- Tracy Alloway. We're starting to think the avocado / bitcoin price correlation isn't just a meme.
⚡️Bitcoin Hash Rate
Keeps going up and to the right in spite of a weak market. Though hashrate can be a lagging indicator, many in the space attribute the uptick in hashrate to miners' bullishness on bitcoin's price in the future.
🔹 Ethereum 2.0 Update
Danny Ryan, Ethereum 2.0 lead researcher, provided an important update on the Ethereum 2.0 roadmap. The update includes the removal of shard crosslinks from the Phase 0 spec and delaying it to Phase 1. It also includes the intent to use standardized BLS signatures for the Eth2 deposit contract. The goal of standardization is to improve interoperability with other chains. This update follows a series of steps taken by Vitalik and the Etheruem Foundation to keep the community updated on the Eth2 upgrade.
🔹 Dharma Launches Its Updated Lending Platform
Dharma's new platform includes some major differences from the first iteration. For starters, Dharma has decided to use a smart contract wallet, similar to Argent, to provide non-custodial lending services. Second, they've integrated Coinbase identity management (which is a stealthy way to comply with KYC regulations). Although Dharma uses Compound as the backend, Dharma's advantage lies in the simplicity and better UX.
🔹 AZTEC Ceremony
The Ignition ceremony for AZTEC protocol is starting this week. The ceremony will witness the participation of hundreds of individuals and entities in the crypto ecosystem to contribute randomness to the protocols trusted setup. With a 30 day-long ceremony, it will be the largest ceremony for a privacy-focused crypto-asset. Disclosure: Token Daily Capital is planning to participate in the ignition ceremony.
💰 Litecoin Shows Some "Development" Life
After significant criticism for being a glorified Bitcoin testnet, the Litecoin team decided to show some differentiation by introducing an opt-in privacy feature for Litecoin. The new privacy feature will be based on the MimbleWimble protocol that is currently implemented on Grin. The privacy protocol will be applied on a sidechain, called Extension Blocks, running in parallel to the Litecoin chain. If approved, this will be the first major deviation of Litecoin from being a Bitcoin's copycat. In related news, here's our opinion on the privacy guarantees of the MimbleWimble protocol.
💰Libra and Zuckerberg's Congress Comeback
A good way to understand how Facebook's playing ball with the US government to get Libra approved is to read this short tweet thread and watch the video within. For the record, Zuck knows EXACTLY what the US government wants and will deliver it. Hint: it's not just enforcement of sanctions.
READ OF THE DAY
Why I Called It "Quantum Supremacy"
You've probably seen news of Google's breakthrough in quantum computing which was published last week in Nature. You may have also encountered some folks who've tried to incorrectly indicate that this breakthrough marks the end of public-key cryptography. This article gives Google's breakthrough accurate context and shows that it is just the beginning of a long journey to make quantum computers really useful.
THOUGHT OF THE DAY
Bitcoin and Crypto in a World of Negative Interest Rate
The world has been steadily moving into the erratic territory of negative interest rates. So far, more than 25% of the world debt carries a negative interest rate, the majority of which are government bonds in Europe and Japan.
Investor Howard Marks recently wrote an informative memo titled Mysteriouswhere he discusses the reasons behind how we ended up here. He also analyzes how negative rates could impact the global economy moving forward. It is a must-read for anyone who invests. For us in crypto, one of the first questions that comes to mind is: How will these negative interest rates affect Bitcoin and the cryptocurrency ecosystem in general?
The first is that investors will have a flight to safety and avoid investing in any risky alternative including Bitcoin.
The alternative scenario is that investors will refuse to willfully pay interest on their bank deposits and find it reasonable to invest in assets that may act as a store of value like gold and, hopefully, Bitcoin.
We don't have a clear answer yet, however, there are a number of encouraging observations. Patrick Jenkins of the Financial Times argues there is clear evidence that institutional investors are willing to take on more investment risk to avoid the negative interest rates. This risk appetite may be the reason behind the $200M+ of weekly institutional deposits that Coinbase Custody claims to see. When the US-China trade wars escalated this summer, Bitcoin's price spiked and Bloomberg had dubbed it an "unlikely sanctuary" on its front page.
Negative interest rates could be beneficial for Bitcoin. However, economists fear that extended negative interest rate policies could backfire and, instead of stimulating the economy, have it spiral further down. Negative rates are generally economic acts of desperation.
The extensive use of these policies could increase public fear - pushing investors to avoid any investments and sit on their cash. Even if they have to pay for it.
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Disclosure: Token Daily Capital and/or its partners may have exposure to some of the cryptocurrencies mentioned in this newsletter.