ExxonMobil's Bitcoin Mining Pilot

The biggest crypto news and ideas of the day

Mar. 25, 2022

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Welcome to The Node.

In today's newsletter: ExxonMobil is piloting a bitcoin mining project. India passes stiff crypto laws. And EU legislators continue bill negotiations without crypto ban provision.

–Daniel Kuhn

Today's must-reads

Top Shelf

STRANDED ENERGY: Oil giant ExxonMobil is running a bitcoin mining pilot project using wasted gas from its North Dakota oil wells.

The Irving, Texas-based company is also reportedly looking to make use of its excess natural gas supply, which it said would have otherwise been wasted, burned or flared off in facilities worldwide.
It has partnered with Crusoe Energy Systems on the North Dakota oil pilot.
Meanwhile, CoinDesk's Jeff Wilser reports on seven other wild bitcoin mining rigs.

TAXING EFFECT: India has passed stiff crypto laws that will ramp up capital gain taxes by 30%, beginning April 1.

In addition to a capital gains tax, that country will also impose a 1% "tax deducted at source" (TDS) on crypto transactions beginning in July and will eliminate potential tax deductions on losses.
Some experts in India's crypto industry said the bill will be "more harmful than good" and perhaps "one that will hamper the overall growth of the industry."

MiCA MOVES: The European Union's proposed comprehensive crypto regulatory policy proposal, Markets in Crypto Assets (MiCA), is moving forward to the next stage of negotiations without the controversial provision that would have restricted cryptos like bitcoin that are based on proof-of-work.

EU legislators will now move on to trilogue negotiations between the parliament, council and commission, which are still debating the use of NFTs, DeFi and divvying up supervision over the crypto space.
Elsewhere in the EU, lawmakers have passed legislation that will support smaller players against tech conglomerates like Google, Apple, Amazon and Meta called the Digital Markets Act.

TERRA FIRMA: Following a community vote on Thursday, decentralized money market Anchor protocol said it will readjust its interest rates each month moving forward, changing its policy from offering blanket 20% returns.

The Terra-based platform said the move is about making Anchor, which relies on earning stalking rewards from blockchains, more sustainable in the longer term. Reactions from users were mixed, and the protocol's token dropped 5% on the news.

BLOCKCHAIN IN TEXAS: Crypto in the Lone Star state? In a city of one million, Austin, Texas, is taking a step forward when it comes to bitcoin adoption.

City councilors have approved plans to investigate the practicality of accepting payments via bitcoin or other cryptocurrencies.
The "fact finding study" will look to hammer out a number of details, including the potential benefit crypto could have on public services, its economic and environmental impact and the financial stability and security of using the digital assets. Findings for the study are said to be due on June 16.

–Fran Velasquez

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What others are writing...

Off-Chain Signals

Vanuatu prime minister says yes to Satoshi Island crypto project (Cointelegraph)
DeFiance Capital rescues $13.3 million at risk of being stolen (The Block)
Meme Stonk GameStop Taps Loopring for Beta NFT Marketplace (The Defiant)
Ukraine launches NFT 'Museum of War' in crypto crowdfunding push (Reuters)
Latest in Crypto Hiring: Jefferies Execs Leave to Create Startup (Blockworks)

Introducing CoinDesk's Mining Week. Our reporters visited crypto mining farms around the world, interviewed key players and crunched network data to shed light on a little-understood industry. Follow along with our continuing coverage .

How Northern Italian Hydropower Producers Became Bitcoin Miners

In the pursuit of economic sustainability, northern Italian hydropower producers are turning to bitcoin mining.

Exponential Software Requires Exponential Hardware

Web 3 will require the creation of a new structure of hardware, custom-built for the rapidly growing needs of the software.

Putting the news into perspective

The Takeaway

The Perils of Crypto's Pseudonymous Economy

If crypto's pseudonymous economy is to survive this era of NFT rug pulls and token Ponzinomics, then I've yet to see a reason why or how it should. We're living through a massive digital whack-a-mole game. But these moles have mallets – Groucho Marx masks, too. Why, then, do we keep plunking quarters into their machine?

Take Thursday's announcement of fraud charges against two organizers of the "Frosties" non-fungible token blowup. Federal prosecutors alleged 20-year-olds Ethan Nguyen and Andre Llacuna scammed investors in their million-dollar metaverse mumbo jumbo, a collection of cutesy JPEG PFPs (profile pics).

Infected by FOMO (fear of missing out) and crypto hype culture, thousands of well-meaning if misguided victims didn't know who was selling them a tin digital Spam. Some Frosties buyers eagerly dropped thousands of dollars on mint day. They didn't start asking whodunit until after the rug had been pulled. Why bother vetting creators "Meltfrost" and "heyandre" in an ecosystem that lionizes the pseudonymous hack?

Therein lies the ... rug. Crypto and DeFi (decentralized finance) and NFTs and Web 3 have grown to adore pseudonymity's romantic mystique. This makes perfect sense from a historical standpoint: Bitcoin's Satoshi Nakamoto set a trillion-dollar precedent for keeping one's real name under wraps. He or she or they created a financial disintermediation platform that didn't know or care who used it. Years of open-source collaboration, auditing and innovation – and Satoshi's early exit stage left – mean bitcoiners nary fret over the founder's real name.

Earned trust?

Bitcoin earned our respect over a decade of growth. Its pseudonymous precedent is now being exploited by a new generation of scam-happy thieves. Carnival goldfish have longer, happier lives than these ringleaders' phony names.

Read the full article here.

–Danny Nelson

What Does a Successful Blockchain Look Like? Hint: Volume Isn't Everything*

How do you know that today's most successful NFT blockchain will still be on top three months from now?

You don't – and part of that uncertainty has to do with how "successful" is defined. In the infancy of the non-fungible token (NFT) space, maybe it was appropriate to obsess over sales volume. While that provides a snapshot of how blockchains rank at a moment in time in terms of a single metric, sales volume can no longer be considered the only indicator of current performance. Nor can it be relied on as an indicator of future performance.

Real-world consequences exist for ignoring other metrics.

*This is sponsored content from Wax.

The Chaser...