NFTs Join Bitcoin: Community Debates New Use Case for Blockchain

• Ordinals, a protocol that stores non-fungible tokens (NFTs) on the Bitcoin blockchain, has sparked a debate in the crypto community
• Bitcoin purists believe that the blockchain should be restricted to financial transactions only
• Others argue that it is large and versatile enough to host a range of use cases, like meme-themed art

What is Ordinals?

Ordinals is a new protocol that stores non-fungible tokens (NFTs) on the Bitcoin blockchain. It uses „inscriptions,“ or arbitrary content like text or images that can be added to sequentially numbered satoshis or „sats“ – the smallest units in Bitcoin – to create unique „digital artifacts“ that can be held and transferred across the Bitcoin network like any other sats. Inscriptions are finally ready for Bitcoin mainnet.

Debate Over NFT Project Ordinals

The debut of Ordinals has driven a wedge between those who want to restrict blockchains to financial transactions only and those who think they should also support other use cases such as meme-themed art. Some see this as an attack on the original mission of bitcoin while others embrace it as part of its evolution.

Technological Requirements for NFTs

In order for NFTs to work on Bitcoin’s blockchain, two technical upgrades were required: Segregated Witness (SegWit) and Taproot. SegWit helped scale Bitcoin by introducing a block field for witness data – signatures and public keys for Bitcoin transactions. Taproot then resolved any security concerns allowing old SegWit restrictions to be removed and allowing large chunks of NFT data to be stored on-chain. This paved the way for Ordinals which leverages these technologies.

Existential Debate Among Crypto Community

The launch of Ordinals has sparked an existential debate among members of the cryptocurrency community about what purpose blockchains should serve, with some arguing they should remain focused purely on financial transactions while others advocating they can host a range of different use cases including NFT projects like Ordinals.

Conclusion

Ordinals offers an exciting new opportunity for developers and users alike with its ability to store digital assets natively on the Bitcoin network, but not everyone is convinced it’s right fit for bitcoin’s mission which could lead further divisions within the cryptocurrency community going forward.

LayerZero Denies Keeping ‚Backdoor‘ Secret, Uniswap Vote Looms

• Nomad, a LayerZero competitor, has accused the platform of keeping a “backdoor” secret.
• LayerZero CEO Bryan Pellegrino denies the accusations and says that its security practices are open and developers can set their own parameters.
• The allegations come just before Uniswap votes on whether to partner with LayerZero.

Allegations Against LayerZero

Nomad, a LayerZero competitor, has accused the platform of keeping a “backdoor” secret. According to Nomad founder James Prestwich, this backdoor-like capability could let LayerZero bypass security controls to pass data between blockchains without anyone’s permission. In a tweet outlining his findings, Prestwich said that this could potentially allow LayerZero to „unilaterally steal or move around funds locked up with platforms“ using its services.

LayerZero Denies Accusations

Bryan Pellegrino, co-founder of LayerZero, denied these accusations and stated that the project does have backdoor-like capabilities but never tried to hide them. He also said that every application has the ability to select their own security properties and all they have to do is set their configuration so there’s nothing anybody can ever do. Pellegrino suggested Prestwich’s motives may be tied to an upcoming Uniswap governance vote which will decide who will be chosen as the bridge provider.

Uniswap Governance Vote

The allegations from Nomad came just before Uniswap votes on whether or not it should partner with Layer Zero for bridging services. This vote in Uniswap’s governance system is important as it decides which company will provide bridging services for Uniswap users.

Competing Bridge Providers

Pellegrino said competing bridge providers such as Nomad and Wormhole have the same capabilities as Layer Zero and should not be presenting themselves as more secure alternatives when they all share similar features.

Concluding Thoughts

At this time, it remains unclear who Uniswap will choose as its bridge provider and what impact this decision could have on DeFi applications in general. It is important for users of any DeFi protocol to thoroughly research any potential risks associated with relying on third party service providers like bridge networks before making any investments or transactions involving digital assets.

Doodles Acquires Emmy-Nominated Animation Studio Golden Wolf

• Doodles, a NFT collection, has acquired Golden Wolf, an Emmy-nominated animation studio.
• The acquisition will help Doodles to tap into new types of content, such as storytelling, world building and character development.
• The deal will also bring Golden Wolf’s business into markets beyond animation, such as fashion and music.

Doodles, a whimsical non-fungible token (NFT) collection, has made a major move in the entertainment world with the acquisition of Emmy-nominated animation studio Golden Wolf. The acquisition was announced on Monday and terms of the deal were not disclosed.

Doodles and Golden Wolf had previously worked together on Doodles‘ announcement for Doodles2 at NFT NY in 2022. This acquisition will help Doodles to tap into new types of content, such as storytelling, world building, and character development. It will also bring Golden Wolf’s business into markets beyond animation, such as fashion and music.

Jordan Castro, the founder of Doodles, commented on the acquisition, saying that it “marks a brand new chapter for Doodles as we continue to expand the franchise.” He believes that the acquisition will help Doodles to create “storytelling without constraints & AI (artificial-intelligence) animation generation R&D.”

Ingi Erlingsson, the founder of Golden Wolf, expressed his excitement over the deal and said that he is „over the moon to have found a team that shares our ambition and love of creativity.” He believes that the acquisition will help Golden Wolf reach new heights in terms of creative expression, and he looks forward to what the future holds.

The acquisition of Golden Wolf is a major move for Doodles, and the company hopes that it will help them to become a major player in the entertainment world. With the help of Golden Wolf’s talented team, Doodles will be able to create amazing stories and animations that will captivate audiences all around the world.

Ethereum ‚Shanghai‘ Upgrade: Traders Anticipate What’s Next

• Digital asset traders are starting to handicap various market scenarios ahead of Ethereum’s upcoming „Shanghai“ upgrade in March.
• Over 16 million ether, worth over $22 billion, have been deposited into the Beacon Chain staking contract.
• Brian Mosoff, CEO of Ether Capital, discusses the milestone of the second-biggest blockchain and the state of competing Layer 1s.

Digital asset traders have begun to place their bets on what Ethereum’s upcoming „Shanghai“ upgrade will bring to the crypto markets. This is due to the success of Ethereum’s historical shift last year to a proof-of-stake network – known as „the Merge“ – which was one of the biggest stories of the year in crypto markets. As such, the anticipation for what will come next has been high, and traders are now starting to speculate on the outcomes of the Ethereum upgrade.

Etherscan data shows that over 16 million ether, worth over $22 billion, have been deposited into the Beacon Chain staking contract. This is a testament to the success of the Merge, and a sign of how much the Ethereum network has grown in the past year. Brian Mosoff, CEO of Ether Capital, recently discussed the milestone of the second-biggest blockchain and the state of competing Layer 1s. He believes that Ethereum is well-positioned to become the dominant blockchain, and that the upcoming Shanghai upgrade will only serve to strengthen its position in the market.

Mosoff also believes that the Shanghai upgrade will bring a number of improvements to the Ethereum network, including increased transaction speed and scalability, as well as a range of new features and capabilities. Additionally, he believes that the upgrade will make the network more secure, and that it will open the door for new use cases and applications.

Overall, the anticipation for the upcoming Ethereum upgrade is high, and traders are already placing their bets on what the outcome will be. With the Merge being such a success, many are expecting that the Shanghai upgrade will be just as successful, if not more. The fate of Ethereum and the future of the blockchain industry will be determined in March when the upgrade is complete.

Huobi Confirms 20% Layoffs: Crypto Markets Left Wary and Bated Breath

• Huobi, a crypto exchange, has confirmed a 20% headcount reduction.
• This comes after reports of Huobi requiring employees to take their salaries in stablecoins, closing internal staff communication channels, and outflows of $64 million in the past 24 hours.
• Justin Sun, Huobi’s adviser, has denied the Huobi layoffs.

The crypto world has been abuzz with news of Huobi, one of the world’s largest crypto exchanges, announcing a 20% reduction in its employee base. This news comes a week after reports of Huobi requiring its employees to take their salaries in stablecoins and closing internal staff communication channels to quell a rebellion.

The news of the layoffs has caused a lot of market concern, with outflows from the exchange totaling $64 million in the past 24 hours, according to Nansen. This has had a significant effect on the price of Huobi’s exchange token, as well as its trading volume, which has dropped by 23%.

In an attempt to calm the markets, Huobi adviser Justin Sun, who has been representing the company publicly, denied the Huobi layoffs. However, his words seemed to have little effect, as the news of the layoffs caused a further sell-off in the exchange’s token.

The “Hash” panel discussed the recent news, pointing out that Huobi is the latest in a string of centralized exchanges hit by the collapse of FTX. It remains to be seen how Huobi will fare in the coming weeks and months, as the market continues to be wary of its future.

With the crypto market continuing to be volatile, many are watching Huobi closely to see how it will navigate the choppy waters. It is clear that the exchange still has a lot of work to do to restore its reputation and rebuild investor confidence. Until then, the crypto world awaits further news from Huobi with bated breath.

Kraken Exits Japan, Argo Avoids Bankruptcy, Bankman-Fried Borrows Millions

• Cryptocurrency exchange Kraken announced it will be exiting Japan at the end of January 2021.
• Bitcoin miner Argo Blockchain has avoided filing for bankruptcy protection with the help of a new $35 million loan from Mike Novogratz’s crypto-focused financial-services firm.
• Former FTX CEO Sam Bankman-Fried borrowed hundreds of millions of dollars from Alameda Research, the trading firm he owned, to purchase his stake in trading app Robinhood Markets.

Cryptocurrency exchange Kraken has announced that it will be exiting Japan as of January 31st, 2021 due to “current market conditions in Japan in combination with a weak crypto market globally.” Kraken users in the country have until the end of next month to withdraw their fiat and crypto holdings, with the option of transferring crypto to another wallet or wiring Japanese yen to a local bank.

Meanwhile, Bitcoin miner Argo Blockchain has managed to avoid filing for bankruptcy protection with the help of a new $35 million loan from Mike Novogratz’s crypto-focused financial-services firm. The miner was in a precarious situation when a deal for $27 million in funding fell through in October. However, it was able to bolster its balance sheet and avoid bankruptcy after agreeing to sell its Helios mining facility in Dickens Country, Texas, to Galaxy Digital for $65 million.

Former FTX CEO Sam Bankman-Fried also made headlines recently for reportedly borrowing hundreds of millions of dollars from Alameda Research, the trading firm he owned, to purchase his stake in trading app Robinhood Markets. Bankman-Fried and FTX co-founder Gary Wang reportedly borrowed the money from Alameda Research, which is also a major shareholder in FTX. The affidavit provided to a Caribbean court before Bankman-Fried’s arrest states that the money was used to purchase Robinhood shares and that the transaction was approved by the board of Alameda Research.

These recent developments in the crypto space demonstrate the ever-evolving nature of the industry. From major players like Kraken exiting Japan to large investments being made in mining facilities and trading apps, the crypto landscape is constantly shifting and adapting to meet the demands of the market. It will be interesting to see how these moves affect the industry in the long run.

Ethereum’s Radical Shift in 2022: The Merge and Beyond

• Ethereum completed its radical shift to a more energy-friendly system for powering its network in 2022.
• Concerns around censorship and record-shattering hacks on Ethereum-linked infrastructure were major themes of the year.
• The Merge, Ethereum’s massive, years-in-the-making upgrade, marked a massive reduction to the network’s energy footprint, but also led to charges that it is becoming too centralized.

In 2022, Ethereum saw a number of significant milestones and events. The year marked a radical shift in Ethereum’s network, as the blockchain finally completed its transition to a more energy-friendly system for powering its network. This transition, referred to as the Merge, was the result of years of planning and was a major reduction to the network’s energy consumption.

However, the year was not without problems. Concerns around censorship, as well as record-shattering hacks on Ethereum-linked infrastructure, were at the forefront of many discussions. Despite the Merge being a major step forward, it was met with criticism from some who argued that it was leading to an overly centralized network. Additionally, the Merge failed to spur the long-hoped-for bump in the price of ether (ETH), the chain’s native currency, further complicating the situation.

The Merge was the most significant event for Ethereum in 2022, but it was far from the only one. The year also saw a number of other changes and upgrades, such as the introduction of new tools to support developers, as well as the launch of Ethereum 2.0, which is designed to address the scalability issues that have been plaguing the network for some time.

Overall, Ethereum had a tumultuous yet successful year in 2022. The Merge marked a major shift in the network’s architecture, while other upgrades and changes have put the blockchain on a path to becoming a global computer and decentralized financial system. Despite the difficulties, Ethereum has made impressive strides in the past year and appears to be on track to continue its steady progress in the years to come.

Kraken Exits Japan, Cuts 30% of Global Workforce

• Kraken has announced that it will be exiting Japan and deregistering from the Financial Services Agency as of Jan. 31.
• The decision was prompted by „current market conditions in Japan in combination with a weak crypto market globally,“ the company said in a blog post on Wednesday.
• Kraken users in the country have until the end of next month to withdraw their fiat and crypto holdings, with the option of transferring crypto to another wallet or wiring Japanese yen to a local bank.

Kraken, a major cryptocurrency exchange, has announced that it will be exiting Japan and deregistering from the Financial Services Agency as of Jan. 31. This decision was made in response to „current market conditions in Japan in combination with a weak crypto market globally,“ according to a blog post released by the company on Wednesday.

Kraken’s Japan-based customers will have until the end of next month to withdraw their fiat and crypto holdings. They have the option of transferring their crypto to another wallet or wiring Japanese yen to a local bank. The company is encouraging its customers to do so as soon as possible in order to avoid any potential delays in the withdrawal process.

The decision to withdraw from Japan follows the departure of Kraken’s co-founder and former CEO, Jesse Powell, in September. He was replaced by Chief Operating Officer Dave Ripley. In November, Kraken took the unfortunate decision to cut 30% of its global workforce in response to the continuing stagnation of the crypto market, following the collapse of rival exchange FTX.

Kraken is now looking to prioritize resources and investments in order to ensure the long-term stability of the exchange. It is hoped that this decision will enable the company to continue providing quality service to customers without the distraction of attempting to remain operational in Japan.

Crypto Exchange Giant Implodes, CEO Faces Serious Charges

Bullet Points
• Prices for Bitcoin remained largely frozen near the levels they held for the past week.
• CoinDesk’s Chief Insights Columnist David Z. Morris wrote about the seriousness of crypto exchange giant FTX CEO Sam Bankman-Fried’s offenses.
• Catch the latest episodes of CoinDesk TV for insightful interviews with crypto industry leaders and analysis.

Cryptocurrency prices remained largely frozen on Tuesday, with Bitcoin drifting lower but not by much. The largest cryptocurrency by market capitalization was recently changing hands at $16,700, off 1.3% over the past 24 hours but near its most recent support just under $17,000. BTC’s price has remained resilient over the past two months, despite the widely-reported market turbulence.

As the year nears its end, CoinDesk is revisiting some of the most impactful stories from the past year. One such story was the implosion of crypto exchange giant FTX, which less than a month after a CoinDesk story led to the investigation of its CEO Sam Bankman-Fried. The U.S. Department of Justice subsequently charged Bankman-Fried with wire fraud and other alleged crimes. After posting bail, he is confined to his parents California home except to exercise, and must wear a tracking device.

To keep up with the latest news and insights from the crypto world, be sure to check out CoinDesk TV for insightful interviews with crypto industry leaders and analysis. Sign up for First Mover, CoinDesk’s daily newsletter, for the latest moves in crypto markets in context.

Crypto Prices Steady Over Christmas Holiday, Investors Cautious

• Bitcoin held steady over the Christmas holiday weekend, trading at about $16,900.
• Most other major cryptos were flat, with a slight green tint.
• Investors largely ignored crypto and the macroeconomic uncertainties this year.

It’s been a tumultuous year for the cryptocurrency market, with prices soaring to unprecedented heights before crashing back down. This Christmas holiday weekend, however, investors largely ignored crypto and the macroeconomic uncertainties that have plagued the world in 2022, with Bitcoin holding steady at about $16,900.

Most other major cryptos were also flat, though they were tinted more green than red. Ethereum was trading at slightly over $1,200, mirroring Bitcoin’s flat trading of the past three days. This indicates investors’ belief that the cryptocurrency market has stabilized somewhat, and that prices are prime to start rising again in the near future.

It’s likely that Bitcoin and other cryptos will continue in the same vein during the year’s final days, given business’ historical, end-of-year slowdown. Edward Moya, senior market analyst for foreign-exchange market maker Oanda, noted that Bitcoin “looks like it might be finding a home between the $16,000 and $17,000 zone.”

Though the cryptocurrency market has been volatile this year, the past few weeks have seen prices remain relatively stable. This has led many investors to believe that the market has now reached a point of equilibrium, and that prices are prime to start rising again in the near future.

In the meantime, investors are taking a more cautious approach to the cryptocurrency market. Columnist David Z. Morris argued in a column last week that investors’ growing uncertainties about crypto’s future will root out careless speculation and refocus attention on “good deals and ideas.”

It’s clear that the cryptocurrency market is still trying to find its footing after a tumultuous year. But the steady prices of Bitcoin and other cryptos over the Christmas holiday weekend are promising signs that the market is beginning to stabilize, and that prices will soon start to rise again.