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Satoshi&Co Daily Crypto Newsletter

December 16 · Issue #254 · View online
ZPX | Satoshi&Co Newsletters

Check out past issues of the newsletter along with more interesting crypto content as well as short (but great) conversations with leading crypto industry participants at our newly-launched website www.satoshiand.co

Over the past couple of weeks, in case you might have noticed, the Satoshi NL has been silent. We have been on the road, talking about crypto, tech, as well as Qume, covering Singapore, the Middle East and the US over the past month or so for various events, conferences and meetings. One of the highlights was the opportunity to attend the SALT conference in Abu Dhabi and meet Anthony Scaramucci (@scaramucci) himself in person. Also a h/t to the one and only @RuchiDana for making this happen.
So many things have happened in the interim - the LedgerX founders being replaced, China’s blockchain strategy playbook for global dominance, BAKKT’s CEO getting appointed to the senate. The long flights and the layovers and the timezone shifts also allow for periodic pockets of undisturbed time, where one can look back over a period of time, rather than the short 24 hour time cycles that the daily newsletter usually demands. Paradoxically enough, and perhaps not surprisingly, the longer the time window, the fewer the truly important events! Which is probably why reading the Economist is far more satisfying than reading the Financial Times - sort of a distilled, Keto diet for the brain.
One thing that we have been thinking about a lot is money crypto v tech crypto. Money crypto is basically the stuff that is making money in crypto, i.e, creating and capturing value. Tech crypto is the potentially game-changing stuff, and is creating some value, but it is fair to say that most of the value creation and capture in tech crypto is ahead of us. Money crypto is more East focused, in Asia primarily, while Tech crypto is, not surprisingly, more of a US thing. 
The following slide highlights the differences -
Source: Nick Grossman@USV
Source: Nick Grossman@USV
Clearly the left side is the one that has created far more value so far. The left side deals with crypto as money, an asset class, and is a level-1 primitive. The right side is more second-order, and the bet is that it will start coming into its own as more infrastructure gets built up, regulations mature and development efforts hit their stride.
With that preamble out of the way, and with the hope that we become more frequent with the newsletters as we enter the home stretch for the decade, here is jumping into the main course; some of the things we found interesting over the past few days.
Token transactions surpass ETH transactions on the Ethereum blockchain
  • Ever since the launch of the Ethereum blockchain in 2015, non-token transaction count (i.e. just ETH only transactions) has been higher than the token transaction count (i.e. ERC-20 and ERC-721 transactions). Non-token transactions have peaked at 1M at the height of the ICO bubble in late 2017 and have been on a persistent decline since then. Barring the cryptokitties frenzy that caused the ERC-721 transactions to reach 300k per day in Dec’18, the number of ERC-721 token transfers has remained relatively miniscule as compared to the ERC-20 token transactions. 
  •  After Tether’s migration to the Ethereum blockchain, the transaction count for ERC-20 version of Tether has skyrocketed, causing the ERC-20 transaction count to surpass the non-token transaction count on the Ethereum blockchain. In less than six months, ERC-20 USDT’s transaction throughput now accounts for more than 80% of the ERC-20 transaction throughput on the ETH blockchain, with DAI in second place with <5% share of transactional throughput. 
Monero’s hash rate surges by three times
  • A recent upgrade to Monero’s consensus algorithm caused a 3x spike in the network’s hash rate. The consensus algorithm changed to RandomX from the previous CryptoNight algorithm, resulting in efficiency gains for CPU miners while also making GPU mining mostly infeasible
  • The RandomX mining algorithm results in estimated efficiency gains of 8x to 10x for CPU miners while “GPU performance either gets a tiny boost or degrades after the mining algorithm change”.
  • These changes to consensus algorithms are a part of the regular process agreed upon by the stakeholders in 2018 to prevent ASICs from taking over the mining pools, as was the case in the case of bitcoin and ethereum
  • However, there is a concern among the community members that CPU botnets could be controlling a majority of the mining pools since the change to RandomX
Meanwhile in Crypto Wonderland....
“17% Tokens Staked In ADA’s Testnet”
Cardano’s incentivized testnet went live with promising results. Holders already staked 5.4 billion Ada, representing 17% of the coin supply. IOHK also announced that over 120 staking pools went online during the first day of operation, well on its way to its 1,000 pool target. Although some of the leading pools are operated by IOHK itself, several independent pools are also topping the charts at PoolTool. Cardano’s roadmap suggests that the blockchain’s incentivized staking system will “reach equilibrium” at 1,000 pools, meaning the project is on its way to meeting that target.
“Digix Integrates A Dissolution Mechanism Into Its Platform”
Gold-backed stablecoin issuer Digix has integrated a dissolution mechanism into its DigixDAO platform, created to fund projects which encourage the growth of the Digix ecosystem. Each quarter, DGD token holders will vote on the mechanism — called Project Ragnarok — with DigixDAO only continuing into the next quarter if the dissolution vote fails. The first Project Ragnarok proposal was recently submitted to the DigixDAO for voting, although the concept was first announced in a blog post on Nov. 29. Digix makes clear that its position is firmly opposed to dissolution, as it believes that the Digix Gold (DGX) ecosystem would not have grown as it has without the support of DigixDAO community members. Due to this bias, it will abstain from voting on any dissolution projects.
“ING To Venture Into Crypto Custody”
Dutch bank ING is working on developing technology to help clients safely store digital assets, according to people familiar with the matter. The custody project, which is being run out of Amsterdam, is still in its early days and is one of the bank’s several initiatives around blockchain, the technology underlying cryptocurrencies, the sources said. ING is particularly focused on developing the technology behind digital assets to give its clients a compliant way to access the emerging sector, it added. The project comes as established financial companies look into offering custody and other services for both cryptocurrencies such as bitcoin, as well as other types of digital assets.
“R3 Closes The Largest Open-account Trade Finance Trial On Corda”
R3 has closed what it’s calling the largest open-account trade finance trial ever conducted on its Corda platform. This trial included more than 70 organizations from more than 25 countries. Upwards of 340 participants from those organizations were involved and came out from sectors like financial services, information technology, telecommunications, logistics, the maritime industry, real estate, hospitality and the automotive industry. The trial tested working capital applications developed by TradeIX and focused on the receivables finance product on Marco Polo’s platform, TradeIX announced Thursday. Accounts receivables financing, also called factoring, is where a business sells account receivables to a third party at a discount in return for immediate cash payment.
Crypto Twitter Pick
Qume
64% of the #Bitcoin didn't move from their wallets since December 2018.

#BTC #HODL #Crypto https://t.co/eE9CAzlli0
2:31 PM - 3 Dec 2019
What We Are Reading / Listening To
The DeFi Déjà Vu by Mario Laul
Bitwise’s Latest Plans to Get a Bitcoin ETF Approved featuring Hunter Horsley and Matt Hougan
Overnight Performance of Top 10 Currencies
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Brought to you by Satoshi&Co
This newsletter does not constitute an offering of securities in any jurisdiction. The contents of this note should not be construed as investment advice or as a recommendation to purchase securities. This note is intended for the consumption of the recipient alone and not for public distribution. Please consult a certified financial advisor or other appropriate practitioner as may be appropriate as per your jurisdiction.
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