Podcast Summary
Bitcoin Halving Celebration and Discussion: The Bitcoin halving brings excitement and uncertainty, with potential price impacts and significant discussions on sound money and the Bitcoin standard.
This week marks the Bitcoin halving, a rare event that only occurs every four years. David from the Bankless podcast is celebrating this occasion with a Bitcoin-themed party, where he invites friends over to discuss the significance of sound money and the Bitcoin standard. The Bitcoin halving, scheduled for Saturday, has left many wondering if it will be bullish or bearish for Bitcoin prices. Other topics include the release of layer twos by Coin and OKX, Kraken's new open-source and privacy-first wallet, Ethereum's upcoming ETFs and upgrades, the emergence of alt restaking, and Solana's recent patch to address transaction spam. Additionally, Safe Wallet was highlighted for its role in account abstraction and its upcoming SafeCon event. With the Bitcoin halving just around the corner, the crypto community remains focused on the potential impact on prices and the broader ecosystem.
Bitcoin Halving and Release of Bitcoin Runes: Historically, Bitcoin's price has surged after halvings, but short-term price movements can be volatile. New feature, Bitcoin Runes, may bring new use cases and value to Bitcoin.
The Bitcoin reward for mining a Bitcoin block is getting cut in half for the third time in its history, which happens approximately every 4 years. This event, known as "The Halving," has historically led to significant price appreciation for Bitcoin in the years following, with returns ranging from 285% to 8,800%. However, the month following The Halving has been relatively flat, with price movements ranging from a 9% increase to a 10% decrease. This time, there is additional excitement as the release of Bitcoin Runes, a new feature inside the Bitcoin layer 1, is happening in conjunction with The Halving. This event is significant because it allows for the creation of fungible tokens directly on the Bitcoin blockchain, and it's expected to bring new use cases and potential value to Bitcoin. Overall, while The Halving and the release of Bitcoin Runes are exciting developments, it's important for investors to keep a long-term perspective and not be swayed by short-term price movements.
Bitcoin's Price Decrease: Reasons Unclear: Bitcoin's price dropped 10%, potentially due to tax day, geopolitical tensions, decreased ETF inflows, and stock market downturn. Reasons unclear.
The price of Bitcoin experienced a 10% decrease this week, starting at around $70,000 and currently sitting at $62,500. Several potential reasons have been proposed for this drop, including tax day in the United States, geopolitical tensions between Iran and Israel, decreased Bitcoin inflows into exchange-traded funds (ETFs), and the overall downturn in the stock market. The tax day theory suggests that individuals might have sold Bitcoin to pay their taxes, but the validity of this explanation is uncertain. The geopolitical tensions between Iran and Israel have also caused market uncertainty and potential instability. The decrease in Bitcoin inflows into ETFs has coincided with a period of price stagnation. Lastly, the stock market's downturn has also affected the price of Bitcoin. Gold, on the other hand, has seen relentless growth in the past month. The legitimacy of these explanations remains debatable, and it's important to remember that market fluctuations can be influenced by a multitude of factors.
Bitcoin's price movements not tied to traditional safe-havens, linked to stock market instead: Bitcoin's price is volatile and uncertain, but some view recent price declines as a buying opportunity for long-term investors
Despite the global turmoil and economic uncertainty, Bitcoin is not behaving like a traditional safe-haven asset, such as gold. Instead, it's price movements seem to be more closely tied to the stock market. Some believe this is due to the recent inflows into Bitcoin ETFs and the oversold condition of the S&P 500. Additionally, the Fed's potential delay in reducing interest rates could also be a factor. It's important to note that Bitcoin's price history is still relatively short, and we have only seen 38 days where its closing price surpassed $60,000. This means that we are still in the same price range as the all-time highs reached over the past month and a half. While some may see this as a cause for concern, others view it as an opportunity to buy at lower prices. The same goes for Ethereum, which experienced a sharp decline in value last week, but has since rebounded slightly. Overall, the crypto market remains volatile and uncertain, but some believe that the current conditions present a buying opportunity for those with a long-term investment horizon.
Ethereum's Layer 1 and Layer 2 Markets Bifurcated by Blob Space: Blob Space buffers Layer 2s from Layer 1's high gas prices, allowing for minimal awareness and concern, with cheapest swap fees on Arbitrum at 0.65¢ and an 11x scaling factor for TVL on Layer 2s and 3s.
Ethereum's Layer 1 and Layer 2 markets are now distinct due to the introduction of Blob Space, which has buffered Layer 2s from the high gas prices experienced on Layer 1. This bifurcation allows users on Layer 2s like Optimism, Arbitrum, and Polygon to transact with minimal awareness or concern about the congestion and high gas prices on Layer 1. For instance, the cheapest swap fees on Arbitrum are only 0.65¢. Additionally, the total value locked (TVL) on Layer 2s has reached an 11x scaling factor, with Layer 3s like Degen Chain on Arbitrum now leading in transactions per second. Overall, the introduction of Blob Space and the growth of Layer 2s and 3s are revolutionizing the Ethereum ecosystem by providing more affordable and efficient transaction options. For more information on fee dynamics and economics of Layer 2s, visit fees.growthepie.xyz.
Innovation and growth in the crypto industry: Kraken offers intuitive trading tools and award-winning support, Casa ensures secure self-custody, and new layer 2 chains like Worldchain and X's are introduced, driving ongoing innovation in the crypto space.
There are several significant developments happening in the crypto space, including new layer 2 chains, wallet launches, and the transition to smarter crypto management. Kraken, a well-established crypto platform, was highlighted for its intuitive trading tools, award-winning support, and commitment to building a more accessible and inclusive financial system. Another important topic discussed was the importance of self-custody of crypto assets, with Casa being a trusted solution for secure storage and inheritance planning. Additionally, Worldcoin introduced Worldchain, marking another layer 2 solution, while X also announced the launch of their own layer 2 chain. Overall, these developments underscore the ongoing innovation and growth in the crypto industry.
Human-aware blockchain with iris scan verification: World Chain uses iris scans to verify human identity, granting users a private key and subsidized transactions, and creating a more civil-resistant platform for developers.
World Chain, a part of the World Coin vision, is developing a human-aware blockchain by using iris scans to verify human identity. This verification process grants users a private key associated with their iris, providing them with a 1st class position on the World Chain and subsidized transactions. The goal is to differentiate humans from bots on the chain, creating a more civil-resistant platform for developers to build on. The concept of a human-aware blockchain is significant because it aims to assure developers that they are building for individual humans rather than bots. This idea expands the possibilities of what can be achieved on a blockchain and addresses the growing concern of the "dead Internet theory," which asserts that the Internet is increasingly dominated by bots and automated processes. The integration of human verification into the blockchain could potentially shift the balance back towards human interaction and activity.
The Role of Bots and AI in the Internet and Cryptocurrency: Bots and AI are increasingly dominating online interactions, and exchanges are entering the layer 2 space, allowing for perfect interoperability and sharing of liquidity among chains, signaling a significant step forward for the Polygon ecosystem. This trend is likely to continue, with major financial institutions following suit.
The Internet as we know it may not be as human-driven as we assume, with bots and AI increasingly dominating online interactions. Meanwhile, in the world of cryptocurrency, exchanges continue to enter the layer 2 space, with OKX's X Layer being the latest addition to Ethereum's Polygon stack. This development allows for perfect interoperability and sharing of liquidity among chains, making it a significant step forward for the Polygon ecosystem. As more exchanges join the layer 2 bandwagon, it's likely that major financial institutions will follow suit. The future of the digital world may involve a blend of human and artificial intelligence, with technological advancements like OKX's X Layer playing a crucial role in facilitating seamless transactions and interactions.
Financial industry's shift towards blockchain technology: Banks may become side chains, exchanges develop wallets, and users can access DeFi on multiple chains with ease, enhancing efficiency, security, and accessibility.
The financial industry is moving towards blockchain technology, with banks potentially becoming side chains or layers on top of global settlement systems like Ethereum. Exchanges, like Kraken, are also embracing this trend by developing their own wallets, which could be a step towards building their own chains. Kraken's open-source wallet, which offers IP privacy, is a great example of this transition. From the user perspective, having multiple wallets on different chains, each with its unique features, is becoming a reality. The ability to use WalletConnect to access DeFi on various chains without having to switch between them adds to the convenience. Overall, the financial industry's shift towards blockchain technology is an exciting development that promises greater efficiency, security, and accessibility.
Kraken enters DeFi, Ethereum ETFs approved in Hong Kong, Ethereum upgrade, and more: Kraken joins DeFi with Ethereum staking, Hong Kong approves Bitcoin and Ethereum ETFs, Ethereum upgrades, Solana improves transactions, and innovation continues with sponsors like Mantle and Celo.
Kraken's entry into the world of decentralized finance (DeFi) through its new Ethereum-based staking service is a significant step towards the exchange becoming more on-chain and potentially even creating its own chain. Meanwhile, Hong Kong's approval of Bitcoin and Ethereum ETFs is symbolic but may not significantly impact markets due to small market size, capital control restrictions, and high fees. Elsewhere, Ethereum is set to receive a major upgrade with EIP 3074, while Solana has improved transaction processing, and 0xmaki, a well-known figure in the crypto world, has resurfaced with new projects causing buzz. Sponsors like Mantle and Celo continue to drive innovation in the space, offering grants and building ecosystems to support the growth of web 3 applications.
Exploring Ethereum-Celo Integration and Ethereum Upgrades: Celo and Ethereum are exploring integration, bringing potential benefits like lower gas fees and 1 block finality. Ethereum's EIP-3074 upgrade introduces account abstraction, enhancing wallet functionality and streamlining transactions.
Celo, a blockchain project, is exploring the possibility of integrating with Ethereum as a layer 2 solution through various projects like Matter Labs and Arbitrum. This integration could bring advantages such as lower gas fees, decentralized sequencing, and 1 block finality. Additionally, Ethereum is working on a significant upgrade called EIP-3074, which aims to introduce account abstraction, allowing logic to be embedded in wallets and eliminating the need for multiple token approvals. This could lead to more sophisticated smart contract wallets and streamlined transactions on the Ethereum network. For those looking to launch tokens, TOKU offers specialized support to ensure compliance and optimize tax efficiency. Ethereum's upcoming upgrades, such as account abstraction, aim to increase the network's sophistication and improve user experience.
Ethereum Users to Migrate to New Account Abstraction Wallets During Spectra Upgrade: Ethereum's Spectra hard fork in early 2025 will enable users to upgrade their wallets, improving security and user experience. Eigenlayer, a liquid staking platform, may hold a larger Ethereum supply, becoming a significant player in the ecosystem.
Ethereum users, even those with numerous existing wallets, will be able to migrate them to account abstraction wallets during the next Ethereum hard fork, named Spectra. This upgrade, which is expected to occur in early 2025, will bring significant benefits such as improved security and user experience. Moreover, Eigenlayer, a popular Ethereum liquid staking platform, has recently removed the cap on deposits, potentially allowing it to hold a larger portion of the Ethereum supply. This could make Eigenlayer a significant player in the Ethereum ecosystem, comparable to Bitcoin ETFs in the Bitcoin market. Additionally, the discussion touched upon the naming convention of Ethereum hard forks, which involves combining a city on Earth with a star's name.
Alt restaking networks for various tokens beyond Ethereum: Ethereum ecosystem is expanding its scope to support other assets for staking services, reducing cross volatility risks and attracting competitors
The Ethereum ecosystem is seeing a significant focus on alt restaking networks, which aim to provide staking services for various tokens beyond Ethereum itself. Eigenlayer, a foundational infrastructure for the Ethereum ecosystem, is also expanding its scope to support other assets besides Ether, recognizing the importance of having a single unit of account and reducing cross volatility risks. One of the notable competitors in this space is Karak, which recently raised a billion dollars to accelerate universal security and expand its restaking services for various tokens. Another player is Nektar, which pivoted from its initial DVT focus to become a restaking platform. These developments reflect the growing importance and success of the Ethereum ecosystem, attracting competitors and expanding its scope beyond Ether.
New projects in crypto focus on gaming and restaking on Ethereum and layer 2 solutions: Immutable builds gaming ecosystem with dedicated chains for each game, offering horizontal transaction settling and native tokens, making it an attractive option for developers in the crypto gaming sector
The crypto industry is seeing a surge in the development of new projects focused on restaking and gaming, specifically on Ethereum and other layer 2 solutions. For instance, Immutable is building the Immutable Nexus, an ecosystem of gaming chains, which includes the upcoming Dark Souls game with on-chain assets. This game, and potentially others, may have their own zkEVM chains to ensure dedicated resources and customization for each game. The cost of spinning up these chains is relatively low, making it an attractive option for developers. This layer 3 approach allows for a more horizontal settling of transactions, offering dedicated throughput and native tokens for each game. Overall, these developments showcase the innovation and growth in the crypto gaming sector.
Reality TV-style game 'Survivor Meets Crypto' on Ethereum: Compete in daily trials, vote off others, and win Ethereum in this 10-day reality game with a 1 ETH entrance fee.
"Survivor Meets Crypto" is an innovative reality TV-style game built on the blockchain where players compete in daily trials and vote each other off to win a pot of Ethereum. The game, which has had two seasons with hundreds of players, lasts 10 days and requires a 1 ETH entrance fee. Players are grouped together and must coordinate with their tribe while also planning to eliminate others. Popularity can be a curse as it makes a player a target. Despite its elimination aspect, the game is equitable and has gained significant popularity, with some employees of Bankless, a popular crypto newsletter, becoming avid players. The winner of the latest season received a substantial reward of 72 ETH. If you're interested in learning more, Bankless has a dedicated episode on the game on their premium feed.
Promoting Decentralization through Hero Glyphs: 0x Maki's new project utilizes Ethereum's beacon chain and graffiti space to mint and distribute tokens to solo stakers, promoting decentralization in Ethereum's network.
0x Maki, a well-respected figure in the crypto community, is working on a new project called Hero Glyphs. This project aims to promote decentralization in Ethereum by rewarding solo stakers over institutional or organizational stakers. The mechanism behind this rewards system is the use of graffiti space in the Ethereum beacon train, which allows validators to add a 32-character message to each proposed block. 0x Maki is utilizing this space to mint tokens on a layer 2 network, which are then associated with the individual Ethereum Owned Address (EOA) of the validator proposing the block. This system is not perfect in targeting solo stakers but is directionally correct. The creation of tokens that can only be accessed by solo stakers is reminiscent of other projects, such as runes. The innovation lies in the use of Ethereum's beacon chain and the graffiti space to mint and distribute these tokens. While the exact benefits for solo stakers and the potential impact on Ethereum's decentralization are yet to be fully understood, the concept is intriguing and showcases the creativity and problem-solving abilities within the crypto community.
Solana network issues and proposed crypto bill: Solana faced network congestion and scalability issues, causing transaction failures. A network update was deployed, but long-term sustainability is uncertain. A proposed crypto bill may limit decentralized stablecoins, giving too much power to banks and potentially having extraterritorial provisions.
There have been issues with the Solana network, specifically regarding network congestion and scalability, leading to transaction failures for users. Solana responded by deploying an update, version 1.17.31, which improved networking issues and allegedly stopped a spamming project. However, the long-term sustainability of this solution is uncertain. Additionally, a proposed bipartisan stablecoin bill, introduced by Senators Lummis and Gillibrand, has been criticized by crypto lawyers as potentially killing decentralized stablecoins that don't have US dollars in a bank, giving too much power to banks and potentially having extraterritorial provisions. Overall, these events highlight the challenges faced by decentralized networks and the potential impact of regulation on the crypto ecosystem.
Disappointment with Crypto Regulation Bill and Importance of Cheap ZK Verification: The new crypto regulation bill may ban most cryptocurrencies, only allowing centralized custodial stable coins. The importance of cheap and accessible ZK verification is crucial for the growth of a massive ecosystem of new ZK apps.
The recently published bill regarding cryptocurrency regulation is deeply flawed and may ban nearly everything except centralized custodial stable coins, which would be worse than the current status quo. The speakers expressed their disappointment and frustration with the lack of progress in getting a good legislative bill. They discussed two startups, Aligned Layer and Nebra, that are part of the Bankless Ventures universe and are contributing to the trend of going from compute to trustless compute in the blockchain industry. Aligned Layer is an AVS (Autonomous VeChain Service) outside of the Eigenlayer ecosystem that provides extremely cheap and fast ZK (Zero-Knowledge) proving and verification. Nebra is a ZK proof aggregator that consumes other people's ZK proofs and aggregates them, making it cheaper for all of these ZK proofs to be settled on the Ethereum layer 1. Overall, the speakers emphasized the importance of abundant ZK verification being cheap and accessible to enable a massive ecosystem of new ZK apps. The meme of the week featured a tweet by Tim Copeland, showcasing the potential and excitement of the blockchain industry.
Crypto Crimes Will Be Prosecuted: Despite the belief that crypto transactions are untraceable and immune to legal consequences, crimes committed in the crypto world will still be punished. A recent example is Avi Isenberg's manipulation of Mango Markets, leading to his arrest and upcoming sentencing.
While the crypto world may seem like a wild frontier, crimes committed in this space are still illegal and will be prosecuted. Avi Isenberg, a crypto trader, learned this the hard way when he was found guilty of commodities fraud, commodities manipulation, and wire fraud for manipulating the Mango Markets in 2022. Despite the belief that crypto transactions are untraceable and immune to legal consequences, Isenberg's actions boosted the prices of future contracts by 1300% in just 20 minutes, leading to his arrest and upcoming sentencing. This serves as a reminder that the crypto world is not a lawless land and that crimes committed in it will still be punished. It's important to remember that while crypto offers new opportunities and freedoms, it's essential to respect the law and the rights of others.
