Visa Uses Ethereum

What you need to know today in crypto and beyond

March 29, 2021

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Today's must-reads

Top Shelf

VISA TAKES USDC: Visa will allow users to settle transactions in USD coin, a stablecoin. The payments giant also announced it had completed its first transaction on the Ethereum blockchain in a trial conducted with Crypto.com. This move will remove hurdles for crypto firms that previously had to switch between crypto and fiat to interact with Visa.

WIDE WORLD: Cosmos’ long-awaited inter-blockchain communication (IBC) integration, a messaging standard for the varied world of decentralized protocols, has been voted in. Now, other chains just have to implement it.

BITCOIN-BACKED LOANS: Silvergate Bank will be the second lender to extend bitcoin-backed loans to investors who custody their crypto with Fidelity. The product targets investors who are interested in using their bitcoin without selling it, hedge funds, miners and over-the-counter trading desks.

CRYPTO BATTLES COVID: A blockchain-based COVID-19 app is live in New York state. New York Gov. Andrew Cuomo said the IBM-developed health app can be used to prove COVID-19 vaccination and test results. Meanwhile, Miami wants to be a hub for bitcoin mining.

– Daniel Kuhn

Overheard on CoinDesk TV

Sound Bite

"Frankly, you look at a lot of the challenges facing crypto right now and it's interfacing. You have crypto and you want to go buy bread or you have bread and you want crypto. How do you make that happen?"

– Sam Bankman-Fried, CEO of Alameda Research and FTX, said on CoinDesk TV's First Mover.

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What others are writing...

Off-Chain Signals

DeFi TVL surges to $79 billion (a record) as Binance Smart Chain-powered protocols come online. (Cointelegraph)

Forbes’ Crypto 'A List' (USA edition)

It’s not just Square’s Jack Dorsey that caught the bitcoin bug, CFO Amrita Ahuja thinks: “There’s absolutely a case for every balance sheet to have bitcoin on it.” (Fortune)

– D.K.

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BTCS: Proof of Stake: A stake through Proof of Work's heart?

Putting the news in perspective

The Takeaway

Don't Follow the Suits

The cryptocurrency industry was created by a guy who liked message boards.

Then a young developer who thought decentralization could go even further kicked off a world computer with a white paper and some emails.

The big wins in crypto are going to come from the punks, the hippies, the malcontents and the contrarians. What I'm saying is: In this very bullish season, don't be enraptured by the suits.

We see the allure of the suits here at CoinDesk in a very direct way. For a few years we saw an onslaught of corporate blockchain accelerators and pilot projects that were never about ... well, anything. It was obvious “innovation theater,” but toward what end? Who knows?

I appreciate the allure. The whole argument to be "grown up" seems very convincing. Yes, the future of blockchains is probably enterprise something something ... it sounded truthy.

Now the suits are back and it looks like this time they are here for real. Instead of “blockchain not bitcoin” it seems like we have hit an inflection point where a lot of the rich guys hold a little BTC and maybe some ETH.

So is it all "game over" once Goldman or Morgan Stanley open up a crypto division?

Game, set and match. Satoshi has won! Sooo ... Wall Street can take it from here, right?

Just today, Visa announced a demo project using an Ethereum stablecoin. So this is all … settled?

That's not where I'd place my bets.

I would suggest continuing to look at what the tinkerers are up to.

The method works; it's where I have invested my reporting attention and it keeps paying off. Like non-fungible tokens (NFTs) now? I first wrote about them in 2018. I told you about OpenSea three years before the venture capitalists at a16z dropped $23 million into the NFT marketplace. Were you happy about the UNI airdrop? This guy gave you a heads up about Uniswap a year before it started to shake up the space. The DeFi summer of 2020 was wild, right? Well, I first told you about the decentralized finance market Compound in 2018 and I was digging into MakerDAO regularly through 2019.

It's not hard to find real stuff out on the edge. That's where all of it is.

The suits show up when sectors become safe, after they plateau. They show up when something can be turned into a nice, predictable little business. They show up once it's boring. If they manage to show up early, they show up to make it boring.

DAOs

The opposite of the suits is DAOs, decentralized autonomous organizations.

The first big one didn't work out great. Shortly after that debacle, MakerDAO decided to get a lot more formal, though the protocol itself continued to be governed by token holders.

For a while, it might have looked like the suits, with their proofs-of-concept and press releases and sticky note-covered innovation labs, were winning. But that had clearly changed by last summer when we saw DeFi take off and people started to once again get excited about organizations that exist entirely on blockchains, with no formal instantiation in the legally governed world.

The most prominent DAO in this space doesn't even really use that branding. It is Yearn Finance. I often wonder how many people who put their assets into Yearn think about the fact that there are a bunch of actual people behind this thing. What might be called the "staff" of Yearn put a ton of time into it, they make a lot of money from it and – at least insofar as I have ever been able to determine – none of that occurs under the auspices of any sort of formal organization like you or I might normally expect. No company. Just a baby giant, growing.

We got a rare glance under the hood about how it works when Tracheopteryx, who functions in a sort of chief operations officer-ish role within Yearn, spoke at ETH Denver:

But basically we have a bunch of smart contracts written by an enigmatic DeFi artiste that attracted a bunch of other savvy degens to get involved and start suggesting ways to juice the already considerable profits on assets dropped into Yearn.

This is not normal. This is weird. Yet, Yearn and other DAOs like it will grow and shake things up further.

Facebook/Libra

On the other end of the spectrum, we have Facebook's foray into crypto: born as libra, downgraded to diem.

The social network thought that it could convince global regulators to allow it to upend the way money works by asking nicely and showing up at a lot of legislative hearings.

It turned out that asking permission to disrupt global industries doesn't work that well.

Zuckerberg and Co. never really appeared to have actual conviction about decentralization. The company needed to diversify its revenue streams if Facebook was going to let users communicate privately, as the company had been promising in 2019.

But playing nice with the global money cops didn't work out, so it moved on.

Actual change comes from folks too irascible to quit doing something because someone tells them it's a bad idea or it doesn't fit their conception of how we've always done things.

So if big banks and financial companies and payment firms want to hop in, cool, let them. But that's not when the excitement starts. That's when the excitement ends.

If you want excitement, keep your eyes on the folks with unicorns on their shirts, buzzes in their hair and/or chains hanging off ... wherever — weirdos for the win.

– Brady Dale

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Download "Bitcoin + Ether: An Investor's Perspective" from the CoinDesk Research Hub.

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