From Abra’s CEO – This Week in Crypto – June 10, 2020

Current Events

Black Lives Matter has taken over all headlines. If you’ve never considered white privilege to be a thing then you should read this. This article really affected me. Many of my fellow white libertarian friends simply don’t want to accept that this is a thing. It is. What I desperately want is for capitalism to work its magic for everyone on the planet and to operate under a level playing field, starting with our own backyard. As an aside, I absolutely love it when people protest for what they believe in. It reminds me that government and their power are not absolute and that government works for us, not the other way around.

Crazy is being redefined on an as we go basis in 2020. Stocks are up huge since mid March while unemployment is way up and is likely being significantly underreported.  As I said, I fully support the ongoing protests, and people’s right to protest, but I also sincerely hope that everyone is able to stay healthy while we combat Covid-19 and remember the original reasons behind people being asked to shelter in place and to wear masks if and when they are able.

By the way, Bitcoin briefly touched $10k USD as I’m writing this!

 

Money Reimagined – Crypto and Developing Markets

One of the more  interesting crypto related articles I read last week was from Michael Casey, Chief Content Officer at Coindesk. The article highlighted the potential reasons for the awakening of cryptocurrency adoption in certain developing countries. 

Relevant data includes:

• African p2p transactions has recently surged to more than $12 million per week
• In Latin America stablecoin usage on the Ripio app grew over 10x in the first quarter
• Services like Stak in Venezuela that allow people to earn Satoshis in small amounts for accomplishing “micro tasks” are gaining in popularity

I started Abra out of frustration that there was no single global bank account that could be used for investing, savings or money transfer safe from both bank failure as well as government overreach. Anyone who has lived through a currency devaluation such as in Venezuela, Argentina, Zimbabwe, Peru or Germany or the US Savings and Loan crisis knows what I’m talking about. I believe cryptocurrencies like Bitcoin, Ethereum and Stellar can play a significant role in solving this problem. Abra is betting its future on this. It’s great to see lots of different services popping up all over the world to address these challenges and opportunities.

As a reminder , Michael Casey will join me live Friday for the next Money Talks episode to discuss this growth of crypto in developing markets and other relevant and current topics of interest.

 

Ethereum 2.0

One of the hot topics in crypto-2020 is Ethereum 2.0. While its release date has been pushed back several times, interest in the new platform remains high and is growing. This interest precipitated a big run in Ethereum’s price to over $285 in February before crashing to $120 in March during the broader market self off. But now the crypto is on the move again with Ethereum recently reaching a three month high of over $240 meaning Ethereum has more than doubled in the past 90 days.

From the Abra Archives!: Here is an Abra Money 3.0 episode with myself speaking with Vitalik Buterin about Ethereum’s future, the problems Ethereum is trying to solve and what it will take to scale Ethereum to billions of users. While Ethereum 2.0 has been significantly delayed, interest remains high. You can listen to the episode on Apple and Spotify.

 

What is Ethereum 2.0?

Ethereum 2.0 is basically about speed, scalability, and security.

Ethereum 2.0 includes a series of  updates aimed at addressing current scaling, mining and consensus protocols, and security issues including moving from proof-of-work (or PoW) to proof-of-stake (or PoS), solutions like Beacon Chain, Casper FFG, Sharding, eWASM, Plasma, Raiden, and most important, Serenity. Lots of terms that are probably unfamiliar to you. I’ll break them down briefly here.

Serenity is meant to be an ‘all-in-one’ solution to fix various problems introduced in Ethereum 1.0. It combines most of the Ethereum upgrade ideas (Sharding, eWASM, Proof-of-Stake, etc.) together on a new parallel chain that would run alongside and be fully compatible with the existing chain.

Ethereum 2.0 Components

• Proof-of-Stake (PoS): Beacon and Casper are the proof of stake solutions that aim to improve how new Ethereum coins are mined and how transactions are validated. In proof of stake/PoS, there is no mining which means there is no block reward; the block creators are called Forgers (instead of Miners as in PoW). They are only being incentivized with transaction fees. The Forgers of the next block are elected through a random procedure according to the Forger’s stake (amount of coins the Forger stakes) and age.
• Sharding is a process whereby the entire state of the network is split across a number of partitions called shards each containing their own independent piece of state and transaction history. This addresses issues of scalability and transaction speed and stops one app from slowing down the network.
• eWASM which stands for ethereum web assembly allows code (i.e. smart contracts) to execute faster by expanding the coding options (including C/C++) and capabilities of the Ethereum Virtual Machine with near native execution speed! 
• Plasma is a layer two service that sits on top of the Ethereum network to handle massive amounts of transactions. Plasma is basically Ethereum’s version of Bitcoin’s Lightning Network.
• Raiden, similar to Plasma, is categorized as an off-chain or layer-two scaling solution. Raiden uses state channel technology to move transactions off-chain and open a separate payment channel.

I’ll have a lot more to say about Ethereum 2.0 improvements, DeFi and smart contract adoption in the coming weeks!

 

Tweet of the Week

Introducing a new section to my weekly newsletter.  Here I highlight a tweet that caught my attention and I think is worthy of more commentary here. If you see a tweet you think is worthy of nomination then you should reply to that tweet and cc me on the reply to @billbarhydt. 

#Bitcoin S2FX Phases
1: Pizza, GPU miner, Silk Road, MtGox
2: >$1, Wikileaks, Satoshi Dice, Coinbase, Halving1
3: >$100, Cyprus, Bitstamp, Ulbricht arrest, MtGox default, XT fork, Halving2
4: >$1000, JPN&AUS legalize BTC, Altcoins/ICO, BCH/SV forks, Segwit/LN, Futures, Halving3 pic.twitter.com/fEjfhSaHyY

— PlanB 🔴 (@100trillionUSD) June 10, 2020

This week’s tweet of the week is from none other than Plan B who is getting huge amounts of attention right now for his ongoing analysis of stock to flow and Bitcoin. Is phase 5 of stock to flow here? Has the march to 100k Bitcoin begun? We shall see. Seat belts on. Get ready for the ride!

See you at our AMA on Friday! Until then….  

 

Peace and Love,

Bill

 

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