Crypto Guides, Knowledge & Insights

Square Buys Another $170M in Bitcoin

Payments giant Square said Tuesday it had purchased an additional $170 million of bitcoin (BTC), adding to the stash it purchased in October.　　Someone should have looked at the price of BTC before that went to press.　　According to the payment processors press release, the company added 3,318 BTC to its treasury for $170 million. Doing the math, that results in a per bitcoin purchase price of $51,235.70.　　Unfortunately for Square, after setting a record high above $58,000 over this past weekend, bitcoin hit a recent low of $44,964.49 before rebounding to about $48,408.31 at press time.　　When Squares announcement was released, just after 4 p.m. New York time, the price of bitcoin was below $48,000, which means those 3,318 BTC were then worth less than $160 million.　　In disclosing it lost more than $10 million in its latest investment in BTC, the company may inadvertently draw attention to an argument that JPMorgan analysts have made as to why they think many companies won‘t be following in the footsteps of Square and others (Tesla, MicroStrategy) who’ve added BTC to their treasuries, namely the cryptocurrencys volatility.　　The company made the announcement just before the release of its fourth-quarter earnings call that it had added to the 4,709

2021-02-24Deep Dive

POLKADOT VS. POLYGON: UNDERSTANDING TWO PROMINENT SECOND LAYER ETHEREUM BLOCKCHAIN SOLUTIONS

The meteoric rise of decentralized finance across 2020 exposed numerous vulnerabilities with the Ethereum network. While the Ethereum blockchain is one of the most secure and ‘battle-hardened’ infrastructures, high gas costs and scalability issues have led some projects to innovate instead of waiting for the long-desired Ethereum 2.0.　　Second-layer solutions have gained notoriety lately as companies endeavor to reduce gas fees and foster Ethereum scalability by shifting transactions to sidechains.　　Polygon, a recent rebrand of Matic Network, intends to build a “multi-chain system” utilizing solutionslike Optimistic Rollups, xkRollups, and Validium. Some advisors describe Polygons approach as part of a strategy to function as a “Polkadot on Ethereum” and compete against the open-source project founded by the Web3 Foundation.　　A price surge in February 2021 drove Polkadots DOT token to sit as the fourth-largest by total market capitalization, according to CoinMarketCap. The surge began after Polkadot released a para chain rollout map and noted it was in the Rococo testing phase.　　Matic Networks rebrand places Polygon and Polkadot as two of the most prominent Ethereum-based layer-two solutions focused on shifting the Ethereum ecosystem.　　Understanding the history, focus, and structure of both projects is vital for those curious in learning more about the “complex narrative” of Ethereum.　　POLKADOT

2021-02-24Deep Dive

Report: Bitcoin Mining Firm Northern Data AG Plans for a $500 Million IPO

While the public prepares for the upcoming Coinbase public offering, the mining firm Northern Data AG is reportedly planning to go public as well. Sources say that the mining business is in talks with Credit Suisse Group to launch an initial public offering (IPO) in the United States.　　Report: Sources Say Northern Data AG IPO for $500 Million Is in the Works　　Recent reports say that Northern Data AG, the mining operation that mines bitcoin (BTC), is planning to IPO in the near future. Bloomberg reveals that “sources familiar with the matter” have told the publication that Northern Data AG is “working with Credit Suisse Group AG.”　　Northern Data claims to be one of the largest mining operations worldwide and on November 18, 2019, the German company teamed up with Whinstone US, Inc., a Louisiana-based firm.　　At that time, Northern Data detailed that the merger agreement with its U.S. competitor Whinstone would position the firm as a “leading global player” in the bitcoin mining industry. Northern Data claims the mining site in the U.S. state of Louisiana will be “by far the largest bitcoin mining facility worldwide with a capacity of one gigawatt on an area of over 100 acres in Texas.”　　The Bloomberg report

2021-02-24Deep Dive

Bizarre Bitcoin On-Chain Correlation With Fear And Greed Index Discovered

Fear and greed are just two key emotions that drive the price action behind all markets, including Bitcoin and other cryptocurrencies.　　A bizarre correlation has been discovered in on-chain Bitcoin network data that directly matches up with the cryptocurrency market “fear and greed” index. Heres why this find is so striking and and what information investors, traders, and analysts can glean from the data.　　Bitcoin Behaviors: Fear And Greed Appears In Unspent Transaction Outputs　　There‘s nothing else quite like Bitcoin and the way the network and user base behaves. As a result, certain tools have been developed to analyze the cryptocurrency network’s on-chain metrics, including the total number of transactions, how much money is being spent, and much more.　　The data also includes very specific and specialized information such as unspent transaction output (UTXO).　　As a speculative asset, nothing else quite behaves like Bitcoin. Shifts in sentiment take price action to the extreme. As a result, tools have been developed to monitor the fear or greed in the market.　　Interestingly, one crypto analyst has discovered that the percentage of UTXOs in profit matches the fear and greed index perfectly.　　Each peak and trough in the fear and greed index aligns eerily well with UTXO data layered over

2021-02-24Deep Dive

Russian Orthodox Church will not accept Bitcoin in offering plate

With roughly 100 million members, the church representing the dominant religion in Russia has no plans to accept cryptocurrency donations or offerings.　　According to a Q&A streamed on YouTube by Jesus Portal, the chairman of the Department for External Church Relations of the Moscow Patriarchate, Hilarion Alfeyev, said the Russian Orthodox Church, or ROC, is not planning to create its own digital currency, nor is it planning to accept cryptocurrency including Bitcoin (BTC) for donations. However, Alfeyev added it was possible to use other forms of technology to send money to the church: phone calls.　　“We are unlikely to accept donations of various cryptocurrencies and Bitcoin, nor will we release our own currency,” he said. “I think that it is quite possible to make a donation to the church over the phone.”　　The statement is somewhat of a softened stance for Alfeyev, who three years ago compared cryptocurrency to a Ponzi scheme “behind which there is nothing.” At the time he did not seemingly distinguish between crypto and traditional banks, saying the currency “[paved] the way for usury, which the church has always spoken out against.”　　The ROC was reportedly in an “extremely difficult” financial situation last year as the pandemic shut down its

2021-02-24Deep Dive

Charles Hoskinson Reveals Significant Updates for Cardano (ADA) as Price Attempts Recovery

While ADA‘s price aims at recovery following its sharp drop, Cardano’s founder hinted of upcoming products and vital network upgrades.　　The decentralized open-source project running a public blockchain platform for smart contracts, Cardano, plans to implement several significant upgrades in the upcoming few months. During a recent interview, the projects founder, Charles Hoskinson, also noted that Cardano has been negotiating potential partnerships with many industry names such as Celsius, Fireblocks, and Prime Trust.　　Significant Updates Coming for Cardano　　The 33-year-old co-founder of Ethereum spoke about his current project‘s upcoming plans during an interview with the Financial Fox. Although he failed to provide more precise information on what’s coming, he said that the network will see many “smart contract stuff” in the next up to three months.　　Simultaneously, the research arm of the Cardano Foundation is working on several new implementations:　　 “We are going to be announcing several new things like a smart contract institute that specializes in smart contract development design embedded at a university.”　　Cardanos founder said that he and his team have met with representatives from Prime Trust, Fireblocks, SingularityNET, and Celsius to discuss potential partnerships, such as support for Cardano.　　He believes that integrations on larger-scale companies like the aforementioned names could enhance

2021-02-24Deep Dive

Impermanent loss is a death sentence for DeFi mining

Decentralized finance is a prevalent industry that keeps reaching new milestones. Despite the appeal, no one can deny plenty of issues with the current DeFi mining model. In my opinion, we need to revamp this entire aspect by removing impermanent loss from the equation.　　DeFi Mining Has Issues　　One of the more popular aspects of decentralized finance today is the option to engage in liquidity mining. Every cryptocurrency user wants to earn a passive revenue stream by owning the right tokens. In this day and age, these tokens requirements are less strict than a few months ago. Many opportunities exist to engage in DeFi mining these days, yet there are certain risks.　　Even though there is plenty of Total Value Locked in DeFi mining solutions today, the users are exposed to many risks. This doesnt deter Uniswap or Sushiswap users, contributing to $4.47 billion and $3.85 billion in liquidity mining today. Some of these problems can be mitigated a bit, but others will require upgrading the entire decentralized finance infrastructure.　　A new solution needs to be found rather than exposing users to impermanent loss while engaging in DeFi liquidity mining. After spending some time glancing over many whitepapers, one particular concept stands out to

2021-02-24Deep Dive

Thousands of Users Flock to Binance Smart Chain's Latest Apps

Dapps built on the Binance Smart Chain are dominating the crypto sector as PancakeSwap races ahead of Uniswap in number of active users.　　More users are using decentralized applications (dapps) based on Binance Smart Chain, despite concerns that the blockchain platform has centralized elements.　　As data from DappRadar shows, the PancakeSwap decentralized exchange (DEX)—which runs on Binance Smart Chain—has now flipped Ethereum-based DEX Uniswap in the number of unique active wallets (UAW). PancakeSwap has 47.47 million active wallets versus Uniswaps 43.7 million. Here, “users” refer to the number of active wallets interacting with the application, an imprecise measure because one user can control multiple wallets.　　PancakeSwap, which was originally cloned from Uniswap, has seen over $665 million in trading volume in the past 24 hours. This puts it just behind its rival, which has $1.05 billion of trading volume.　　Looking at numbers of active users, two more dapps using Binance Smart Chain, Autofarm and Goose Finance, are in Dappradars Top 10 dapps as well. This shows that Binance Smart Chain-based applications are starting to grow in popularity.　　If you look over a seven-day stretch, PancakeSwap had 128.59 million users, showing a a 63% growth on the previous week. In case of Autofarm, the growth rate

2021-02-23Deep Dive

MoneyGram Drops Ripple Citing SEC Lawsuit

MoneyGram will no longer use Ripples XRP-based liquidity product due to the “uncertainty” surrounding the crypto asset.　　Wire transfer service MoneyGram has suspended its partnership with Ripple Labs in the wake of the SECs lawsuit against the crypto payments firm.　　That suit, filed in December, alleged that Ripples sales of cryptocurrency XRP, beginning in 2013, were unregistered securities offerings.　　Major cryptocurrency exchanges such as Coinbase and Binance have since delisted XRP, and leading crypto asset manager Grayscale dissolved its XRP-focused trust. XRP was at one point the third-largest cryptocurrency by market capitalization, but has dropped in price considerably following the lawsuit.　　MoneyGram made the announcement Monday in its Q4 earnings release.　　“Due to the uncertainty concerning their ongoing litigation with the SEC, the Company has suspended trading on Ripples platform,” MoneyGram wrote. The company added that it is “not planning for any benefit from Ripple market development fees in the first quarter,” meaning it doesnt expect any revenue from its Ripple deal this quarter. Representatives for MoneyGram were not immediately available for comment.　　Ripple, in a statement sent to Decrypt, said it signed a multi-year contract in 2019 with MoneyGram that is “still in place and is not limited to their use of ODL [on-demand liquidity].”

2021-02-23Deep Dive

New report predicts NFTs will explode in popularity during 2021

Canadian-based analytics company NonFungible has released a report predicting that 2021 is poised for “a new Bull Market in the NFT industry.”　　Although NFTs have been around since ERC-721 was invented by William Entriken, Dieter Shirley, Jacob Evans, and Nastassia Sachs in January 2018, the sector largely remained an obscurity outside of hardcore crypto circles until the latter part of 2020. The second half of 2020 saw NFT sales increase by 200% to more than $9 million.　　However, NFT sales have since risen at an incredible rate with approximately $60 million non-fungible tokens sold in the last 24 hours.　　The value of highly-sought NFTs has similarly skyrocketed, with multiple NFT sales garnering more than $1 million each in February so far. On Feb. 22, one collectible in the Cryptopunk series sold for 550 ETH, worth more than $1 million at the time of sale.　　Three days earlier, another CryptoPunk sold for 800 ETH with a value of $1.55 million at the time of sale, while another sold four days ago for 650 ETH.　　According to the report, the total market cap for project-based NFTs finished was $338 million at the close of 2020. Messari research analyst Mason Nystrom believes this figure could rise to more

2021-02-23Deep Dive

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