Podcast Summary
EatDenver meetup for Bankless citizens with free beer and exciting crypto discussions: Bankless citizens can enjoy free beer at the EatDenver meetup, while discussions covered SEC actions, Blur token drop, Bitcoin Ordinals growth, potential Celsius returns, and ZK EVM wars. Bitcoin ended the week near $25,000 and ETH broke through $1700 resistance. Bankless premium rebranded to citizenship with perks like event discounts and exclusive content.
The EatDenver meetup for Bankless citizens is coming up on the 3rd Friday of February, and premium members can enjoy free beer at the event. The discussion also covered various topics in the crypto space, including the SEC's actions against crypto, the drop in the price of Blur token, the growth of Bitcoin Ordinals, potential returns for Celsius customers, and the heating up of the ZK EVM wars. The speakers expressed their excitement about the upcoming Bankless Nation meetup and encouraged those interested to sign up. Bitcoin had a good week, ending just shy of $25,000, and ETH started to break through the $1700 resistance line. The discussion also mentioned the rebranding of Bankless premium to Bankless citizenship and the perks that come with it, including discounts on events and access to exclusive content.
Markets respond positively to inflation increase despite uncertainty: Bitcoin outperforms Ethereum, crypto market cap nears $1.2 trillion, markets view higher inflation as a sign of peaking prices, but Fed may increase interest rates further
Despite the recent increase in inflation, the markets are responding positively due to the belief that the downtrend has started. Bitcoin outperformed Ethereum this week, with Ethereum showing resilience even during the bear market. The total crypto market cap is approaching $1.2 trillion, and despite the long-lasting bear market, Ethereum and Bitcoin have fared better than other assets. The inflation report showed a higher-than-expected increase of 0.5% in January, but the markets took it positively as a sign that inflation has peaked. However, it's unlikely that the 2% inflation rate will be the new normal, and the Fed is expected to increase interest rates further to combat inflation.
Understanding Inflation and Deflation in Crypto: Crypto assets like Ethereum can experience deflationary trends, driving up gas fees and block space demand. Inflation and deflation have real-world impacts and understanding their complexities is vital for informed financial decisions.
While reported inflation rates may not always reflect the true economic situation, as seen in Argentina's 99% annualized inflation, the realities of inflation and deflation can have significant impacts on individuals and economies. In the crypto world, Ethereum's deflationary trend, with a negative monthly inflation rate, is driving up gas fees and block space demand, making it an attractive asset for some investors despite recent market downturns. The debate over which approach to monetary policy - keeping it constant or making changes that benefit the holder base - continues among crypto communities. Ultimately, understanding the complexities of inflation and deflation, and their real-world implications, is crucial for making informed financial decisions.
Crypto Values and Beliefs: Bitcoin vs Ethereum: Historically, Bitcoin's halving cycles boost prices, but Ethereum's flexible monetary policy may change the game. Bitcoin's dominance may wane as Ethereum gains narrative capture, and illicit crypto transactions make up a small percentage of the market.
The value and appreciation of different cryptocurrencies depend on individual values and beliefs. While Bitcoin's halving cycles have historically led to price increases, Ethereum's approach to monetary policy may offer more flexibility. Bitcoin still dominates the crypto market from an external perspective but may lose narrative capture to Ethereum and other crypto assets. Additionally, the percentage of illicit crypto transactions is relatively low, at 0.24%, according to Chainalysis' annual report. Overall, the conversation revolves around the evolving nature of cryptocurrencies and their role in the financial landscape.
Persistent belief of crypto being used for illicit activities is a myth: Only 0.24% of Bitcoin transactions are linked to illegal activities, yet the perception continues. Regulatory bodies take action against exchanges like Kraken for unregistered securities, but they remain industry leaders prioritizing security, transparency, and client support.
Despite the persistent belief that cryptocurrency is primarily used for illicit activities, the actual usage is much lower. A recent statistic suggests that only around 0.24% of Bitcoin transactions are linked to illegal activities. However, this perception continues to persist, even in the halls of Congress. Meanwhile, regulatory bodies like the SEC are taking action against crypto exchanges like Kraken, accusing them of offering unregistered securities in their staking programs. Kraken has agreed to shut down its staking services and pay a $30 million fine to settle the charges. Despite the regulatory challenges, Kraken remains a leader in the crypto industry, prioritizing security, transparency, and client support for its over 9 million clients. For those interested in crypto, Kraken offers a simple and intuitive user experience, making it an excellent place to learn and get involved. Additionally, Bankless Premium offers valuable resources and support for those exploring the crypto frontier.
SEC's crackdown on Kraken's staking service: The SEC's decision to shut down Kraken's staking service for US citizens and fine the company $30 million raises questions about the agency's approach to cryptocurrency staking and potential regulatory overreach.
The SEC's decision to shut down Kraken's staking service for US citizens and fine the company $30 million raises questions about the regulatory agency's approach to cryptocurrency staking. Some argue that the SEC could have initiated a public process to develop a workable registration process instead of simply shutting down the service. Hester Peirce, a commissioner at the SEC, dissented from the decision and criticized the agency for being paternalistic and lazy. She called for guidance on staking to have been issued long before and praised the principles of a regulator taking accountability. Representative Bill Huizenga also weighed in, promising oversight of the SEC's interactions with SBF and FTX. The incident highlights the need for clearer guidance from regulators on cryptocurrency staking and raises concerns about the potential for regulatory overreach.
SEC's Regulation of Crypto: Lack of Guidance and Controversy: The SEC's approach to regulating cryptocurrency is criticized for lack of clarity and transparency, leading to confusion and frustration within the industry. Kraken's settlement over staking services being deemed securities highlights the uneven enforcement, with some arguing favoritism and selective enforcement.
The regulatory environment for cryptocurrency is unclear and contentious, with some industry players facing enforcement actions while others receive more lenient treatment. The SEC's approach to regulating crypto has been criticized for lack of guidance and transparency, leading to confusion and frustration within the community. Kraken's settlement with the SEC over staking services being deemed securities stands out as a point of contention, with some arguing that Coinbase's simpler offering allowed them to avoid similar scrutiny. The SEC's chairman, Gary Gensler, has been accused of favoritism and selective enforcement, as well as using public statements to influence public perception. The crypto industry continues to call for clearer guidance and a more collaborative approach from regulators.
Regulatory crackdown on centralized exchanges and stablecoins: Regulatory pressures on centralized exchanges and stablecoins may impact decentralized staking protocols and the crypto market, but staying vigilant and fighting against regulatory overreach is crucial to protect the decentralized nature of crypto.
The regulatory crackdown on centralized exchanges and stablecoins is causing uncertainty in the crypto market, with regulators potentially targeting decentralized staking protocols next. The market's strong performance of staking tokens like RPL and Lido doesn't guarantee safety from regulatory scrutiny. The SEC's action against Paxos, the issuer of Binance USD (BUSD), indicates that regulators believe Binance and its stablecoin may be involved in illicit activities. This regulatory pressure has led PayPal to pause its stablecoin plans, showing the short-term impact of these regulations. However, over the long run, the crypto market may prove resilient to regulatory pressures. But, it's crucial for the crypto community to stay vigilant and fight against any regulatory overreach to protect the decentralized nature of staking and crypto as a whole.
SEC and FTC push for stricter crypto regulations on custody of digital assets: Regulatory bodies aim to separate exchange and custodian services due to asset commingling concerns, impacting registered investment advisers and potentially limiting ease of crypto investments
Regulatory bodies like the SEC and FTC are pushing for stricter regulations on crypto exchanges and investment firms, specifically around custody of digital assets. This could lead to a separation of exchange and custodian services, as exchanges may no longer be able to hold clients' assets. The SEC's argument is that commingling of assets on exchanges could leave investors vulnerable in the event of a platform bankruptcy. This could significantly impact registered investment advisers who provide financial advice to a large portion of Americans in the US. The fight against these regulations is ongoing, with industry figures like Brian Armstrong of Coinbase advocating for the technology in Washington D.C. However, the future of crypto custody remains uncertain, with potential implications for the ease and accessibility of crypto investments.
SEC's New Rules Could Make it Harder for RIAs to Handle Crypto Assets: The SEC's proposal could make it harder for RIAs to handle crypto assets, potentially discouraging investment and limiting their ability to serve clients effectively. Critics argue it's a broad overreach and could delegitimize RIAs in the crypto space.
The Securities and Exchange Commission (SEC) is proposing new rules that could significantly impact the crypto industry by making it harder for registered investment advisers (RIAs) to handle crypto assets. The SEC is pushing RIAs to store crypto assets with banks instead of crypto exchanges, but this move could delegitimize RIAs and make it difficult for them to advise on crypto, an asset class that is increasingly popular among younger investors. Jake Chervinsky, a prominent crypto lawyer, criticized this proposal as a violation of the SEC's mission to protect investors and encourage capital formation. The SEC's actions could discourage crypto investment and make it harder for RIAs to serve their clients effectively. The SEC's proposal also covers non-securities that it shouldn't regulate, making it a broad overreach. The SEC's actions have sparked memes and criticism from the crypto community, with some comparing it to a dog that won't let investors play fetch with crypto while claiming to protect them. Despite these challenges, the crypto industry continues to innovate, with new projects like Blur, a tokenized NFT trading platform, attracting significant investment and attention.
Polygon's zk EVM Mainnet Launch and Ethereum's Censorship Resistance: Polygon's zk EVM mainnet launch marks a significant milestone, Ethereum's non-compliant blocks highlight censorship resistance, tools like Earnify help stay informed, Uniswap simplifies entry to DeFi and NFTs
The world of cryptocurrency and decentralized finance (DeFi) is constantly evolving, with new developments and opportunities emerging regularly. Two major events discussed in the podcast include the upcoming launch of Polygon's zk EVM mainnet and the increasing number of non-OFAC compliant blocks on Ethereum. Regarding the former, Polygon is set to launch its zk EVM mainnet on March 27, marking a significant milestone in the world of zero-knowledge (zk) rollups. This comes after over a year of research, development, and testing, and it could potentially put Polygon ahead of competitors like ZKSync in the race to provide a zk EVM solution. On the other hand, the increasing number of non-OFAC compliant blocks on Ethereum highlights the culture of censorship resistance built into the layer 0 of the Ethereum network. This trend, while potentially concerning for regulatory compliance, underscores the decentralized and competitive nature of the protocol. To keep up with these developments and ensure you don't miss out on airdrops and other opportunities, consider using tools like Earnify to monitor your wallets and stay informed about new projects and events. Additionally, sponsors like Uniswap are making it easier than ever to go from fiat to DeFi assets and explore the NFT world.
Competition between Polygon and zkSync for zkEVM solutions: Polygon and zkSync are launching their zkEVM solutions, allowing for dApp deployment on mainnet. Polygon targets March 27th launch, zkSync in 'fair onboarding' period. Both undergoing security audits, public access imminent. Legal cases involving crypto, decentralized finance add complexity to industry evolution.
Both Polygon and zkSync are getting close to launching their zkEVM solutions, which will allow for the deployment of decentralized applications (dApps) on the mainnet. Polygon has announced a March 27th launch date, while zkSync is currently in a "fair onboarding" period, where teams can sign up to build and test their dApps on the zkSync era. Both projects are undergoing security audits and are expected to open up to the public within the next few weeks. However, the contrasting situations of Alexei Pertseff, a developer who is currently in jail for his involvement in Tornado Cash, and Sam Bankman-Fried, who is out on bail despite being involved in a case involving potential fraud worth billions, highlight the complex and often misunderstood nature of the crypto world. The legal system is still grappling with how to handle cases involving decentralized finance and open-source code, and it remains to be seen how the courts will rule in these cases. Overall, the competition between Polygon and zkSync, as well as the ongoing legal battles, demonstrate the rapidly evolving nature of the crypto industry.
NFTs expand to Bitcoin ecosystem: NFTs are now on Bitcoin, with art donations, unique digital collectibles, and even constitutions being minted as NFTs, sparking debates and new ways for Bitcoiners to engage with the technology
The NFT world is expanding beyond Ethereum and into the Bitcoin ecosystem. A notable example is the addition of Cosmo Dei Medici's NFT collection to the Los Angeles County Museum of Art, marking the first donation of on-chain art from a collector to a museum. Bitcoin is also seeing the emergence of NFTs like Bitcoin Punks, which are unique digital collectibles on the Bitcoin blockchain. The El Salvador constitution was even recently minted as an ordinal NFT, showcasing the potential for Bitcoin to host distinct global cultures. However, this exploration of NFTs on Bitcoin has sparked debates and infighting within the Bitcoin community regarding the appropriate use of the blockchain. Despite the controversy, the NFT community in Bitcoin is starting to establish its own independent culture, offering new ways for Bitcoiners to engage with the technology beyond the fundamentalist perspective.
Unequal Distribution of Risk and Reward in Crypto: While some get bailed out, smaller investors face losses. Celsius case: Smaller investors get 70% back, larger ones equity. Insiders asked to return funds, potential asset seizures. Ethereum integration into mainstream platforms, but unequal risk and reward remains.
While some individuals and institutions continue to use their influence and resources to bail out troubled crypto projects and executives, smaller investors and creditors are left with significant losses. In the case of Celsius, those with balances under $5,000 will receive around 70% of their funds back in cash, while larger investors will receive equity in a new company. Meanwhile, insiders, including Celsius founder Alex Mashinsky, are being asked to return funds and face potential asset seizures. Stanford University, where Celsius founder's parents are faculty, has become embroiled in the scandal with two professors providing the bail money. The crypto community is seeing more integration of Ethereum into mainstream platforms, with Shopify allowing users to sign in and purchase items using their Ethereum wallets, and potentially unlocking token-gated products. These developments highlight the unequal distribution of risk and reward in the crypto space, and the importance of transparency and accountability.
Blockchain's Transparency Game-Changer in Finance: Blockchain technology brings unprecedented transparency to finance through real-time reporting and open access to data, revolutionizing the way regulators and investors operate.
The use of blockchain technology in the financial sector can provide unparalleled transparency and real-time financial reporting, surpassing the capabilities of traditional, regulated companies. This was discussed during a podcast, where the transparency and ease of use of platforms like Token Terminal were highlighted. These platforms can generate financial reports automatically and in real-time for decentralized finance (DeFi) protocols, providing a clear and long history of transactions. This level of transparency is a game-changer, especially for regulators who are committed to protecting investors and ensuring fair and orderly capital markets. The contrast between this open and transparent financial system and the traditional, opaque one was emphasized, with the latter often revealing corrupt practices between quarterly reports. Additionally, sponsors like Arbitrum and Phantom were highlighted for their role in making web 3 development more secure, fast, and user-friendly.
Canto vs OP Stack: Community-driven vs Standardized Infrastructure: Canto relies on community-driven approach and early builder participation, while OP Stack offers interoperability and standardized infrastructure for app chains, potentially blurring boundaries and expanding possibilities for cross-chain composability and synergy.
Canto, a blockchain project, differentiates itself through its community-driven approach and early builder participation, despite other chains like NEAR also offering contract secured revenue. However, its long-term prospects are uncertain, as it's still very early in its development. The OP Stack, used by Optimism, offers interoperability between its app chains and has the potential to blur the boundaries between them, making it a highly bullish development for the ecosystem. The difference between Cosmos and the OP Stack lies in their infrastructure designs; Cosmos is a mesh network of independent chains connected by IBC, while the OP Stack provides a standardized infrastructure for creating numerous app chains. Ultimately, the future may see projects using both Cosmos and the OP Stack for app chains, expanding the possibilities for cross-chain composability and synergy.
Competition and innovation in App Chain space: Ethereum is challenging Cosmos with layer 2 solutions, and regulatory competition could impact traditional regulatory bodies.
While Cosmos has a lead in the App Chain space, Ethereum is catching up with the help of layer 2 solutions like Bedrock, which offer shared security and ease of use for developers. Balaji Srinivasan's perspective adds that competition and innovation from states and alternative financial regulators could outmaneuver traditional regulatory bodies like the SEC. Additionally, Ryan Sean Adams reflects on the realization of adulthood, suggesting that it comes with accepting responsibility when adults don't have all the answers. Overall, the discussion highlights the ongoing evolution of the crypto landscape, with various players and ideas shaping its future.
Realizing adults don't have all the answers in crypto: The crypto world, like life, requires taking on responsibilities and figuring things out as we go. New frontiers like ZK EVMs offer untapped potential for innovation and growth.
Both the speakers have come to the realization that adults don't have all the answers and that they, too, are figuring things out as they go. This was particularly evident in their experiences with crypto, which allowed them to see that many people are just making things up as they go along. However, taking on adult responsibilities and being responsible is crucial for growth, whether it's in the crypto world or in life in general. The advent of crypto protocols and the ZK EVMs is a new frontier that is yet to be fully explored, offering untapped potential for innovation and growth. This is akin to the broadband moment in the late 1990s, where the Internet went from being a novelty to a game-changer. The speakers are bullish about the future of ZK EVMs and the limitless possibilities they offer.
Exploring the Intersection of Crypto and AI: Balancing Optimism and Pessimism: The intersection of cryptocurrency and AI holds great potential but also existential risks. It's crucial to explore both optimistic and pessimistic perspectives to fully understand AI's implications in crypto.
The intersection of cryptocurrency and artificial intelligence (AI) holds immense potential for innovation and transformation, despite the existential risks. Ryan and David discussed their podcast interview with Eliezer Yekowsky, a brilliant AI researcher with a pessimistic outlook on the technology's future. While the conversation was challenging and left them with feelings of existential dread, it highlighted the importance of exploring both the optimistic and pessimistic perspectives on AI's role in crypto. Ryan is now actively seeking a more optimistic AI expert to balance the conversation and provide a more hopeful perspective. Additionally, Ryan shared his ongoing efforts to secure an interview with Sam Altman, the co-founder of OpenAI and creator of ChatGPT, who could offer a more optimistic perspective on AI's potential. Overall, the conversation underscored the importance of exploring the complexities and risks of AI in the context of cryptocurrency, and the need for ongoing dialogue and exploration to fully understand its implications.
The collision of AI and crypto and Bankless' exploration of it: AI and crypto are intersecting, Bankless is exploring this intersection through concepts like 'ordinal', crypto is risky but valuable resource for understanding intersection, Bankless podcast provides insights on coordination technology
The worlds of AI and crypto are on a collision course, and the potential for coordination failures, particularly in relation to artificial general intelligence, is a major concern. The Bankless community is striving to understand this intersection through their exploration of AI technology. A recent example is the concept of an "ordinal," which can be appended to a single satoshi, giving it the value of an NFT. This meme, inspired by the movie "The Wolf of Wall Street," showcases the potential of crypto to evolve and adapt. However, it's important to remember that crypto is a risky frontier and not for everyone. Always be aware that you could lose the money you invest. The Bankless podcast, with its focus on coordination technology, is a valuable resource for those embarking on this journey.
