22/02/2021 - 7/03/2021
The Biggest Stories…
Non-fungible Tokens take-off as tweet selling becomes mainstream…
Non-fungible tokens (NFTs) are nothing new to blockchain, Crypto-Kitties being an early, yet infamous example, however the concept has exploded in popularity in recent weeks with a new marketplace to buy and sell tweets on Ethereum’s blockchain.
The tweet marketplace ‘Valuables by Cent’ allows users to sell and monetize their digital content, by issuing and selling a non-fungible and digitally signed certificate of ownership on Ethereum's blockchain.
As part of the craze, Jack Dorsey, the co-founder of Twitter and notable Bitcoin advocate, has listed his first ever tweet for sale, with bids reaching a whopping $2.5 million.
As for why somebody might pay to own a public tweet, the Valuables FAQ describes various reasons for why someone might like to purchase such a token. It can be a “financial investment, hold sentimental value, and create a relationship between collector and creator” due to its unique and scarce nature.
But, whilst digitizing tweets into NFTs won’t go down in history as blockchain’s most revolutionary use-case, it represents a gradual step in the widespread adoption and popularization of NFTs, and a step towards the future of blockchain-based asset ownership and tokenization.
Indeed, dozens of companies and projects are looking to issue NFTs in the age of digital ownership. Examples include the world’s most expensive Pepe, the "Homer Pepe", selling for $320,000, a new soccer/football collectible NFT game, Sorare, which recently raised $50 million of funding from major backers including Twitter and Discord, and the rock band, Kings of Leon planning to sell their new album as an NFT, including 6 limited edition NFTs which grant lifetime access to the band’s shows.
Gaming, digital art and music all stand to benefit from the changes in digital ownership which blockchain technology can bring, but of course, it is global finance which stands to be transformed even more radically by the unfolding tokenization revolution.
EIP 1559 Scheduled for Inclusion
A long awaited and contested alteration to Ethereum has now been scheduled for inclusion into the codebase in July. Ethereum Improvement Proposal (EIP) 1559, proposed over two years ago, will be included in the upcoming London hard fork.
EIP 1559 will change the way that Ethereum transactions fees are processed, with a view to improve the user experience (UX) of users. The proposal breakdown can be read here. In summary, it will reduce fee overpaying.
Traditionally, gas fees are sent to a miner for a transaction to be included in a mined block. This has led to an inefficient price-auction as users compete for bandwidth. Now, required gas fees will be determined by an algorithmic ‘market rate’, with only an optional tip paid to miners, streamlining the process for Ethereum’s users.
Beyond this, the new gas fee system will use token burning as parts of its new dynamically adjusted transaction fee model, something which could create deflationary pressure on Ethereum’s monetary supply.
The move should make it easier for users to select appropriate transaction fees, however it will also cost the mining industry millions in lost revenue. With Ethereum mining recently reaching $1.37 billion in revenue as a result of the recent crypto boom, it should come as no surprise that several mining pools are reportedly forming cartels to protect their profits and thwart the new implementation plans. Although there is widespread doubt over whether these mining pools will actually follow through with their threats.
You can view the Ethereum All Core Developers meeting here.
In Other news….
Policy + Regulation
- Four major Asian Central Banks have teamed up to trial a new cross-border central bank digital currency (CBDC) experiment, Ledger Insights reported. The new proposals are designed to improve cross-border transfers, international trade settlement and capital market transactions.
- Chainlink has rolled out its new Off-Chain Reporting (OCR) upgrade designed to improve the network’s data processing capacity, opening it up to more use-cases, reported Decrypt. Chainlink’s new architecture will now aggregate data off-chain using a separate P2P consensus algorithm, before submitting and verifying aggregated data on-chain.
- Moderna and IBM are planning to introduce a new pilot blockchain, aiming to improve Vaccine traceability for governments and healthcare providers, Ledger Insights reported.
- The US central bank payment system crashed for several hours on Wednesday due to an “operational error”, the BBC reported. The crash highlighted the dangers of building legacy financial infrastructure around centralized points of failure, something which distributed networks can help fix in future.
- Ripple announced it is piloting a private version of its XRP Ledger as part of its CBDC pitch to central banks in a recent blog post. The company is one of several payment firms and blockchain companies vying to provide the core infrastructure for the next-generation of CBDCs, Ledger Insights reported.
- The global total of cryptocurrency users has topped 100 million for the first time according to a report from crypto.com, Cointelegraph reported. The report claims that over 33 million new users have joined the crypto market since June 2020, driven by growing institutional and retail demand.
- 25% of Latin Americans want to make payments with cryptocurrencies according to a recent Visa survey, Decrypt Reported.
- A leading London School of Economics director has raised concerns about a new class of emerging “bitcoin aristocrats” who could further entrench societal inequalities.