And other metrics are looking strong.
After the year began with a lot of uncertainty about Ethereum’s position as a top smart contract platform, the network is now showing a lot of strength, according to a report published this week by CoinMetrics. That’s good news ahead of its upcoming Istanbul hard fork, which is itself a prelude to an eventual transition to Ethereum 2.0 in 2020. Meanwhile, Federal Reserve Chairman Jerome Powell laid out the ways in which it is analyzing a potential U.S. central bank digital currency, in a response to a September letter from two Congressional Representatives.
Central bank digital currencies were a big topic on the Unchained episode this week, with Martin Chorzempa, a research fellow at the Peterson Institute for International Economics, and Dovey Wan, founding partner at Primitive Ventures, discussing China’s upcoming digital yuan. We talk about how that plays into bigger geopolitical issues and the dominance of the U.S. dollar as a global reserve currency.
Meanwhile, a different kind of stablecoin was the subject of this week’s Unconfirmed, with MakerDAO hitting a long-awaited milestone: the launch of multi-collateral Dai.
This Week’s Crypto News…
CoinMetrics released an in-depth analysis of key stats on the Ethereum blockchain, showing that the network-value-to-token-value ratio, or NVTV ratio, is quite low, at 1.90, hovering near the all-time low of 1.57 on April 1st. The firm says token valuations on Ethereum have been gaining relative to the value of ether, with most of this growth fueled by stablecoins, and most of the stablecoin increase driven by Tether. Plus, transactions in the tokens on Ethereum have now surpassed transactions in ether itself.
On top of all that, ERC-721s have also increased their activity, surging past the numbers hit during the CryptoKitties craze, and even surpassing transactions in ERc-20s and ether — almost all due to the card game Gods Unchained. If you listened to the recent episode of Unconfirmed with them, then you know they saw a spike after Blizzard Entertainment’s punishment of a winner who made a statement supporting the protesters in Hong Kong. And if all that wasn’t enough to show that Ethereum is doing well nowadays, CoinMetrics also points out that Ethereum contract calls hit an all-time high, likely pushed over by current enthusiasm for Gods Unchained.
After receiving a September letter from Representatives French Hill and Bill Foster, Federal Reserve Chairman Jerome Powell wrote a letter back, detailing how the Fed is thoroughly weighing all the costs and benefits of a U.S. CBDC, including impacts on commercial banking, implications for privacy and surveillance, risk of cyberattacks, etc.
He wrote, “In analyzing the potential costs and benefits of general purpose CBDC, we are carefully monitoring the activities of other central banks to identify potential benefits that may be relevant in the U.S. context. To date, our observation is that many of the challenges they hope to address do not apply to the U.S. context including disuse of physical cash, narrow reaching or highly concentrated banking sectors, or, poorly developed payment infrastructure, more generally.”
Dragonfly Capital published what seemed to be a pretty devastating post on the weaknesses in Mimblewimble’s privacy, with Ivan Bogatyy claiming that he was able to unmask 96% of transactions. This has big implications for Grin, Beam and Tari. Grin published a rebuttal, and in an article, The Block quotes both sides saying that Grin is closer to Bitcoin than other privacy coins and concludes that the two sides are actually closer than they appear.
The Block reports that Binance’s Shanghai office has been closed after a police raid, causing employees to either work remotely or relocate to Singapore. Binance denies the report.
Vanity Fair had a rollicking feature story on the theft of 225 Bitcoin miners in Iceland, which is replete with characters like the mysterious, and potentially fake, mastermind Mr. X, the drug smuggler Haffi the Pink, and Viktor “the Cutie” Jonasson, who eventually had a tattoo artist testify that he’d spent the night of the theft with her. It even features an escape from prison and cute Icelandic details like, people disbelieving that something had been stolen.
Another Coin Jazeera gem begins, “Our reporters watched closely as Brock Pierce meticulously combed over the University of Texas’ Tether Report line by line, his face concentrated as he chewed his fingernails nervously. He was focused on one thing and one thing alone — making sure he got away with it. After what felt like an eternity, the “Hippie King of Cryptocurrency” closed his laptop lid and breathed a deep sigh of relief. “They don’t know it was me.” All at once the room erupted in celebration — streamers popped, confetti rained from the sky, and chants broke out, “Viva Puerto Rico! Viva La Brock!” Mr. Pierce had just escaped being exposed as the sole whale responsible for the biggest financial pump in human history.”