Bitcoin is one of the only sources of funding available for the “pirate” science site, Sci-Hub, which is quietly engaged in war against copyrights.
Despite Bitcoin’s ability to disintermediate money from politics, a new quantum computer may eventually crack its code. Here’s the story:
You’re reading Blockchain Bites, the daily roundup of the most pivotal stories in blockchain and crypto news, and why they’re significant. You can subscribe to this and all of CoinDesk’s newsletters here.
A Quiet Revolution
Alexandra Elbakyan, the founder of Sci-Hub, a database of over 80 million articles from academic journals usually locked behind subscription services, is fomenting a quiet rebellion against copyright funded by bitcoin. The website has been sued by two science publishing houses and reportedly investigated by the U.S. Department of Justice, effectively cutting Elbakyan off the mainstream financial services in the West. Elsewhere, Honeywell unveiled the most powerful quantum computer to date, again opening questions over Bitcoin and most cryptocurrencies’ security models. “According to a June 2017 paper, a quantum computer would need to have around 2,500 qubits of processing power in order to break the 256-bit encryption used by Bitcoin,” Decrypt’s Liam Frost reports.
Confusion at the Top
Zhan Ketuan, the once-ousted Bitmain co-founder who returned to power this month, offered to buy back shares held by his rival co-founder Wu Jihan in an attempt to end the firm’s internal war. Zhan’s offer values the company at $4 billion, significantly down from a market high. Meanwhile, after significant push and pull, U.S. Securities and Exchange Commission (SEC) Chairman Jay Clayton may be the next U.S. Attorney for the Southern District of New York. Clayton was nominated by U.S. President Donald Trump to replace Geoffrey Berman, who initially refused to step down. Finally, the Financial Conduct Authority (FCA) told crypto businesses they must submit their completed anti-money laundering applications by June 30, although the hard deadline for applications is Jan. 10, 2021.
Crime and Punishment
New Zealand police have seized NZ$140 million (US$90 million) in bank funds linked to Alexander Vinnik, a Russian alleged to have been the controller of the now-defunct BTC-e cryptocurrency exchange. The seizure is said to be the largest in the country’s history by federal police. Meanwhile, a wallet allegedly linked to PlusToken, which has been accused of being a $3 billion Ponzi scheme, has withdrawn 26 million EOS tokens (more than $67 million). (Decrypt)
Pilots, Tests & White Papers
The National Bank of Cambodia has revealed new details about its upcoming blockchain-based payments system dubbed “Project Bakong.” The quasi-digital currency project is a revamp of the Khmer Riel secured by a Hyperledger Iroha blockchain. Meanwhile, a solar energy trading trial, partly funded by the Australia government, run by blockchain startup Power Ledger found the initiative to be “technically feasible” for real world use. Finally, the Italian Banking Association (ABI) said its 700 banking institutions are willing to pilot a digital euro.
Crypto for Social Good
Racial diversity and financial inclusion are good for cryptocurrency and blockchain – and the industry has work to do. At a virtual Juneteenth event put together by the founder of the National Policy Network of Women of Color in Blockchain, panelists said crypto has the potential to allow citizens to opt out of what they described as a racist financial system, though people of color must be part of the development of the technology. Independently, Ron Kim, a member of the New York State Assembly, has become a fierce advocate for progressive politics as well as a surprising voice for crypto advocacy. Kim has put forward bills to create local cryptocurrencies and a decentralized standard for contact tracing in a bid to give his constituents self-sovereignty.
Funding & Finance
Crypto trading platform CrossTower has raised $6 million in a seed funding round led by European tech investor Gerard Lopez. The platform supports highly active order books and tight spreads for crypto-to-crypto trading. Elsewhere, OMG Network’s parent company SYNQA has raised a $80 million Series C fund led by SCB10X, the venture arm of Thailand’s Siam Commercial Bank, and Mirai Creation Fund II of Japanese asset manager SPARX Group, and including participation from Toyota Financial Services Corporation, among others. (The Block) Finally, a record $1 billion of Bitcoin and Ethereum options will expire on the Deribit exchange on June 26. (The Block)
Bitcoin & Gold
Bitcoin is reporting moderate gains on Monday as gold, a safe haven asset, rallies amid renewed coronavirus concerns. The cryptocurrency is priced around $9,430 – up 1.5% on the day – having put in lows near $9,260 during the Asian hours, according to CoinDesk’s Bitcoin Price Index. Gold, however, printed a one-month high of $1,759 per ounce early on Monday and was last seen trading near $1,750.
Looking Through the Water
XRP, the fourth-biggest digital asset by market value, has been left out of 2020’s crypto rally, marking the second straight year of underperformance. The token is down 2% in 2020, while bitcoin is up 30% and ether has gained 76%. Analysts told CoinDesk’s First Mover XRP is likely underperforming because of regulatory pressure, slow growth as a payments solution and a lack of classic proof-of-work mining that generates fresh supply for the trading market. Such negatives have outweighed bullish factors like a reduced pace of sales by the XRP software developer Ripple and signs of progress in a partnership with the payments transmitter MoneyGram (NASDAQ: MGI).
Start With Gold
Gunnar Jaerv, COO of First Digital Trust, said the tokenization revolution, which could reach more than $544 trillion worth of assets, will be kicked off by tokenizing precious metals by paving the way for regulatory clarity and proving the effectiveness. “Gold has long been a trusted store of value for investors, especially when fiat currencies experience volatility. By tokenizing assets like gold on the blockchain, you are guaranteed the digital rights to your investment,” Jaerv said.
Crypto Long & Short
What Changed My Mind About Bitcoin Narratives
CoinDesk’s Head of Research Noelle Acheson thinks one of crypto’s virtues is its level of debate. Last week, Bloomberg editor Joe Weisenthal and several JPMorgan analysts gave differing views of Bitcoin’s value and performance throughout 2020. Both are centered around the idea that Bitcoin has a central narrative it either hits or misses. “I have always regarded bitcoin’s lack of a clear narrative as a strength. I was wrong – it is both a strength and a weakness,” Acheson writes. “Bitcoin’s main use case is yet to be determined… [and] the demand growth from any one of its many narratives could be enough to push up its value.”
Who won #CryptoTwitter?
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.