  What you need to know today in crypto and beyond August 16, 2021 Sponsored by  Welcome to The Node.
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–Daniel Kuhn
Today's must-reads Top Shelf  BREAKING ON ‘BROKER’: The U.S. Treasury Department is breaking with Congress over the broad definition of “broker” found in the bipartisan infrastructure bill. Citing an unnamed department official, Bloomberg reported Friday the agency will not go after crypto developers, miners and hardware firms that don’t meet the tax code’s own definition of a “broker.” Guidance on the matter could come this week, the report said.
CHIPPING IN: FTX is committing $150,000 a year for the next three years to Brink, a non-profit that funds bitcoin’s open-source developer community. FTX joins a growing list of crypto firms stepping up to the plate to keep the open-source work of Bitcoin Core contributors well supported. It is the first company to make a multiyear donation commitment.
ORDER: Binance has been ordered by the London High Court to trace the perpetrators of a $2.6 million hack. Fetch.ai, an artificial intelligence company, said that in June hackers stole the assets from its Binance account before selling them at a fraction of their value less than an hour later.
HIRING: Walmart posted a job opening for a digital currency and cryptocurrency product lead. The retail giant has long experimented with using blockchain for nonfinancial means like tracking drugs and food along the supply chain.
–Helene Braun
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Overheard on CoinDesk TV Sound Bite  "Low-cost tokens are much more favored in India because a lot of investors are small-time investors.”
–CoinDCX co-founder Neeraj Khandelwal, on CoinDesk TV’s “First Mover.”
What others are writing... Off-Chain Signals 
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Putting the news in perspective The Takeaway  Education Is a Challenge for the Crypto Industry Last week, I published a report looking at the resurgent growth of the crypto community in Puerto Rico. Bull markets are a breeding ground for tax minimization strategies and crypto’s wildest ambitious to remake the world. And while there is a crush of rich crypto investors, builders and founders to the island known for its lenient tax code, crypto is just another professional, white-collar industry there.
Jorge Fernandez, chief development and marketing officer for Powercoin and Bitstop, one of the largest bitcoin ATM networks, wrote in offering insight into what crypto is like on the ground. Bitstop machines are found in over 1,000 locations across the continental U.S. and Puerto Rico.
The company placed 25 machines on the island this year as a test, Fernandez said. A veteran of the traditional ATM and credit card business, he said people still associate crypto with crime or are otherwise intimidated. “Our machines have done OK so far but we spend more time educating than selling,” he said.
That’s not uncommon in the industry. Brimming with revolutionary potential, crypto’s adoption is also dependent on getting people on board with complicated and obscure technologies (even if packaged in the form of an ATM). Money, after all, has almost always been a monopoly interest of the government. In breaking with that, crypto is breaking with one of the cornerstones of civilization. It takes some explaining and some time getting used to it.
“When we first got into the BTM business, we made the mistake of assuming" it was just like the ATM business, he said. In some aspects, it's similar, but overall it's not. “It’s the same retail customers where ATMs and BTMs are installed but, in the end, the mindset of the buyers is different, the demographic is way different and it's really hard to pinpoint what locations are going to be good or not. It can take nine+ months for a new location to start to produce, this is way different than an ATM where one knows within two-three months if the location is good.”
Fernandez said transaction volumes on his BTM network fluctuates strongly because of the relative few people using the machines.
“In the ATM business, our customers hold over 700 million debit or pre-paid cards in their wallets so at some point during the week we know 80% of those customers will need access to cash, at least $20 for tips and incidentals. Not the same on the crypto side. Only a small portion of the population knows about crypto and an even smaller percentage buys. Of those that buy, not everyone has cash available on a consistent basis to invest in crypto, so the volume of the BTMs is not consistent from one month to another.”
“Not only are the BTMs twice as expensive as the ATMs, but one also has to invest substantial amounts in 'liquidity' or crypto inventory to sell," he added. "Operating expenses are higher because customer service calls are much more frequent on BTMs than ATMs and compliance is becoming a bigger expense as states start to regulate the business more and more.
“Overall, our machines do well, but I have noticed that the bulk of the volume on each location comes from just a handful of customers. That tells me that we have a few die-hard customers but it's not like the island has embraced crypto in any way.”
He continued, “There are ‘crypto-heads’ around and some of them meet regularly to talk about nonsense, but as far as Puerto Ricans running out to buy bitcoin, that has not happened. This is a heavy cash society, our regular ATMs in the island process about twice as [many] transactions as the ones in the U.S. The crypto machines, on average, do about as well as the ones in the mainland.”
Fernandez said education is key to growth, but the road to adoption is long:
“Crypto lives in the real world and we need to be discussing this topic down at the consumer and user level. That is what is going to make or break this as an acceptable medium of payment and currency. I see some of that in the industry but most still live in the clouds (not the iCloud either).”
“Crypto is the future, I have no doubt about that, but we do have a long way to go before it becomes ubiquitous,” he said.
Education is a challenge for the entire industry.
–D.K.
 The CoinDesk DeFi Index (DFX), measuring the investable DeFi market, is now available for investors watching decentralized finance.
It is the latest index by CoinDesk Indexes, the market standard for crypto assets since 2014. The DFX provides a market-cap-weighted index for a representative basket of DeFi-sector cryptocurrencies that is designed to be investable and replicable for professional investors.
Find out more at coindesk.com/indexes/dfx, or email indexes@coindesk.com.
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