'Green' Bitcoin Is the Price of Mass Adoption

What you need to know today in crypto and beyond

March 16, 2021

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Top Shelf

Today's must-reads

BITCOIN STIMULUS: Some $40 billion could flow into bitcoin and stocks from the latest round of direct stimulus checks in the U.S. Mizuho Securities ran a survey and found two in five Americans expecting to receive $1,400 checks, part of a COVID-19 relief package President Biden recently passed, anticipated using a portion of them to invest. Others have noted the $1.9 trillion stimulus package could create the inflationary conditions in which a so-called "hard money" like bitcoin thrives.

CONSENSYS COMEBACK? Staffers at ConsenSys, the Ethereum development shop that retrenched mightily during the crypto winter of 2018-2019, may finally get their long-awaited equity payouts soon, according to an internal memo obtained by CoinDesk's Ian Allison. A complex restructuring, capital injections from JPMorgan, the DeFi explosion and the rebounding of crypto generally all seem to have helped reverse the Brooklyn, N.Y., studio's fortunes.

IF YOU BELIEVE THAT... Someone is auctioning an NFT tied to a digital image of New York City's iconic Brooklyn Bridge, in an apparent tongue-in-cheek homage to the 20th-century scoundrel whose deceptions begat the phrase, "I have a bridge to sell you." The stunt could be interpreted as a wry comment on the boom for non-fungible tokens, which confer the bragging rights to a rare item but little else, especially when that item is digital and can be freely enjoyed by anyone with an internet connection. But in this case the mischief is for a good cause, at least in part, as half the proceeds of the NFT sale would go to the Brooklyn Public Library.

GONE GLOBAL: Nigerian investors are reportedly turning to dollar-backed stablecoins to protect their savings from local inflation. This is creating competitive conditions for mobile payments options and crypto protocols to gain market share in the nation. But it's a global story, reports CoinDesk's Sandali Handagama. Anywhere there is local currency volatility or hyperinflation there are people who see stablecoins as a compelling option.

– Marc Hochstein & Daniel Kuhn

Sound Bite

Overheard on CoinDesk TV

"Beeple is the artist of our century."

– MetaKovan, buyer of the $69M Beeple NFT, on CoinDesk TV's First Mover Tuesday morning. Watch the episode here.

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Introducing 'The Hash,' news analysis on CoinDesk TV

From the world leader in crypto news and events, the all-new CoinDesk TV covers the rapidly evolving world of digital finance and its role in the global economy.

We cut through the hyperbole and confusion to explain what's happening in this fast-changing industry and why it matters to investors, companies and governments.

On "The Hash," a daily panel show, CoinDesk journalists Zack Seward, Benjamin Powers and Will Foxley choose five of the day's big stories to hash out and analyze. With a personality-driven, fast-paced, entertaining format, it presents themes ranging from serious to fun.

Watch "The Hash" daily on YouTube or CoinDesk.com.

Off-Chain Signals

What others are writing....

Crypto giveaway scams are on the rise, the BBC reports, having already brought in more sums (in dollar terms) in the first three months this year than all of 2020.

Crypto risks aren't limited to retail investors, but governments too. As "competitors in the global market for cash, [financial regulators] need to improve their products," Bloomberg's editorial board wrote.

Bitcoin is setting a new price record every four days, on average, industry publication Protos found. Its latest "all-time high" of $61,788 set Saturday was the cryptocurrency's 17th this year.

– D.K.

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The Takeaway

Putting the news in perspective

This isn't 2015 anymore

Kevin O'Leary appeared on CoinDesk TV yesterday to deliver a bombshell: Before Wall Street goes all-in on bitcoin, he said, it needs to know how BTC is being mined.

The "Shark Tank" star and chairman of O'Shares ETFs said institutions want to invest in BTC, but they have environmental issues. They're leery, as it were, of operations driven by coal or other climate-unfriendly technology. And they want transparency around origin.

O'Leary even compared some BTC to "blood diamonds," suggesting that miners who want to be on the right side of history need to become more efficient.

This raises a lot of big questions, including whether BTC can remain fungible, or whether we might see a split between provably "clean" coins and coins with uncertain provenance.

The reactions on Twitter to O'Leary's comments were furious.

Commenters speculated O'Leary was trying to drive down the BTC price so Wall Street could buy more on the cheap. They accused him of hypocrisy. (Doesn't Wall Street invest in gold and oil and other noxious stuff?) They scoffed, "Who cares about Wall Street?"

Others shrugged and said they'd heard it all before.

And it is true that this is a new version of an old narrative. As my colleague Marc Hochstein wrote, "For years, there has been talk of newly mined, 'virgin' bitcoins fetching a premium over units that have passed through multiple wallets." That alleged coin discrimination had to do with legal and regulatory rather than environmental concerns.

Meanwhile, the "bitcoin energy debate" has been one of crypto's fiercest (which is saying something).

On one side are people who complain (somewhat erroneously) that bitcoin's energy consumption is the size of a small country and who can't understand why a climate-threatened world needs energy-intensive peer-to-peer money.

On the other, people say that 1) bitcoin's mining is getting cleaner, 2) that fiat uses plenty of energy, too, and 3) that, why don't we ever talk about the energy consumption of, say, America's wars and Christmas lights?

To me, O'Leary's comments point to two reckonings.

One, as much as bitcoiners want to dismiss the energy/environment debate, it's not going away. There are simply too many people frightened about climate change to allow BTC a free pass on these questions. The community needs to account for its footprint the same way every industry (more or less) has to these days. That's just modern business.

And two, well, the energy debate actually doesn't matter. It's not important if you think the critics are wrong or hypocritical. It only matters that the people who matter on Wall Street take this seriously.

At bottom, this is a question less about the environment and more about institutionalization. Large companies are bound by sustainability and ESG committees. They have stakeholders and rules and processes to follow. And, these days, environmental impact is a material liability. They need to prove they're clean.

Bitcoiners may not like it. But "greener" bitcoin may be the price of admission to mainstream markets. This isn't 2015 anymore.

– Ben Schiller

What are bitcoin and ether's value propositions for investors?

A new report by CoinDesk Research explains how the two most popular cryptocurrencies by market capitalization behave in the market, how their infrastructure differs, and what on-chain metrics say about them.

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

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