Yesterday in Crypto - Issue #27

Read time: ~8 minutes

In a significant reshuffle in the crypto space, Coinbase has acquired an equity stake in Circle, the company behind the popular USD Coin (USDC) stablecoin.

🚀 What's Happening?

Coinbase and Circle, which jointly launched USDC, have decided to dissolve their Centre Consortium, which governed the stablecoin. Instead, Circle will now take on full operational and governance responsibilities for USDC, including holding smart contract keys and ensuring regulatory compliance.

💡 Quick Refresher:

• What is Circle:

  • A global financial technology firm that provides various blockchain-based services.

  • Best known for co-creating the USDC stablecoin, a digital currency pegged to the US dollar.

• What is Coinbase:

  • One of the largest and most popular cryptocurrency exchanges in the world.

  • Provides a platform for buying, selling, and managing a diverse set of cryptocurrencies.

• What is a Stablecoin:

  • A type of cryptocurrency designed to have a stable value, typically pegged to a traditional currency like the US dollar.

  • Offers the benefits of digital currency without the extreme volatility often seen in cryptocurrencies like Bitcoin and Ethereum.

🔍 Why the Change?

This strategic move comes as the crypto industry witnesses increased regulatory clarity, particularly around stablecoins. Both companies believe that with this evolving clarity, there's no longer a need for a separate governance body like Centre.

📈 USDC's Growth and Future

USDC, launched in 2018, has grown to become the second-largest stablecoin with a market cap of $26 billion. The stablecoin is set to expand further, with plans to launch on six new blockchains in the coming months. While the exact blockchains haven't been specified, previous announcements hinted at Polkadot, Optimism, Near, Arbitrum, and Cosmos.

🔗 Strengthened Partnership

This move not only deepens the commercial relationship between Coinbase and Circle but also aligns their strategic and economic interests more closely.

Friend.Tech is the latest buzz in the crypto world, but before you dive in, it's essential to understand how it works and where the real profits go. Let's break it down:

🔗 How Friend.Tech Works:

At its core, Friend.Tech is a social media platform that integrates cryptocurrency. Users can buy "shares" in influencers' profiles, hoping that as these influencers gain popularity, the value of these shares will rise. Think of it as investing in a celebrity's social media stock.

🌟 Influencer Gold Rush:

Big names from the NBA to the FaZe Clan have joined Friend.Tech, driving massive attention and investment to the platform. But here's the catch: these influencers can sell their shares, often at a hefty profit. Once they've cashed in, there's little incentive for them to stay active or engaged on the platform.

💸 The Profit Imbalance:

While influencers stand to make significant gains, everyday users might not be so lucky. The platform's design inherently benefits those with large followings, leaving regular users at a potential disadvantage. As with many investment opportunities, those who get in early (or have a massive following) reap the most rewards.Influencers may also buy up their own shares for pennies, then market themselves, and dump on their fans for a huge profit.

🚫 Sustainability Concerns:

Experts have raised red flags about Friend.Tech's long-term viability. The platform's rapid rise, driven by influencer hype, might not be sustainable. And if these influencers move on after cashing out, the platform could lose its appeal.

🚨 Think Before You Leap:

If you're considering investing in Friend.Tech or a similar platform, it's crucial to understand where the money flows and who truly benefits. Remember, in the world of crypto, things can change in the blink of an eye.

The ongoing saga surrounding Craig Wright's claim to be Bitcoin's creator, Satoshi Nakamoto, has taken another twist.

🚀 The Core Issue: Craig Wright's company, Tulip Trading Limited, is seeking billions of dollars in Bitcoin, alleging that developers have the "power and obligation" to return access to the funds. The company claims that Wright's Bitcoin was stolen in a hack.

💡 Quick Refresher: The Craig Wright & Satoshi Nakamoto Saga

• Who is Satoshi Nakamoto? Satoshi Nakamoto is the pseudonymous creator of Bitcoin, the world's first cryptocurrency. The true identity of Satoshi remains one of the biggest mysteries in the crypto world.

• Craig Wright's Claim: Craig Wright, an Australian computer scientist, has claimed multiple times that he is Satoshi Nakamoto. However, his claims have been met with skepticism and have sparked controversy in the crypto community.

• The Legal Battle: Wright has been involved in several legal battles over his claim to the Satoshi identity. One notable case is with the family of his late business partner, Dave Kleiman. The dispute revolves around a significant amount of Bitcoin that Wright and Kleiman allegedly mined together in the early days of the cryptocurrency.

• Proof of Identity: Many have challenged Wright to provide cryptographic proof of his claim by moving some of the earliest mined Bitcoins, which only Satoshi would have access to. To date, such proof has not been provided.

🔍 Developers' Counterclaim: Bitcoin developers have fired back, labeling the claims as "fraudulent." They argue that they don't have the ability to access or control individual Bitcoin wallets, emphasizing the decentralized nature of the cryptocurrency.

📜 Legal Proceedings: The case, which has been ongoing since 2020, is currently being heard in the London High Court. It's a landmark case, as it's one of the first times developers are being held responsible for the actions on a decentralized network.

💡 Why It Matters: The outcome of this case could have significant implications for the crypto industry. If developers are deemed responsible, it could challenge the very principles of decentralization that underpin cryptocurrencies.

🎭 The Satoshi Mystery Continues: While Craig Wright has consistently claimed to be Satoshi Nakamoto, the true identity of Bitcoin's creator remains one of the crypto world's most enduring mysteries.

That’s all for today. We’ll see you tomorrow.

“Soon, it will be riskier to not own BTC than to own it.”

– Chris Schawel - Founder, Make Crypto Simple