Blockchain Bites: Making Sense of the Halving, Consensus Distributed’s First Day

We’re not even halfway through the first full day of Consensus: Distributed, and the world may never be the same. 

The most ambitious conference of its kind kicked off with CryptoX TV, a full 24 hours of programming featuring European central bankers, former CFTC chairmen and celebrity guests  like Akon and Michelle Phan. 

You’re reading Blockchain Bites: Consensus Edition a twice daily roundup of all the notable news out of Consensuse Distributed. You can sign up for this, and all of CryptoX’s newsletters here.

History is being made elsewhere, too, with the Bitcoin network’s third programmable halving going off without a hitch. 

CryptoX’s Wolfie Zhao breaks it down: 

Miners racing on the network to compete for freshly minted bitcoin produced the 630,000th block at 19:23 UTC on May 11, which triggered the programmed halving event, marking the currency’s third halving in its 11-year history.

The first block in the new 6.25-bitcoin-per-block mining cycle was mined and relayed by China-based Antpool, the fourth-largest mining pool by total computing power. 

In an homage to Satoshi Nakamoto’s iconic “brink of a second bailout” message in the 2009 genesis block, f2pool, which mined the 629,999th block (the last before the halving), embedded a reference to the current financial crisis: “NYTimes 09/Apr/2020 With $2.3T Injection, Fed’s Plan Far Exceeds 2008 Rescue.”

The immediate implication after the third halving is that the newly minted bitcoin in a day will fall from 1,800 to 900 units. That would also mean mining operators will see their daily total revenue – at bitcoin’s current price of $8600 – reduced from $15 million to $8 million.

As such, it has been expected the computing power connected to the Bitcoin network will fall significantly after the halving as the revenue decrease will squeeze out those miner operators who lack efficient resources to cut their electricity costs.

A once-in-four-years event deserves a celebration:

This morning we heard from influential economist Carlota Perez, who broke down her theory of tech revolutions driven by boom and bust cycles. 

She was joined by Placeholder’s Chris Burniske and they discussed automating administrative infrastructure as a way to modernize the state. 

ECB executive Yves Mersch said Europe’s central bank is looking into CBDCs. “A retail CBDC, accessible to all, would be a game changer,” and is now a primary area of research. 

Mersch said a Eurozone CBDC could be based on a digital token circulated “in a decentralized manner,” without a central ledger. 

Other economic leaders aren’t so attracted by the possibility of taking all cash digital through the central bank. Avanti’s Caitlyn Long said CBDCs could be turned into a surveillance tool and as a way to exert undue economic pressure on citizens. 

Former U.S. Treasury Secretary Lawrence Summers, isn’t worried about a privacy-corroding CBDC proposal. He thinks there may be “too much privacy” associated with government-issued cash already. 

“In a world of inordinate tax evasion, trillions of dollars of laundered money around corruption and the drug trade, the last objective of government policy should be the promotion of anonymity with respect to large financial transactions,” Summers said. 

Joon Wong was one of the heavy lifters that made today such a success. One of the first CryptoX employees, back when the company was still London-based, Joon knows the crypto industry inside and out. He’s now running programming for our events. Here’s what he has to say about the first day of Consensus: Distributed:

To access all of the deeper cuts available through Consensus: Distributed, you’ll need to login through Brella, our virtual conferencing platform.

You can create an account through Gmail, LinkedIn, Facebook or set one up manually on Brella. Your profile will be the way you match and network with others. As soon as you’re set up, you’ll be directed to a dashboard showing other registrants.

Brella is easy to use and has a number of features to help you through this virtual experience. There are multiple tracks of simultaneous programming happening inside Brella. You’ll also be able to browse the entire agenda, bookmark sessions and build your own schedule.

Wild horses are the way to go when you live in Wyoming. 

Peep Erik “FIATSUX” Voorhees’ vanity plates. 

26. The People’s Bank of China
China leads in the world in the development of national digital currencies. While other central banks are talking about CBDCs, the People’s Bank of China (PBoC) is already trialling its toolkit. Just recently, screenshots emerged of a “digital yuan” interface being piloted at the Agricultural Bank of China (ABC), one of four state-owned banking giants. That PBoC is first to the CBDC starting line is not surprising. It has been working on the project for six years. Meanwhile, China’s government has made blockchain a national priority in several directions, including the recently launched Blockchain Services Network (BSN), which is now being piloted in Chinese cities and along its “Digital Silk Road” trade routes. FULL STORY

The CryptoX 50 is a selection of the most innovative and consequential projects in crypto/blockchain. See the other nominees here. We’ll announce more tomorrow.

This afternoon I took a guided tour of crypto art hanging across galleries in Cryptovoxels. One of the most inspiring and innovative sub-economies within crypto, blockchain-based artworks are proving their value in a time when most museums are shuttered. 

Here are some of my favorite installations, and where to find them. 

These three photos are all part of Nissla’s CryptoWiener Art Gallery found in Cryptovoxels at 304E,137N.

Welcome to Skeenee’s Skull Gallery (202E,347S)

Hedge Fund Pioneer Paul Tudor Jones Says He Holds 1%-2% of Assets in Bitcoin
Speaking to CNBC in an interview on Monday, Paul Tudor Jones II expressed some concerns with bitcoin, but he still praised its potential, when confirming his allocation in crypto. “There’s very little trust in it [bitcoin],” he said. However, “we’re watching the birthing of a store of value, and whether that succeeds or not only time will tell.” 

Vitalik Buterin Says Much-Delayed Ethereum 2.0 Still on Track for July Launch
Ethereum’s creator said the Ethereum 2.0 protocol upgrade, which will change the consensus mechanism to proof-of-stake (PoS), is well on its way to launching sometime in July. Sometimes known as Serenity, the update has long been subject to delays, with July a target date for developers since the beginning of the year. 

Ashton Kutcher and Michelle Phan Invest in Lolli’s $3M Seed Round
The $3 million seed round with Phan and Ashton Kutcher’s VC firm, Sound Ventures, marks roughly $5.4 million in total capital raised by Lolli so far. Pathfinder, the early-stage investment arm of Peter Thiel’s Founders Fund, led this recent round with participation from Bain Capital Ventures, Craft Ventures and Digital Currency Group, CryptoX’s parent company.

Zcash Alliance Aims to Bring Privacy Tech to Bitcoin, Cosmos and Ethereum
The Electric Coin Company (ECC) announced Monday the launch of the Zcash Developers Alliance (ZDA), an invite-only working group that includes the Lightning Network startup Bolt Labs, the cross-chain technology startup Thesis, the Ethereum conglomerate ConsenSys and two leading startups working on the Cosmos project, Agoric and Iqlusion, just to name a few. 

Binance.US Launches OTC Trading Desk for Large Trades
The feature will allow users of Binance’s US affiliate to process orders worth $10,000 or more directly between customers, off of the normal exchange’s order book. Catherine Coley, CEO of Binance America, said the launch comes at an opportune time for large value traders given increasing interest in bitcoin from well-known investors, such as hedge fund pioneer Paul Tudor Jones II.

ErisX Announces Launch of First U.S. Ether Futures Contracts
The new contracts, the first futures contracts for the second-largest cryptocurrency by market cap in the U.S., will begin trading effective immediately, ErisX announced. The move comes a few days after ErisX announced it had received a virtual currency license from the New York Department of Financial Services, and would begin offering trading services in what is the nation’s most stringent regulatory regime.

Crypto.com Lands Record $360M Insurance Cover for Offline Bitcoin Vaults
The crypto finance platform accessed the cover through institutional custody provider Ledger Vault, which offers $150 million of pooled insurance cover to clients, and Lloyd’s of London underwriter Arch Insurance.

CME Says Volume Surge Shows Strong Institutional Interest Before Bitcoin Halving
In a note sent out late on Sunday, the derivatives exchange said a strong “ramp up” in volumes over the past week showed institutional investors were getting exposure to bitcoin, most likely in preparation ahead of the supply-cutting event. CME said 844 unique accounts have begun trading bitcoin derivatives since the start of 2020 – more than double the number of new market entrants compared to the same period last year.