Blockchain Bites: the Slim Margins of the Bitcoin Miners, the latest CBDC pilot of ConsenSys, the Power Hire of a16z

Bitcoin’s hashrate is skyrocketing. Ethereum Incubator ConsenSys has signed up for another CBDC pilot project. JPMorgan unveiled a revamped interbank transfer blockchain network that could challenge SWIFT.

Lower profits
Profitability of bitcoin mining is at an all-time low in 2020, spurred in part by new ASIC mining machinery that increases the network’s hashrate. While bitcoin’s hashrate suffered a drop with the rainy season ending in China, mining professionals predict this will only be temporary and has only greatly improved profit margins, reports Colin Harper of CoinDesk. According to the hashprice index of the North American Bitcoin mining firm Luxor, miners are mining $ 0.096 for every terahash they produce, down from the roughly $ 1.40 miners could expect to make three years ago.

ConsenSys CBDC
ConsenSys will work with Société Générale – Forge, the bank’s digital assets arm, in a central bank digital currency (CBDC) pilot project. The Ethereum incubator will explore the limits of CBDC issuance and management, delivery versus payment and cross-chain interoperability, reports Daniel Palmer of CoinDesk. Société Générale – Forge has already issued bonds worth millions of euros on a blockchain, with one of the initiatives in collaboration with the French central bank. ConsenSys was selected in September to partner with the Hong Kong Monetary Authority on a different CBDC pilot project.

GBTC whales
BlockFi took a 5% stake in Grayscale’s $ 4.8 billion bitcoin trust. According to documents from the Securities and Exchange Commission (SEC) on Tuesday, reviewed by CoinDesk’s Danny Nelson, the cryptocurrency lender now holds 24,235,578 GBTC shares. CEO Zac Prince said in a press release that BlockFi’s “significant” position in GBTC “will add value” to the “liquid and illiquid stock market.” Crypto fund manager Three Arrows Capital is the only other entity with comparable GBTC holdings, having accumulated over 21 million shares – roughly 6.26% of GBTC at the time – by June. (Grayscale and CoinDesk are both wholly owned by the Digital Currency Group.)

Banking blockchain
JPMorgan is inviting over 400 financial institutions (including 25 of the 50 largest banks) to start building on its revamped blockchain network, Liink. Designed to connect banks peer-to-peer and help them remove pain points from cross-border payments, closed source Liink is more a “decentralized network” and less like a “central command product,” Christine Moy, head of Liink, told CoinDesk’s Ian Allison. “Consider it the foundation of a corporate mainnet.” The interbank transfer system is meant to be a complement to SWIFT, but it could be a killer.

Energy rental
The former New York State financial regulator who led the state’s BitLicense in its early days will join the Andreessen Horowitz (a16z) tech initiative fund to focus on cryptocurrency companies. A blog post from a16z said that the fund’s new chief regulation officer, Anthony Albanese, will focus on crypto wallet companies in “games, digital storage, payment systems, social media, creative markets and more”. “We are seeing a lot of things in frontier areas like DeFi and stablecoins, but also between legacy financial services institutions from PayPal to JPMorgan,” said a16z general partner Katie Haun. “It really is the perfect addition to the perfect moment.”

Personality test
Yesterday, Paula Berman, co-founder of Democracy Earth, and Divya Siddarth, a researcher in Microsoft’s CTO office, published an essay on CoinDesk detailing an answer to a long-standing question in Internet development: How do you know you ‘Aren’t you talking to a dog on the Internet?

By explaining the concept of “proof of personality”, the authors aim to outline a new consensus model that authenticates digital identities, using real human traits.

Currently, authentication systems rely on third-party algorithms or credentials, often provided by centralized companies like Facebook or Twitter, to provide a level of trust. As we’ve seen from the rise in misinformation and scams, it’s shaky at best.

Furthermore, as current identity systems rely on the disclosure of personal and private information to an identifier, it opens our lives to a level of surveillance never before possible.

“Identity is one of our most fundamental human rights. However, in the era of surveillance, commodification and centralization it is threatened, ”they write.

Their solution, the test in person, first explained as part of CoinDesk’s Internet 2030 series, outlines ways to form identities around subjective, rather than objective, metrics. “Instead of being generated and solved by computation, they are created and unlocked solely by the distinctive cognitive abilities of the human brain,” they write.

In turn, rather than having the web as a field of exploitation, combining real-world identities with digital ones, in ways that preserve privacy and human dignity, “will promote prosocial, community-oriented behaviors in which both users and applications are significantly limited in their ability to exploit and attack each other. “

The authors also delve into areas where blockchain and other decentralized tools, as well as AI, have not already been able to meet this need. If you are interested in the idea of ​​digital utopias, I recommend that you read the entire article.

Overbought Bitcoin?
A key indicator shows that bitcoin’s recent rally is not excessive. The Z-score of “market value at realized value” (MVRV) – a measure used to evaluate undervalued and overvalued conditions – shows bitcoin at lower levels than would be expected if it were a top market, reports Omkar Godbole. by CoinDesk. Bitcoin is still well below the 7.0 score where an asset is considered overbought. “Put simply, the cryptocurrency is slightly overvalued, but still has plenty of room to extend the earnings run from its mid-March low of $ 3,867,” writes Godbole.