CoinDesk Crypto

Seamless login for the decentralized apps (dapps) of any blockchain. That’s the vision for Torus Labs’ new identity solution, DirectAuth.

The Singapore-based firm released a software development kit (SDK) Thursday for blockchain-agnostic dapp logins. Torus launched its blockchain network and one-click login protocol in February counting eight initial members for its key management system – including Binance, the Ethereum Name Service (ENS) and Skale.

The key innovation with DirectAuth compared to the previous Torus offering is blockchain neutrality, Torus Labs CEO and co-founder Zhen Yu Yong said in a phone interview with CoinDesk.

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“We’ve abstracted all of the core security features out of the Torus wallet and put it into an SDK so that any application can plug it into the application and interact with trust whilst maintaining their own permissioned structure,” said Yong.

Read more: Torus Launches to Bring One-Click Login to Web 3.0

Torus’ newest product makes dapp logins as easy as accessing your Gmail – a tangible bridge between Web 2.0 and Web 3.0. DirectAuth commits a blockchain transaction on the user’s behalf while maintaining a similar experience to traditional logins, eliminating the need for digging up the private keys or mnemonic passwords common in today’s Web 3.0 products.

Yong said DirectAuth has already integrated with multiple networks including digital card game SkyWeaver, universal basic income project GoodDollar and social platform Sapien. 

Related: Blockstack Pledges to Enforce Patents for ‘Defensive Purposes’ Only

Arweave CEO Sam Williams told CoinDesk that “simplifying login and key management” for Web 3.0 products was “critical” for mainstream adoption. His storage protocol was one of the first to integrate DirectAuth before the product launched publicly.

Yong also said the product’s user interface (UI) was overhauled to put native developers in the driver’s seat. Kyle Samani, managing partner of Multicoin Capital, which led the project’s 2019 $2 million seed round, said the UI’s flexibility is the “most powerful aspect” of DirectAuth as it gives “developers control over the user experience in ways they’ve never had before.”

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The coronavirus crisis may have given one censorship-resistance project a small boost.

There are several startups trying to decentralize the internet’s domain-name infrastructure, including Ethereum Name Service (ENS) and Unstoppable Domains. So far, ENS director of operations Brantly Millegan said the ENS ecosystem has roughly 30,000 Ethereum accounts that own .eth domains, a total of 350,000 unique web names. Unstoppable Domains co-founder Brad Kam said his project has 220,000 registered domains since January 2019, with 8,000 live websites.

Kam said Unstoppable domains generally sold to companies like MyCrypto and the Kyber Network for between $40 and $10,000 each, which even modest estimates indicate as income worth more than $8.8 million. This startup’s business model bets that crypto exchanges and wallets will need censorship-resistant domain options for regulatory arbitrage. Kam said he is passionate about freedom of speech and businesses being able to resist dictators. 

Related: Bitcoin News Roundup for May 28, 2020

Meanwhile, the comparable and highly anticipated web domain project Handshake, which airdropped an estimated $100 million worth of HNS tokens to developers with active GitHub pages, has attracted thousands of participants since it launched in February 2020. 

Read more: Handshake Revealed: VCs Back Plan to Give Away $100 Million in Crypto

Tieshun Roquerre, CEO of the Handshake-centric Namebase exchange, said users traded $10 million worth of HNS tokens so far, while claiming web domains through 80,000 auctions in four months. Community members estimate only a few million dollars worth of HNS was spent on domains – with most of that activity coming from people trading airdropped HNS for other assets like bitcoin.

Roquerre estimated 4,373 people claimed their tokens out of roughly 150,000 eligible recipients, and “some of our users have reached out about coronavirus-related names.”

Related: Enjin’s New Minecraft Plug-in Lets Players Spawn Blockchain Assets

Although this represents a small portion of the airdropped tokens, the domain name service (DNS) provider NextDNS also offers support for Handshake name resolution. 

“More people are using it than we thought, and from what we’ve seen a few cool handshake-only mini-sites are starting to pop up,” NextDNS CEO Romain Cointepas said.

This year the plan is for NextDNS to run its own HNS nodes, Cointepas said, comparable to running a Simplified Payment Verification bitcoin node. This would let customers use Handshake for top-level domains (TLDs) like .com and .net, “effectively replacing the root servers completely,” Cointepas said.

So far, this primarily appeals to developers with hobby projects who like the idea of completely owning their own website without trusting service providers. Beyond hobbyists, some crypto companies like Brave have claimed their corresponding Handshake web domains as well. 

“With Handshake you own it directly with a private key, the way you own bitcoin with a private key,” said HNS user Matthew Zipkin, who built the reference site easyhandshake.com. “As long as you keep that key secure, no one is taking that name from you. … There’s a lot of money and corruption and centralization. The namespace is dominated by ICANN.”

Many believe the current system is relatively public and well-managed. The central body that governs domain space, ICANN, recently rejected an attempt to sell .org domains to the private firm Ethos Capital. Yet, Zipkin said ICANN’s dominance is still problematic because the organization is based in the United States and other tech organizations, like the Microsoft-owned GitHub, stopped offering full services in 2019 to some jurisdictions for fear of American sanctions.

Read more: Planned $1.1B Sale of .Org Angers Many Open Source Crypto Developers

“Handshake doesn’t replace DNS, it extends it,” Zipkin said. “When I’m using a Handshake resolver, that means my internet service provider (ISP) doesn’t know where I’m browsing because I’m not asking them. … Anyone can run a resolver on their computer. They can verify Handshake names trustlessly with minimal data downloads and bandwidth.”

Zipkin said Handshake can also be used with a privacy-enhancing Tor browser, in addition to regular VPN services. Yet some DNS veterans remain skeptical about the prospect that Handshake could achieve commercial traction, beyond hobbyists and crypto startups.

Farsight CEO Paul Vixie, who helped scale DNS and build the system we use today, said that “no one wants to splinter the namespace because that will fragment the market.” 

He added at least a dozen startups have tried to achieve Handshake’s same goal – to decentralize DNS infrastructure options – but none have achieved both significant and sustainable traction. Plus, the Handshake community is already being faced with its first legal conundrum over whether it can offer “.music,” another version of which is run by ICANN. 

Read more: The Domain Startups Building an Uncensorable Internet on Top of Ethereum

“The commercial community, outside of that [tech bubble] … they are happy with the namespace as is,” Vixie said. “There is no endgame for multiple namespaces. … You can certainly waste a lot of investor money but in the end there’s got to be one that works.” 

Speaking to that point, Namebase’s Roquerre said he expects it will take a long time for developers to buy or trade TLDs for business, not pleasure.“In the long term there’s going to be more commercial activity,”  Roquerre agreed. “I think the main theme of censorship resistance is generally why people are interested in Handshake, it’s been like that for a long time and it’s continuing.”

Update (May 28, 20:11 UTC): The headline and body of this article have been edited to clarify there were reportedly $10 million worth of HNS trades on Namebase since the token launched, but only a fraction of those users bought domain names.

• ‘Decentralized ID at All Costs’: Adviser Quits ID2020 Over Blockchain Fixation
• Bitcoin Transaction Fees Decline as Network Congestion Eases

The coronavirus crisis may have given one censorship-resistance project a small boost.

There are several startups trying to decentralize the internet’s domain-name infrastructure, including Ethereum Name Service (ENS), Unstoppable Domains and UniLogin. So far the ENS token ecosystem has garnered 9,813 addresses and roughly 270,000 unique web names. Unstoppable Domains co-founder Brad Kam said his project has 220,000 registered domains since January 2019, with 8,000 live websites. 

Kam said Unstoppable domains generally sold to companies like MyCrypto and the Kyber Network for between $40 and $10,000 each, which even modest estimates indicate as income worth more than $8.8 million. This startup’s business model bets that crypto exchanges and wallets will need censorship-resistant domain options for regulatory arbitrage. Kam said he is passionate about freedom of speech and businesses being able to resist dictators. 

Related: Enjin’s New Minecraft Plugin Lets Players Spawn Blockchain Assets

Meanwhile, the comparable and highly anticipated web domain project Handshake, which airdropped an estimated $100 million worth of HNS tokens to developers with active GitHub pages, has attracted thousands of participants since it launched in February 2020. 

Read more: Handshake Revealed: VCs Back Plan to Give Away $100 Million in Crypto

Tieshun Roquerre, CEO of the Handshake-centric Namebase exchange, said users spent $10 million worth of airdropped HNS tokens so far, claiming web domains through 20,000 auctions in four months. This range already compares to estimated revenues for the 14-month-old Unstoppable, which raised a $4 million Series A in 2019. 

With regards to Handshake, Roquerre estimated 4,373 people claimed their tokens out of roughly 150,000 eligible recipients, and “some of our users have reached out about coronavirus-related names.”

Related: ‘Decentralized ID at All Costs’: Adviser Quits ID2020 Over Blockchain Fixation

Although this represents a small portion of the airdropped tokens, the domain name service (DNS) provider NextDNS also offers support for Handshake name resolution. 

“More people are using it than we thought, and from what we’ve seen, a few cool handshake-only mini-sites are starting to pop up,” NextDNS CEO Romain Cointepas said.

This year the plan is for NextDNS to run its own HNS nodes, Cointepas said, comparable to running a Simplified Payment Verification bitcoin node. This would let customers use Handshake for top-level domains (TLDs) like .com and .net, “effectively replacing the root servers completely,” Cointepas said.

So far, this primarily appeals to developers with hobby projects who like the idea of completely owning their own website without trusting service providers. Beyond hobbyists, some crypto companies like Brave have claimed their corresponding Handshake web domains as well. 

“With Handshake you own it directly with a private key, the way you own bitcoin with a private key,” said HNS user Matthew Zipkin, who built the reference site easyhandshake.com. “As long as you keep that key secure, no one is taking that name from you. … There’s a lot of money and corruption and centralization. The namespace is dominated by ICANN.”

Many believe the current system is relatively public and well-managed. The central body that governs domain space, ICANN, recently rejected an attempt to sell .org domains to the private firm Ethos Capital. Yet Zipkin said ICANN’s dominance is still problematic because the organization is based in the United States and other tech organizations, like the Microsoft-owned GitHub, stopped offering full services in 2019 to some jurisdictions for fear of American sanctions.

Read more: Planned $1.1B Sale of .Org Angers Many Open Source Crypto Developers

“Handshake doesn’t replace DNS, it extends it,” Zipkin said. “When I’m using a Handshake resolver, that means my internet service provider (ISP) doesn’t know where I’m browsing, because I’m not asking them. … Anyone can run a resolver on their computer. They can verify Handshake names trustlessly with minimal data downloads and bandwidth.”

Zipkin said Handshake can also be used with a privacy-enhancing Tor browser, in addition to regular VPN services. Yet some DNS veterans remain skeptical about the prospect that Handshake could achieve commercial traction, beyond hobbyists and crypto startups.

Farsight CEO Paul Vixie, who helped scale DNS and build the system we use today, said “no one wants to splinter the namespace because that will fragment the market.” 

He added at least a dozen startups have tried to achieve Handshake’s same goal – to decentralize DNS infrastructure options – but none have achieved both significant and sustainable traction. Plus, the Handshake community is already being faced with its first legal conundrum over whether it can offer “.music,” another version of which is run by ICANN. 

Read more: The Domain Startups Building an Uncensorable Internet on Top of Ethereum

“The commercial community, outside of that [tech bubble] … they are happy with the namespace as is,” Vixie said. “There is no end game for multiple namespaces. … You can certainly waste a lot of investor money but in the end there’s got to be one that works.” 

Speaking to that point, Namebase’s Roquerre said he expects it will take a long time for developers to buy or trade TLDs for business, not pleasure.“In the long term there’s going to be more commercial activity,”  Roquerre agreed. “I think the main theme of censorship resistance is generally why people are interested in Handshake, it’s been like that for a long time and it’s continuing.”

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Bitcoin is so speculative and volatile that it doesn’t deserve to be considered an asset class, according to Goldman Sachs.

Diving deeper into the realm of the more than 5,000 cryptocurrencies in existence, things get even more speculative – with traders often jumping on fast-moving and thinly traded tokens for a quick profit and then quickly moving on to the next hot trade. 

That’s why it’s so notable that holders of one token, Chainlink (LINK), appear to be in it for the long term. 

Related: Market Wrap: Bullish Traders Push Bitcoin Over $9,100, Returning to Halving Levels

You’re reading First Mover, CoinDesk’s daily markets newsletter. Assembled by the CoinDesk Markets Team, First Mover starts your day with the most up-to-date sentiment around crypto markets, which of course never close, putting in context every wild swing in bitcoin and more. We follow the money so you don’t have to. You can subscribe here.

Data extracted from the underlying blockchain and cryptocurrency markets reveal declining balances of the token held at exchanges. In the logic of digital-asset traders, that’s seen as a sign that holders of the token have no near-term intention of selling their LINK tokens: After withdrawing the tokens from exchanges, holders are likely either hoard them or send them to be used in smart contracts on the Chainlink blockchain. 

High market capitalization and real users is a rare combination for blockchain networks. But with Chainlink, backers of the project are so devoted that they refer to themselves on social media as “LINK Marines” – a sly reference to the community known as the “XRP Army” that supports the eponymously named token from Ripple. The idea is that LINK investors are “HODLing,” an expression that dates back to early cryptocurrency chat forums and refers to long-term, often ideologically motivated investors.

“Chainlink is the most successful blockchain network over the last two years and we still feel like the underdog,” said Michael Anderson, co-founder of Framework Ventures, which published a Chainlink investment thesis in late 2017. 

Related: Blockchain Bites: Google Validates Theta, Coinbase and BitGo Eye Crypto Prime Brokerage

During a year when traditional assets like U.S. stocks are floundering, and bitcoin is up 27%, Chainlink more than doubled, making it the top-performing digital asset among the top 10 ranked by market capitalization, according to OnChainFX. The coin’s market value is now almost $3.8 billion. 

Chainlink is a tokenized decentralized network that provides blockchain networks with price feed data collected from sources both on and off blockchains. The protocol offers a potential solution to what is known as the “oracle problem,” or the ability to get the off-chain data needed in many smart contracts. Given that blockchains are intended to operate as “trustless” networks, using outside data requires integrating with a trusted source – an “oracle.” 

“As time goes by, there are definitely some questionable projects that break the top-10 market capitalization ranking for crypto,” said Anil Lulla, analyst at cryptocurrency research firm Delphi Digital who recently authored a report on blockchain-based oracles. “It’s very easy to point to a lot of names on that list and see very little to no usage.” 

However, the Delphi Digital team was “impressed at some of the early trends we’ve been seeing in usage for Chainlink,” Lulla said. 

So is it bullish that LINK Marines are HODLing? It’s tough to say, according to Lulla. 

“I just don’t see the connection with the token economics,” Lulla wrote in a Telegram message. “But they’re dominating the oracles space so I think the LINK memers can keep this narrative going for a while.” 

A Chainlink spokesperson declined to comment on the data. 

In May 2019, the total amount of LINK held on exchanges began to steadily decrease, a trend that would continue for the next 12 consecutive months, according to Glassnode. 

Exchange withdrawals coincided with the first significant LINK price inflation when the token traded above $1.00 for the first time. And as more tokens left cryptocurrency exchanges, trading volume steadily grew, according to Nomics. 

So where where did the LINK tokens taken off exchanges go? 

The data suggest that the Marines are sending their tokens to either their own wallets or Chainlink smart contracts. The percentage of LINK supply held by the top 1% of addresses has grown by almost 25% in the past year, according to Glassnode. 

Median transfer value fell by 77% over the same period, suggesting that when LINK Marines decide to actually transfer tokens, their transactions are increasingly small. 

LINK is also being sent to smart contracts designed to utilize the protocol’s oracle services. According to Glassnode, the year-to-date supply of LINK in smart contracts grew by 1.3% percent. 

The strong price performance has foiled traders who have taken short positions on LINK, betting on a decline in the token’s price. 

Such challengers have been “getting their faces ripped off” in markets for over a year, Rob Paone, a popular YouTube crypto personality and startup founder, noted in a March 18 tweet. 

At the time of Framework’s investment, according to Anderson, “many of the ‘industry experts’ either said Chainlink was over-engineered,” or that two rival oracle projects, Augur or Uniswap, would ultimately win out.  

Yet the young protocol has inked cross-industry partnerships with Google and Tezos, for example. 

And the LINK Marines are staying faithful. 

Trend: Bitcoin is struggling to maintain momentum after Wednesday’s convincing break above the psychological hurdle of $9,000.

At press time, the number one cryptocurrency by market value is trading near $9,190, having faced rejection at $9,300 during the Asian trading hours. 

The pullback has neutralized the immediate bullish view put forward by a falling wedge breakout on the four-hour chart Wednesday. Further, it has established $9,310 – a lower high created May 24 – as strong resistance. 

If buyers can push prices past that threshold, a price rally to  $9,850 may be seen. That level is currently housing the upper end of the contracting triangle represented by trendlines connecting May 7 and 18 highs, and May 10 and 25 highs. 

The overall bias will stay neutral while the cryptocurrency is held withing the three-week-long narrowing price range on the daily chart. A breakout would imply a continuation of the rally from lows below $4,000 seen on March 13 and open the doors for a test of February high of $10,500.

Alternatively, a move below $8,760 would confirm a range breakdown and shift risk in favor of a deeper decline to support at $8,109 (May 10 low) and $7,900 (100-day average). 

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Gemini has become the first U.S. crypto exchange and custodian to partner with Samsung, the companies announced Thursday. 

Samsung Blockchain users in the U.S. and Canada can now connect to Gemini’s mobile app to buy, sell and trade crypto after the companies built an integration between the two applications. 

The Samsung Blockchain Wallet allows users to self-custody crypto directly on their Samsung Galaxy phones. 

Related: Blockchain E-Sports TV App to Ship on Samsung S20 Phones in US

With Gemini Custody, Samsung users can now also transfer their crypto into cold storage. 

“Crypto is not just a technology, it is a movement,” Tyler Winklevoss, CEO of Gemini, said in a press release. “We are proud to be working with Samsung to bring crypto’s promise of greater choice, independence and opportunity to more individuals around the world. Now, Samsung Blockchain Wallet customers can buy crypto in a simple, elegant and secure way on Gemini.”

Read more: Samsung Continues Support for Crypto With New Flagship Smartphone

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Crypto companies hard hit by the economic impact of COVID-19 have had a plea for a 100 million Swiss franc ($103 million) bailout rejected by Switzerland’s government.

Local news site Tages-Anzeiger reported Wednesday that Heinz Taennler, finance director of the canton of Zug, had been denied a call for assistance for local blockchain startups through a sovereign wealth fund. Taennler had planned to issue loans to local startups, which in turn could be converted into shares.

See also: TokenSoft Expands Security Token Services to Europe With New Swiss Entity

Related: Tencent Is Pouring $70B Into New Tech Including Blockchain

Zug, located near Zurich, is sometimes known as “Crypto Valley” for the large number of crypto and blockchain startups that have chosen the area as their home. It offers regulatory leniency towards such firms and has become an innovation hub for blockchain technology in Europe.

Taennler had requested the funding package in April in addition to the central government’s CHF 154 million ($158.6 million) credit handout for fintech startups, saying the latter would not be sufficient to curb the economic impact of coronavirus.

Local media reported that the proposed fund would have consisted of a number of different funding vehicles, including private investment, federal guarantees and contributions from local government.

See also: Ex-CFTC Chair Chris Giancarlo Joins Swiss Effort to Fund COVID-19 Relief Projects

Related: Finance and the Real Economy Can’t Stay Out of Sync Forever

Swiss blockchain and crypto firms have warned of their impending demise with private investment drying up in recent months. A survey published in April by the Swiss Blockchain Federation showed more than 160 firms would be put at risk of immediate bankruptcy should the government fail to act.

“The Crypto Valley and the entire Swiss blockchain scene face an existential danger due to the restrictions and uncertainties caused by the corona pandemic,” the federation wrote. “Now it is a matter of helping the entire ecosystem as quickly as possible with targeted measures.”

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Minecraft, one of the world’s most popular video games, has a new plug-in enabling players to place blockchain assets directly into their servers.

Built by gaming startup Enjin, EnjinCraft is an open-source blockchain plugin that enables players to spawn assets in the Minecraft Java Edition without the need to write any code.

The tool works by dropping the EnjinCraft file into a player’s server “plug-ins” folder, where they can then begin integrating and distributing blockchain assets in the form of tokens.

Related: Handshake Domains Bring in $10M as Race for Censorship-Resistant Websites Heats Up

The plug-in marks the second release by Enjin for Minecraft after it initially released DonationCraft in 2013 in collaboration with Bukkit. Now downloaded 5.1 million times, DonationCraft allows players to grow their Minecraft servers by creating a server website and donation store.

See also: Trust No Dapp: Chainlink Launches Oracle for Provable Randomness

The new offering allows server hosts to create their own localized Minecraft economies by providing their players with tangible ownership over in-game items and currencies. It also allows for players to securely trade their assets in peer-to-peer (P2P) fashion through the server or via external chat rooms and digital trading platforms like the Enjin Marketplace.

“EnjinCraft is the beginning of a new era for sandbox games. Players now have a tangible stake in their gaming worlds, and server owners can create new kinds of addictive experiences by using branded collectibles and items with scarcity and value in the digital universe,” said Enjin’s co-founder and CTO, Witek Radomski..

Related: ‘Decentralized ID at All Costs’: Adviser Quits ID2020 Over Blockchain Fixation

Enjin has also released an open-source software development kit (SDK) for Java, allowing developers to implement blockchain in Java-based mobile, desktop or web apps.

See also: CryptoWars Leaves Loom Sidechain in Pivot to ‘Play-to-Earn,’ Aka Betting

The gaming-focused project has been active this year, having launched its development platform on Ethereum in February. The launch enables potentially millions of developers to integrate crypto assets into games and apps without prior knowledge of coding for blockchain.

In April, Enjin announced it would be opening its crypto wallet to Chinese users ahead of a planned expansion into the Asian nation after it sought approval from China’s Ministry of Industry and Information Technology.

• Bitcoin Transaction Fees Decline as Network Congestion Eases
• Thailand Turns to Blockchain to Boost Renewable Energy Push

Minecraft, one of the world’s most popular video games, has a new plugin enabling players to place blockchain assets directly into their servers.

Built by gaming startup Enjin, EnjinCraft is an open-source blockchain plugin that enables players to spawn assets in the Minecraft Java Edition without the need to write any code.

The tool works by dropping the EnjinCraft file into a player’s server “plugins” folder, where they can then begin integrating and distributing blockchain assets in the form of tokens.

Related: ‘Decentralized ID at All Costs’: Adviser Quits ID2020 Over Blockchain Fixation

The plugin marks the second release by Enjin for Minecraft after it initially released DonationCraft in 2013 in collaboration with Bukkit. Now downloaded 5.1 million times, DonationCraft allows players to grow their Minecraft servers by creating a server website and donation store.

See also: Trust No Dapp: Chainlink Launches Oracle for Provable Randomness

The new offering allows server hosts to create their own localized Minecraft economies by providing their players with tangible ownership over in-game items and currencies. It also allows for players to securely trade their assets in peer-to-peer (P2P) fashion through the server or via external chat rooms and digital trading platforms like the Enjin Marketplace.

“EnjinCraft is the beginning of a new era for sandbox games. Players now have a tangible stake in their gaming worlds, and server owners can create new kinds of addictive experiences by using branded collectibles and items with scarcity and value in the digital universe,” said Enjin’s co-founder and CTO, Witek Radomski..

Related: Bitcoin Transaction Fees Decline as Network Congestion Eases

Enjin has also released an open-source software development kit (SDK) for Java, allowing developers to implement blockchain in Java-based mobile, desktop or web apps.

See also: CryptoWars Leaves Loom Sidechain in Pivot to ‘Play-to-Earn,’ Aka Betting

The gaming-focused project has been active this year, having launched its development platform on Ethereum in February. The launch enables potentially millions of developers to integrate crypto assets into games and apps without prior knowledge of coding for blockchain.

In April, Enjin announced it would be opening its crypto wallet to Chinese users ahead of a planned expansion into the Asian nation after it sought approval from China’s Ministry of Industry and Information Technology.

• Thailand Turns to Blockchain to Boost Renewable Energy Push
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Electronics company LG joined Hedera Hashgraph’s Governing Council on Wednesday, becoming its 14th member.

The addition edges Hedera toward its council’s long-term goal: tap 39 hands-on node runners to govern its enterprise-grade public ledger, Hashgraph. Hashgraph is an alternative to blockchain platforms with buy-in from Google, IBM, Boeing and University College London among others. 

LG, a South Korean home appliance manufacturer, is the first such business and only the second based in Asia, after the Japan-based Nomura, to join.

Related: University College London Joins Hedera Hashgraph as Council Member, Research Partner

Those attributes add a fresh perspective Hedera’s telecom-heavy and Asia-light council, said Hedera CEO Mance Harmon. He said members “vote on just about every part of the business” of the limited liability corporation.

“For that to be done well, we want to make sure that we have that really broad representation, not just across verticals but also by geography,” Harmon said. “LG is bringing diversity and further decentralization to the council in the way that we haven’t had before — that’s part of the excitement here.”

LG did not respond to a request for comment by press time.

In 2017, the electronics manufacturer trialed R3 Corda for financial transactions. LG also participated in a 2019 cobalt-tracing pilot via Hyperledger Fabric.

Related: Hedera’s Token Price Spikes Prematurely After Google Joins the Network’s Governing Council

Harmon claims that the Hashgraph beta can handle 10,000 transactions per second – “way faster” than blockchain-based public ledgers running ethereum and bitcoin. It follows a proof-of stake model in which users pay via tokens for network services.

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A member of the ID2020 Alliance, which aims to bring digital identities to billions of people, has resigned over the organization’s direction on digital immunity passes and COVID-19. 

In her resignation email Friday, Elizabeth Renieris cited ID2020’s opacity, “techno-solutionism,” and corporate influence along with the risks of applying blockchain to immunity passes.

“At this stage, I can no longer even describe what ID2020’s mission is with any confidence,” wrote Renieris, who was one of six members of ID2020’s technical advisory committee. “All I can perceive is a desire to promote decentralized identity solutions at all costs.”

Related: Bitcoin Transaction Fees Decline as Network Congestion Eases

Renieris (an occasional CoinDesk contributor) is a fellow at the Berkman Klein Center for Internet and Society at Harvard University and an expert in cross-border data protection and privacy issues. She was previously in-house counsel at two digital identity startups. 

Her concerns about the technology, which highlight the tradeoffs between health and privacy during the pandemic, are spelled out in a white paper published in mid-May. She says the introduction of immunity passes could interfere with people’s privacy, freedom of association, assembly, and movement. 

“Blockchain-enabled ‘immunity certificates’ or ‘immunity passports’ for COVID-19, if implemented by public authorities, would have serious consequences for our fundamental human rights and civil liberties,” she writes.

The discord within ID2020 hints at larger debates around where to use distributed ledger technology (DLT), and where it may create more problems than it solves. But when it comes to the issue of immunity passes, the stakes seem higher. 

Related: Thailand Turns to Blockchain to Boost Renewable Energy Push

Renieris worries about how the influence of corporations like Microsoft may influence the development of these systems.

Kim Cameron, Architect of Identity at Microsoft, sits on ID2020’s board, and Kim Gagné, newly appointed as Board Chair, also worked at Microsoft. 

“Who is doing the building here is a critical vulnerability, as critical as any technical challenge,” said Renieris. “This is 100% a hammer looking for a nail.”

Immunity passports or certificates are digital or physical documents that individuals would receive if they had tested positive for COVID-19 antibodies. Traditionally, development of antibodies after a disease offers some level of immunity, though scientists are still working to sort out whether this is the case, or how long such immunity might last, when it comes to COVID-19. Potentially, immunity passports allow people to return to work and have greater freedom of movement. 

See also: Immunity Passes Explained: Should We Worry About Privacy?

In late April, the World Health Organization warned against the idea of immunity passports, and said that there was “no evidence that people who have recovered from COVID-19 and have antibodies are protected from a second infection.” But countries such as Chile said they would move ahead with such passes, despite the WHO’s warning. 

The ID2020 Alliance is a public-private partnership, with partners including Microsoft, Accenture and Hyperledger. It hopes to develop a global model for the design, funding, and implementation of “digital ID solutions and technologies,” according to the website.

ID2020 published a white paper in April urging policymakers, technology providers, and civil society groups to collaborate to ensure that digital health credentials or “immunity certificates,” if implemented, are designed to protect privacy and civil liberties.

This is 100% a hammer looking for a nail.

According to Renieris, the paper initially cited the Covid Credentials Initiative (which is advocating for immunity passes based in part on blockchain) and Microsoft’s work with blockchain. It said these are potential solutions for privacy and identity questions around immunity passes. But when Renieris queried their inclusion, the section was dropped, because, says Renieris, ID2020 did not want to deal with the tech problems those initiatives would raise.

The initiative neglects to acknowledge any technology-specific risks of a blockchain based approach, instead highlighting generic risks that could apply to any technological solution, said Renieris. While she says she was told the paper would be published as Executive Director Dakota Gruener’s personal view, the press release that was put out around the paper framed it as an ID2020 paper. 

“I cannot be part of an organization overly influenced by commercial interests that that only pays lip service to human rights,” she wrote in her resignation. “The stakes are simply too high at this stage.”

In a statement to CoinDesk, Gruener said technology solutions are not a panacea for the pandemic and must be accompanied by robust, fit-for-purpose trust frameworks and legislative and regulatory actions to ensure ethical implementation and transparency.

ID2020 has sought feedback from civil liberties and digital privacy groups to ensure that these considerations are built into the technical architecture of any digital health certificate system.

“The stakes are high and we have one chance to get this right,” said Gruener. “Even with these safeguards in place, digital health certificates may still be insufficient to meet the current challenge. However, absent such safeguards, we can be assured that they will do more harm than good.”

As CoinDesk has reported previously, a number of organizations and companies are actively exploring the idea of immunity passes based on blockchain technology. 

See also: Citizen App’s New Contact Tracing Feature Raises Privacy Red Flags

Renieris wrote the paper published in May with global health researcher Sherri Bucher of Indiana University School of Medicine, and Christian Smith, CEO of Stranger Labs, which researches, develops, and designs advanced technologies that enhance privacy and security. 

In it, they criticize the CCI initiative that ID2020 initially touted, which proposes combining a World Wide Web Consortium (W3C) standard for Verifiable Credentials (VCs) with non-standard decentralized identifiers (DIDs) and DLT. The architecture is a product of premature standardization, experimental technologies, and speculative requirements, the authors argue, questioning whether these solutions can support such a critical role in public safety as immunity passes. 

They also criticize the lack of a proven method of private key management for end-users, especially in offline instances, which digital immunity passports would likely have to include, and say the VC specification merely “provides a data model, not a complete protocol or end-to-end solution.”

UPDATE (May 28, 03:50 UTC): This article has been updated with additional quotes.

• Colombia, Deloitte, ConsenSys Sign On to WEF’s ‘Blockchain Bill of Rights’
• Citizen App’s New Contact Tracing Feature Raises Privacy Red Flags

The price of bitcoin (BTC) shot above $9,100 Wednesday in high-volume buying at around 10:00 UTC (6 a.m. ET) thanks to traders feeling optimistic about the crypto markets. 

As of 20:40 UTC (4:40 p.m. ET), bitcoin was trading at $9,162, gaining 3.5% over the previous 24 hours. Trading seems to support a higher upward climb as bitcoin’s price is now above its 10-day and 50-day moving averages, a signal of bullish sentiment.

The question for the market is whether bitcoin’s price can continue to rise after Tuesday’s struggle to stay at $9,000. Traders like to talk about the $10,000 level as some kind of barrier to blow through that will result in new highs, but bitcoin hasn’t been able to push past that number since hitting it for a short time on May 7. 

Related: Goldman Sachs: Cryptocurrencies ‘Are Not an Asset Class’

“Bulls seem unable to break the $10,000 psychological support for some time since the halving,” said Peter Chen, a cryptocurrency trader at Hong Kong-based OneBitQuant.

Some are more optimistic. “Bitcoin must shine over the next 18 months, and I think it will. The short-term technical picture is not bad. Bitcoin is trading around where it was at the halving,” said George Clayton, managing partner at New York-based Cryptanalysis Capital. 

Read More: Number of Bitcoins on Crypto Exchanges Hits 18-Month Low

Bitcoin was as high as $9,184 on exchanges like Coinbase on May 11, the date of the network’s reward reduction event that happens every four years. During that recent halving miners’ rewards for successfully adding a block to the Bitcoin blockchain were cut 50% from 12.5 to 6.25 BTC. 

Related: Bitcoin Transaction Fees Decline as Network Congestion Eases

Elie Le Rest, a partner at France-based quantitative firm ExoAlpha, says the lower prices seen in the past few weeks were a bit of a post-halving slump. “We have witnessed the hashrate taking a breather and blocks taking longer to be mined immediately post-halving, which might explain some lack of enthusiasm,” Le Rest said. When looking at bitcoin price overlaid with the hashrate, price has stayed steady since the halving.

Le Rest senses the post-halving hangover might continue, telling CoinDesk he expects record-setting bitcoin prices in the longer term. “We could be in for a correction in the short term before perhaps a bounce taking bitcoin to a new high in 2021,” Le Rest said. 

Meanwhile, the bitcoin options market has an event coming up this week, Singapore-based trading firm QCP Capital wrote in a recent market update. “Keep an eye out this Friday as over 40,000 BTC worth of options will be expiring,” the firm noted. 

Read More: Bitcoin Demand Pushes Tether Below $1 for Longest Stretch Since March

As quantitative traders seeking to capture value in crypto volatility, QCP predicts more rocky price movements ahead. In fact, bitcoin’s at-the-money implied volatility, a measure of price movements, has dipped recently, according to data from aggregator Skew.

“We don’t see any particular catalyst for volatility, but with the futures basis drifting lower again and USDT [U.S. dollar-based tether stablecoins] back in prolonged discount territory, first time since mid-March, something might be brewing,” QCP noted. 

Digital assets on CoinDesk’s big board are all in the green Wednesday. The second-largest cryptocurrency by market capitalization, ether (ETH), gained 3% in 24 hours as of 20:40 UTC (4:40 p.m. EDT). 

Cryptocurrency winners on the day include cardano (ADA) up 3.5%, litecoin (LTC) climbing 3% and monero (XMR) in the green 2.8%. All price changes were as of 20:40 UTC (4:40 p.m. EDT) Wednesday.

Read More: EOS Has Still to Prove Itself After Spiraling Down This Past Year

In the commodities sector, oil experienced a drop, down 6.6% with a barrel of crude at $31.89 as of press time. 

Gold traded flat on the day, with the yellow metal closing $1,712 at the end of New York’s trading day. 

As for equities, In the United States, the S&P 500 index was up 1.5%. U.S. Treasury bonds were mixed. Yields, which move in the opposite direction as price, were up most on the 2-year, in the green 5.6%

The FTSE Eurotop index of companies traded flat on the day Wednesday, up less than a percent. 

Read More: Slipping Yuan May Be Good for Bitcoin Price, Past Data Suggests

In Asia, the Nikkei 225 index of large companies in Japan also closed the day flat, up less than a percent but in the green 4% on the week on fresh stimulus plans by the government.

• Bitcoin News Roundup for May 27, 2020
• Number of Bitcoins on Crypto Exchanges Hits 18-Month Low

Goldman Sachs held an investor call Wednesday to discuss current policies for bitcoin, gold and inflation in the context of the COVID-19 crisis. The big takeaway? The stalwart investment bank is still no fan of bitcoin or other cryptocurrencies. 

A slideshow released before the call cited hacks and other losses related to cryptocurrencies as well as their use to “abet illicit activities” as some potential liabilities.  

Seven of Goldman’s 35 slides mention bitcoin, but the people on the call only discussed bitcoin for roughly five minutes at the end, with no questions taken after.

Related: Bitcoin Transaction Fees Decline as Network Congestion Eases

In the call materials, Goldman notes that while cryptocurrencies like bitcoin “have received enormous attention,” they “are not an asset class.” 

Why? The reasons include bitcoin’s inherent lack of cash flow, unlike bonds, and its inability to generate earnings through exposure to global economic growth, according to the presentation. Goldman also notes bitcoin’s volatility, citing the recent drop to 12-month lows in early March. The price spiked nearly 5% to $9,200 a few hours before the call.

See also: Number of Bitcoins on Crypto Exchanges Hits 18-Month Low

Some professional cryptocurrency analysts were less than impressed by Goldman’s analysis.

“The criticisms were very cookie cutter, the type you’d expect if someone just read mainstream headlines,” said Ryan Watkins, bitcoin analyst at Messari and former investment banking analyst at Moelis & Company. “It’s like they didn’t fully diligence the asset.”

Related: Bitcoin News Roundup for May 27, 2020

Goldman’s cash flow argument was particularly odd to Tom Masojada, co-founder of OVEX Digital Asset Exchange. 

“Many investments that Goldman labels as ‘suitable for clients’ do not generate cash flows and are primarily dependent on whether someone is willing to pay a higher price at a later date,” he said on Twitter.

“One could argue bitcoin isn’t backed by anything, but to liken it to a game of hot potato ignores the subjective value such a novel asset provides,” said Kevin Kelly, former equity analyst at Bloomberg and co-founder of Delphi Digital, a cryptocurrency research firm that recently published a comprehensive report on bitcoin.

Bitcoin’s current value, according to Kelly, is backed by “the demand for an apolitical speculative asset that may or may not turn out to be one of the world’s most valuable safe havens.”

The two Goldman speakers on the call, its head of research and a Harvard economics professor, said several bitcoin forks, which they refer to as “nearly identical clones,” occupy three of the six largest cryptocurrencies by market value. With this, Goldman inferred that cryptocurrencies as a whole “are not a scarce resource,” according to the presentation.

See also: Bitcoin Transaction Fees Decline as Network Congestion Eases

This critique is “particularly eye roll worthy,” Watkins told CoinDesk. “Forks are their own assets and have nothing to do with bitcoin.”

In its conclusion, Goldman does not recommend investing in bitcoin “on a strategic or tactical basis for clients’ investment portfolios even though its volatility might lend itself to momentum-oriented traders.” 

“I was hoping for a more constructive call,” said Kyle Davies, co-founder of cryptocurrency trading firm Three Arrows Capital. Still, he added, “The fact that they are having this call, period, means there’s a lot of interest.”

• Number of Bitcoins on Crypto Exchanges Hits 18-Month Low
• Slipping Chinese Yuan May Boost Bitcoin Price, Past Data Suggests

Base-Layer Tech
Google is teaming up with Theta Labs to help the video delivery network onboard users through Google Cloud. As part of the partnership, the tech giant is assisting Theta with its Mainnet 2.0 launch, and will become the platform’s fifth validator. Polkadot is now live following the mining of its first “chain candidate’s” genesis block. Polkadot will first launch under a Proof-of-Authority (PoA) consensus algorithm controlled by the Web3 Foundation, in its bid to become an interoperable blockchain for other chains and dapps to utilize.   

Prime Brokerage
San Francisco-based cryptocurrency exchange Coinbase is finally acquiring Tagomi, a prime brokerage platform specializing in digital asset trading. In an all-cash deal, Tagomi will integrate into Coinbase’s product suite, helping the firm complete its liquidity, custody, lending offerings. BitGo, a crypto custodian, has also announced its prime brokerage status, with the launch of its new entity BitGo Prime. Earlier this year, London-based Bequant launched a prime brokerage service, while Genesis Trading (owned by CoinDesk parent DCG) recently purchased crypto custodian Vo1t in a bid to become a prime broker.

Financial Innovation
Brazilian retailer Via Varejo has purchased the Boston-based fintech startup Airfox to provide financial services for underbanked Brazilians. The firm, with more than 1,000 locations in the country, plans to begin offering free bank accounts and gradually expand into other financial services, with Airfox serving as an innovation hub. Meanwhile, a senior figure at the International Monetary Fund said a digital currency backed by a central bank, but issued through private entities, would open the door to much greater innovation in retail payments. “This public-private partnership is intended to conserve the competitive advantages of the private sector: to interface with clients and innovate, and the comparative advantage of the central bank: to regulate and provide trust,” IMF’s Tommaso Mancini-Griffoli said.

Related: Bitcoin News Roundup for May 27, 2020

Expansions
TradeLens has been tapped by India’s largest port operator to digitize shipping supply chains across the nation. Crypto.com will expand its Visa crypto debit card and a wallet app to 31 European countries with a partnership with digital-payments company i2c Inc. (PYMNTS)

Open Accounts
Kingdom Trust has rolled out a single retirement account for traditional and digital assets called Choice. The self-service retirement platform allows investors to hold stocks, exchange-traded funds (ETFs) and digital assets in one tax-advantaged account. Bitfury launched an investment opportunity offering “exposure to bitcoin by way of the mining company’s data center” for institutional investors, The Block reports. 

Real and Virtual Worlds
Switzerland’s government has rejected a $103 million coronavirus-related bailout for “Crypto Valley.” The Swiss Blockchain Federation recently surveyed 203 firms in the area and found 80% on the brink of bankruptcy. (Bitcoin.com) Crypto startup Centrifuge is introducing a dapp that allows users to collateralize real-world assets for use in the decentralized finance ecosystem. (The Block) Land parcel auctions in the virtual Somnium Space have totaled $470,000 over the past 10 weeks. (Decrypt)

To See Libra’s Potential, Look at the Philippines, Not the US
Leah Callon-Butler argues that the much derided Libra project could provide real utility in countries where Facebook – one of the project’s leads – essentially is the internet. “Take the Philippines as an example. I’ve lived here since 2018 and it’s not hard to imagine how fast libra could become the preferred tender of Filipinos everywhere. To paint you a picture: While very few are banked – only 22.6 percent of adults have a formal account – the number of mobile phone subscriptions is greater than the number of actual people who live here,” she said. 

Related: Google Signs On as Network Validator for Blockchain Video Network Theta

Look to Design, Not Laws, to Protect Privacy in the Surveillance Age
Raullen Chai argues that privacy preserving measures should be built into a product, rather than ensured by law, if there is any hope to counter wanton surveillance. “Data privacy regulations have begun emerging in recent years, but these reactive measures simply cannot guarantee our privacy. We must proactively build and adopt new technologies with “privacy by design” to reach a human-centered future,” he said. 

Macro Movements
The yuan (CNY) fell to 7.1613 per U.S. dollar earlier on Tuesday to hit the lowest level since early September. Bitcoin has historically seen gains as the Chinese yuan falls. “If China’s CNY continues to weaken against USD, then we could have a 2015 and 2016 repeat, where BTC strength coincided with yuan weakness,” tweeted Chris Burniske, partner at venture capital firm Placeholder.

EOS
Over the past year, the EOS token’s price is down 69%, the worst performance among digital assets with a market capitalization of at least $1 billion, based on Messari data. That’s more than twice the decline over that period in prices for EOS’s biggest rival, Ethereum. Bitcoin is flat over the past 12 months. Things could worsen for the cryptocurrency, as lingering concerns over its applicability and centralized structure have yet to be adequately addressed, according to industry experts surveyed by CoinDesk’s First Mover team. 

‘Narrative Violations’
Bedrock Capital founder Geoff Lewis joins The Breakdown podcast to discuss how alternative ideas and narratives are challenging the media’s consensus-making function. These “narrative violations” are reshaping how people understand the world. 

• First Mover: EOS Has Still to Prove Itself After Spiraling Down This Past Year
• Coinbase Buys Tagomi as ‘Foundation’ of Institutional Trading Arm

After facing a heavy load of transactions earlier this month, bitcoin’s (BTC) network has returned to a more normal level, recent developments suggest. 

The total amount of fees paid to miners was 80 BTC as of Tuesday, down from its 11-month high of 201 BTC on May 21, according to the data provided by the blockchain intelligence firm Glassnode. It was at 57 BTC on May 3. 

The percentage of miner revenue from fees has also pulled back to 9.4% from the 28-month high of 21% registered on May 20. 

Related: Goldman Sachs: Cryptocurrencies ‘Are Not an Asset Class’

“The fall back in transaction fees are related to a normalized transaction activity and recent mining difficulty adjustment, which occurs around every two weeks,” said Wayne Chen, CEO of Interlapse Technologies and founder of virtual currency platform Coincurve. 

Users pay fees to miners for processing transactions on the blockchain. Miners also receive a fixed amount of BTC per block mined. That number halves every four years, most recently on May 11 of this year. 

See also: Bitcoin Mining Difficulty Drops by 6% in First Adjustment After Halving

Transaction fees are determined by the state of the network (how congested it is) and the size of the transaction. 

Related: Bitcoin News Roundup for May 27, 2020

Bitcoin’s block size is 1 MB, which means miners can process only 1 MB worth of transactions per block mined roughly every 10 minutes. If the number of transactions exceeds 1 MB, the network gets congested and miners prioritize transactions with higher fees. 

Network congestion, as represented by bitcoin’s memory pool or its collection of unconfirmed transactions on the blockchain, has been on a declining trend since topping out at the 28-month high of 267,608 on May 18 with a total block size of 78.5 MB, as per data source Bitcoin Visuals. As a result, transaction fees have come off highs seen on May 21. 

The memory pool exploded at the end of April and remained congested for a few days after halving as the programmed supply cut revved up investor interest, leading to an increase in the number of transactions. “This forced users to increase their mining fee, so they can jump ahead in line to have their transactions confirmed quicker,” said Chen. 

The recent decline in fees could also be associated with the downward adjustment in the mining difficulty and the resulting drop in block interval time. 

The mining difficulty, a measure of how hard it is to mine blocks, was adjusted lower by 6% to 15.14 terahashes per second on May 20, as the hashrate, or the mining power dedicated to mine blocks fell following the halving. 

See also: The Last Word on Bitcoin’s Energy Consumption

The seven-day rolling average of bitcoin’s hashrate fell from 120 exahashes per second (EH/s) on May 11 to 90 EH/s to May 23. Moreover, halving doubled the cost of mining, forcing inefficient miners to shut down operations. 

When that happens, the time taken to mine blocks and confirm transactions rises, putting upward pressure on prices. Hence, the difficulty is decreased, enticing miners back to the blockchain. 

While the seven-day average of hashrate is still hovering around 90 EH/s, the mean block interval fell to 11 minutes from the high of 14.3 minutes registered on May 17. The mean block time had jumped by nearly 150% immediately after halving, forcing miners to charge higher fees.  

• Number of Bitcoins on Crypto Exchanges Hits 18-Month Low
• Slipping Chinese Yuan May Boost Bitcoin Price, Past Data Suggests

Blockchain meets basketball in the newest game from the developers of CryptoKitties.

Dapper Labs’ NBA Top Shot has launched into private beta following the game’s initial product announcement in July 2019. The game is looking to fill a product niche by combining manager-style sports games with digitally scarce goods called non-fungible tokens (NFTs).

“Fans can own a piece of the action and they can participate in this economy of basketball, which has never really happened before,” Dapper Labs VP of Partnerships Caty Tedman said in a phone interview. 

Related: Blockchain E-Sports TV App to Ship on Samsung S20 Phones in US

NBA Top Shot is also the first Dapper Labs game built on top of the team’s new custom blockchain, Flow.

Read more: NBA and ‘CryptoKitties’ Creator Team Up to Launch In-Game Collectables

Tedman said the new chain gives the game higher throughput and consistency, a valuable product given Dapper Labs product history.

In 2017, Crypto Kitties infamously clogged the Ethereum blockchain by executing more transactions than the chain could handle at that time. The team announced a new blockchain with faster transaction speeds in March.

Related: Surveying the Carnage: Movies, Sports and Education in Crisis

“We want to make sure, first of all, that the environment is totally stable since we’ve had the experience of CryptoKitties crashing – not by our volition,” said Tedman.

Tedman said Top Shot is looking to tip off in the coming months and at least by the beginning of the NBA’s next season in October (which may itself be postponed).

In essence, Top Shot combines digital trading-card games with apps like Tap Baseball.

“The main premise of the mobile game is a manager-style game where you’re kind of creating the strongest team you can,” Tedman said.

Users can build rosters – Tedman herself prefers a lineup of European hoopers known for smooth passing and shooting – based on interests or viral moments like a slam dunk.

Dapper’s NFTs also capture “moments” such as a LeBron James poster dunk or a Steph Curry step-back three-pointer from real in-game events. These moments are then wrapped using the ERC-721 token standard, creating a digital basketball card only you can own.

NFTs can then be traded on Dapper’s secondary market and are available for purchase in crypto or with credit cards, Tedman said.

To begin with, the mobile game is free while NFTs are an add-on, a similar method debuted by crypto game MLB Champions this spring.

Read more: ‘MLB Champions’ Downplays ETH, Aims for Mass Market in New Game Reboot

Not only that, but Dapper reached an agreement with the NBA and the National Basketball Players Association (NBPA) to use the likenesses of basketball’s greatest stars from the league’s 50-plus-year history: think Magic Johnson on the blockchain.

“We’re lucky that we tied the product to a moment in time rather than the live game because we can continue going backward [in time],” Tedman said.

• As Museums Go Dark, Crypto Art Finds Its Frame
• ‘MLB Champions’ Downplays ETH, Aims for Mass Market in New Game Reboot

The total number of bitcoins held in cryptocurrency exchanges wallets dropped to an 18-month low to just above 2.3 million on Monday, according to data estimates from Glassnode. The decline marks an 11% year-to-date reduction in the number of bitcoins held by exchanges.

Meanwhile, over the same period, the amount of ether in exchange wallets increased by more than 7%. Some market participants see this as a sign that more bitcoin investors are increasingly taking direct possession of their cryptocurrency.

“People are accumulating aggressively, and the market participants seem to have a higher time preference these days,” said Avi Felman, head of trading at Stamford, Conn.-based BlockTower Capital. “I think the trend is going to continue.”

Related: Slipping Yuan May Be Good for Bitcoin Price, Past Data Suggests

A portion of these active and often ideologically motivated bitcoin accumulators are called “holders of last resort,” a label implying they never intend to sell regardless of market movements. 

This type of investor partially contributes to the decline in exchange bitcoin balances by continuing to “accumulate for the long term and self-custody their bitcoins,” said Pierre Rochard, bitcoin strategist at Kraken, the largest U.S.-based cryptocurrency exchange by liquidity according to Crypto Watch. 

Speaking with CoinDesk, Rochard added that “improvements in fiat rails” also materially contribute to this trend by enabling arbitrage traders to “be more capital efficient and thus hold fewer bitcoin.”

Read more: Crypto Custodian BitGo Joins Race to Provide Prime Brokerage Services

Related: Market Wrap: Bitcoin Can’t Stick to $9,000 While Stocks Rally

It’s important to note that on-chain data analysis of exchange balances is only an estimate given that some exchange addresses may be overlooked by or unknown to data aggregators. The downward-sloped trend, however, is nonetheless pronounced.

“On-chain data is not perfect and new exchange wallets may be missed,” added Rochard.

Others see bitcoins leaving exchanges for a reason completely unrelated to strong-willed, die-hard investors, however: the rise of prime brokers. 

Felman added that currently “there are few alternatives to holding bitcoins on an exchange if you want to trade, but new offerings in the prime brokerage space will lead to greater outflows from exchange-specific wallets.” 

On Thursday, for example, trading and lending firm Genesis (like CoinDesk, owned by DCG) acquired Vo1t as part of its strategy to become a full-service prime brokerage. Tagomi, a digital asset prime brokerage, was also recently acquired by Coinbase in the San Francisco-based exchange’s bid to expand its institutional trading service.

Read more: Coinbase Buys Tagomi as ‘Foundation’ of Institutional Trading Arm

Regardless of the reason, a “consistent decline in the supply of bitcoin on exchanges implies a strong level of confidence from the holder base,” said Yan Liberman, former associate at Deutsche Bank and co-founder of digital asset research firm Delphi Digital. 

Roughly 60% of the issued bitcoin supply hasn’t moved in over 12 months, added Liberman, and that has been a precursor to previous bullish market cycles. 

• Bitcoin Bounce Stalls at $9K Amid 2% Rise in S&P 500 Futures
• As Bitcoin Falls to 2-Week Lows, Small Investors Look to Be Buying

Google is teaming up with Theta Labs in a move meant to help the video delivery network onboard users through Google Cloud.

As part of the partnership, the tech giant is assisting Theta with its Mainnet 2.0 launch, a hard fork happening around noon Pacific time on Wednesday, said Theta Labs CEO Mitch Liu.

“Theta is unique in that their video delivery network needs both a reliable, high-performance network—which we provide via our premium network tier—as well as reputable node operators to ensure protocol security,” said Google Cloud developer advocate Allen Day

Related: Mauritius Central Banker Confirms Island’s Digital Currency Plans

Google will become the protocol’s fifth external validator node. Theta Labs is staking 5 million THETA tokens (worth about $2.4 million at a press-time price of $0.48 each) for Google on the network.

Theta rewards network participants for relaying video content to other users using their spare bandwidth and computing resources. The end result should be a “massive decentralized mesh network of relayers,” Liu said.

Google joins the likes of Binance, Blockchain Ventures and gumi Cryptos as external enterprise validators that propose and validate new blocks on the Theta blockchain. Eventually, Theta aims to have 31 external enterprise validators. Google Cloud is also becoming Theta’s preferred cloud provider with today’s announcement.

“I can’t speculate on what will happen in the future, but we’re looking forward to working with users who want to join the Theta network,” Day said. “Users can launch a Theta Guardian node from the GCP marketplace. With a few clicks, they can deploy a Guardian and be peering with the Theta network.”

Related: FireBlocks CEO Pours Cold Water on Libra Excitement

Google will be Theta’s first European enterprise validator since the tech giant will be hosting the node at its office in Ireland, further geographically decentralizing the network. In February, Hedera Hashgraph announced that Google Cloud would run a node on the blockchain-like network and make hashgraph analytics available for users.

Read more: Hedera’s Token Price Spikes Prematurely After Google Joins the Network’s Governing Council

The hard fork will inflate Theta Fuel (TFUEL) – a second token that powers on-chain operations – by 5%, creating a bigger reward for stakers. 

In addition, hundreds of Guardian nodes (available to the public) will act as an extra layer of consensus with the Mainnet 2.0 launch by finalizing blocks and checking for bad-actor validator nodes. Liu said he could see Google help Theta scale the number Guardian nodes on the network to the thousands or tens of thousands. 

Theta also plans to further collaborate with Google’s artificial intelligence, machine-learning and big-data initiatives. Google also owns YouTube, a key target for Theta’s partnership aspirations.

“YouTube is particularly interesting because they utilize mostly internally-developed technology for video delivery and streaming, which makes experimentation a lot easier without having to rely on external platforms like Akamai or AWS,” Liu said.

• Donate to Help Fight COVID-19 With CoinDesk and NY Blockchain Week
• Vitalik Buterin Says Much-Delayed Ethereum 2.0 Still on Track for July Launch

Digital asset custodian Kingdom Trust is offering investors a single retirement account for traditional and digital assets. 

Called Choice, the South Dakota-based custodian is offering a self-service retirement platform where investors can buy, sell or hold stocks, exchange-traded funds (ETFs) and digital assets in one tax-advantaged account, said Kingdom Trust CEO Ryan Radloff. Currently, fewer than 1% of the 100,000 retirement accounts for which Kingdom Trust provides custody have any digital assets as part of their portfolios. 

“Basically it’s a self-directed IRA with a web interface and mobile app to go back and forth between legacy and digital assets,” Radloff said.

Related: Genesis Trading Buys Crypto Custodian Vo1t in Bid to Become Prime Broker

Kingdom Trust built connections to crypto exchange Kraken to access digital assets and legacy brokers for traditional assets.

As someone calling out my fellow bitcoiners, we need to be focused on the U.S. retirement market.

The launch comes after Kingdom Trust acquired Choice Holdings, a digital asset retirement company built by Radloff in the first quarter of 2020. In that same quarter, Choice trialed a version of direct crypto trading on the platform and saw an average of $13,000 per trade. Radloff was previously the CEO of crypto asset manager CoinShares.

Read more: Bitwage Rolls Out Bitcoin 401(k) Plan With Help From Gemini

Related: Bakkt Announces New Insurance Coverage, Claims More Than 70 Custody Clients

“Most people have more investable discretionary dollars in retirement accounts than they do in brokerage accounts,” Radloff said. “Account balances are materially larger than at Kraken or a Coinbase, and the average purchase size is much larger than what you would see on an exchange.” 

With accounts being denominated in post-tax savings, clients can make larger trades without the tax burden, Radloff said. As a promotion, the company is offering the first 1,000 Choice members $62.50 of bitcoin upon opening an account.

“As someone calling out my fellow bitcoiners, we need to be focused on the U.S. retirement market,” Radloff said. “It’s important that we don’t just think about brokerage, but also savings and other parts of our financial lives.”

• BitGo Now Providing Custody for India’s Largest Crypto Exchange
• Canadian Exchange VirgoCX Taps Ledger Vault for Custody, Insurance Support

EOS, a smart-contracts platform, has had its fair share of bother. 

The blockchain’s launch in 2018 was bumpy. Some users had their accounts frozen, twice. Many more were irritated when they discovered there was an all-powerful arbitrator whose role was unclear. Then, last year, Brock Pierce, one of the project’s early backers, said in a public forum the blockchain ecosystem was a “little bit of a Chinese oligarchy” — implying a troubling lack of decentralization on the network.

You’re reading First Mover, CoinDesk’s daily markets newsletter. Assembled by the CoinDesk Markets Team, First Mover starts your day with the most up-to-date sentiment around crypto markets, which of course never close, putting in context every wild swing in bitcoin and more. We follow the money so you don’t have to. You can subscribe here.

Related: Slipping Yuan May Be Good for Bitcoin Price, Past Data Suggests

Over the past year, the EOS token’s price is down 69%, the worst performance among digital assets with a market capitalization of at least $1 billion, based on Messari data. That’s more than twice the decline over that period in prices for EOS’ biggest rival, ether. Bitcoin is flat over the past 12 months. 

So is the worst now behind EOS? After all, it was once billed as the “Ethereum killer.” 

For starters, the concern that EOS is too centralized in the hands of Chinese operators might have lessened. 

Bobby Ong, CEO of price aggregator site CoinGecko, said the number of block producers controlled by Chinese entities has declined. In October 2019, around 80% of block producers were Chinese. Now, that number is closer to 60%. 

Related: Market Wrap: Bitcoin Can’t Stick to $9,000 While Stocks Rally

Earlier this month, Block.one, the software publisher behind EOS, released a voting criteria requiring block producers to disclose their locations. Officials with the project told CoinDesk the location requirement could help increase “inclusivity and diversity among block producer nodes.”

Block.one also removed another overhang last September when it agreed to pay $24 million to settle charges brought by the U.S. Securities and Exchange Commission that it raised the equivalent of several billion dollars in an unregistered initial coin offering through 2017 and 2018. 

The settlement may have freed Block.one to use its sizable war chest for network development. In December, the company announced it would hand out $50,000 grants to any promising projects looking to build on EOS. 

But several unresolved concerns remain. 

One of the chief selling points of EOS is that it’s scalable, and that it offers zero-fee transactions. But in this case, the zero-fee strategy isn’t necessarily all positive: A study from Imperial College London published earlier this month found that free transactions led to “spammy behaviors.”

Late last year, one project, EIDOS, airdropped so many tokens that it clogged the EOS network. Volume increased 10-fold and at one point comprised 95% of total network activity. 

This caused the network to clog up and enter “congestion mode,” obliging users to stake a small amount of EOS to keep the network operating. According to the Imperial College London researchers, free transactions ended up discouraging legitimate users from using the protocol, rather thaan encouraging network activity.  

Another concern: As a platform for decentralized applications, EOS might be overly focused on gambling.  

Rankings from dapp.com show that 13 of the top 20 applications are gambling related. And it’s a key concept in crypto networks that less diversification increases vulnerability: If blockchain gambling were suddenly to end, activity on EOS could nosedive, causing significant, possibly even fatal, disruption.

This makes the investment case for EOS harder.

Mati Greenspan, founder of Quantum Economics, said there was “nothing in my radar that differentiates it from two dozen other top-cap cryptos.” 

Bitcoin and Ethereum have proven themselves, Greenspan said, while EOS languishes as one of those coins that has yet to find broader real-world adoption.

Of course, that could all change. Greenspan said one bullish signal for EOS is that it has a large community, “which really goes a long way.” 

But the market for smart-contracts platforms is highly competitive. As well as Ethereum, EOS counts both TRON, Tezos and, more recently, Binance as direct competitors.

With a market capitalization of more than $900 million, even following the past year’s price declines, EOS looks like a show-me story.

The project may still have to prove why it should be worth that amount. 

BTC: Price: $9,162 (BPI) | 24-Hr High: $9,162 | 24-Hr Low: $8,707

Trend: Bitcoin popped back above $9,000 on Wednesday, having been forced to defend sub-$8,700 levels twice in the last two days.

The top cryptocurrency by market value is currently trading over $9,100, representing a near 3% gain on the day. On a few exchanges, including Switzerland-based Bitstamp, prices have hit highs near $9,200.

The four-hour chart is now reporting a falling wedge breakout, a bullish reversal pattern. It indicates the recent sell-off has ended and the buyers have regained control.

On the way higher, the cryptocurrency could face resistance at $9,310, which is the bearish lower high created on May 24. A violation there would expose $10,000. The overall bullish trend would be restored if prices establish a strong foothold in the five figures.

Alternatively, if prices fail to keep gains above $9,000, we may see a fall back to the current weekly low of $8,630.

That said, the macro factors look bullish with China’s yuan falling to eight-month lows early Wednesday. Historical data shows that cryptocurrency tends to rally during bouts of CNY weakness.

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San Francisco-based cryptocurrency exchange Coinbase is finally acquiring Tagomi, a prime brokerage platform specializing in digital asset trading.

Announced Wednesday, the two companies said the deal is expected to be finalized later this year, without disclosing the financial terms.

“We are going to be integrating the Tagomi platform into our product suite and it will form the foundation for the future of our institutional trading business,” said Shan Aggarwal, head of corporate development at Coinbase.

Related: Crypto Custodian BitGo Joins Race to Provide Prime Brokerage Services

In terms of how the integration will pan out, Aggarwal added: “Tagomi will continue to operate for the near future. We’re still thinking through long-term options.”

The purchase of Tagomi by Coinbase has been in the pipeline since last year when the deal was prematurely reported to have closed. A source familiar with recent developments said it was an “all-stock deal” and “significantly less” than the $150 million reported last year. 

Read more: Correction: Coinbase and Tagomi Deny Acquisition

Crypto prime brokerage, which offers institutional clients easier access to liquidity, custody, lending and other products, appears to be on a roll right now. Genesis Trading (owned by CoinDesk parent DCG) recently purchased crypto custodian Vo1t in a bid to become a prime broker, London-based Bequant launched a prime brokerage service earlier this month and BitGo also announced its prime brokerage play earlier on Wednesday.

Related: Crypto Custodian Anchorage Teases Growth Plan With 2 Executive Hires

Coinbase said the acquisition comes at something of an inflection point in the industry, with recent pronouncements by Paul Tudor Jones serving as a bellwether for bitcoin acceptance from leading hedge fund and macro investors. Coinbase also said it has seen a 100% increase in volume from professional and institutional traders over the past three months.

But some commentators will see the Tagomi deal as consolidation in a market that has turned out to be sluggish, at least as far as the eagerly awaited arrival of traditional institutional investment is concerned.

“We definitely all thought there would be more banking and asset manager interest, and Tagomi really built a product that would muster up to those people,” Tagomi co-founder Marc Bhargava told CoinDesk.

Read more: PTJ on BTC: Bitcoin Is Now the Macro Big Bet

According to certain reports, Tagomi has been on the hunt for new opportunities because its fees on trading volumes of around $1 billion a year were only adding up to about $1 million in revenue. 

Tagomi has had a focus on best execution, which involves pooling buy and sell orders across 10 or so large crypto exchanges, including Coinbase, Binance and Gemini, and then routing clients’ transactions to the venues offering the best prices. 

Asked if being owned by Coinbase created any kind of conflict of interest, Bhargava said he didn’t necessarily think so. 

“We think we will still be able to deliver really great pricing to our clients,” said Bhargava. “Obviously, we will still have market maker relationships. Over time, we’ll disclose which exchanges we continue to work with.”

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