The biggest crypto news and ideas of the day |
Were you forwarded this newsletter? Sign up here. Don't want this newsletter? Unsubscribe |
|
|
The TON blockchain created by messaging app provider Telegram is suffering its second outage in as many days. "Block production issues began at 19:19 UTC" the team behind the project told users in a message posted to Telegram and X (formerly Twitter) on Wednesday during U.S. afternoon hours. "The disruption appears to be due to heavy load attributed to DOGS token minting. TON Core is working on a solution." The team emphasized that users' assets were not at risk. They followed with an "urgent" post on X asking mainnet validators to update their nodes and restart. According to the Tonscan block explorer, the last blocks were recorded on the chain at 12:23 Eastern time, or 16:23 UTC. The price of the blockchain's TON token didn't really budge due to this latest outage, falling 0.99% on a four-hour basis and down 4% over 24 hours at the time of writing, according to CoinDesk data. "As long I can finally withdraw my dogs 😅😅 - I can wait," one user wrote in a reply to the team's Telegram message. The previous outage occurred during Asia trading hours Wednesday and lasted about six hours. It, too, had little lasting effect on the TON price, which had already taken a hit several days earlier when Pavel Durov, Telegram's founder and CEO, was arrested in France. That earlier downtime was also partially blamed on the popularity of the DOGS airdrop, part of the Ton Foundation's effort to raise awareness of what it believes is the unjust arrest of Durov. |
|
|
Bitcoin L2 Stacks Upgrades |
Stacks, a layer-2 blockchain that augments the Bitcoin network, has begun its Nakamoto upgrade with the aim of making transactions even faster. The Nakamoto upgrade, which is named after Bitcoin's pseudonymous creator, Satoshi Nakamoto, will decouple the block production schedule on Stacks from Bitcoin's. Network operators now have a two-week window to implement the Nakamoto upgrade, after which there will be hard fork that completes the process. Nakamoto introduces a new way of producing Stacks blocks, using a proof-of-transfer consensus algorithm. Users burn bitcoin (BTC) to mine Stacks blocks and receive rewards. This process began its implementation in April, with block "signers" coming online to validate "tenures" of transactions. (Tenures are periods of time that miners are assigned to produce multiple blocks that are ultimately settled on Bitcoin.) Stacks' aim is to introduce greater utility such as smart contracts and other decentralized finance-related functions using Bitcoin as a base layer. To this end, Stacks is also rolling out sBTC, a bridging asset that allows users to bridge their BTC to the Stacks economy. STX, the token used as fuel for the network and as the reward for miners, has fallen over 8% in the last 24 hours. The broader digital asset market has also slumped, with the CoinDesk 20 Index down nearly 4%. |
|
|
Since 2015, Consensus has set the stage for the most pivotal moments in digital assets, blockchain and Web3. Now, this unparalleled event is coming to Hong Kong. Join global leaders from East and West as they gather for groundbreaking discussions, key announcements and game-changing deals. Don’t miss your chance to be part of the event that defines the next era of innovation.
Register todaybefore prices increase and use code NODE15 for an additional 15% off.
|
|
|
Are Prediction Markets Sustainable? |
Election day will bring judgment for hundreds of millions of dollars in bets placed on the U.S. presidential contest and the myriad other political races that have turned sector leader Polymarket into a massive success. Once these races are decided, so will their prediction markets, leaving their bettors with a win or a loss. What happens then? Will bettors keep prognosticating when the quadrennial Super Bowl of prediction markets is over? Probably not, says DiPeppe, an attendee at the semiannual mtnDAO hacker house gathering who runs far-smaller competitor Hedgehog Markets. He reckons that 90% of prediction markets trading volume is "all around politics," and will likely evaporate when this cycle is over, as it has before. DiPeppe mused: "Once November 6 hits, is there enough liquidity" to keep market makers and other behind-the-scenes players sufficiently interested to support trading on prediction markets? He doubts it. To weather the coming drought, Hedgehog Markets is building a type of prediction market that is less tradeable, but in his view more enduring than Polymarket's binary shares-based model for highly publicized events, which needs a lot of liquidity to work as designed. Hedgehog focuses instead on the "long tail" of bettable events that have fandoms willing to put money on their favored outcome but aren't too concerned about trading their position. It's more similar to sports betting experiences prevalent on DraftKings and FanDuel, where bettors take a gamble on odds and let it ride, than a stock market. "There's clearly people interested in sports betting. It's all short-term, same thing with crypto: It's a lot of memecoin, short-term trading," DiPeppe said. "So how do we cater with a market type that fits this shorter-term time frame?" |
Crypto ATMs, a Law Enforcement Concern |
Since 2019, the cash-to-crypto industry – which is dominated by crypto ATMs – has processed at least $160 million in illicit transactions, according to a study by blockchain analytics firm TRM Labs. The report, released Wednesday, highlights why law enforcement authorities worldwide have concerns about the growing use of crypto ATMs, which take fiat currency and send crypto to the desired digital wallet. In 2023 alone, 79% of all illicit cash-to-crypto tranfers, over $30 million, went to known scam addresses through cash-to-crypto services. Crypto ATMs were in the spotlight again earlier this month when Germany's financial regulator, BaFin, seized 13 in a raid, confiscating cash amounting to almost 250,000 euros ($280,000). The report said such crackdowns are part of a "broader trend," citing the 2023 examples of the U.K. shutting down 26 bitcoin ATMs and U.S. authorities seizing 18 in Texas and more than 50 Bitcoin of America ATMs in Ohio. The U.K. charged a shopkeeper with operating an illegal crypto ATM for the first time, the BBC reported on Wednesday. "While illicit actors look to cryptocurrencies to move funds faster cross-border, crypto ATMs face additional money laundering vulnerabilities due to the use of cash and lack of face-to-face communication or account open controls," the report said. Of the 15,000 complaints last year involving $1 billion in losses due to digital asset scams affecting people aged 60 and above, as many 2,000, some 13%, involved bitcoin ATMs. |
The Takeaway: Art Is Not a Security |
By Brian Frye, law professor at the University of Kentucky Apparently, the Securities and Exchange Commission thinks the NFT market is a securities market. On Tuesday, August 27, NFT marketplace OpenSea received a Wells notice from the SEC. A Wells notice is a formal notification that the SEC staff intends to file a civil enforcement action against the recipient. While a Wells notice is a confidential communication, the SEC seems to think that some or all of the NFTs on OpenSea are unregistered securities and selling them violates the securities laws. The SEC is wrong. No, it’s worse. The SEC is nuts. The NFT market is identical to the art market. Or rather, the NFT market is an art market. If the SEC can regulate the NFT market, then it can also regulate the art market. But the art market existed long before the SEC was created in 1934, and the SEC has never regulated the art market or even contemplated regulating the art market. It can’t and it shouldn’t. If Congress had wanted to give the SEC authority to regulate the art market, it would have said so. And, if it made sense for the SEC to regulate the art market, it would have done so a long time ago. While this Wells notice is ridiculous, it’s also no surprise, at least to me. I predicted it five years ago, when I published a law review article styled as a work of conceptual art titled “SEC No-Action Letter Request” in 2019. The conceptual artwork consisted of filing a no-action letter request with the SEC, proposing to sell an editioned conceptual artwork titled “SEC No-Action Letter Request” and observing that it looked an awful lot like an unregistered security, according to the SEC’s definition. But the SEC ignored me, because it considered my observation “fanciful.” And others like Bloomberg’s Matt Levine, agreed with them, claiming that my artwork wasn’t a security because no one would actually buy it. Okay, I guess. But, when I was a securities lawyer at Sullivan & Cromwell, I sure as hell wouldn’t have advised a client that they could avoid SEC regulation by offering to sell a security that no one would actually buy. Along came the NFT market, and it turned out that people would buy my artwork after all. I refashioned “SEC No-Action Letter Request” as an NFT, and it sold out in less than an hour. I was delighted, not only by the money, but also by the proof of concept. I guess people would buy it after all. But the SEC still didn’t care and kept ignoring my no-action letter requests. What gives? At first, I thought the SEC didn’t care about NFTs. But I was wrong. They didn’t want to sue me, they wanted to sue someone with an incentive to settle. That’s why they sued Impact Theory and Stoner Cats. Both were conventional NFT projects that had run their course. The defendants had no reason to fight, because they had nothing to gain. That’s why we sued the SEC. I don’t care about money. I care about the principle. I create and write about NFTs because I find them interesting. And part of what I find interesting about NFTs is that they expose the incoherence of the SEC’s understanding of what it’s authorized to regulate.
Read the full op-ed here. |
|
|
|
