CoinDesk Crypto

Bitcoin is on the hunt for a new yearly high, having crossed above $12,000 early on Monday.

• The cryptocurrency picked up bids during the Asian trading hours, rising from $11,750 to $12,068, according to CoinDesk’s Bitcoin Price Index.
• At press time, bitcoin is trading at $12,000 – just 1% short of the 2020 high of $12,118 reached on Aug. 2.
• A break above $12,118 looks likely, as bullish demand can be seen in the strong hourly volume that continues to rise with bitcoin's hike in value.
• If bitcoin manages to surpass the $12,118 level, the next target would be the high of $12,325 reached early in August 2019.

• Bitcoin ended last week (Sunday, UTC) at $11,683 – the highest weekly close since January 2018 (see chart above right).
• That has has opened the doors for further gains, according to some analysts.
• The options market is also skewed bullish, with call options (bullish bets) drawing higher prices than puts (bearish bets) on the one, three, and six-month time frames.
• Crypto investment firm Three Arrows Capital’s co-founder Kyle Davies said Ethereum’s decentralized finance (DeFi) ecosystem could be another catalyst bolstering bitcoin’s recent rally.
• Davies said new projects in DeFi may be taking advantage of “existing primitives for loans and trading.”

• Bitcoin, however, looks vulnerable to a potential bounce in the U.S. dollar, having recently developed a relatively strong negative correlation with the greenback.
• Bitcoin jumped from $9,100 to $12,118 in the 13 days to Aug. 2, as the dollar index, which tracks the value of USD against major currencies, fell from 96 to a 26-month low of 92.55.
• The dollar is now at its most oversold in over 40 years, according to Morgan Stanley.
• The investment bank said it had exited its bearish position in the U.S. dollar.
• At press time, bitcoin’s price was slightly below the $12,000 mark at $11,990.

Also read: Link’s Trading Volume on Coinbase Surpasses That of Bitcoin

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The blockchain subsidiary of messaging app giant LINE has made its native token available to Japan-based traders for the first time.

• Announced last Thursday, BitMax – operated by LINE’s LVC Corporation – has become the first crypto exchange in Japan to offer LINK (LN).
• The token was previously listed on LVC’s U.S. exchange Bitfront, which denies access to Japanese traders.
• The token was launched as a rewards incentive in 2018 for LINE’s over 84 million monthly active users, per the company’s figures.
• The company aims to develop an ecosystem in which users of services over LINE’s network are rewarded in LN tokens for using decentralized apps, or dapps.
• LINK is not to be confused with decentralized oracle network Chainlink's token of the same name (and goes by the ticker symbol LINK).
• LINE’s token was previously issued via the firm’s proprietary private blockchain network and was listed on the Bitfront exchange (formerly Bitbox) back in August 2018.
• The token joins five other listed crypto assets on BitMax including bitcoin (BTC), ethereum (ETH), XRP (XRP), bitcoin cash (BCH) and litecoin (LTC).
• LVC is the operator of LINE’s crypto asset and blockchain-related businesses.
• It launched the BitMax exchange after being awarded a license by Japan’s Financial Services Agency (FSA) on Sept. 6, 2019.

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The rags-to-riches legend of Cosmos from 2017 (turning a $17 million token sale into roughly $104 million by 2019) almost came to an end in February 2020 when the interoperability project’s co-founders engaged in a scathing feud.  

Jae Kwon accused Zaki Manian of blasphemy, arguing over whether this software was “godly” and demanding that Manian renounce his “self-professed godliness.” (This is a quasi-religious industry, after all. Kwon did not respond to requests for comment by press time.) Many tokens are blatantly tethered to their celebrity creators. Would Cosmos fade into the already expansive graveyard of once-hyped token projects? 

Don’t put dirt on that grave just yet. 

Related: Investors Suing Over Status ICO Can’t Find Execs to Serve Papers

Manian said it was “pointless to continue with the current corporate structure” at Tendermint, adding the dramatic yet amicable breakup split the founding team into three companies, which may benefit Cosmos. 

Read more: How to Turn a $17 Million ICO Into $104 Million: The Cosmos Story

According to the Interchain Foundation (ICF), the Swiss foundation that shepherds the project’s ICO earnings, Cosmos blockchain technologies were used to “secure” $6 billion worth of assets by July 2020.

The foundation committed nearly $15 million so far in 2020, on 36 grants to software developers like the team at Tendermint. ICF plans to continue ongoing grant evaluations throughout the year.

Related: Republic Cuts Through SEC Red Tape to Raise $16M via Security Token Sale

There’s no denying this initial coin offering (ICO) project from 2017 is still impacting real people and their assets.

Multiple teams

Kwon continues to spearhead Tendermint’s work on software development, as does Manian’s startup, Iqlusion, and a few other companies like Althea and Chainsafe. Plus, the non-profit created a startup in Berlin, Interchain GmbH, now staffed by former Tendermint technologists working on the same goals as 2019.

“The whole engineering team working on the consensus algorithm moved over to Interchain GmBH when it started,” said Tess Rinearson, VP of engineering at Interchain GmbH. “The transition was very smooth.”

“Interchain Berlin is perhaps the most focused team on the core infrastructure of Cosmos. At the moment, they don’t have any other business interests,” Manian added. “Other teams are working on Cosmos technology but for specific customers who either have launched Cosmos chains or are planning to.”

Read more: How Chainlink and Cosmos Fit Into China’s Grand Blockchain Initiative 

For example, Iqlusion generates revenue by running Cosmos validators and also offering software development services unrelated to the blockchain industry. Kwon is still president of the foundation and CTO at Tendermint, while Cosmos veteran Peng Zhong has taken the reins as Tendermint’s new CEO. 

There’s always going to be politics at play when it comes to who gets funding. This is why ICF grant manager Billy Rennekamp said the foundation is actually working with Swiss authorities to structure an external oversight working board.

“That’s going to bring more eyes, hopefully, to who is getting money and why,” Rennekamp said. 

More governance

Stepping back, the whole reason Cosmos exists is fans believe there will someday be many robust blockchain ecosystems and people will want tools that can work seamlessly across them.

For example, you might have a product or service that, on the backend, uses several smart contracts and crypto assets; like many ingredients in a single gourmet dish.  

“The whole idea of blockchains is there should be many paths to access each other,” Rennekamp said.

Read more: ‘One Network, Many Chains’ – The Case for Blockchain Interoperability

It may seem counterintuitive for cypherpunks to seek out even more bureaucracy, but Cosmos fans believe formal governance will keep the project going, regardless of whether any of these particular startups fail. 

“Because the mission of the Cosmos ecosystem itself is disparate entities being able to engage and collaborate with each other, it’s a good innovation to spend for us,” Rinearson said, referring to the hassle of coordinating five companies and dozens of stakeholders. 

Much like the MakerDAO project, people who own the Cosmos network’s ATOM tokens can vote on how the platform is being built. Each project has different needs. Voting participation among roughly 120 active token-owning validators appears unusually high, with a 55% turnout in the most recent proposal. Manian said this required a significant outreach and coordination effort, which his startup handled so Interchain Berlin could focus on software development.

“It is the first step in the long road towards ATOMs building comparative advantage,” Manian said.

Meanwhile, Polkadot, another interoperability project often uttered in the same breath as Cosmos, is still fundraising with an ongoing token sale and also gearing up for a competing launch in 2020.

Read more: Polkadot Releases Rococo, Its Test Environment for Interoperable ‘Parachains’

Collaborative building

The Cosmos community managed to mature beyond a cult of personality without turning founders into martyrs, working together to reduce individual influence over the shared resources. 

It remains to be seen whether the project will evolve, despite conflicting interests, into something that attracts user demand beyond niche crypto circles. 

This is a business-to-business model, not a crusade to promote ATOMs as a dominant currency. Other types of companies need to want blockchain-related software services in order for any of this to matter. The token project could still fail to find product-market fit, even if the software works and the builders cooperate. 

Read more: Proof-of-Stake Chains Team Up to Prove DeFi Is Bigger Than Ethereum

For now, Rinearson said her team is focused on Inter-Blockchain Communication, which should be live and usable on the mainnet by the end of the year. Meanwhile, Manian is rallying the troops to tackle a controversial software update called Stargate.  

“The cost is that, unfortunately, it will be a disruptive upgrade for many ecosystem participants, like wallets and exchanges,” Manian said of Stargate, which will make the Cosmos ecosystem more compatible with external tools used across the mainstream tech industry. 

“The purpose of the Stargate [participatory governance] process is going to ensure a high degree of ecosystem coordination in the upgrade,” he said.   

It may have started in the trendy rush of 2017, but this token project’s story is far from over.

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Chainlink’s link token, driven by the increased popularity of decentralized finance (DeFi), has surged past bitcoin, becoming the most traded cryptocurrency of the past 24 hours on Coinbase Pro, the biggest crypto exchange in the U.S. 

• Link’s 24-hour trading volume on Coinbase Pro is $163 million – nearly 70% higher than bitcoin’s trading volume of $96.48 million, according to data source Messari.
• However, link’s 24-hour aggregate global volume of $3.13 billion still amounts to just 17% of bitcoin’s global overall volume of $17.53 billion.

• Spike in volumes lends credibility to recent price rally.
• Link’s price jumped to a lifetime of $14.38 early Sunday.
• The sixth-largest cryptocurrency by market value has gained 68% in the last seven days alone.
• The token’s staggering 700% year-to-date gain makes bitcoin’s 61% price gain look meager by comparison.
• All 184,330 link addresses are now making profit on their investment, according to data source IntoTheBlock.
• Link’s meteoric rise looks to have been fueled by increased usage of Chainlink’s price oracles in the ever-expanding DeFi space.
• Price oracles act as a bridge between cryptocurrency smart contracts and off-chain data feeds.

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• Market Wrap: Bitcoin Dips to $11.5K; Cardano Is Making a Big DeFi Move
• Market Wrap: Bitcoin Breaks $11,800; Ether Options Market Explodes
• Bitcoin’s Patronage System Is an Unheralded Strength

Attorneys representing cryptocurrency exchanges Bittrex and Poloniex notified Judge Failla of the Southern District of New York Friday of their intention to move for summary judgment in a class action case that alleges they, along with Tether and Bitfinex, were involved in fraud and market manipulation, according to court filings.

• The motion seeks summary judgment, saying the plaintiffs cannot “prove the central premise of their claims” that cryptocurrency addresses at issue in the suit belong to Bitfinex nor that Bitfinex was using the funds to manipulate the market.
• “In fact, both addresses belong to an individual with no apparent connection to Bitfinex,” the letter explains.
• Bittrex and Poloniex were added to the suit as defendants in June 2020.
• The suit has been ongoing since October 2019.

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Bitcoin’s price is trending down and an Ethereum competitor is entering the DeFi race this weekend.

• Bitcoin (BTC) trading around $11,579 as of 20:00 UTC (4 p.m. ET). Slipping 2.4% over the previous 24 hours.
• Bitcoin’s 24-hour range: $11,348-$11,919
• BTC below 10-day and 50-day moving averages, a bearish signal for market technicians.

Bitcoin’s price was able to rally to as high as $11,917 Friday before losing momentum, falling back into the $11,500 range. “Over the past day, bitcoin tested the level of $11,900 but it did not succeed, and BTC slipped,” said Constantine Kogan, partner at crypto fund of funds BitBull Capital. 

Read More: Fixing This Bitcoin-Killing Bug Will (Eventually) Require a Hard Fork

Related: Market Wrap: Bitcoin Breaks $11,800; Ether Options Market Explodes

Bitcoin and gold continue to trade together. Gold is also down Friday, in the red 1.6% and at $2,030 as of press time. “The gold/BTC correlation is at an all-time high right now,” said Daniel Koehler, liquidity manager for cryptocurrency exchange OKCoin. “The one-month correlations between BTC and gold have seen a significant spike over the past two weeks, currently sitting at about 67%,” he added. 

One downward trending day is not altering optimism about the crypto market, added Koehler. “With bitcoin following gold as a store of value, and DeFi pushing ETH, the excitement is palpable in the trading community right now.” 

John Willock, CEO of digital asset liquidity provider Tritum, agrees. “Sentiment in the market is highly buoyant and generally positive market news is increasing confidence and aggression in positioning,” he said. “I expect to see bitcoin bounce back quickly to $12,000 with ether to $400 this weekend.”

Ethereum rival Cardano making progress

The second-largest cryptocurrency by market capitalization (ETH), ether, was down Friday, trading around $347 after slipping 4.6% in 24 hours as of 20:00 UTC (4:00 p.m. ET). 

Related: Bitcoin’s Patronage System Is an Unheralded Strength

Read More: Polkadot Releases Rococo, Test Environment for Interoperable ‘Parachains’

Smart contact platform Cardano intends to start producing proof-of-stake (PoS) mainnet blocks this weekend. Ethereum’s switch to PoS from its current proof-of-work setup is expected sometime by the end of the year. 

Since the start of 2020, Cardano’s token, ada, has seen a market capitalization increase from $1 billion to $4.5 billion, according to CoinGecko. The platform, a competitor to Ethereum, has taken a methodical approach towards launching and now has 770 pools staking almost 20% of ada supply.

George Clayton, managing partner of Cryptanalysis Capital, is looking forward to watching Cardano in the DeFi race, as smart contract capabilities for building decentralized applications on the platform are expected to launch later in 2020. “The transition to PoS mainnet is complete but stake pools do not start producing blocks until Aug. 8,” he said. “Very interested to see what happens with Cardano; that’s a big moment for the protocol.” 

Other markets

Digital assets on the CoinDesk 20 are mostly in the red Friday. One notable winner as of 20:00 UTC (4:00 p.m. ET): 

• chainlink (LINK) + 0.62%

Read More: Kyber CEO Predicts 2020 Transactions at $3B as DeFi Token Soars

Notable losers as of 20:00 UTC (4:00 p.m. ET): 

• zcash (ZEC) – 8.1%
• tezos (XTZ) – 7.4%
• dash (DASH) – 7.4%

Read More: Ethereum Classic Attacker Double-Spends $1.68M in Second Attack

Equities:

• In Asia, the Nikkei 225 closed in the red 0.39% as weak corporate earnings spurred profit taking ahead of a three-day weekend in Japan.
• In Europe, the FTSE 100 ended the day flat, in the green 0.09%. as U.S. tensions with China countered better-than-expected job numbers.
• In the United States, the S&P 500 lost 0.40% as progress slows on negotiations for fresh coronavirus economic stimulus.

Read More: NBA’s Spencer Dinwiddie, Andre Iguodala Join Dapper Labs $12M Funding 

Commodities: 

• Oil is down 1%. Price per barrel of West Texas Intermediate crude: $41.51.

Read More: Binance Says NY Banks Can Now Use Its Stablecoin After Approval

Treasurys:

• U.S. Treasury bonds all climbed Friday. Yields, which move in the opposite direction as price, were up most on the 10-year, in the green 5.4%.

Read More: Privacy Group Slams California Bill Putting Health Records on Blockchain

Related Stories

• Bitcoin Entering ‘New Adoption Cycle,’ Coin Metrics Exec Says
• Market Wrap: Bitcoin Trudges Past $11.7K as DeFi Lending Rates Gyrate

Riot Blockchain, one of the few publicly traded bitcoin mining companies in the U.S., closed trading Friday with its second largest weekly gain since April 2019 ahead of the firm’s Q2 earnings release next week. The gain marks a continuation of the stock’s rally that started mid March after the market’s crash.

• Riot Blockchain gained 29% closing since Monday, closing the week at $3.75.
• The company set a 2020 high of $4.58 Thursday afternoon.
• Q2 earnings are scheduled to be released early next week, the company told CoinDesk.
• “We’re strong believers in the macroeconomic fundamentals underlying bitcoin,” said Jeff McGonegal, CEO of Riot Blockchain. Riot’s rally is connected to the increasing investor attention paid to bitcoin (BTC) and cryptocurrencies generally, he added.
• Riot has gained 70% this quarter following BTC, which has rallied 24% over the same period, according to Messari, trading near $11,500 at last check.

• The company pivoted from biotechnology to blockchain technology in October 2017, and focused exclusively on bitcoin mining in 2019, McGonegal said in an email correspondence with CoinDesk.
• Riot has a current mining capacity of 357 petahash per second with an anticipated increase to 566 petahash by Q4.
• Even with recent gains, however, the shares are a far cry from their all-time intraday high of $3638.40, reached in October 2007.

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The Federal Reserve is rushing ahead with its payments platform, Russia’s largest bank is going in on blockchain and so is Goldman Sachs.

You’re reading Blockchain Bites, the daily roundup of the most pivotal stories in blockchain and crypto news, and why they’re significant. You can subscribe to this and all of CoinDesk’s newsletters here. 

Top shelf

Fed Now!
The Federal Reserve is working to get its FedNow payments platform up and running. Board Governor Lael Brainard said the U.S. central bank will debut its instant payment service “as soon as practically possible,” in 2023 or 2024. FedNow is being developed in response to private-sector, real-time, gross settlement initiatives. “By creating that neutral platform, banks in partnership with these other companies will be able to offer much more innovation services, services that we may not even be imagining,” Brainard said. 

Related: First Mover: Kyber CEO Predicts 2020 Transactions at $3B as DeFi Token Soars

Banking Coins
Sberbank, Russia’s biggest consumer bank, is launching a blockchain platform built on Hyperledger Fabric and mulling a stablecoin. The blockchain will be used for trade finance and potentially other existing lines of business. It’s an open system, with other banks or tech companies able to spin up nodes and build their own smart contracts. Anatoly Popov, Sberbank’s deputy chair, was quoted Wednesday saying the bank hopes to launch a ruble-backed stablecoin. The bank is waiting for a new digital assets law to come into force in January 2021, and after that will make the final decision. In similar news, Binance’s USD stablecoin has been green-lighted by New York’s financial watchdog for use by banks and other financial institutions.

Funding the Future
OKCoin is awarding its largest individual grant yet to Bitcoin Core maintainer Marco Falke, the second-most prolific contributor in the software’s history. Awarded an Independent Developer Grant, “equivalent of a developer salary for the year,” Falke will continue maintaining the code base, help organize geographically dispersed developers and ensure updates are merged. “I am proud to see what Bitcoin Core is today and how everyone’s contributions shaped Bitcoin Core for the future,” he said. OKCoin has previously awarded grants to Bitcoin Core contributor Amiti Uttarwar and to open-source payment processor BTCPay.

All Stars
Dapper Labs raised another $12 million in a round led by five professional National Basketball Association stars. Spencer Dinwiddie, Andre Iguodala, JaVale McGee, Aaron Gordon and Garrett Temple all invested along with Coinbase Ventures and existing partners Union Square Ventures and Andreessen Horowitz (a16z) Cultural Leadership Fund. The capital will be used for further development of blockchain games including the eventual launch of NBA Top Shot. “Sports are our most important vertical now,” Dapper Labs CEO Roham Gharegozlou said. To date, the firm has raised $51 million in seven rounds. 

Exchange Raise
IDEX has raised $2.5 million to relaunch as a trading platform accessible to market makers and algorithmic traders. The Ethereum-based hybrid exchange said Thursday the seed round cash – from G1 Ventures, Borderless Capital with other commits from Gnosis and Collider Ventures – would go to launching IDEX 2.0, a new, more liquid platform. The new exchange targets market makers, algorithmic and high-frequency traders. IDEX’s creator, Panama-based Aurora Labs, raised a $6 million ICO in early 2018.

Quick bites

• Japan’s new FSA chief stands firm on crypto regulation, calls for push on digital yen.
• Upcoming crypto derivatives exchange Alpha5 raises more than $1.5 million in seed round. (The Block)
• OneCoin lawyers persuaded U.K.’s FCA to take down scam warning. (Decrypt)
• Uniswap sees 15-fold uptick in web traffic during DeFi boom. (Decrypt)
• The White House’s plan to purge Chinese tech from the internet is just bluster – for now. (The Verge)

At stake

Related: Blockchain Bites: Bulls Reborn, Backrunning Bots, Bitmain Blowout

Thursday, Goldman Sachs announced it hired a new global head to oversee its growing digit assets division. 

Mathew McDermott, an internal hire, told CNBC he envisions a world where the entire financial system resides on distributed ledgers. What’s more, he sees this happening within the next decade. 

“In the next five to 10 years, you could see a financial system where all assets and liabilities are native to a blockchain, with all transactions natively happening on chain,” he said.

Tasked with preparing the bank for this imminent future, McDermott is doubling his team’s headcount and mulling the creation of the bank’s own “fiat digital token,” colloquially known as a stablecoin. He reportedly snagged one of JPMcoin’s architects from the rival firm.

While the news shows more than one Wall Street titan is thinking seriously about the commercial viability of blockchain, it’s also an inside look into the black boxes that banks have become. 

“The first thing you need to know about Goldman Sachs is that it’s everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money,” Matt Taibbi wrote of the bank in the aftermath of the 2008 financial crisis. 

Just a few months ago, a leaked slidedeck showed Goldman analysts didn’t consider bitcoin and other cryptos investment grade. Now it seems the bellwether bank is keen on the underlying technology. 

Goldman’s clients apparently ignored the bank’s own advice anyway. “We’ve definitely seen an uptick in interest across some of our institutional clients who are exploring how they can participate in this space,” McDermott said. “It definitely feels like there is a resurgence of interest in cryptocurrencies.”

Market intel

Ether Option
The ether options market is bustling, with open interest approaching $400 million. “Open interest is now 2.5 times higher than it was just a few weeks ago, touching a new record,” noted Chris Thomas, head of digital assets for broker Swissquote. Approximately $351 million of this activity is on Netherlands-based platform Deribit. “There’s almost zero real institutional volume through these exchanges,” said Thomas. He indicated those using ether options are high-net-worth individuals or small cryptocurrency funds preparing for increased ETH volatility. 

Tech pod

Not Baroque, Rococo
Parity Technologies’ Polkadot has launched a testnet, Rococo, of the protocol’s first parachain specification, according to a blog Thursday. Parachains underlie Parity Tech’s vision of a “protocol for protocols.” The Proof-of-Authority (PoA) network will enable three parachains attached to a “Substrate,” or a building kit for other blockchains to interoperate as a Polkadot parachain. This is the first test of this inter-blockchain communication. 

Op-ed

Patronage Over Parsimony
Nic Carter, a CoinDesk columnist and partner at Castle Island Ventures, thinks Bitcoin’s unofficial and piecemeal system of funding developers is one of its strengths. “For those versed in the dynamics of open source, Bitcoin’s patronage system as a funding model should come as no surprise. Bitcoin works in ways that are not short-term expedient, but pay dividends in the final analysis. Of course, a protocol-derived pool of rewards with which to pay developers would have been much more convenient, but it would have completely undermined the political neutrality of the monetary system,” he writes.

Podcast corner

History of Central Banks
George Selgin, director of the Cato Institute’s Center for Monetary and Financial Alternatives, joins The Breakdown to walk through the 200-year history of central banking.

Who won #CryptoTwitter? Related Stories

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Major digital rights group the Electronic Frontier Foundation (EFF) has said a proposed law to put medical records on the blockchain would be a major privacy breach.

• Proposed in the California legislature earlier this year, the bill, A.B. 2004, would create verifiable health records on the blockchain that citizens show on entry into public buildings or public transportation to check whether they have or have had the coronavirus.
• Per the bill's fact sheet, the idea is this would help slow the rate of infection and take people in the high-risk category out of harm’s way.
• But in an article Thursday, Adam Schwartz, EFF senior staff attorney, said putting any health records on a permanent ledger was a “troubling step” to a national identification system that could be used to track citizens.
• The proposed system would mean everyday citizens would have to disclose their personal health records to unknown people who aren’t necessarily medical professionals, Schwartz said.
• He also said the system would unfairly affect those unable to afford regular testing – and therefore leave people marked as infected even if they no longer are.
• Blockchain’s immutability also means that false diagnoses would not be able to be erased, he added.
• EFF has publicly opposed the bill since it was first proposed in May; the state Assembly bill was passed and moved to the California Senate in early June.
• EFF has previously defended the right of a former employee at Kraken to post an anonymous review about the crypto exchange.

See also: ‘Careless’ Users Are Ruining Ethereum’s Privacy: Paper

Related Stories

• ParaFi Invests and Begins Staking in Bitfinex Spin-Out Exchange
• BCB Group Teams With Circle to Offer EU Institutions USDC Stablecoin Settlement
• Binance Says New York Banks Can Now Use Its Stablecoin After Watchdog Approval
• Polkadot Releases Rococo, Its Test Environment for Interoperable ‘Parachains’

Ethereum Classic’s second 51% attack Thursday resulted in a massive reorganization of 4,236 blocks and successful double-spend of $1.68 million worth of cryptocurrency, according to an investigation by Bitquery.

• The attacker tried to double-spend 465,444 ethereum classic (ETC), worth approximately $3.3 million, but only successfully double-spent 238,306 ETC, worth $1.68 million, according to the report.
• An additional 14,200 ETC were also claimed by the attacker via block rewards during the event.
• Bitquery found the hashpower required for the attack was probably bought from the same source as for the first attack: Nicehash DaggerHashimoto.
• Thursday’s attack is the second on the Ethereum Classic platform within five days. The first attack occurred on Aug. 1 and was originally thought to be the result of software complications.
• Ethereum Classic Labs, the core development organization behind Ethereum Classic, announced Friday that it has retained law firm Kobre & Kim to investigate and pursue criminal charges against the perpetrators of both 51% attacks, according to a press release shared with CoinDesk.

Update (August 7, 16:22 UTC): This article has been updated additional information about Ethereum Classic Labs’ response to the attacks.

Related Stories

• Market Wrap: Bitcoin Breaks $11,800; Ether Options Market Explodes
• Ethereum Classic Suffers Second 51% Attack in a Week
• Ethereum Classic Suffers Reorganization That Resembles 51% Attack Amid Miner Complications
• Market Wrap: Bitcoin’s Price and Ether’s Dominance Sit at 2020 Highs

DeFi-focused fund ParaFi Capital has invested $450,000 in USDT, along with D1 Ventures, and will start staking on Ethereum-based exchange DeversiFi.

• DeversiFi announced Friday that ParaFi and D1 had together invested $450,000, in tether tokens, in return for governance token nectar (NEC).
• San Francisco-based ParaFi’s portfolio includes other DeFi projects such as Aave, Curve, MakerDAO and Kyber Network, into which ParaFi invested in June.
• D1 Ventures’ previous investments include The Graph, Thorchain, Tellor and Nest Protocol.
• Formerly Ethfinex, DeversiFi is a non-custodial exchange spun out of Bitfinex in 2019 and that re-released its trading platform with a newly built privacy layer earlier this year.
• The exchange acts as a hybrid where trades are executed off-chain and settled on-chain in batches every hour; this means DeversiFi can settle 9,000 transactions every second.
• ParaFi and D1 have committed to staking tokens in the platform’s governance protocol necDAO, so they’ll be able to play a role in the project’s direction as they would with an equity stake.
• DeversiFi co-founder Ross Middleton says there is currently 17,000 ether (around $6.7 million) pledged to the necDAO, most being trading fees collected from when it was Ethfinex.
• Both funds will have a role in determining how these funds are spent – one current proposal is using ETH to connect necDAO to liquidity pools and allow it to earn a passive income.

See also: IDEX Raises $2.5M to Rebuild Hybrid Exchange for Algorithmic Traders

Related Stories

• Privacy Group Slams California Bill That Would Put Health Records on the Blockchain
• BCB Group Teams With Circle to Offer EU Institutions USDC Stablecoin Settlement
• Binance Says New York Banks Can Now Use Its Stablecoin After Watchdog Approval
• Polkadot Releases Rococo, Its Test Environment for Interoperable ‘Parachains’

The California Energy Commission, the state’s primary energy policy and planning agency, is funding an experimental market for carbon-credit trading on a public blockchain. 

Under a plan announced Friday, digital tokens will be awarded to participating businesses that cut their carbon footprint by powering electric van sharing, said Eduardo Javier Muñoz, CEO of EVShare, the startup running the pilot. The credits can then be used to pay for electricity consumption, rides and services.

Mobility-related transactions will be recorded on the RSK blockchain, a smart contract-oriented platform that is similar to Ethereum but runs on top of the Bitcoin network.  

Related: ‘Superman29’ May Do Time: California Resident Pleads Guilty to Laundering Millions Using Illegal Bitcoin ATMs

The market is part of a $20-million initiative that will track data related to solar panels, energy storage, electric vehicles and charging infrastructure in Bassett, an unincorporated community in Los Angeles County. The commission’s previously disclosed $9 million grant will cover nearly half the cost; Google, the University of California at Los Angeles and others are covering the remaining $11 million, according to EVShare.

Read more: RSK Launches Interoperability Bridge Between Bitcoin and Ethereum

The project aims to digitize carbon credit reporting, create opportunities for businesses to redeem credits, and make electric vanpooling cheaper for Bassett residents, Muñoz said. 

“Today carbon credit trading is not digitized,” he said. “It’s a very unconventional market … Now it will be easier to hold them and trade them.” 

Related: IOV Labs Takes on Lightning Network With New Light Client

It is rare for enterprise blockchain projects to use public networks, which are auditable by and open to all comers, instead of a private ledger restricted to authorized participants. Rarer still are enterprise experiments tied to Bitcoin; Ethereum has been the platform of choice for most corporates venturing into open-network territory.

Green mind

The Bassett initiative is the also latest attempt to streamline trading processes for carbon credits using blockchain record-keeping. In July, the InterWork Alliance announced that it was working on blockchain tools to prevent double-spending of carbon credits.

The RSK blockchain will also register transactions between vehicles and solar panels, batteries and chargers. Records of their usage will be stored on-chain with the help of RIF, an identity product developed by RSK Labs, the startup that created the chain. The electric vans will be operated by Green Commuter, an electric vehicle rental company based in Los Angeles.

Phase 1 of the pilot included research and development, business collaboration and participation from the Bassett community. Phase 2, which the companies also announced Friday, will connect 50 houses to the solar grid over the course of two years, Muñoz said. 

Read more: Carbon Credits Have a Double-Spend Problem. This Microsoft-Backed Project Is Trying to Fix It

Carbon credits permit companies to emit a certain amount of carbon dioxide and other greenhouse gases. Companies with unneeded carbon credits can sell them to other firms that emit more.

EVShare aims to help 1,000 cities transition to a sustainable sharing economy over the next decade. The firm plans to connect solar home-energy systems with shared electric vans operated by Green Commuter. Excess energy is sold to the grid or used by households.

Related Stories

• California Assembly Considers Exempting Some Digital Assets From State Securities Law
• IBM Teams With 3 European Power Grids to Build Green Energy Blockchain Platform

Most of us will be dead by then.

Projected to happen in the year 2106, Bitcoin will suddenly stop running based on the code its network of users is running today. Users won’t be able to send bitcoin to others; miners securing Bitcoin’s global network will no longer serve a purpose. Bitcoin will just stop. 

The good news is that the bug is easy to fix. It’s a problem Bitcoin developers have known about for years – since at least 2012, maybe earlier, according to Bitcoin Core contributor Pieter Wuille. To some developers, the Bitcoin bug potentially sheds light on the limits to Bitcoin’s decentralization, since the community will all need to join together to fix it. 

Related: Cardano Introduces Proof-of-Stake With ‘Shelley’ Hard Fork

Read more: A Bitcoin Hard Fork? The Science of Contentious Code is Advancing

“This is a consensus change, but a very simple one, and I hope one that will be non-controversial,” Blockstream co-founder and engineer Pieter Wuille told CoinDesk in an email. “We have about 80 years left to address [the bug]. Who knows what might happen in such a time frame.” 

The bug is simple. Bitcoin blocks are the containers within which transactions are stored. Each Bitcoin block has a number tracking how many blocks come before it. But because of a limitation revolving around how block height numbers are stored, Bitcoin will run out of block numbers after block number 5101541. 

In other words, at a block height roughly 86 years into the future, it will be impossible to produce any new blocks. 

Hard fork

Related: OpenEthereum Supported 50% of Ethereum Classic Nodes. Now It’s Leaving the Project

The change requires what’s known as a “hard fork,” the most demanding method of making a change to a blockchain. Hard forks are tricky in that they’re not backwards-compatible, they require everyone running a Bitcoin node or miner to upgrade their software. Anyone who doesn’t do so will be left behind on a stonewalled version of Bitcoin that’s incapable of any activity.

While some blockchains, such as Ethereum, execute hard forks regularly, a hard fork isn’t the happiest word in Bitcoin land. 

The last time a Bitcoin hard fork was attempted, it attracted vicious debate. Several big Bitcoin businesses and miners rallied around a hard fork called Segwit2x in 2017. The problem is that far from everyone in the community agreed with the change, so many saw it as an attempt to force the upgrade on the community, which doesn’t exactly jibe with Bitcoin’s ethos of leaderlessness.

Read more: No Fork, No Fire: Segwit2x Nodes Stall Running Abandoned Bitcoin Code

Because of this diary entry in Bitcoin’s history, when many people in Bitcoin hear the phrase “hard fork,” they think of a centralized power trying to impose a change.

However, this bug fix hard fork comes in stark contrast to Bitcoin’s most famous hard fork attempt. Rather than attracting debate, the community and developers will most likely agree it is a change that needs to be made. 

After all, anyone who chooses not to upgrade their software will eventually be running a dead Bitcoin chain. 

Protocol “ossification”

The bug fix is unlikely to be a controversial hard fork change. But that doesn’t make the issue any less interesting. 

In conversation with CoinDesk, Head of Product and Research at Bitcoin tech startup Veriphi, Gustavo J. Flores, argued that it brings to light a limit to Bitcoin’s “protocol ossification.”

Read more: Hard Fork vs Soft Fork

Bringing to mind squishy cartilage hardening into bone over time, protocol ossification is the idea that Bitcoin will grow harder to change as it matures. The first several years of Bitcoin’s life, the protocol was immature and there were far fewer users and developers tinkering with the software, so the technology was easier to change. But Bitcoin may be hardening into a bony specimen that will be very difficult to change.

“Protocol ossification means a certain point in time, some say it should be now, where Bitcoin doesn’t change anymore. The rules are set such as a country’s constitution would be set, unchangeable, since it would be too decentralized to coordinate any change,” Flores told CoinDesk.

Just a dream?

The reason many Bitcoin technologists think ossification is a good quality is because it is a sign that the system is actually as decentralized as the community wants it to be, ensuring the system is really free from one person or entity stepping in and pushing through a change that isn’t good.

Flores went on to argue that protocol ossification helps to “prevent future tentatives that would resemble Segwit2x, where some actors try to force an upgrade, because they’re known developers or big businesses, and this ends up hurting Bitcoin because it’s either untested code or cryptography, or because the change removes the core value proposition or would decrease decentralization which would hurt the core value proposition on the long-term.

“However, this bug makes it desirable to be able to coordinate a hard fork to fix it, since we all want Bitcoin to be able to survive that deadline,” Flores said.

“It basically brings us back to reality, where the dream of protocol ossification (which makes us achieve ultimate decentralization) is a further than expected and it might be just a dream, which we can get closer over time, but we can’t ever complete it since emergencies such as this, might present themselves,” Flores told CoinDesk.

Related Stories

• Ethereum Developers Delay Berlin Hard Fork to Stem Client Centralization Concerns
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The Indian crypto community now has the opportunity to earn passive income merely by holding cryptocurrencies – an activity known as staking.

• Mumbai-based cryptocurrency exchange CoinDCX launched its new product on Friday, allowing its users to stake three cryptocurrencies: Harmony (ONE), Qtum (QTUM) and Tron (TRX).
• Users with a minimum balance of 100 ONE tokens, one QTUM token, and five TRON tokens will be eligible for staking.
• An alternative to proof-of-work, or mining, proof-of-stake is a system used by some blockchains enabling users to hold coins in a cryptocurrency wallet to support the operations of the network in return for newly minted coins.
• In effect, staking is similar to buying government bonds in return for a fixed yield.
• CoinDCX said it will pool the holdings of multiple customers as a way to increase their chances of receiving rewards.
• “We want to make staking very simple for our users,” Neeraj Khandelwal, co-founder of CoinDCX said.
• The exchange will aggregate staking rewards via partner exchanges such as Binance, and also stake natively on blockchains, according to the announcement.
• CoinDCX is the first firm to launch a staking product within India, according to Khandelwal.
• Mumbai-based WazirX exchange’s founder and CEO, Nischal Shetty, told CoinDesk in a Telegram chat his team is planning to launch a staking offering later this month for platforms like Tron and EOS.

Adoption driver?

• Sumit Gupta, CEO of CoinDCX, told CoinDesk that the lure of making additional earnings via staking would be a big boost for the Indian market and could drive cryptocurrency adoption in the country.
• WazirX’s Shetty agreed, saying, with interest on bank savings interest relatively low, Indian citizens are seeking other ways of earning passive income.
• The Reserve Bank of India (RBI) reduced the benchmark interest rate to a record low of 4% early this year.
• The annual returns from staking ONE, QTUM, and TRX at CoinDCX are 8–10%, 6–10%, and 5–10% respectively, the exchange said.
• Exchanges have witnessed a steady rise in trading volumes ever since the Supreme Court overruled the Reserve Bank of India’s ban on banking services for cryptocurrency firms in March.

Also read: Crypto Trading Volumes Rise in India After Banking Crisis, COVID-19 Lockdown

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The fast-growing realm of decentralized finance, known as DeFi, has produced some of the year’s richest returns for cryptocurrency investors, from Compound’s COMP tokens to Chainlink’s LINK.

So it may come as little surprise that the Kyber Network’s KNC token has jumped eight-fold in price this year, giving it the largest market capitalization among decentralized exchanges tracked by the data firm Messari. 

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: Blockchain Bites: Bulls Reborn, Backrunning Bots, Bitmain Blowout

First Mover interviewed Kyber CEO Loi Luu about the project, including its July 7 launch of the KyberDAO governance platform. Luu says some 30% of the circulating supply of KNC tokens are staked on the platform, which he argues is evidence that “holders want to get behind it.”

First Mover: How would you explain Kyber to the uninitiated?

The short version is to say it’s a liquidity protocol for anybody, anywhere. The longer version of it is we’re building an on-chain liquidity endpoint in which contributors integrate to either contribute liquidity or utilize liquidity.
      
So why has the KNC token done so well this year?

People look at the growth of Kyber, and people look at the ecosystem that we’re building. I think so far we have one of the biggest ecosystems in this space. We have more than 100 different applications, wallets, that have integrated with Kyber. We have surpassed $1 billion of volume in 2020 and we are looking to cross $3 billion before the end of the year. Whether the token can do well or not, it really depends on how the protocol is performing. 

Related: Bitcoin Entering ‘New Adoption Cycle,’ Coin Metrics Exec Says

Do you think there’s any speculation in the KNC token related to future Kyber developments?

Honestly, I think there’s going to be speculation for any token, so it’s not only for KNC. If you ask me, that’s true for every token.

What is the importance of liquidity in this ecosystem?

In finance, liquidity is the key. We are working closely with the DeFi community. For example, an asset management protocol from time to time, they need to rebalance their portfolio. So they need to do a lot of on-chain trading from one asset to another. And that’s where Kyber can come in, because they can do everything on-chain. 

What advantage does Kyber have by being on-chain?

I emphasize a lot on the on-chain aspect because everything Kyber does runs on the smart contract, on the blockchain. It’s important to run everything on-chain so it is smart contract talking to smart contract. Everything is trustless that way. There is no centralized custodian. 

How do you feel about this year’s boom in DeFi?

Currently we are seeing a lot of experiments happening in the DeFi ecosystem, from liquidity mining, from bootstrapping adoption of a protocol and things like that. I think this is good that there are a lot of things happening. We’ve also started seeing a lot of new projects that have nothing to do with DeFi also branded as DeFi to get some hype. So I think there’s definitely some hype, but compared with the ICO boom in 2017, it’s nowhere close. We’re not seeing retail get into the DeFi hype. We’re not seeing people talking about DeFi in the mainstream.

DeFi is built on Ethereum, but there are constraints on that protocol, especially right now. How are you feeling about that today?

I think it really worries us. The gas prices, or fees to use Ethereum, are still very high. So we are actively looking at different layer-2 protocols to see which one that we should work with. For end users, they can’t pay $5 to $10 everytime they use a decentralized protocol. There must be a cheaper and more efficient way to use decentralized applications every day.

Tweet of the day Bitcoin watch

BTC: Price: $11,775 (BPI) | 24-Hr High: $11,924 | 24-Hr Low: $11,662

Trend: Bitcoin’s price action of the last 24 hours is telling a tale of indecision and hinting at price pullback. 

The top cryptocurrency by market value jumped to highs above $11,900 during Thursday’s U.S. trading hours, extending the recovery from Sunday’s low of $10,659. However, further gains remained elusive and the cryptocurrency ended the day (UTC) on a flat note at $11,770. 

Put simply, the day began with optimism but ended on a pessimistic note, with buyers failing to keep prices at highs above $11,900. The bulls had made another failed attempt to scale that level early on Friday. 

This type of price action after a notable recovery rally and near multi-month highs is indicative of indecision among bulls (uptrend fatigue) and often precedes pullbacks. 

The immediate support is located at $11,575 (Thursday’s low), which, if breached, would open the doors for $11,000. On the higher side, an hourly close above $11,900 would imply a continuation of the recovery rally and shift the focus to recent highs above $12,100. 

At press time, the cryptocurrency is trading below $11,800, representing slight losses on the day.

Related Stories

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BCB Group – a firm that provides financial services for cryptocurrency firms in the U.K. and European Union – has inked a deal to integrate with Circle’s platform to make the USDC stablecoin available to institutional clients.

• Announced Thursday, the partnership will see BCB add elements of Circle’s crypto finance platform in an attempt to improve the efficiency of payments, clearing and custody for business customers.
• The move means BCB’s clients will gain access to USDC, the U.S. dollar-linked stablecoin launched by the CENTRE Consortium, which was founded by Circle and Coinbase in October 2018.
• USDC can help EU-based companies “mitigate negative risk” exposure by providing secure and efficient payments solutions, BCB said in a statement.
• According to Circle’s co-founder and CEO, Jeremy Allaire, demand for dollar-pegged stablecoins is quickly growing and USDC would provide “critical” infrastructure for BCB’s clients.
• USDC moved close to 1.1 billion coins in circulation in July 2020, according to CoinMarketCap, with numbers having sharply risen since late March.
• It still has a way to go to catch up on the most used stablecoin, tether (USDT), which now boasts a circulating supply close to 10 billion.
• Circle recently teamed with Genesis Trading in a $25 million deal also aimed at boosting adoption of USDC. Like CoinDesk, Genesis is a fully owned Digital Currency Group subsidiary.

See also: Circle CEO Claims ‘Explosive’ Stablecoin Demand From Everyday Businesses

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• Polkadot Releases Rococo, Its Test Environment for Interoperable ‘Parachains’

BCB Group – a firm that provides financial services for cryptocurrency firms in the U.K. and EU – has inked a deal to integrate with Circle’s platform to make the USDC stablecoin available to institutional clients.

• Announced Thursday, the partnership will see BCB add elements of Circle’s crypto finance platform in an attempt to improve the efficiency of payments, clearing and custody for business customers.
• The move means BCB’s clients will gain access to USDC, the U.S. dollar-linked stablecoin launched by the CENTRE Consortium, which was founded by Circle and Coinbase in October 2018.
• USDC can help EU-based companies “mitigate negative risk” exposure by providing secure and efficient payments solutions, BCB said in a statement.
• According to Circle’s co-founder and CEO, Jeremy Allaire, demand for dollar-pegged stablecoins is quickly growing and USDC would provide “critical” infrastructure for BCB’s clients.
• USDC moved close to 1.1 billion coins in circulation in July 2020, according to CoinMarketCap, with numbers having sharply risen since late March.
• It still has a way to go to catch up on the most used stablecoin, tether (USDT), which now boasts a circulating supply close to 10 billion.
• Circle recently teamed with Genesis Trading in a $25 million deal also aimed at boosting adoption of USDC. Like CoinDesk, Genesis is a fully owned Digital Currency Group subsidiary.

See also: Circle CEO Claims ‘Explosive’ Stablecoin Demand From Everyday Businesses

Related Stories

• Binance Says New York Banks Can Now Use Its Stablecoin After Watchdog Approval
• Polkadot Releases Rococo, Its Test Environment for Interoperable ‘Parachains’
• Federal Reserve Is Rushing to Get Its Instant Payments Offering Ready
• German Regulator Seizes Crypto ATMs

Binance’s USD stablecoin has been given the green light by New York’s financial watchdog, meaning licensed banks and financial institutions can use the asset without any further regulatory approval.

• The New York Department of Financial Services (NYDFS) updated its "Greenlist" this week to include Binance USD (BUSD).
• This means licensed banks and other permissioned financial institutions in the New York area can now custody and list BUSD without prior approval from the NYDFS but must still inform the regulator before adding it.
• Binance Compliance Officer Samuel Lim told CoinDesk BUSD could be accepted “on an immediate basis” by licensed entities.
• “So if tomorrow, JPMorgan decides to use BUSD, they can and can do so immediately,” he said.
• Binance said BUSD was NYDFS-approved at its launch in September 2019, but exchanges needed approval before listing it.
• BUSD is a white-label stablecoin from the Paxos Trust Company, which the NYDFS approved to issue stablecoins in 2018.
• Bitcoin, ether and litecoin are all on the NYDFS’ Greenlist, as are stablecoins such as Gemini dollar and Paxos.
• Notably absent is Binance coin (BNB), the exchange’s native token. The spokesperson declined to comment on whether Binance was trying to get BNB greenlisted.
• Binance U.S., the exchange’s local trading platform, is still not available in New York.

See also: Binance Australia Is Actually Run by an Entity Linked to TravelbyBit

UPDATE (Aug. 9, 19:10 UTC): This article has been updated to specify the approval applies to banks and other permissioned financial institutions.

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• BCB Group Teams With Circle to Offer EU Institutions USDC Stablecoin Settlement
• Polkadot Releases Rococo, Its Test Environment for Interoperable ‘Parachains’

Binance’s USD stablecoin has been green listed by New York’s financial watchdog meaning banks and financial institutions can use the asset without any further regulatory approval.

• The New York Department of Financial Services (NYDFS) updated its "Greenlist" this week to include Binance USD (BUSD).
• This means banks in the New York area can now custody and list BUSD without prior approval from the NYDFS – they must still inform the regulator before adding it, however.
• Binance Compliance Officer Samuel Lim told CoinDesk BUSD could be accepted “on an immediate basis” by licensed entities.
• “So if tomorrow, JP Morgan decides to use BUSD, they can and can do so immediately,” he said.
• Binance said BUSD was NYDFS-approved at its launch in September 2019, but exchanges needed approval before listing it.
• BUSD is a white-label stablecoin from the Paxos Trust Company, which the NYDFS approved to issue stablecoins in 2018.
• Bitcoin, ether, and litecoin are all on the NYDFS’ Greenlist, as are stablecoins like Gemini dollar and Paxos.
• Notably absent is Binance Coin (BNB), the exchange’s native token. The spokesperson declined to comment on whether Binance was trying to get BNB green listed.
• Binance U.S., the exchange’s local trading platform, is still not available in New York.

See also: Binance Australia Is Actually Run by an Entity Linked to TravelbyBit

Related Stories

• Financial Service Provider to Coinbase Teams With Circle to Offer Stablecoin Payments in EU
• Polkadot Releases Rococo, Its Test Environment for Interoperable ‘Parachains’
• Federal Reserve Is Rushing to Get Its Instant Payments Offering Ready
• German Regulator Seizes Crypto ATMs

The incoming chief of Japan’s Financial Services Agency (FSA) has expressed reluctance to soften rules governing cryptocurrencies.

• As Reuter's reported on Wednesday, commissioner Ryozo Himino, said the regulator was not considering taking “special steps” to promote cryptocurrency trading.
• Himino became the head of the FSA in July when he replaced the previous commissioner Toshihide Endo.
• Deregulating crypto, he said, would not necessarily advance technical innovation, but could increase “speculative” trading.
• Instead, Japan should focus on the viability of a central bank digital currency (CBDC) to which the country’s central bank, the Bank of Japan, is currently exploring.
• In undertaking a CBDC, Japan would need to think “really hard” about whether to issue a digital currency based on the “merits and demerits” in doing so, he said.
• The coronavirus pandemic, the commissioner said, might prompt the faster arrival of a cashless society.

See also: Japanese Financial Giant MUFG to Launch Digital Currency in 2020

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