New name, who dis?

March 1, 2021

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What you need to know today in crypto and beyond

Welcome to The Node, CoinDesk's newly redesigned flagship daily newsletter.

Formerly known as Blockchain Bites, The Node aims to be your daily pulse check for what matters in crypto and beyond: In every issue, you'll find a digestible summary of the day's most important news, a thoughtful take on current trends by one of our writers and, to wash it all down, our favorite trending meme or tweet. It's all part of a balanced information diet.

If you were forwarded this newsletter and would like to receive it, or to unsubscribe, change your email preferences here.

Send feedback to marc.hochstein@coindesk.com – we'd love to hear from you!

– Marc Hochstein, Executive Editor

Today's must-reads

Dogecoin's new tricks: The canine cryptocurrency's developers announced the first update to its codebase since July 2019. Thanks to celebrity endorsements, the whimsical asset has fetched a multi-billion dollar market cap, spurring the coders to finally take their mangy animal to the software vet.

The absolute madman: MicroStrategy's Michael Saylor buys another 328 bitcoin (for $15M), bringing the business software company's total haul to 90,859 BTC. Saylor began acquiring the bellwether cryptocurrency for MicroStrategy's corporate treasury as an inflation hedge last year, presaging similar moves by Jack Dorsey's Square and Elon Musk's Tesla.

Mystery round: The team behind Ethereum speed booster zkSync has closed a Series A funding round led by Fred Wilson's Union Square Ventures (USV) as the competition among Ethereum scaling solutions tightens. The amount raised wasn't disclosed, so it's hard to tell how it stacks up against Optimism's recent $25M round led by Andreessen Horowitz. This much is clear: It's likely a two-horse race between between zkSync and Optimism given the respective VC nods, and every exchange is going to have to pick one or the other for settling transactions in ether or other Ethereum tokens given that blockchain's scaling roadmap.

– M.H.

Sound bites

Max Boonen is a well-known "no-coiner," or someone who doesn't hold bitcoin or other cryptocurrencies personally. But he still has a lot riding on the market.

His company B2C2 is an infrastructure provider for crypto trading, meaning that Boonen is "structurally" exposed to market movements. So his perspective is somewhere between that of True Believers on the one hand, and skeptics and normies on the other.

Boonen thinks it's unlikely for more finance chiefs to buy into the idea that a volatile asset like bitcoin would be safer than just keeping U.S. dollars on the balance sheet. "[C-suite executives] tend to be really square types," he said. If he's right, then Saylor, Dorsey and Musk are outliers rather than harbingers.

Watch the full interview here.

- Daniel Kuhn

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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 including Zack Seward and Benjamin Powers choose five of the day's big stories to hash out, as it were, 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.

The Takeaway

Putting the news in perspective

But Is It Art?

It's the same overwrought quandary that pops up every time technology invents a new kind of paintbrush. And with regard to non-fungible tokens, digital art and collectibles, that's really what the blockchain and other decentralized technologies are: another paintbrush.

Non-fungible tokens (NFTs) are artworks made with the blockchain and smart contracts as key tools. (There are also potential meat-and-potatoes business applications for these tokens – but art and collectibles are the use cases NFTs are known for right now.) Axios columnist Felix Salmon doesn't get them.

In his Feb. 25 newsletter Salmon traces the idea of digital ownership back to the blockchain startup Monegraph (whose launch your correspondent covered for another news site). Salmon claims (probably correctly, who knows?) that the sky-high prices for the best stuff right now reflect, in his words, "Excess wealth and liquidity, especially in a world where a lot of people are experiencing windfall cryptocurrency profits."

Maybe! It's good to remind people to be cautious in any speculative market.

But then he asserts:

"If you look at Hashmasks or CryptoPunks or much of the rest of the NFT world, there's no connoisseurship at play — no correlation between artistic merit and financial value."

Objection, your honor

If Salmon wanted to choose cases in point for artistically meretricious works, it's hard to imagine worse choices than CryptoPunks and Hashmasks.

I suspect Larva Labs did not describe CryptoPunks as a work of "art" when the team created it in June 2017, but I will. Breaker Magazine (RIP) did, too.

To assess merit, it's important to consider a work's context. Artwork doesn't exist outside of history or outside of space; the quality and depth of the statement it makes is relevant to its time and place.

Created before a standard was in place for such tokens, Cryptopunks existed entirely online. It made a statement about the potential of the Ethereum blockchain simply by existing as intended.

Further context: CryptoPunks were minted during the initial coin offering craze with hundreds of millions of dollars flowing from avaricious retail investors to startups that often had little or no plan. So it's hard not to read a critique of that frenzy into Larva Labs' decision to issue CryptoPunks for free to any Ethereum user who claimed them.

But those are deeper aesthetic points. Most people understand aesthetics in terms of appearance. So, fine: Choosing to go with "punks" as the theme spoke specifically to Ethereum's more countercultural, hipster vibes, particularly then.

Further, the pixelated, 8-bit graphics spoke playfully to a digitally native form. All very on point and artfully capturing that moment.

Next level

Then there's Hashmasks.

I happened to catch Hashmasks early, when you could still get one for 0.3 ETH (about $500 at current exchange rates). They're now selling for six-figure dollar sums. I debated banging out a story late on a Friday night, because as soon as I saw them I thought: oh dang, these are going to be big.

Hashmasks were picking up on similar themes as CryptoPunks, but a few years later, deftly extending the narrative.

The project combined work by flesh-and-blood artists with procedurally generated computer graphics, making software just as much an artistic tool as a cartoonist's pen and ink.

Further, Hashmasks used liquidity mining, an innovation of the budding decentralized finance (DeFi) market, to enable token holders to participate in the works by renaming them, a collaboration that will run for at least a decade.

The graphics themselves evoke Basquiat-esque vibes and the vernacular of graffiti. The mood could be read as either speaking to how much more diverse the crypto community has become or a hope for it to be yet more inclusive.

Either way, as statements go: Not bad.

Eye of the NFT holder

And beyond all that? They were just. So. Cool.

I get it, not to everyone's tastes but look: Your grandpa probably didn't like rock and your dad probably didn't like hip-hop. Was either on the right side of history?

Dismissing these works out of hand reads roughly the same.

Seriously, if there were an OK, Boomer award show, I don't know if Felix Salmon's take would have taken 2021, but it for sure won February. – Brady Dale

Join CoinDesk Research on March 3 at 12:30 p.m. ET for a look at bitcoin and ether from an investment perspective.

In this 30-minute webinar, research analysts Christine Kim and Damanick Dantes will give an overview of the investment case and some key metrics for the two largest crypto assets by market capitalization.

This discussion will dive deeper into the topics featured in the CoinDesk Research report "Bitcoin + Ether: An Investor's Perspective." Download the free report next week on the CoinDesk Research Hub.

Off-Chain Signals

What others are reporting....

More on NFTs from Decrypt, writer Sean Blanda and bitcoin dev Jimmy Song. Trigger warning: Song could plausibly be described as a BTC maximalist.

The New York Times on China's national digital currency initiative. "No other major power is as far along with a homegrown digital currency."

"How I Got Sucked Into a Discord Stock-Trading Group and Made Thousands." Similar to the Reddit WallStreetBets saga, but with weed.

- M.H.

The Chaser...

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