Welcome back to the Digital Asset Weekend Round-Up! There were fewer fireworks this weekend but that doesn’t mean there weren’t any. No fireworks this weekend in prices of crypto markets with trading volumes remaining low. Bitcoin continued to be choppy as it tried to find support levels. Ethereum remained strong this weekend but is showing bearish indicators according to some analysts (read more here). Where fireworks did happen was in a Florida courtroom where a Satoshi impersonator settled a court case, NFT’s grabbed a ton of headlines, and a major Ethereum competitor continued to have struggles in its early days.
We are especially excited for this week’s learning opportunities with the “Crypto SMA’s: The Easy Onramp for Financial Advisors” event hosted by Steve Sanduski and sponsored by BITRIA on Wednesday. Earn CFP CE credits and learn how Crypto Separately Managed Accounts (SMAs) can give your clients the exposure to digital assets they want while letting you spend your time with your clients and grow your practice. Special guests include Ric Edelman, Arbor Digital’s very own Matt Kolesky, Kristen Mirabella from Gemini, and Samantha Viola from Linn Wealth.
This week’s Round-Up:
- Wright vs. Kleinman: Will the real Satoshi Please Stand Up?
- Thought NFT’s were going away? Not by a long shot.
- Solana at an inflection point
- Other headlines:
- SEC Obtains Judgments Against Bitconnect’s Lead National Promoter and His Company
- Bitcoin Core developer Samuel Dobson decides it is ‘time to go’
- IMF advocates for ‘coordinated’ crypto policy among the world’s governments
- Bitmart pledges to reimburse hack victims
- Learning Opportunities:
- Replay: Cryptocurrency for Advisors | What Financial Planners Need to Know About Crypto & Digital Assets
- Arca 2022 Digital Assets Outlook Webinar
- Staking in a Multi-Chain World
- NFT’s: Understanding Opportunities and Risks
- Stability in Crypto: Exploring the promise, reality, and regulation of Stablecoins
Weekend ETH Prices
Weekend BTC Prices
|ETH Wednesday at 5 pm: $3,968
ETH Weekend Low: $3,880
ETH Weekend High: $4,168
ETH Price as of posting: $4,019
Performance YTD: +448.23%
|BTC Wednesday at 5pm: $47,680
BTC Weekend Low: $47,025
BTC Weekend High: $50,625
BTC Price as of posting: $49,012
Performance YTD: +65.89%
Satoshi | Will the Real Satoshi Please Stand Up?
On Tuesday, December 7th, Craig White, an Australian computer scientist, was ordered to pay $100 million to W&K Info Defense, a venture he set up with now-deceased developer Dave Kleinman. You may be asking, “Who is Craig White or Dave Kleinman? Why do they matter?”
The TLDR: Craig White has been making claims since 2016 that he is Satoshi Nakamoto. The crypto community has called for him to prove this on several occasions over the years with nothing to show. Ira Kleinman, Dave Kleinman’s brother, sued Craig White in 2018. Summarized by Ben Munster at Decrypt.co, “Ira Kleinman alleged that Wright designed the Bitcoin protocol with Dave Kleinman under the pseudonym Satoshi Nakamoto, but also that Wright misappropriated a large portion of the early Bitcoins he and Kleiman supposedly mined (currently worth around $50 billion) and to which the Kleiman estate was entitled.
Ultimately, the jury determined that Wright hadn’t stolen from the duo’s mining operation, and Wright wasn’t made to shell out billions. The court did, however, order Wright to pay the joint business venture $100 million in damages related to “conversion,” the misuse of another’s property.”
With the verdict, Wright is claiming this as proof that he is Satoshi Nakamoto and has spent a lot of time and money marketing it. The fact is we don’t know who Satoshi Nakamoto is but given the evidence and history, we are comfortable saying the probability of Craig White being Satoshi is minuscule probability. A recent episode of ‘Opinionated’ by Coindesk dives into this and more.
NFT’s here to stay…
The State Hermitage in Saint Peterburg, Russia, is the largest museum in the world by gallery space with around 3 million works of art. Dmitry Ozerkov, the head of the museum, is currently developing the “Celestial Hermitage”, a digital version of the iconic Russian museum, which will be exhibiting nonfungible (NFT) art. According to him, all museums will build their digital copy in the metaverse.
Over the weekend UNICEF, The United Nations International Children’s Emergency Fund, announced Friday the launch of a collection of NFTs on Ethereum to commemorate the 75th anniversary of the UN agency. Reported by Jason Nelson at Decrypto.co, “UNICEF says the profits from the January 2022 NFT launch—an exhibition by digital artist and data scientist Nadieh Bremer called “Patchwork Kingdoms”—will go toward supporting its many projects, including the Giga initiative to fund internet access for children worldwide.” Learn more about The Giga Initiative, The Patchwork Kingdom Collection, and UNICEF’s history within crypto here.
NFT’s are also being experimented with as a form of tuition credit for education programs. Reported by Jeff John Roberts at Decrypto.co, “A team of veteran educators has launched “Invisible College”—a new platform to teach people about the topic using core features of Web3 itself, including NFTs and a decentralized community known as a DAO. The curriculum will be voted on by the DAO itself, but is likely to include lessons on topics like how to build a token-based play-to-earn economy, according to one of the Invisible College founders, Nick deWilde.”
While there are many issues to be hashed out with this, it’s important to understand that NFT’s are much more than just digital art and collectibles. FATF is also starting to give guidance on NFT’s as seen from Cointelegraph, “FATF advises that NFTs are “generally not considered to be [virtual assets] under the FATF definition.” This arguably creates a presumption that NFTs are not VAs and their issuers are not VASPs. However, similar to its approach toward DeFi, the FATF emphasizes that regulators should “consider the nature of the NFT and its function in practice and not what terminology or marketing terms are used.” In particular, the FATF argues that NFTs that “are used for payment or investment purposes” may be virtual assets.”
Read more about the FATF guidance, the Invisible College DAO, and other NFT news below.
Solana at an inflection point
As reported by Danny Nelson at Coindesk, “Solana’s superfast blockchain slowed to a relative crawl Thursday morning due to a mysterious congestion event that spurred debates about centralization, communication, and transparency at the ecosystem’s critical stakeholder, Solana Labs. Those tensions were on display midday after validators, peeved by slowdowns to Solana’s claimed Nasdaq-like speed, joined an impromptu roundtable. The problem was simple: A network that usually processes more than 2,000 transactions per second was stumbling along at speeds below 500. (Ethereum processes around 15 transactions per second.)”
This is important because this year we have seen the emergence of so-called “Ethereum killers”. Solana arguably is the one with the most potential to dethrone Ethereum as the premier base layer smart contract platform to build on top of in the future. But core to Solana, or any other platform vying for supremacy, is network effects. Ethereum has deep-rooted network effects, the level of which Solana and other platforms are trying to get to. At least to say, it’s extremely difficult to establish. You have to ask questions like: Are people joining the network and using it? Are developers building on top of it? How are these communities set to flourish?
Each time Solana has an outage, or the network doesn’t perform the way it’s supposed to, some in those communities lose trust in the platform. Ethereum had its own struggles in the early days and still has them, but those communities are as strong as ever.
After the most recent outage on Solana, which was mostly resolved by Thursday evening, the lingering questions that came from a public video chat within the community, “experimenting with a new layer of centralization that would aim to give Solana Labs more insight into the network. Hickey polled the room on an “observability system.” He acknowledged such a system would be centralized by design. He said it could help the engineers pinpoint problems and prepare patches faster.’
Given crypto gives a promise of a certain level of decentralization, this will certainly get pushback from the community. What you should take away from this is that competing smart contract platforms are far from achieving the network effects that Ethereum has.
Thank you for reading this all the way through. Be sure to tell someone you care about them. Stay safe, healthy, and happy 😊
– Marc Nichols