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Riding The Wave
Riding The Wave News Summary #7

Riding The Wave News Summary #7

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Thomas Holland
Jan 09, 2022
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Riding The Wave
Riding The Wave
Riding The Wave News Summary #7
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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

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News

Table of Contents

  1. Bitcoin prices fall to lowest in months after US Fed remarks

  2. Will Bitcoin Hit $100,000 in 2022? We Asked the Experts

  3. Vitalik proposes new ‘multidimensional’ Ethereum fee structure

  4. Polygon Under Accidental Attack From Swarm of Sunflower Farmers

  5. Crypto Firms Brace for New Tax-Reporting Rules to IRS

  6. WisdomTree Adds Bitcoin Futures Exposure to Fund, Refiles for Spot ETF

  7. Mozilla backflips on accepting crypto after ‘planet-incinerating’ backlash

  8. GameStop shares jump 26% in after-hours trade after NFT division unveiled

  9. PayPal Is Exploring Creating Its Own Stablecoin as Crypto Business Grows

  10. Airbnb users want crypto payment options, according to CEO’s Twitter poll


Bitcoin prices fall to lowest in months after US Fed remarks

The crypto-currency dropped in value from $47,000 (£34,700) earlier this week to less than $42,000 (£31,000) per digital coin.

It follows minutes from a meeting of the Federal Reserve, which suggested it may raise interest rates.

Political events in Kazakhstan have also raised concerns about the network's capacity.

This is what happened:

  • Bitcoin started the week at a price above $47,000 per coin

  • That began to slip by mid-week to around $46,000

  • On Wednesday, the Federal Reserve minutes were released

  • By Thursday, the price fell sharply to around $42,000

  • It hit a low of nearly $41,000 at one point on Thursday before recovering slightly

Matthew Dibb from Singapore-based crypto-company Stack Funds told Reuters news agency: "We are seeing broad risk-off sentiment across all markets currently, as inflationary concerns and rate hikes appear to be at the forefront of speculators' minds."

Markets tend to overreact especially when multiple negative events stack together. Kazakhstan shutting down should only have a short-term impact on Bitcoin due to the systems mining difficulty automatically adjusting over the next couple of weeks to accommodate the 18% drop in network contribution. As you can see by how much of the network was mined by China (Over 50%) before this is a small drop in comparison.

US interest rates can also have a short to medium-term impact on Bitcoin but in the long term, the government won’t get rid of inflation, which means any economic policy could only slow down Bitcoins growth. As long as inflation exists Bitcoin will likely be a better store of value than the current alternatives available.

Full Article


Will Bitcoin Hit $100,000 in 2022? We Asked the Experts

“The No. 1 influencing factor for Bitcoin and cryptocurrencies in 2022 is central bank policy,” Antoni Trenchev, managing partner of crypto lender Nexo, said in an email. “Cheap money is here to stay which has huge implications for crypto,” as “the Fed doesn’t have the stomach or backbone to withstand a 10%-20% collapse in the stock market, along with an adverse reaction in the bond market.”

I agree that it’s unlikely the US makes any moves that could cause panic. The government is relatively happy with the current market state minus the high inflation. At first, they called it transitory but have now accepted it is permanent unless they take action. Fortunately for Bitcoin and unfortunately for the current financial system, our economy is dependent on inflation as it incentives people to spend rather than save. I doubt the US will ever want to get rid of inflation as it’s such a powerful tool for forcing growth within the economy.

Full Article


Vitalik proposes new ‘multidimensional’ Ethereum fee structure

Ethereum co-founder Vitalik Buterin has put his thinking cap on again in an attempt to improve the current fee structure for the network.


The proposal titled “Multidimensional EIP-1559” was laid out in a blog post on Wednesday in which Buterin noted that different resources in the Ethereum Virtual Machine (EVM) have different demands in terms of gas usage.

Buterin outlined his fairly complicated proposed changes with a lot of technical math, but in a nutshell, the proposal offered two potential solutions using “multidimensional” pricing.

The first option would calculate the gas cost for resources such as call data and storage by dividing the base fee for each unit of resource by the total base fee. The base fee is a fixed-per-block network fee included in the Ethereum Improvement Proposal (EIP) 1559 algorithm.

The second more complex option sets a base fee for using resources but includes burst limits on each resource. There would also be “priority fees,” which are set as a percentage and calculated by multiplying the percentage by the base fee.

Gas prices (cost of a transaction on a crypto network) are the problem that every crypto network is trying to solve as it’s a scaling problem. This means the larger the network and the more successful, the higher the gas prices. This multidimensional fee structure might help but with ETH 2.0 on the horizon, I think it’s unlikely the development team focuses on this scaling issue immediately. I also think this would be challenging to implement as the more complicated a solution is the more potential loops holes there are.

Full Article

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