Bitcoin's 12th Birthday

PLUS: Binance's byzantine structure under fire, Ripple's MoneyGram incentives and more

October 30, 2020 By Daniel Kuhn If you were forwarded this newsletter and would like to receive it, sign up here.  Top shelf Ripple has invested over $50 million in remittance firm MoneyGram over the course of the firms' working relationship. Forbes published an investigation detailing the byzantine corporate structure Binance may have created to avoid U.S. regulations. Ether grew as a share of Genesis Capital's total loan book.   No offenses Investors who say they lost around £100,000 ($130,000) in an alleged cryptocurrency Ponzi scheme will not see remuneration after bringing their claims to the police. According to an investigation by the Metro newspaper published Tuesday, a number of investors said they had invested in a cryptocurrency project called Lyfcoin on promises of hefty returns, but had not received their money back. West Midlands Police dropped the case, however, saying none of the evidence provided took the case "further forward" and, the Metro said, "no offenses had been committed." Funding remittance firm MoneyGram has received over $52 million for providing "market development fees" for blockchain payments firm Ripple, since the firms struck a working relationship. In Q3 2020, Ripple invested over $9.3 million in the remittance firm, following a $15.1 million injection made the previous quarter, according to Moneygram's latest financial report. MoneyGram has described the market development fees as compensation for providing liquidity to Ripple's On-Demand Liquidity (ODL) network – its payments product using the XRP cryptocurrency to send money across borders. Byzantine Binance Binance Holdings Limited created a corporate plan for profiting from the U.S. market while avoiding the country's regulatory scrutiny, Forbes reported Thursday, citing a 2018 document it obtained. The leaked presentation outlines a web of U.S.-compliant entities that would funnel revenue to Binance, which is currently unregulated to operate in the U.S. The Forbes article included a screenshot of a slide but not the entire deck. Binance CEO Changpeng "CZ" Zhao disputes the reporting, claiming the draft came from an affiliated third party. U.S. affiliate Binance.US operates under a corporate structure similar to the proposed network, according to Forbes. Binance.US CEO Catherine Cooley has long refused to discuss Binance.US's ownership. Huawei's DC/EP hardware China's digital yuan looks closer than ever to launch with the news that Huawei will be supporting the central bank digital currency (CBDC) on an upcoming range of phones. Announced on Huawei's Weibo channel Friday, the Mate 40 line of devices will feature a built-in hardware wallet with "hardware-level security, controllable anonymous protection, and dual offline transactions," the tech giant said. In recent weeks, a public trial in the city of Shenzhen saw 10 million digital yuan given away to residents in a kind of lottery. The Mate 40 was announced in October and will be the latest flagship from Huawei, along with the Pro and Pro Plus models, according to TechRadar. Ether shares Genesis Capital saw the share of bitcoin in its loan portfolio drop as the share of ether loans increased to 12.4% of its total loan book this quarter. According to the lender's report, this was mainly due to liquidity mining on DeFi protocols such as Compound, Aave and Uniswap. DeFi interest rate arbitrage drove Genesis – which is wholly owned by CoinDesk parent company Digital Currency Group – clients to borrow ETH and stablecoins to "lever up liquidity mining strategies," the company wrote. Total trading volume in the third quarter was $4.5 billion, down from $5.25 billion in the second quarter but up by 285% from the third quarter last year.  CoinDesk's upcoming virtual event Bitcoin for Advisors, on two half days Nov. 9-10, aims to equip investment advisors with tools to better understand bitcoin, talk to their clients about it and work it into their business.   In close cooperation with professional advisors, CoinDesk is showcasing a program tailored to the financial advisor community. Through a series of keynotes, panels and interactive roundtable sessions, we will discuss investment theses for bitcoin, why younger demographics are turning to this asset and how it fits into the current global macroeconomic picture.   We will also walk through the practicalities: how to answer client questions about bitcoin, how to talk to your compliance department about bitcoin, how can bitcoin can help grow your book. Apply for Bitcoin for Advisors, Nov. 9-10. Quick bites "That most people still hate bitcoin isn't a bad thing," writes Dylan Grice of Calderwood Capital. The Economist gives an introduction to bitcoin by comparing it to a posh London club known primarily for turning away Mick Jagger at the door. Citing high gas fees and slow blocktimes, Audius said it will migrate part of its system to Solana's blockchain from an Ethereum sidechain. Staking and governance functionality will remain on Ethereum. (CoinDesk) A margin change in FTX's TRUMP future's contract indicates traders are factoring in President Donald Trump's diminishing chances of reelection come Nov. 3. (CoinDesk) OKEx, still paralyzed by founder's arrest, details plans for bitcoin cash hard fork. (CoinDesk) On Purpose podcast host and Onramp Invest CEO Tyrone Ross invites the public to CoinDesk's first podcast live taping party on Wednesday, Nov. 3.   Attendees will be part of the experience and get to ask frank questions to Ross and his guests Adam Pokornicky, COO of Digital Asset Investment Management; Andy Edstrom, financial adviser and investor at WESCAP Group; and Sunayna Tuteja, head of digital assets at TD Ameritrade; as they raise the big questions for financial advisors in a jargon-free, transparent discussion.   Pokornicky, Edstrom and Tuteja, who are also speaking at CoinDesk's Bitcoin For Advisors event for registered investment advisers Nov. 9-10, are experts in the digital asset class in the context of how it fits in the realm of portfolio management, including understanding bitcoin's macro implications, preparing against bitcoin's volatility and how to fold it into retirement accounts.   Podcast taping attendees will also be fast-tracked for approval to attend Bitcoin For Advisors after applying separately here.   Register for On Purpose's live taping party on Nov. 3. Market intel Hashrates & fees The average price of a transaction on the Bitcoin blockchain is now  0.00086764 BTC (~$11.66), the highest since June 2018. This represents a 573% increase over the past 12 days. The spike in fees comes amid a rally to yearly highs to $13,800, and as the networks number of unconfirmed transactions ticked up 1,800% reaching highs not seen since December 2018. "In other words, the mining power dedicated to approving transactions and mining blocks has gone down amid the price rally, boosting waiting times and network congestion," CoinDesk's Omkar Godbole reports.  At stake Happy birthday, Bitcoin Tomorrow marks the 12th anniversary of Bitcoin's white paper.   Published by pseudonymous developer Satoshi Nakamoto to a small cadre of cryptographers, the eight-page conceptual proof for a fully decentralized, peer-to-peer electronic cash system has since sparked a monetary revolution.   In the intervening years, Bitcoin has been called many things: a scam, a ponzi, dead on arrival, a joke, a tool for criminals, rat poisoned squared, a currency for geeks, and did we mention dead? While pundits are wont to predict Bitcoin's death, the simple ledger has remained, and has even breathed new life into how societies think about money, financial access and the nebulous concept of "trust." Heads are turning. Yesterday, The Economist, published an ode to Bitcoin saying, "Even people who are hostile to bitcoin will concede that its technology is fiendishly clever. It is essentially a way of accounting for who has spent what. Instead of a central exchange to keep score, and to verify payments and receipts, it uses an electronic ledger that is distributed across the entire system of bitcoin users."   Wishing Bitcoin a happy birthday, cybersecurity firm Halborn produced a video with a number of celebrities wishing it well. (It's a bit bizarro, but well-meaning.)   In a cameo appearance, Wu-Tang Clan's RZA said, "Ya know Bitcoin was created by the anonymous Satoshi Nakamoto doin his thang. I wanna say one thing about this— If you don't know about it, you better know about it, because yo… at the end of the day scientists can create something, son, but the value on everything is what we put on it. The Bitcoin revolution has started." Who won #CryptoTwitter? 2020 has not been a good year by most metrics. There is no way to avoid this in a year-end retrospective.   Every year, CoinDesk recognizes the "Most Influential" people working to expand cryptocurrency and blockchain's reach. It's a list of the 10 outsized individuals who have gone the furthest and done the most.   In this most unusual year, we need your help determining who should be named as Most Influential. Check out the list of the top contenders and cast your vote by Oct. 31. With the U.S. Election Day next week, much is at stake - including crypto policy over the next four years.   Like it or not, this election will matter for the crypto industry. Our latest limited-run newsletter, The State of Crypto: Election 2020 by regulatory reporter Nikhilesh De, aims to walk you through why.   At stake: Will new crypto products be approved or allowed to operate in the U.S.? Will regulators target more overseas exchanges and platforms like BitMEX? Will the U.S. launch a "digital dollar" or some other form of central bank digital currency?   These questions will come down to who takes the reins at the various financial regulators and government departments. Over the next several days, we map out the possible outcomes and introduce analysis of the candidates.   Our limited-run newsletter runs Mondays, Wednesdays and Fridays at least until Election Day. Subscribe to The State of Crypto: Election 2020. ATTENTION: Scammers have been sending fraudulent emails with links to sites disguised to look like coindesk.com. If you are in doubt about a link, type https://www.coindesk.com directly into your browser; do not copy and paste. Remember, if something seems too good to be true, it probably is. Blockchain Bites   A newsletter from CoinDesk   See Previous Editions Copyright © 2020 CoinDesk, All rights reserved.    250 Park Avenue South New York, NY 10003, USA You can manage your preferences here or unsubscribe from all CoinDesk email.