Riding The Wave News Summary #28
Britain will reveal crypto regulation plans in coming weeks, sources say, Is Miner Concentration Once Again Jeopardizing Bitcoin? Not Exactly
Welcome to Riding The Wave. If you have questions or feedback, please reply to this email. If you are new to the Newsletter, please check out what we provide on our about page and consider subscribing. Within the Newsletter, I provide News Summaries, Weekly Status Updates, & Deep Dive Articles on Specific Topics (Ex: How do I pick which coins/tokens to buy?). More details here
News
Table of Contents
Tweets
Britain will reveal crypto regulation plans in coming weeks, sources say
Is Miner Concentration Once Again Jeopardizing Bitcoin? Not Exactly
After years of doubts and concerns, it is finally Bitcoin’s time to shine
Ethereum price hits $3.2K as anticipation builds ahead of the ‘Merge’
Charles Hoskinson cheekily admits: ‘I was wrong’ about DApp rollout
White House office seeks public opinion on crypto-climate implications
Tweets
Britain will reveal crypto regulation plans in coming weeks, sources say
LONDON — The U.K. government will soon reveal plans to regulate the cryptocurrency market, focusing on a fast-growing type of token known as stablecoins
Details of the plans are still being finalized, however sources who spoke to CNBC say they are likely to be favorable to the industry, providing legal clarity for a sector that has so far been mostly lacking in regulation.
According to the sources, Treasury officials have shown a willingness to understand the complexities of the crypto market and so-called stablecoins, digital assets that derive their value from existing currencies like the U.S. dollar.
The department has been in discussions with a number of firms and trade groups. That includes the Winklevoss brothers’ crypto exchange Gemini, one of the sources said. Gemini issues its own stablecoin called the Gemini dollar, which is pegged to the U.S. dollar.
It’s exciting to see Britain move towards clarifying stable coin regulations as stablecoins help to support the cryptocurrency space in general. Many investors will move funds between stable coins and more volatile crypto currencies instead of between traditional fiat currencies & crypto. The conversion process from crypto to crypto is much faster than crypto to fiat currencies allowing for investors to get traditional currencies stability while still having access to the speed of crypto.
Is Miner Concentration Once Again Jeopardizing Bitcoin? Not Exactly
One of the main pillars of bitcoin’s value proposition is decentralization. Why then does the computer processing power behind the largest cryptocurrency seem to be concentrating again in one place, this time North America? The answer is multifaceted but some of the main reasons come down to where it's the safest in this geopolitical environment and most profitable for the miners to operate.
According to a report released by Cambridge Centre for Alternative Finance (CCAF) in October, the U.S. accounted for 35.4% of Bitcoin’s global computing power, or hashrate, at the end of August, more than doubling the 16.8% share at the end of April. Kazakhstan and Russia followed the U.S. with hashrate shares of 18.1% and 11%, respectively, at that time. Meanwhile, mining operations in mainland China had effectively dropped to zero, down from a high of 75.53% in September 2019.
“Ideally, miners would distribute Bitcoin's hashrate across the globe and multiple jurisdictions, but they will migrate to the most favorable business, energy, and political climates they can find—that's why they are coming to the United States,” said Colin Harper, head of content and research at the the crypto software and services company Luxor Technology.
As the US regulatory environment is much more stable & therefore less likely to ban crypto mining outright I don’t view this as an issue. In the worst case if crypto mining was banned it would only slow down network speed for 2 weeks before the algorithm adjusted causing minimal impact to Bitcoin in the long term.
After years of doubts and concerns, it is finally Bitcoin’s time to shine
Despite the recent explosion within the crypto sector, crypto markets remain in the shadow of traditional market investments in terms of valuations. Through mainstream exposure to the potential of Bitcoin, we have seen the closing of this gap at a much faster rate than initially predicted. Investors have always sought the most up-to-date and viable options for their portfolios.
With the advantages Bitcoin holds over gold and the certainty of a digitized future, many investors are looking to diversify their portfolios, and Bitcoin looks to be the best option. This incremental flow of capital into the crypto-space can only go on for so long until the flood gates eventually open, allowing Bitcoin to take its place as the new gold.
I’m not entirely sure about Crypto replacing gold as they both have unique strengths and weaknesses but I do agree that we may be nearing crypto’s flood gate moment where it sees the majority of its adoption. Technologies like the internet, personal computers, phones, & crypto that rely on network effects to grow tend to catch on slowly at first until later bursting out with exponential growth.
Keep reading with a 7-day free trial
Subscribe to Riding The Wave to keep reading this post and get 7 days of free access to the full post archives.