influence, regardless of whether they're dealing with OPEC, SWIFT, the Strait of Hormuz, or internet infrastructure. Despite this, Bitcoin's authority is influenced by its hash power. This is where mining comes into play as a matter of national security. The term national security is often misused to justify policies of surveillance, military deployments, technology, or other legal

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implementations. An important step toward more equitable distribution of global power is ensuring a given country's safety, stability, and sovereignty through national security. In the process of Bitcoin's evolution from an internet curiosity to a global settlement layer accessible to all, nation-states, including sanction evaders such as Russia and North Korea, may realize they want a more significant say in the direction and operation of the Bitcoin network. Having a stake in global hash rate is crucial. By fostering domestic mining industries instead of banning them, nations can also prevent their enemies from controlling the network.

Power on the Bitcoin network. A Bitcoin miner's influence depends on how much work, or computational power, they put into the network. Hashing power is a measure of that. Hashing power is the sum of computational work. The more work done, the greater the influence. There is, however, a limit on their influence: They can neither create Bitcoin, nor steal coins, nor alter the underlying code of Bitcoin. Instead, influence ensures that transactions are included on the blockchain and that they happen.

The proof-of-work mining process is one of the most important aspects of Bitcoin's blockchain. Miners worldwide use cheap energy sources to run their mining rigs at maximum capacity at the lowest possible cost. The more hash power miners can generate, the better their chances are of winning the next block, receiving 6.25 brand new Bitcoins, and, crucially, adding their version of "transnational truth" to the global Bitcoin ledger. It is estimated that a new block of records is added to the blockchain every 10 minutes, and only after a block has been verified, and validated, are transactions permanent. Nodes around the world are required to accept the new block, which happens automatically if all the rules of the Bitcoin protocol are followed, and no manipulation or double-spending occurs. Tampering with a record can be extremely costly. Although Bitcoin is the most secure network globally due to its decentralized nature, its security would be severely compromised if, for example, one miner - perhaps acting on behalf of a state actor - gained the majority hash rate (51%). Even with a significant stake in the global hash rate, winning each block is not guaranteed. Furthermore, any reward associated with a corrupted block of transactions would

April 2022 | Volume 22


18

FEATURE Crypto Weekly

the most hash power, a position it earned after China forced miners within its borders to shut down. China made a mistake when it expelled its domestic mining industry because the more hash power a country has, the more influence it has in protecting its interests. There is no doubt: Bitcoin is still held and thrives among Chinese investors.

be null and void if it were to pass through and then be rejected by a majority of nodes. This would theoretically allow censorship of other miners and transactions and similar forms of overreach on the network. But, to see the argument and understand how having a stake in the global hash rate supports national security and eventually adds to geopolitical equilibrium, we have to look at the incentives for participation from a number of different angles.

Putting game theory into practice. A hack in 2019 led to the theft of $40 million worth of Bitcoin from Binance, the largest crypto exchange in the world. He proposed "rolling back" the Bitcoin blockchain, which would remit the stolen funds back to Binance (and reverse any transactions that had been completed since the theft).

essential for the rehabilitation of the nascent blockchain. We know today's Ethereum network, which Microsoft (MSFT), JPMorgan (JPM), Amazon (AMZN), and other corporate giants are reportedly already using, and which has a market cap of over $300 billion, as a result of that rollback. Technically, this is an off-shoot. The Ethereum Classic chain predates the original Ethereum chain, which still bears the scars of a hack. Ethereum Classic has a market capitalization of about $3.5 billion. The exact mechanism that makes blockchains hard to modify is crucial when upgrading the network. Hashing drives both integrity and change, and represents a type of influence in enforcing norms and preventing abuses on networks, all requiring consensus. Currently, the U.S. has

Is it feasible for the U.S. to house zero miners while all hash power resides in Russia, just for argument's sake? Considering that Russia is both a technologically advanced savvy nation and profoundly undemocratic, investors in Bitcoin, or publicly traded companies exposed to Bitcoin, like MicroStrategy (MSTR) and Tesla (TSLA) in the U.S., would be concerned. Why not have all the hash power Bitcoin uses come from the United States and its allies instead of Russia? Thus, elites in Russia would be discouraged from storing their wealth in Bitcoin, and Russian efforts to use Bitcoin for global trade would be hindered. Granted, miners do not hold all the power. Bitcoin cannot easily be weaponized or subjected to intervention without agreement from most individual nodes. In the event of North Korea hacking a cryptocurrency exchange (as it has allegedly done in the past), even the most ardent advocates of freedom and the financial agency could be convinced to support intervention in the blockchain. This global consensus network is also open to everyone. From individual,

To accomplish this, he would need to convince a majority of Bitcoin miners and node operators to follow his plan. There was no rollback as a result of immediate opposition. The consensus was against Binance, and instead of taking the loss, the company fixed its internal systems. If only geopolitics could be as straightforward. Blockchain is hailed for its "immutability," but the industry consensus isn't always conservative. It is possible for changes to occur, as was evident in 2016 after the Ethereum community forked the chain to recover $50 million in stolen Ether (ETH) after the DAO attack. Though a sizable portion of the community rejected the intervention, consensus was that it was

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hash power residing within the concerned jurisdiction: no hash power, no say.

Towards geopolitical equilibrium. A critical aspect of this argument is recognizing that Bitcoin's global financial system share is rapidly increasing. The international adoption of Bitcoin, the asset, continues to unfold faster than the growth of the Internet in the 1990s.

engaged miners spread out across the world, to industrial-scale miners that are capable of becoming integral to geopolitics, there is a direct link between reasoning and incentive. Consensus is not about homogeneity, but rather about maintaining a balance of power that transcends countries and perspectives. Miners in a shared jurisdiction may not necessarily share the same values, nor should we assume that the State and miners are on the same page. Nonetheless, we could foresee the formation of clusters by establishing associations, such as the Bitcoin Mining Council, state-run mining facilities, such as in El Salvador, or even regulations requiring at least public companies to adhere to.

order calling for a unified approach to crypto regulation could impact legacy and find easy implementation at the surface layer of applications around crypto. MetaMask, a wallet for Ethereum, and OpenSea, a platform for non-fungible tokens, both based in the United States, have recently unilaterally blocked Iranian and Venezuelan users. Having a stake in global hash power is essential for any jurisdiction exposed to Bitcoin, whether through its citizens and corporations or as part of a sovereign wealth fund. Unlike these apps and most cryptocurrencies, Bitcoin does not have a CEO or centralized home base. Therefore, any attempt to regulate at the level of protocol, or around security, must have

We know why individuals and corporations may wish to save in Bitcoin or include the asset on their balance sheets. We have seen more people, billionaires, corporations, hedge funds, and even countries embrace Bitcoin in the last two years, if not entirely. The next phase of growth for this network, and asset class, is likely to involve a race for hashing power and investors, and regulators, realizing that participation in the operation of the network itself is the best way to maintain public interest. Despite Bitcoin being an investable asset, its holders enjoy its freedom from arbitrary policy-making and money printing. It provides a global network for the settlement of an internet-native currency independent of any single entity. In this way, it offers an alternative framework for developing a more equitable global financial system that is borderless and democratic by design. While still allowing bottom-line moral imperatives to impact consensus and execution, it represents disarmament of finance. Bitcoin mining is, therefore, a national security issue. The importance of having hash power increases each day as the global community of Bitcoin investors increases. The risks of not having it also increase. 

In the absence of a total boycott of Bitcoin, each jurisdiction is incentivized to participate in the global hash rate, just as domestic miners compete for the local hash rate. On Russia's end, this might be to mine new Bitcoin for local wealth generation, secure an avenue for trade, and protect the assets of its citizens, invested corporations, and, in the future, potentially, its national reserves. Whether it's the U.S. or the E.U., it's not simply about protecting investors; it's about maintaining regulatory clout. U.S. President Joe Biden's March 9 executive

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April 2022 | Volume 22


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Earn a Living in Gaming Using NFTs

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FTs are transforming the gaming industry. As of now, players can own virtual land, build objects, and play-to-earn through NFTs. Experts say that market integration and verifiable scarcity will be the key to the future. The sector would greatly benefit from an interoperable avatar across multiple platforms. The NFT LA conference began on Monday, covering everything from nonfungible tokens as art, to their use as financial instruments and investments. These digital assets are available to rent, trade, buy, and own on a blockchain and within an ecosystem, and can be used in numerous industries, including gaming. Panelists discussed ways to earn a living exclusively in gaming using NFTs during the "Ways to Earn a Living Exclusively in Gaming with NFTs" discussion. Having the potential to generate money from NFTs is great news for gamers who dedicate a lot of time and money to a game only to quit afterward. Liam Labistour, a panelist and director of growth marketing at Splinterlands, a battle-based gaming platform with earning opportunities, said, “It can feel like a waste of time.” “I've put thousands of dollars into these games, but once I'm done playing, I don't get any of it back." Labistour said, "Those are just dormant accounts." The moderator of the panel, and host of the YouTube channel CryptoStache, Shea Newkirk, admitted to spending far more than he cares to admit on games - and he'd be happy to get even a fraction of what he spends. “It is even possible that these assets could appreciate,” Labistour said. Here's where NFTs come in: they can create a mini-ecosystem in a game because they allow people to transact freely, and there are a number of ways people can earn crypto on these platforms. Digital landlords or owners of digitized objects such as clothing, infrastructure, and gaming tools can be users. Owners

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can either buy or build these objects. Owners can then rent or sell their property. Players can also create games to sell experiences, and users can play and earn on the platform.

co-owner of Beta1Creative, a digital marketing agency that helps companies integrate their brands into the Metaverse, said, “The Metaverse doesn't seem that different from real life.

Logan Welbaum, the creator of Plai, an advertising platform for small businesses, wanted to explore this new world. In addition to owning property in the Sandbox and Decentraland, he became a digital landlord in two prominent metaverses. The Sandbox he bought for about $8,000 and Decentraland for about $2,000 worth of cryptocurrency, according to Welbaum. Other nearby lands have appreciated in value within a year of their purchase, based on his observation.

There could be an endless number of income-earning opportunities as platforms evolve. Users of Decentraland can create objects that can be sold on its marketplace using the Builder page. Anyone can learn how to use the platform's tools through educational videos.”

Virtual property has been the subject of millions of dollars' worth of spending. A parcel of land in Decentraland recently sold for an all-time record amount of $2.43 million. During busy city centers, investors bid up the price of prime real estate as they compete for blocks. Nevertheless, Mark Cuban, a billionaire entrepreneur and co-host of "Shark Tank," told audiences that they shouldn't compete for prime property in the Metaverse since everything is just a click away. “If your property offers a great experience, users will be attracted.” Furthermore, Welbaum tried an approach called play-to-earn. At the cryptocurrency's current price of $3.48 on Thursday, he earned about $3,480 playing The Sandbox's beta release. Welbaum won an Alpha Pass NFT ticket through the contest, so he was able to use it. His Sandbox pass gave him early access to the beta versions of games on The Sandbox. It increased his chances since he owned land in The Sandbox. During the program, anyone with a Facebook account could apply for daily social contests to win a pass. Passes could also be purchased on the secondary market on OpenSea. Staking SAND and earning rewards are particularly attractive features of Sandbox. In an earlier interview, Shawnee Sande, the

The founder of Decentral Games, a platform that rewards Ice Poker players, Miles Anthony, said: "Overall, we're trying to bring the assets within the game to a free market so that when people play it, they contribute their time and they contribute their capital to buy assets, then the assets are not lost. The blockchain also secures their property rights, which is huge for some people to be able to invest time and capital into these ecosystems." Senior vice president of Mythical Games, Daniel Frank, says that the goal is to create games that are fun to play, not games where you earn money to play. The point is to create a more authentic experience so that players can play for fun and earn rewards as a byproduct. “Gaming's future lies in owned assets, verifiable scarcity, and integrated markets,” according to him. In Laboratory's opinion, once gamers understand the value of ownership within gaming, the script will turn in the sector, and any hesitations gamers may have had about NFTs and crypto potentially being scams or part of a pyramid scheme will be resolved. Avatars that are interoperable are considered one of the largest value-adds to the sector, according to the experts. As a result, users could take their avatars into different metaverses and worlds so that ownership could hold value across platforms. 

April 2022 | Volume 22


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Real Estate Investing Made Easy with EstateX Real estate is being revolutionized by EstateX ($ESX). EstateX is creating an ecosystem for online investors, developers, and property owners to invest in real estate using crypto tokens and FIAT. The key benefit here is investing in the fractional ownership of a real estate investment with as little as $100, and having instant liquidity on your real estate

April 2022 | Volume 22

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eal estate is being revolutionized by EstateX ($ESX). EstateX is creating an ecosystem for online investors, developers, and property owners to invest in real estate using crypto tokens and FIAT. The key benefit here is investing in the fractional ownership of a real estate investment with as little as $100, and having instant liquidity on your real estate

real estate investing, which have hitherto only been available to the wealthy and institutions.People without a substantial income or high credit score can invest in real estate with their knowledge and tools. Property-backed security token owners will benefit from appreciation in property value, as well as a passive income stream.

Investment in Real Estate Democratized

Steve Beckford, a marketing partner of EstateX, said: "The time is right for the launch of a decentralized property investment platform. What appeals to me is that we will enable individuals to invest in property without the usual constraints of requiring large amounts of available finance or a high credit score. We will bring to EstateX the same team, knowledge, experience, networks, and more that rocketed the Victoria VR Token into the stratosphere and towards the moon! Our goal is to build on the already passionate community, remembering the original investors who believed in the project from the beginning and to whom we are especially grateful for their continued support and input. As part of our effort to maximize the value of the token for all investors, we will be offering a wide range of rewards including airdrops, property whitelisting, giveaways, and exclusive NFTs.”

EstateX's goal is to make it easier for everyone to benefit from the benefits of

In the process of connecting the biggest revolution since the rise of the Internet

With blockchain technology and cryptocurrencies emerging, tokenizing real estate makes a lot of sense. Due to its inherent trust system, blockchain is the ideal technology for investing in real estate. Smart contracts and ledger capabilities of blockchain enable companies to facilitate renting, buying, investing, and even lending transparently and efficiently. With the EstateX Marketplace, investors will have a global platform for exchanging their fractionalized real estate portfolios and actively investing in new properties. They will offer high-return real estate investments, a secondary market that never stops with instant loans, and asset liquidity on their easy-to-use platform. The process will also speed things up, reduce costs, and save a whole lot of time.

(blockchain) to the largest industry in the world (real estate), EstateX is creating the future of real estate. Utilizing blockchain technology, properties will be broken down into tokens that represent the deposit value in a property. Therefore, even the average breadwinner can invest in real estate. Known for its strong core team and experienced industry advisors, EstateX has wide-ranging expertise and networks covering blockchain, property, marketing, and business development.

Fractional Ownership and Tokenization By enabling the tokenization of real estate through new and highly advanced blockchain solutions, anyone can get into real estate with as little as $100, having instant liquidity. Something next to impossible with the traditional sale/purchase of real estate. Using these solutions, EstateX is able to trade real estate security tokens on their secondary market 24/7 without financial or country barriers. The advantage of fractional ownership is that it removes entry barriers and lowers entry and exit costs. Previously, non-accredited individuals could not participate in the real estate market due to restrictions and limitations. By using smart contracts, blockchain offers safe, secure, and transparent transactions that are not controlled by humans, preventing (Contd...)

Real Estate Investment for Everyone Once Fully Licensed and Launched, EstateX Will Be Able to Offer Our Community of Investors:

Minimal Investment

Non Intrusive

You're in Control

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Invest in real estate from $100.

No credit checks, large deposits or lifecrippling financing risk.

Full control of your real estate investment portfolio.

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Own a fraction of an appreciating proprty asset & earn a regular passive income.

A Hedge against rising inflation.

Trade Real Estate with high liquidity.

Better APY than the bank.

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April 2022 | Volume 22


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Smart Contracts on the Blockchain

Ethical & Sustainable Investment Portfolio

Fractional Ownership

Secondary

ESX Payment

Marketplace

Solutions

Instant Loans

human error and wasting time. It is now possible to buy a fraction of a property and enjoy perpetual returns, without the need to maintain the property. The advantages of EstateX's fractionalized crypto property investment, to existing fractionalized property (non-crypto) investment instruments, are, for example when investing traditionally, you, most of the time, don't have control over where your money is going. With EstateX you can

build your own real estate portfolio and have influence over the decision-making regarding your investments. EstateX also offers instant loans, which means you can loan up to 75% of your total investments. You can almost double your investment portfolio and also double your passive income. Real estate investment trusts (REITs) also have high fees, so it’s hard to cash out your investment. EstateX offers instant liquidity

on your investments. With REITs you get paid out once a quarter or once every half year. EstateX chooses to pay out weekly. All real estate investments are liquid instantly thanks to the ESX token, where you can swap your PROPX token for ESX on their secondary marketplace. That means, thanks to the EstateX pay system, you can technically pay for goods and services with your real estate investments. Be sure to visit the EstateX Twitter feed https://twitter.com/ estatexeu

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April 2022 | Volume 22

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FEATURE Crypto Weekly

Media Coverage of Decentralized Autonomous Organizations is Lacking control over how funds are spent, enable low-cost borrowing, and support artists and musicians. These are all governed by transparent smart contracts that allow users to decide the direction and governance of the organization.

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here are many pieces from establishment media outlets that misunderstand what DAOs are and how they may work. The status quo financial system's defenders echo the talking points of old-guard media outlets, which fear and distrust the economic opportunities opened by decentralized autonomous organizations (DAOs). Although publications rightly acknowledge the early growing pains of DAOs, this sort of hand-wringing fails to recognize the full impact of these initiatives. There are more than 1.7 billion people without access to traditional financial services, and DAOs are crucial to the development of a decentralized financial system (DeFi) that can reach them. Through DeFi, everyone will have access to a reliable, and transparent, financial system with clear rules of the road.

equitable, we've already seen projects emerge that are delivering value to real people around the world. UkraineDAO, founded by Russian collective of Pussy Riot and Trippy Labs, raised over $6.75 million worth of Ether (ETH) that was donated directly to Ukrainian defense efforts against Russia during the war in the country. Although this amount may not swing the balance of the war, UkraineDAO demonstrates that decentralized financial technologies are capable of coordinating disparate global groups of individuals around a single cause to achieve tangible results.

DAOs and their potential.

The work of DAOs doesn't end with fundraising under duress. A DAO currently provides sustainable value to participants all over the world, and it utilizes blockchain technology to address some of the biggest challenges of our time, such as climate change.

While we're only scratching the surface of what DAOs can do for making our financial system radically more transparent and

Today, DAOs are used to support charitable endeavors, remove barriers to crowdsourced fundraising, give donors more

April 2022 | Volume 22

The use of new technologies by other DAOs directly combats climate change. I am a member of KlimaDAO, a subDAO of OlympusDAO, which has created an innovative way to remove carbon credits from the Voluntary Carbon Market and place them in the DAO's treasury, thus driving up the cost of carbon offsets and making carbon-intensive businesses more expensive.KlimaDAO has already accumulated over 17 million tons of tokenized carbon credits, surpassing Croatia's annual CO2 emissions. It is projects like this that are actualizing the promise of DeFi technology and paving a new way to do climate activism by infusing environmental concerns into economic activity itself. DAOs, like any groundbreaking technology, offer boundless opportunities for innovators to solve problems in new ways, but they are also attractive to scammers seeking to make quick money. In the DeFi ecosystem, rugs pulls, where developers withdraw money from a project they have invested in, are serious issues that must be addressed. For the protection of consumers, we are committed to strengthening the regulatory requirements that ensure DAOs are secure and safe. DAOs, and the entire DeFi ecosystem, are disrupting the traditional financial system, which has equitably benefited the wealthiest, while excluding the poorest and harming our planet. We cannot let the bad actors distract us from the true benefits of DAOs and the entire DeFi ecosystem. For the establishment media to paint a more true and nuanced picture of DAOs, we think it's imperative to look under the hood and paint a picture which reflects what all of us involved in DEFi know: that our efforts will be rewarded in the future. 

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FEATURE Crypto Weekly

The United Kingdom Plans to Become a CryptoTech Leader of the World The British government will recognize stablecoins as valid forms of payment in order to make Britain a global leader in the crypto-asset industry. Stablecoins will be regulated in the UK, enabling them to be used as a form of payment. The UK Government is proposing legislation for a 'financial market infrastructure sandbox' to help companies innovate. The FCA is launching a CryptoSprint, and the Royal Mint is developing an NFT. In order to ensure UK financial services remain at the forefront of technology, attract investment and jobs, and enhance consumer choice, a package of measures is being put in place. These include:

April 2022 | Volume 22

Firms can test new ideas by establishing a 'financial market infrastructure sandbox'.

demonstrate the UK's commitment to the future.

To work closely with the industry, a Crypto-asset Engagement Group will be established.

Examining how to improve the competitiveness of the UK tax system to encourage the development of crypto assets.

This summer, the Royal Mint will issue a Non-Fungible Token (NFT) to

Rishi Sunak, Chancellor of the Exchequer, said today: “I intend to establish the UK as a global hub for crypto-assets, and these measures will allow firms to expand, innovate, and invest in the UK. By regulating effectively, we can give the businesses of tomorrow - and the jobs they create - the confidence they need to invest long-term here in the UK. We are taking this step to ensure that the UK financial services industry

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remains at the leading edge of technology and innovation." In order to maintain a stable value, stablecoins are typically pegged to fiat currencies such as the dollar. If properly regulated, they could provide more efficient means of payment and increase consumer choice. Payments made using stablecoins will be brought within the payments regulatory perimeter, creating conditions for stablecoin issuers and providers to operate and invest in the UK. Recognizing the potential of this technology, and regulating it, will ensure financial stability and high standards so that these new technologies can be used safely and reliably in the future. John Glen, Economic Secretary to the Treasury, described the UK's vision for becoming a global hub for cryptoasset technology during his speech at the Innovate Finance Global Summit. Additionally, he announced that the UK is proactively exploring the potential benefits of Distributed Ledger Technology (DLT) in the UK financial markets, enabling data to be synchronized and shared in a decentralized way for greater efficiency, transparency, and resilience. Government officials announced they would begin a research program to determine whether DLT can be used to manage sovereign debt instruments and decide on its potential benefits. 'Sandboxes' for financial market infrastructure (FMI) will be created by legislation to enable firms to experiment and innovate in the provision of the infrastructure services that underpin

markets, such as the use of Distributed Ledger Technology. John Glen reports that the government will consult on regulating crypto-assets later this year.

Among the other measures are:

In order to make the crypto-asset market more attractive, the UK government is examining ways to increase the competitiveness of the tax system. DeFi loans - where crypto-asset holders lend them out for a reward - will be discussed

for tax purposes. Additionally, the government will consult on extending the Investment Manager Exemption to include crypto-assets.

This summer, the Chancellor has commissioned the Royal Mint to create a Non-Fungible Token.

The Financial Conduct Authority will hold a two-day ‘CryptoSprint’ in May with industry participants, seeking views directly from the industry on key issues relating to developing a future cryptoasset regime.

The Cryptoasset Engagement Group, chaired by the Economic Secretary, will bring together key figures from the regulatory authorities and industry to advise the government on issues facing the crypto-assets sector.

The Chancellor outlined a vision for the future of financial services in his Mansion House speech in July 2021, including a plan to ensure that the UK remains at the forefront of innovation and technology. This was one of four key components of that vision, with the ultimate aim of building a financial services sector that continues to be one the rest of the world looks towards. The government consulted on crypto-assets and stablecoins last year, and has published its response setting out the next steps. 

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April 2022 | Volume 22


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A Bitcoin Billionaire and Greenpeace have Developed a Simple Way to Lower Bitcoin's Energy Consumption by 99% Greenpeace has launched a campaign to convince Bitcoin to make a code change to cut its energy use. The crypto community was outraged by the campaign and immediately pointed out its problems. Find out what the crypto community is doing to push back.

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reenpeace USA and several other groups have launched a campaign to lobby Bitcoin to make a code change to reduce its energy usage. In collaboration with publications, such as the Wall Street Journal, New York Times, and social media platforms like Facebook, the "Change The Code, Not The Climate" campaign has been launched. Among the targets will be executives, such as Fidelity's Abby Johnson and Twitter's Jack Dorsey, chief executive of Block. According to the first message, "Hey Fidelity. The Planet Is Not Ready for Early Retirement."

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The second message claims, "Bitcoin Would Stop Polluting the Planet if Only a Few Dozen People Agreed to Change It." The campaign oversimplifies how Bitcoin works and repeats myths that many have spent years trying to dispel, according to the crypto community. Bitcoin uses an energy-intensive system to validate transactions without requiring a third party, but it's also very secure. Greenpeace objects to the energy intensity of this system, which consumes as much power in a year as Greece, Sweden, and

the Netherlands combined. Changes to the existing "proof-of-work" system to a "proof-of-stake" system will reduce the coalition's carbon footprint. In a press release, Greenpeace noted that Ethereum, one of Bitcoin's major competitors, has now transitioned away from this energywasting code to one that uses 99.9% less electricity without damaging the climate and pollution. Changes of this kind can only be made by 50 Bitcoin miners, exchanges, and core developers. Throughout this article, I outline the six reasons why the community is upset

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about the campaign and why a code change will be unlikely anytime soon.

Would it remain Bitcoin? Bitcoin pioneered the proof-of-work consensus mechanism that underpins its entire concept. Mining is the process of solving complex puzzles and being rewarded with crypto in exchange for computers running powerful algorithms. It is a decentralized, secured process. Using proof-of-stake, a network of "validators" contributes their own crypto to validate a new transaction, and when the blockchain is updated with that information, they receive a reward. In an email to Insider, Diana Briggs, chief strategy officer at DeFi Technologies, said, “There is an unshakeable consensus that Bitcoin's proof-of-work code is not going to change. Despite being a very secure network, it cannot simply be replaced by proof-of-stake (PoS)." "At the end of the day, Bitcoin remains the most trusted digital asset. Security comes first," she added. Riegle acknowledges Greenpeace's proposal would change Bitcoin's value proposition, even though his cryptocurrency uses a more environmentally friendly proof-of-stake mechanism. Proof-of-Work has traditionally been Bitcoin's security mechanism, and Riegle says climate activism is unlikely to change that. “The Bitcoin community and

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those who operate nodes do not want to change its code,” he writes in an email to Insider. "The bitcoin community and those who operate nodes will eventually migrate to more sustainable systems." According to Professor Jason Lowery, a national defense research fellow at MIT who studies Bitcoin, countries that outlaw Bitcoin entirely could be disarming themselves if Bitcoin is now used for national security purposes.

There has never been a scaling of the proof-of-stake. “A switch to proof-of-stake would be extremely risky as it would require a complete re-configuration of the blockchain,” said Derek Muhney, head of marketing at Coinsource, a Bitcoin ATM provider. “A solution should not be worse than the problem,” he said. Noelle Acheson, head of market insight at crypto trading firm Genesis, explains there is no solid evidence that proof-of-stake consensus mechanisms scale over time in a blog post. "A risky premise for changing a $900 billion asset," she said.

There's more to it than a simple code change. Many people who have been in crypto for many years know that the code change isn't the result of a handful of miners, exchanges,

and developers. As a result, a hard fork of the blockchain in 2017, that became known as Bitcoin Cash, was created by users without consensus. Several years ago, a proposal was made to reduce transaction fees by increasing the size of Bitcoin's blocks. Bitcoin's block size was proposed to the community a few years ago in order to reduce transaction fees. Due to the lack of consensus, Bitcoin Cash was created as a result of a user-driven hard fork in 2017. A book named "The Blocksize War" was based on the debacle. Genesis's Acheson writes in a blog post that, “It took years of intense development and broad agreement from the very beginning to change Ethereum from proof-of-work to proof-of-stake.” Acheson noted that getting that level of consensus is unattainable, even if the change were a good one. This would inevitably lead to another Bitcoin fork. In an email, Tyler Benster, technology adoption lead for Kadena Eco, explained that the fork is predicated not only on the support of 50 major miners, exchanges, and developers but also on the community recognizing the fork as legitimate. Muhney said, “Greenpeace appears to be working off of the idea of a normal fork.” "Bitcoin can definitely be forked. That's how we got Bitcoin Cash (BCH), but it's a totally different coin now, and most people don't care about it," he said.

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Ripple's co-founder plays an important role. Chris Larsen, chairman and billionaire cofounder of Ripple, has invested $5 million into the campaign. In the Greenpeace press release, Larsen said, “The campaign is not anti-Bitcoin but anti-pollution. As some have suggested, the issue is not to power Bitcoin with clean energy. We need that limited supply of clean energy for other essential uses. The issue is to change the code to use far less energy. That's the environmentally responsible approach." The project isn't being worked on by Ripple, but Larsen has skin in the game. Insider requested a comment from Ripple, but the company did not reply. XRP, the native token of Ripple, is used by the company's own network. The Securities and Exchange Commission is involved in a court case with the company regarding the token's marketing. Larsen said on Twitter that this is

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a personal project and he still wants Bitcoin to succeed. “The fact that someone with years of experience in the crypto industry does not understand how Bitcoin code changes works is shocking,” said Cory Klippsten, CEO of Swan Bitcoin, a Bitcoin-focused company. "Code changes take months. Major code changes take years and rarely happen. They are discussed and debated extensively across tens of thousands of stakeholders."

Neglecting clean energy innovations. "Bitcoins consider decentralized global sound money a good use of energy," said Klippsten. “Greenpeace and its partners are worried about mining continuing to rely on fossil fuels. Some people think Christmas lights are a good use of power, and others don't. However, cleaner energy sources are beginning to emerge.” “Bitcoin, like almost everything that adds value to our society, consumes resources,

but the majority of that energy comes from renewable sources," said Colin Pape, founder of decentralized search engine Presearch, in an email. Briggs notes that mining operations are beginning to use renewable energy sources, such as hydro, solar, wind, and nuclear power. Some organizations use natural gas that would be consumed otherwise. Hive Blockchain Technologies, for example, only uses renewable energy. "At the moment, crypto's energy use is high, but as adoption increases - and I believe it will keep growing exponentially - the energy per unit of economic activity will decrease dramatically," said Kadena Eco's Benster. The campaign has not followed a proposal process. Despite all the talk about Bitcoin making a code change, the campaign has yet to submit a formal proposal to the Bitcoin network to start the code change process. 

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Investors Say New York has Surpassed Silicon Valley and Hong Kong as the Nation's Crypto Capital The cryptocurrency capital of America is likely to become the next Wall Street. Suppose the title doesn't go to Wall Street itself. With the potential to become a primary gateway into the ever-growing digital asset world, just as Silicon Valley has been for big tech and New York has been for big banking, establishing a crypto capital in the U.S.

makes sense. From Wyoming's state capital to Miami's city hall, local governments have been fighting for years to attract the crypto and blockchain industries to their areas. Hence, mayors, governors, and lawmakers have been making their pitches: Lower taxes, friendlier regulations, warmer temperatures. The list goes on. However, there are signs that New York City, the epicenter of senior finance since the Buttonwood Agreement, may be gaining ground. New York City already has a thriving crypto community with Tyler Winklevoss' Gemini, the NFT marketplace OpenSea, and blockchain analytics firm Chainalysis. However, recent activity has picked up. Investment funds are pouring billions into New York's crypto startups; Wall Street banks and money management companies are entering the market; and New York City's newly elected mayor, Eric Adams, has gone so far as to declare the city "the center of the cryptocurrency industry" -all of which has put New York City on a trajectory to become non-fungible to the industry's evolution eventually, executives and investors say. "It's kind of like a person who's got a 100-yard dash, and he gets to start at the 50-yard line," Ava Labs President John Wu says. "It's for New York to lose." 

April 2022 | Volume 22

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NEWS

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War in Ukraine Disturbs Crypto's Fantasy of Stateless Money Such reports are grossly inaccurate. It is easy to imagine that crypto will enable some of Putin's cronies to move their own money undercover despite sanctions and capital controls. For an economy the size of Russia, it is not practical to transfer the necessary sums via crypto exchanges to conduct international trade. There is evidence that smaller sanctions targets, such as North Korea, also utilize these methods. The president's directive for a coordinated policy to encourage "responsible innovation" and make the U.S. a leader in technology while also addressing threats to national security, financial stability, and crime prevention was welcomed by bitcoin supporters. In the long run, the government's recognition of the significance of cryptocurrencies should be considered an endorsement, said Blockchain Association executive director Kristin Smith.

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he recent executive order signed by Joe Biden was advantageous to the crypto industry because it did not include burdensome new regulations or take an adversarial tone. Nevertheless, it pales insignificance when compared to another development-the international response to the Russian invasion of Ukraine. Its ramifications will be far more significant for crypto, and none of them are favorable. As evidence of the dollar's global dominance, Washington has imposed financial sanctions on Moscow, demonstrating its ability to damage foreign individuals, firms, and entire countries. Having learned how the international monetary system works has been a teachable moment. People who were unaware of this have recently discovered that the dollar is vital for all kinds of international transactions and that disconnecting a country's central bank and commercial banks will make that country an economic pariah on a global level. Additionally, the public has seen that

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dollar "weaponization" can be successfully implemented in concert with dozens of like-minded nations for a noble cause. Despite cheering millions sympathetic to Ukrainian independence, the revelations clash with crypto's anarchistic fantasy of stateless money controlled by no central authority while ensuring privacy for its users, eventually replacing fiat currencies and eroding the dollar's hegemony. The arguments of crypto skeptics have also gained strength. As a result of the education Congress members and their constituents have received in the last few days, it will be much harder for the crypto lobby, wellfunded as it may be, to make a case for encouraging the widespread adoption of dollar alternatives. Measures that challenge the dollar's primacy will be accused of aiding and abetting Vladimir Putin and his ilk.

Awareness of a new reality Russia cannot evade sanctions by using Bitcoin, Ethereum, or other crypto assets.

Crypto enthusiasts tend to be cockeyed optimists, as evidenced by such jubilance. Regulators and lawmakers in Washington are unquestionably moving toward prioritizing the three objectives in the Biden executive order: "Protect U.S. investors, consumers, and businesses...Mitigate systemic risk, mitigate illicit finance, and reduce national security threats." Efforts to harmonize and coordinate digital currency regulations worldwide are enhanced by a united front against the Russian invasion. Cryptocurrency firms and exchanges have opened shop in Hong Kong, the Seychelles, and the Cayman Islands to ensure "light-touch regulation." The Financial Stability Board, the Basel Committee on Banking Supervision, and the Financial Action Task Force, which have already advanced some proposals and are eager to tackle the issue more forcefully, will likely be able to threaten jurisdictions that fail to meet international standards with credible sanctions. 

April 2022 | Volume 22


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BEGINNERS GUIDE Crypto Weekly

How are Your Crypto Assets Handled When You Die?

April 2022 | Volume 22

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BEGINNERS GUIDE

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Crypto Weekly

W

ith a market cap of $3 trillion, set in November 2021, cryptocurrency's popularity has exploded in recent years. It can be confusing for those who have invested in cryptocurrency. This new asset represents a world where government regulation and industry best practices are nonexistent or lagging. Even if crypto is a new investment for you, remember to think long-term - and that includes planning for what will happen to your crypto when you pass away.

How Do You Select the Assets That Should Be Included in Your Trust? Cryptocurrencies are digital currencies. Unlike centralized authorities (such as banks), blockchains serve as public ledgers that are independently verified by a network of computers rather than managed by a centralized authority. Decentralized crypto assets are critical to include in your estate plan, and you should

choose someone you trust to execute it. In other words, your beneficiaries may not be able to access your assets after your death.

Is crypto part of your estate plan?

Cryptocurrencies are considered probate assets, like your real estate property and other possessions you own. It would help if you went through probate (the legal and court-driven process of distributing your estate) before legally transferring it to your beneficiaries. Having an estate plan makes the probate process easier and faster. Even the most popular crypto exchanges do not support beneficiary designations for crypto assets - such as transfer on death (TOD) and payable on death (POD) accounts, which are common methods to keep traditional assets out of probate.

Where is your money? Someone needs to know. Cryptocurrencies are digital currencies, but you should still treat them as physical assets

with value, like diamonds, precious metals, and cash. Anyone who obtains access to your crypto can use it to their advantage, or to their detriment. Decentralized assets have unique safety concerns that are absent in assets managed by centralized authorities (e.g., a bank or investment account). A crypto asset locked in a digital wallet that cannot be accessed if you die without giving someone your crypto keys - the random sequences of numbers and letters you use as your password for crypto - will likely be lost forever. It would help if you left your heirs with clear instructions on how to handle your crypto assets.

What is the best way to pass your crypto assets on? Make your crypto assets part of your estate plan. The beneficiary of an asset is the person or organization you want to inherit it when you die. In your estate plan, list all the crypto assets you own, where they are stored, and which beneficiaries should receive them. If you own crypto assets, you should name a beneficiary and an executor in your will. You appoint an executor to administer your choices. Moreover, you can designate a separate digital executor to protect and preserve your digital assets and digital property. Nominate an executor or digital executor familiar with crypto to make the process easier for everyone involved. 

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April 2022 | Volume 22


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Crypto Weekly

of the

week

NFT

Bear Market Protection: BEST Crypto To Hold When It Comes!!

April 2022 | Volume 22

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FEATURE Crypto Weekly

Expert Explains How to Report Crypto, NFTs to IRS

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ccording to a recent NBC poll, one in five U.S. adults has now used cryptocurrency in some way. The tax season is upon us, so you must report them if you have digital assets. How? In terms of cryptocurrency, tax rules are clear and precedent-setting - you can report your cryptocurrency holdings the same way you report your stock holdings. Those who own other assets, such as non-fungible tokens (NFTs), face a different situation. On Yahoo Finance Live, Digital Assets Council of Financial Professionals Founder, Ric Edelman, says that cryptocurrencies are like stocks in that they can be bought and sold, but new creations, such as NFTs, have not been considered by the IRS. "If you create an NFT, you won't have to pay taxes. NFTs aren't subject to tax when they are created, but when they are sold, they become taxable.” Imagine an artist painting a picture. The complexity of NFTs is compounded by multiple complications. According to

April 2022 | Volume 22

Edelman, when someone purchases your NFT and sells it on to another person, "that royalty is also taxable. And, if you're earning royalties from NFTs, those are also taxable." Then there's another layer for digital-asset owners to think about: 1099s. Payments from entities other than your employer are reported on these tax forms. "Most people who trade digital assets don't get 1099s because no institution provides them, and no law requires them to," Edelman said, adding, “Some crypto platforms offer 1099s, like Coinbase (COIN), and that there are tax-tracking services that can assist.”

The rules are unclear. In cryptography, there are a lot of exceptions, things that have not yet been solved. As an example, what would you do if you received free crypto airdrops of tokens such as Ape Coin? "There are no rules," said Edelman, “so perhaps it's time to hire an expert.” "You should work with a tax advisor who is knowledgeable about crypto," he said.

Furthermore, tax revenue from crypto and digital assets is currently unclear to the IRS. Edelman believes the IRS will not see an immediate windfall from taxes paid on digital assets this year, but that it may come in the future. According to him, “Half of all Americans who own Bitcoin purchased it in 2021 and lost money. Therefore, they will have to claim a capital loss on their taxes." The reality is that most serious crypto investors view Bitcoin and other digital assets as longterm investments, so they have not sold yet. “Thus, there's no tax liability to report ... Therefore, they are not paying or declaring their capital gains yet," Edelman explained. There is another type of crypto investor who uses their crypto earnings in a way that does not require them to report to the IRS. “Digital asset owners have proven to be some of the most generous people in America,” Edelman said. “Those who have made a lot of money in crypto are donating it to charities across the country rather than paying taxes on it.” 

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