Cointelegraph By Elias Ahonen
European Parliamentarian Eva Kaili’s conversion to cryptocurrency came as she watched her friends lose their life savings in the fallout of the Global Financial Crisis. The crunch came during the 2012 Cypriot financial crisis, when Cypriot banks collapsed and a levy was imposed on many depositors to fund the resulting bailout.
“Lots of my friends lost their savings because banks suddenly shut down and nobody would guarantee their life savings,” she says. “So this was like quite a shock.”
“And then I thought okay, so if this system couldn’t protect us… we cannot restore trust, we have to have alternatives so that the system itself will start improving the options of the citizens, and so I started exploring decentralization”
Today, Kaili is among the most outspoken proponents for cryptocurrency adoption and blockchain technology on the European political stage.
Birth of a Bitcoiner
An architect by training, Kaili became a popular newscaster for Mega Channel before being elected to the Greek Parliament in 2007 for the Panhellenic Socialist Movement party at just 29. “They were telling me it’s impossible for a young person to participate. I said okay, let’s see if that’s true… and it seems that if citizens have more [candidate] choices, they’re actually quite daring,” she says.
The Greek sovereign debt crisis saw the economy collapse in the months following her election, making it the perfect time for a daring politician to step up. The crises also tested Kaili’s own convictions. “You couldn’t be naive, you couldn’t be romantic or idealistic, you had to find solutions and start to explore all the possibilities I had as a politician. I was trying to think out of the box.”
Kaili thought of decentralization as a possible solution, having been introduced to the concept of peer-to-peer networks while using uTorrent to pirate files with her friends back in Aristotle University. Torrents seemed “like a miracle” she says. Why couldn’t value be exchanged in a similar way?
Watching YouTube videos about these emerging technologies, Eva began to understand Bitcoin. It was the out-of-the-box solution she had been searching for, and it just clicked. Indeed, there were many Cyrpriots looking for alternatives to the legacy financial system that year. Producer Zhou Tonged released a music video in 2014 set to the tune of Swedish House Mafia, that summed up the feelings of many of their compatriots.
There was a time, I thought my government was doing right
But they crossed the line, and now I’m fighting for my f–king life
Laiki [bank] took my funds, and now I think how this all will end
My money’s with Bitcoin, ’cuz what they’ve done they can never mend
Just when the Cypriots were losing faith
That’s when I learned about the Blockchain
I still remember how it all changed
Don’t you worry, don’t you worry, child
Voting on the blockchain
Kaili has been a Member of the European Parliament since 2014. She says blockchain voting is one immediate application by which the bloc could save 90% on election costs while protecting against vote fraud. She recounts the first month of the COVID-19 lockdown, during which she says the EU parliament was unable to develop proper legislation and MEP’s stuck at home had to print out their voting forms before physically signing, scanning, and emailing them back.
Kaili is confident that blockchain voting offers benefits beyond mere cost savings, as “you can actually see the participation in a live way” with biometric controls potentially used to ensure security. Appropriately enough for a virus ravaged world, anyone could vote from their mobile devices without needing to attend a physical voting center. The ease of this system, she believes, would expand voter participation and thus strengthen the democratic process.
Europe as a blockchain hub
Kaili, who belongs to the center-left European Progressive Alliance of Socialists and Democrats, is far from a crypto-anarchist or cyber-libertarian. She has no ideological desire to give up the currency monopoly per se, but rather feels that the current monetary system is not yet mature enough to protect people. It’s because she saw the Euro system fail, setting her country back by a decade with a spiral of austerity, that she believes alternatives are needed.
For Kaili, the purpose of Bitcoin and blockchain technology is not to violently overthrow and burn down an economic or political system by way of revolution. Instead, they are tools by which to strengthen and improve the system by promoting trust, stability, and efficiency.
“Blockchain is the definition of a trusted environment.”
The biggest advantages that Europe can offer to blockchain startups, according to Kaili, is legal certainty and increasing standardization across the single market. She sees Europe’s general approach to cryptocurrencies as less adversarial than the United State’s, where entrepreneurs can sometimes find themselves “in a really complicated situation with the SEC” despite good-faith efforts.
A European digital currency
Not everyone in the EU is as willing as Kaili to embrace financial innovation. In December 2020, the German Finance Minister Olaf Scholz declared Facebook’s stablecoin project Libra, now called Diem, “a wolf in sheep’s clothing … we must do everything possible to make sure the currency monopoly remains in the hands of states.”
Kaili takes a more open approach:
“I wouldn’t go that far, I wouldn’t say we need to control everything. He says that, but then people lost their savings because they trusted the Euro. They trusted their banks, their banking system, and still they lost everything.”
While she wants to provide more choices, Kaili also worries that large foreign companies, or undemocratic regimes, could become the issuers of a global currency. To her, this would be unacceptable because Europeans would lose even more control of their personal transaction data:
“You have the big platforms; most of them are not based in the EU. You have Facebook, Google, Amazon, Alipay, Alibaba, all of them having access to European data, manipulating your perceptions, micro-targeting you,” she says, adding that appropriate regulation of digital currencies would be required to ensure that those mistakes aren’t repeated.
“We are forced to regulate the internet for the European citizens to make sure the fundamental principles of Europe and the rights of people will be protected.”
This means that Europe needs to issue better money than competing technology giants, one reason Kaili is a big supporter of a European Digital Currency. She envisions something much bigger than a simple re-creation of the Euro on a digital ledger.
“I think we’re gonna have more options,” she says. “We’re gonna have it as money, as gold, as storage of value, and I think we’re gonna have it as a way to do crowdfunding.”
Kaili says the best way to bring about financial innovation is by designing “appropriate legislation”. She has been pushing for the creation of hybrid legislative sandboxes to allow for the development of blockchain products.
Soon, this will allow people to invest in companies through tokens, issued by startups and medium sized businesses to access liquidity.
“We should keep, of course, having a monetary system that is there to balance systemic risks from crises; to do crisis management, but we also have to explore innovative solutions […] We have to be able to create new laws for these new technologies.”
So how do the other politicians and bureaucrats at the EU level feel about all of this? Kaili laughs, revealing both humor and frustration.
“Okay so blockchain in general, everybody is positive. When it comes to currencies, everybody is skeptical.” She says this is due largely to a lack of knowledge and understanding on the subject. Very few of her colleagues, Kaili believes, could even explain what an algorithm is. “We should understand that the world is changing […] it’s an unstoppable technology”
A financial system for the future
This talk of unstoppable technology brings up the question of whether Kaili is worried about cryptocurrencies being used to evade taxes. After all she believes in governments taking care of their people, and that requires a tax base.
She laughs again and says, with a hint of irony:
“Elias between me and you, I think the best way to get the ones that want to tax-evade is to put them on blockchain, because nothing is ever gone forever.”
She adds: “I understand there are decentralized coins and then there are actually ways to trick and fool the system, but you can do that with cash, you can do that with Euro.” She believes that blockchain could enable all financial transactions and investment activity to be tracked in real-time in such a way that the appropriate taxes are applied automatically despite the complexities of a multi-country tax system. In essence, Kaili envisions a financial ecosystem and network where taxes are simply built-in, in a way not dissimilar to the way transaction fees work in the Bitcoin and Ethereum networks, respectively.
“Of course, we have to be careful to not overdo it, but I think it could give an opportunity for the government to have the final say in the end of your profits or transactions, without trying to ‘get you’,” she says.
Automatic taxation could result in astronomical savings across the economy when accounting for all the time and effort that individuals and companies now expend on preparing and handling taxes.
This vision is in line with Kaili’s greater political agenda of Pro-Europeanism, which aims to further integrate and harmonize Europe in order to build what some have called a ‘United States of Europe’.
Whether one finds this vision utopian or dystopian, there is no question that Kaili is an ambitious and future-oriented thinker with serious political weight.
Privacy as a pan-European value
Kaili has especially strong support from young voters, many of who have become cynical of governments and the digital world. Blockchain, however, excites them.
“We all realize we need to trust the system again, or at least use the technologies […] So, I have the feeling that it’s the interest of the young generations to be able to trust the internet again.”
A big part of that is putting users back in control of their own data, Kaili explains. Users of online services should be able to grant and remove data-sharing permissions at will, receiving some online goods in exchange for sharing specific data-points which the end-user is always conscious of, and in control of. By building the future on blockchain, this could become reality.
“The foundation of the EU, is to respect your rights, and one of the main rights here is the right to privacy.” Privacy and safety, Kaili says, are two equal pillars which European leaders are not willing to compromise.
I end on a personal note, telling Kaili how, after living on four continents, I do find that it is indeed the EU which takes the most active steps in promoting individual citizen’s rights and well being in the online world. Europe represents a sort of dynamic middle way in an increasingly polarizing world, which is a big part of why I choose to spend my time here now. She seems pleased:
“I think this is an example of how I see things, and why I believe in Europe so much.”
The crypto whale who wants to give billions away – Cointelegraph Magazine
Cointelegraph By Andrew Fenton
Like many people in crypto, Sam Bankman-Fried is in it for the money. As the founder of quant trading firm Alameda Research, exchange FTX and DeFi protocol Serum, the curly haired 28-year-old has amassed a $10 billion fortune in just three years in the industry.
Unlike most people in crypto though, he’s building up a fortune in order to give half of it away. An ‘effective altruist’ he’s essentially robbing from the rich, via his preternatural crypto trading strategies, in order to give to the poor.
“Maybe without the robbing part,” he says. “In the end my goal is to have as much impact as I can, however that is. And right now, I think that’s flowing through donations, so figuring out how I can be able to make as much as I can and donate as much as I can.”
SBF, as he’s sometimes referred to, has been walking the walk for some time now. He spent a couple of months as the director of development at the Centre for Effective Altruism in 2017 and before that, gave away half of his income during his stint on Wall Street. He plans on giving away around 50% of his crypto billions too — but only after he’s finished reinvesting in his ever-expanding empire.
He does donate to causes as they come up however. He was the second largest donor to President Joe Biden’s campaign, after former New York mayor Michael Bloomberg, tipping in $5.2 million.
“I was excited about the impact it might have. I basically thought that it mattered what happened in the election.”
Also, the FTX Foundation launched recently. It’ll give away 1% of the platform’s fees and match user donations dollar for dollar up to $10,000 a day. In its first couple of weeks the Foundation has raised more than $2M, mostly in user contributions, with users able to vote on the recipient charities from a carefully curated list.
The old bean bag
SBF’s growing public profile was given a shot in the arm when he was named on Forbes 30 Under 30 finance list for this year. “I’m honored,” he says. “I tend to be fairly forward looking instead of backward look and so it was cool for a bit but it sort of wore off pretty quickly.”
He also came in at number three in the recent Cointelegraph Top 100.
Famous for sleeping on his bean bag at his Hong Kong office so he never misses a trade, and it seems a key reason SBF makes more money than anyone else is that he’s barely ever off the clock.
“I’m at the office, well usually 24 hours a day. I’ll sometimes just nap on a beanbag here and obviously shoot the shit with coworkers and sometimes with people online, but mostly its work.”
He doesn’t have a girlfriend or even see many people outside of work, though he makes time to speak with his family back in the U.S. “a few times a week on the phone.” It’s safe to say SBF isn’t the type of person desperate to strike the perfect work/life balance or who even accepts that productivity decreases after the first 11 hours or so at work.
“I think that sort of narrative is substantially oversold and the brutal or inspiring truth, depending on how you think about it, is that the more you put in, the more you get out,” he says. “It’s motivating for me and it’s fulfilling, but you know, another piece of it is that, it’s how I think I can have the most impact.”
How did I get here?
The child of two Stanford Law professors, SBF discovered the Effective Altruism movement during his Physics degree at the Massachusetts Institute of Technology.
Popularized by philosophers and ethicists including Toby Ord and Peter Singer the movement is focused on pragmatic ways to help others using science and reason to ensure the benefits are maximized, rather than the good intentions and poor outcomes that characterize some charitable organizations. This practical approach also extends to a hard headed examination of the best way an individual can help.
“Imagine the amount of good that you could do working directly for some cause, versus the amount that you could do working on Wall Street and donating to it. In a lot of cases you could probably actually help them out more with the donations. And so basically I checked out Wall Street.”
Friends who’d interned at quant trading firm Jane Street Capital gave him the pathway to Wall Street, and he began working there straight after college in 2014. Why did they hire a physics major with very little financial experience straight out of school you ask?
It turns out quant trading strategies are “super valuable” trade secrets which means no one teaches the successful ones in Uni degrees. Instead, firms recruit people with raw talent: maths whizzes or people with strong backgrounds in physics or computer science.
“What you need to know about markets, they’ll teach,” he says. He traded a variety of ETFs, futures, currencies and equities and designed an automated OTC trading system. While there he became interested in the insanely profitable arbitrage opportunities in the inefficient crypto markets and set up crypto quant trading firm Alameda Research to profit from it in late 2017.
The whale to rule all whales
Alameda Research has now grown to become one of the biggest companies in crypto with around $2.5 billion in assets under management, although as with his own fortune, SBF qualifies this with some provisos around liquid and illiquid assets.
Alameda is the Moby Dick of crypto whales, responsible for up to 10% of the cryptocurrency moving around the markets at any one time. “I think at particular times it can get up to about that fraction of the volume,” he says. “I think it averages a bit lower. It’s solidly in the group of the five to ten larger trading firms in the space.”
That means any trade Alameda takes has the potential to move markets and cause liquidations. In October last year, Alameda was widely blamed for crashing the price of YFI by shorting, though SBF has downplayed any impact. He believes that with great power comes great responsibility.
“It’s absolutely a responsibility,” he says, adding that he tries to follow the approach of TradFi quant firms. “Their role is to find profitable trades, but it’s also to provide liquidity and promote healthy markets,” he says. “The biggest duty is the duty to do no harm. And to make sure that what you do is, on the whole, promoting liquidity in healthy markets and efficient trading, as opposed to intervening in it.”
He adds that arbitrage trades, for example, can have positive impacts as it makes markets more efficient and brings down prices where there are premiums. Identifying and working out how to profit from arbitrage trades was the whole reason Alameda was founded. “One of the first big ones that we actually made some money on was Litecoin,” he recalls.
“There was a week in late 2017 when Litecoin was trading at a consistent 20% premium on Coinbase GDAX [now Coinbase Pro]. There’s sort of this idea like ‘Oh that’s cool, you just make 10% every half hour I guess you make infinity dollars?’ And of course, that’s not the answer.”
It turns out that trying to exploit the opportunity was hideously complicated and required, getting around trade size limits, and withdrawal limits of a million a day. “Especially a few years ago in crypto an enormous piece of the problem was figuring out the logistical steps,” he says.
Another arbitrage trade saw SBF and friends move up to $25M a day through a series of intermediaries and rural banks in Japan to take advantage of the famous Kimchee premium, which saw Bitcoin trading for up to a third more in South Korea’s hard to access financial system than the U.S.
But it was dealing with the legacy financial system that threw up the biggest challenges. “The single hardest part of the arbitrage, the piece that was slowest and hardest and most expensive and most frustrating was the fiat,” he says, noting difficulties getting accounts, which could then be shut at any moment, the archaic procedures and bureaucracy and insanely slow wire transfers.
“We spent five man hours per day in physical bank branches for a good solid five months, because that’s what it took to send the wire transfers,” he says, adding:
“Like got there at 10am and stayed till 1pm with multiple people there, to have all the meetings we had to have every single f–king day of the week, in order to send the same wire transfer we sent yesterday.”
This is one reason SBF is so passionate about DeFi – his vision is for it to one day replace the lumbering existing financial system. “The current payment rails are not efficient at all,” he says. There’s trillions of dollars of companies, which are just built around trying to abstract that away and you end up with this incredibly complex web of shit to make it usable for most people. They’re running on systems that are old and not designed even with the internet in mind.”
For many people SBF sprang fully formed as a major crypto and DeFi personality during the mid-2020 DeFi boom, as he began to make an impact on Crypto Twitter. This was a deliberate move: he’d been happy to fly under the radar in 2018 because Alameda’s quant trading focus had: “Very little need for publicity, it’s sort of mostly downside.” But when he launched the innovative crypto exchange FTX in 2019 he needed to build a community around it and he stepped up to become its public face on social media.
“With FTX as a retail facing business the more customers the better. You can build the best product in the world but if no one knows about it it’s not worth anything,” he says.
“One of the hardest and most interesting pieces has been figuring out how to get users, and increasing awareness was a big part of that.”
He seems to have figured it out as FTX became the fifth largest derivatives exchange by volume, with a $3.5 billion valuation. It’s launched a range of innovative markets, including tokenized fractional stock offerings of companies like Tesla, Apple and Amazon, as well as pre-IPO trading in Coinbase.
He’s also using his wealth and influence to try and overcome what he sees as the biggest blocker preventing the wide scale adoption of DeFi. He believes that Ethereum, including Eth2 can’t scale enough to allow crypto and DeFi to replace the existing financial system. DeFi can currently handle about 10 transactions per second, with second layer solutions enabling a few thousand TPS.
“This is an absolute hard, immoveable barrier, in terms of growth,” he says. “DeFi just literally cannot grow as an ecosystem until that is addressed. And so no long-term plan that doesn’t address it is viable. […] That is just fatal.” Even Eth2’s goal of 100,000 TPS isn’t enough for what SBF has in mind.
“If your goal is to scale to 100 million or a billion users, […] if you want to have the upside of an application that might grow to the scale of the largest applications in the world, it needs to be able to scale up to about a million transactions a second. And so you can just sort of cross off the list permanently with no recourse and not even needing to consider any other factor, any scaling solution that doesn’t get there, if that’s your goal.”
That’s what led him to become one of the most vocal proponents for Solana, a blockchain that can currently process 65,000 TPS and whose team claim it can eventually scale up to astonishing levels: 710,000 TPS on a 1 gigabit link or 28.4 million TPS on a 40 gigabit link.
He founded the Serum DEX on Solana and launched the SRM cryptocurrency in August 2020. Bankman-Fried say you can see Solana’s benefits in Serum’s on chain order book matching engine and fees of “100th of a penny to send an order and trades happen in seconds.”
“So you get a lot of juice out of having the higher throughput. And that’s really helped scale up that product base quite a bit. To the point where I think that, you know, our best guess is that, probably Serum DEX in six months of operation has, has consumed more transactions than all of the Ethereum blockchain in history.”
Ethereum’s network effects mean he faces an uphill battle getting DeFi projects and users to migrate to Solana. Even after he was handed control of SushiSwap by Chef Nomi, he was unable to convince the community to port over. “It ended up being way harder than we thought to get the existing projects to port over and way easier to just have new projects built,” he explains, adding:
“We would still be super excited for them to have an outpost on Solana. I think they still may at some point. But I also think that Serums’ gonna march on either way. In the end, like, I sort of want to have the best products and users, you know, however it gets there.”
(Following our interview, a new proposal emerged to build a version of SushiSwap on Solana and Serum, potentially called Bonsai.)
“The other part is that while the current DeFi user base is super devoted, super important and powerful, it’s not that large. Daily active users, I think it’s in the tens of thousands. I think FTX probably has more daily active users than all of DeFi combined.”
SBF’s plan appears to be to embed the Solana blockchain as infrastructure in apps where it’s invisible to most users, in order to onboard millions into DeFi. At the start of 2021, Alameda led a $50 million funding round to embed DeFi style tools in Maps.me, a European offline mapping application with 140 million users. It’ll have a multi-currency wallet with staking and swapping facilities built on Solana. FTX’s purchase of Blockfolio may follow a somewhat similar strategy.
“I think it’s gonna be a really cool product and powerful product suite for the app,” he says of Maps.me. “I’m super excited about it. I think it might really kickstart adoption.
What are privacy coins and how do they differ from Bitcoin?
Cointelegraph By Benjamin Pirus
Cryptocurrencies are typically pseudonymous, but not necessarily private. Bitcoin (BTC) and other assets run on blockchains, with each transaction posted publicly online. During a transaction between two or more parties, assets move to different wallets, each represented by a string of characters.
With these addresses and transactions visible to all, however, a certain level of trackability exists, especially if a wallet transfers funds to an exchange requiring Know Your Customer verification.
Certain crypto assets, which are often referred to as privacy coins, private coins or anonymous coins, attempt to hide information about transactions, giving users more privacy. Why might someone need privacy if they are not doing anything illegal? It could be preference or a view of privacy as a basic human right could be two reasons. Cash is largely private. Every transaction is not recorded somewhere for all to see with the click of a button.
A number of possible methods exist for adding privacy to Bitcoin, including peer-to-peer trading, although multiple crypto assets focus on privacy more directly via their technology. Some familiar privacy assets in the crypto space include Monero (XMR), Zcash (ZEC), Verge (XVG), Beam and Grin. Dash also makes it on the list, as it allows for added anonymity, although the coin is not technically classified as a privacy asset.
One of the industry’s most well-known privacy-focused assets, Monero came on the scene about seven years ago, having spurred numerous headlines in the years since. Monero prides itself on decentralization, touting origins that back such stated values. “It was a fair, pre-announced launch of the CryptoNote reference code,” Monero’s website says. “There was no premine or instamine, and no portion of the block reward goes to development.”
Monero, a coin based on its own proof-of-work blockchain, touts multiple different privacy technology features, per its website, including stealth addresses and RingCT. Added to XMR in 2017, “RingCT, short for Ring Confidential Transactions, is how transaction amounts are hidden in Monero,” Moneropedia, the explanatory section of the asset’s site, explains.
Monero piqued the interest of the United States government in the latter part of 2020. The Internal Revenue Service put out a bounty on the asset’s head, promising as much as $625,000 in exchange for cracking the coin’s privacy tech. Two blockchain analytics outfits, Integra FEC and Chainalysis, took home the prize just a few weeks after the IRS announced the bounty.
Zcash hails as another popular privacy-focused asset in the crypto space. It started in 2016 and was initiated by the Electric Coin Company, which is headed up by cypherpunk Zooko Wilcox. Zcash stems from the same code as Bitcoin, according to the asset’s website. ZEC operates on its own blockchain with PoW mining consensus, separate from Bitcoin.
ZEC allows both private transfers, called shielded transactions, and public transactions. “Zcash gives you the option of confidential transactions and financial privacy through shielded addresses,” Zcash’s website explains, adding: “Zero-knowledge proofs allow transactions to be verified without revealing the sender, receiver or transaction amount. Selective disclosure features within Zcash allow a user to share some transaction details, for purposes of compliance or audit.”
Dash (sort of)
Dash is another well-known cryptocurrency hosting privacy features. The entity managing the coin’s development, the Dash Core Group, however, clarified on several occasions that Dash is not a privacy asset, although it comes with elective characteristics for added anonymity.
“Dash is a payments cryptocurrency with a strong focus on usability, which includes speed, cost, ease of use and user protection through optional privacy,” the group’s chief marketing officer, Fernando Gutierrez, told Cointelegraph previously.
“Dash is not an AEC!” Ryan Taylor, CEO of DashPay, said in a January 2021 tweet referring to anonymity-enhanced cryptocurrencies, or AEC — a term used by U.S. regulating bodies. “As a literal fork of Bitcoin, all Dash transactions are completely transparent,” his tweet added: “All inputs, outputs, addresses, and amounts are recorded on each and every transaction and viewable – by anyone – on its public blockchain.”
XCoin joined the crypto world as a 2014 Bitcoin fork, later rebranding as Darkcoin, and subsequently Dash. The asset is based on its own proof-of-stake blockchain.
The coin lets users transact anonymously, if they so choose, through what is referred to as PrivateSend. “The technology that Dash utilizes in our PrivateSend function is CoinJoin, which is a technique for complicating transactions to the point that they’re more difficult for analytics firms to analyze those,” Gutierrez explained, as previously reported.
A PoW asset running on its own blockchain, Verge exists as yet another cryptocurrency touting privacy capabilities. Verge started with a different name. “Verge Currency was created in 2014 under the name DogeCoinDark,” the asset’s website states, but was later rebranded into Verge Currency.
An open-source asset, Verge enables private transfers through I2P and Tor tech, which conceal transactors’ locations (IP addresses), according to information from BitDegree, as well as previous Cointelegraph reporting.
Verge gained significant price traction in late 2017, hitting highs around $0.31, based on TradingView data. The asset currently trades at roughly $0.023.
Beam and Grin
Grin and Beam burst onto the crypto market in 2019, touting a different technology called Mimblewimble. A type of blockchain technology, the concept of Mimblewimble went public in 2016 as a PoW variation, according to a community submission article from William M. Peaster on Binance Academy.
Grin and Beam launched based on Mimblewimble, although Litecoin (LTC), a long-time prominent asset in the crypto space, has been working on implementing the technology.
“In a MW blockchain, there are no identifiable or reusable addresses, meaning that all transactions look like random data to an outsider,” the Binance Academy article reads. “A Mimblewimble block looks like one large transaction rather than a combination of many,” the article adds, subsequently diving into other aspects of the technology.
Privacy coins and regulation
Government overwatch on privacy coins has grown in recent years, as shown in part by the IRS’ efforts against Monero’s technology. Privacy coin references also surfaced in the U.S. Financial Crimes Enforcement Network’s proposed regulation on self-hosted crypto wallets in December 2020.
“Several types of AEC (e.g., Monero, Zcash, Dash, Komodo, and Beam) are increasing in popularity and employ various technologies that inhibit investigators’ ability both to identify transaction activity using blockchain data,” the December document said referring to anonymity-enhanced cryptocurrencies. Additionally, South Korea outlawed anonymity assets in November 2020.
Some crypto exchanges have delisted the abovementioned assets. In October 2019, OKEx Korea ceased trading on its platform for Monero, Zcash, Super Bitcoin (SBTC), Dash and Horizen (ZEN). BitBay removed Monero near the beginning of 2020. Bittrex removed Zcash, Dash and Monero from its exchange in January 2021. A number of other crypto platforms have also delisted privacy-enhanced assets over the past year or two, including ShapeShift.
Beeple on his 5040 day labor of love – Cointelegraph Magazine
Cointelegraph By Elias Ahonen
At the age of 26, Wisconsin web designer Michael Winkelmann began creating a new piece of digital art in his personal time every single day. He calls them ‘Everydays’.
“I saw a pretty big step-up in the work that I do,” he says. “The ‘Everydays’ are basically just the pictures that I do every single day, and I’ve been doing those for over 5,000 days now.”
Thirteen years later Beeple, as he’s better known, has been commissioned by huge acts like Justin Bieber and Imagine Dragons and he emerged in 2020 as a trail blazing figure in the NFT community. His digital art collections have fetched record prices in the millions at NFT auction houses including Rarible and Nifty and he’s about to take a major step into the mainstream, with Christies offering a collage of 5000 Everydays pieces at auction from Feb. 25 until Mar. 11.
“This monumental digital collage marks the first time Beeple’s work will be sold at a major auction house,” Christies said in an announcement. “It’s also the first-ever purely digital artwork (NFT) to be offered at a traditional auction house, with its authenticity assured thanks to blockchain technology,”
Beeple’s work touches on politics and pop culture, with a typical example being a recent image depicting Amazon’s Jeff Bezos as an octopus that he created on the day that the billionaire announced his upcoming retirement as CEO. Winkelmann says his daily ritual has made him a better artist.
“The broader message with this entire Everyday project is just about practicing and looking at things long term. I look at it as one long-term project. And so, incrementally improving and just sticking with something.”
Winkelmann, 39, only discovered NFT’s around four months ago, and immediately set to work converting his freely available Instagram art into highly sought after digital collectibles. In November he sold an election-themed digital collectible for $66,666.60, and a December auction brought in $3.5 million dollars. While one piece went for as much as $777,777, he also sold hundreds of images for $969 each of which have since gained in value exponentially.
NFT stands for Non-Fungible Token, which means each token is unique and thus distinct from other tokens. Unique tokens make it possible to designate them as representing ownership of specific digital goods, allowing for transferable ownership of digital images, texts, or even in-game items.
“I think it’s just going to be seen as the digital art revolution. I truly believe this is the start of the next chapter in art history.”
The Wisconsin artist says that while everything is reproducible on the internet, NFTs allow for individual ownership of a piece even though it is copied and circulated widely.
“I’m very open with allowing people to share stuff and post it wherever,” he says. “You can’t police the f—ing Internet. You post on the Internet, it’s the f—ing Internet! The cool thing about the blockchain is that you can kind of have it both ways.”
He adds that NFT’s are a “very advantageous way of collecting art, because it will live on as long as the blockchain lives on, and it can take all different forms.”
Got 4 offers today in the $12-$14k for @beeple‘s Politics is BS NFT.
What is going on 😱
I bought it for $1k like 2 months ago. pic.twitter.com/q94wXmi3xh
— Matty (@DCLBlogger) February 8, 2021
Last December, Winkelmann hit the crypto news headlines after he auctioned off a collection of digital artworks for $3.5 million on the Nifty platform. While the previous 13 years of Everydays accompanied a steady career progression of better clients and ever-increasing paychecks, he wasn’t quite prepared for “overnight” success.
“That was the big shift where it was like ‘oh shit this is it’, this is a crazy opportunity to look at my work that I never really thought about as being collectible, and now suddenly it’s like ‘wow this is very collectible!’”
But he points out he wasn’t a starving artist before the auction: “[Many people] think this is a little bit more rags to riches than it is. I was making pretty good money before.”
While he credits his success to a large social media following and established name as “one of the most well known digital artists,” Winkelmann acknowledges that he was also in the right place at the right time with little competition.
“There’s a lot of low hanging fruit […] In more mature spaces, you really need to come up with a fantastic idea to stand out, everybody has already got the easy shit. It feels like there’s still a lot of easy shit to try.”
An artistic revolution
It is said that art is either plagiarism or revolution. The art world is in a constant state of redefinition, and it’s normal for new styles to begin as underground ‘degenerate’ movements that struggle for acceptance in the established art world. In this way it’s similar to cryptocurrency, which was first dismissed and derided by traditional investors and institutions, many of whom are now re-evaluating.
In the past, Winkelmann says that neither graphic art, nor graphic artists, could really exist in the traditional sense. No graphic artist could truly sell their personal work — they had to work as artisans because working as an independent digital artist was not an option.
“It wasn’t. There was just no way to collect your work. The technology did not exist, and the market did not exist… Everybody was just, you know, freelance, or they just had a job or whatever.”
This means that the innovation of NFT’s representing ownership of digital art represents a pivotal moment in art itself: art no longer needs be a physical item to be sold and displayed, but is equally legitimate as a digitally expressed and cryptographically transferrable manifestation of the artist’s mind.
Winkelmann said the upcoming Christies auction of his collage will be another milestone, as its a major auction house conducting “their first ever 100% digital auction. There will be no physical piece; they’re literally just auctioning off a JPEG. And so, I think that will be a very big moment, and big validation for this space. They’ll also be accepting Ether for this auction for the first time ever.” (Christies auctioned a combination physical work/NFT piece last year for $130,000.)
“Whoever buys it, I will work with them in the future to be like ‘okay, so how do we want to show this?’ Do we want to project it on the side of a building, do we want to make a giant canvas of it? Do we want to put it on a big screen? The artwork itself can take a bunch of different forms; that’s the beauty of digital art.”
Christie’s is proud to offer “Everydays – The First 5000 Days” by @beeple as the first purely digital work of art ever offered by a major auction house. Bidding will be open from Feb 25-Mar 11.
— Christie’s (@ChristiesInc) February 16, 2021
Banksy on it
Beeple’s NFT journey from avant-garde to acceptance follows an arc not dissimilar to other hugely successful artists like Banksy, whose graffiti stencil art reliably sells for millions today. “20 years ago that wasn’t the case. That was vandalism. Like graffiti is not, you know, ‘art’, it’s vandalism.”
Indeed, we need not go far back in time to find similar narratives within the blockchain space. Back in early 2018 Cryptokitties, one of the first NFT projects, was slowing down the entire Ethereum network causing people to accuse the lovable but useless NFT cats of ruining Ethereum.
It is an unfortunate arc d’art that experimental artists are often under-appreciated in their time, with the likes of Van Gogh and Monet dying in obscurity before achieving wide recognition for their work. “So are you saying I’m going to die?” Winkelmann asks sarcastically but with a hint of existential dread, to which I reassure him that he appears well ahead of his historical peers. He agrees. “I feel very lucky to be in this position, especially so young to be able to capitalize on this.”
While he may now have a lot of money, Winkelmann won’t be rushing out to buy a Lamborghini.
“Honestly, I’m really just putting it back in, making more and more art and cooler projects that I didn’t have the ability to do […] anybody who is collecting my artwork, I very much look at them as ambassadors, and they’ve sort of given me that money to like ‘OK there you go, go do even cooler things’, and that’s what I want to do. I want to do bigger projects, that obviously requires more money, or hiring people, or this or that.”
Considering his generous art budget, I suggest an NFT Bitcoin Lamborghini that comes with a real, physical lambo as a bonus physical token. “I think that’s a good idea, that would be great! Is it a green or a yellow lambo?” he asks. “I’ve got to figure out something like that, I feel like that would be very interesting.”
I tell him I’m claiming a 10% cut on that idea. Beeple laughs. “You’ve got your royalties all set up there!”
Art markets re-imagined
Speaking of royalties, NFTs open up new opportunities for artists because the pieces can be programmed so that whenever they are sold, a 10% royalty payment is returned to the artist.
This means that if an artist originally sells a piece for $100 and the buyer sells it to someone else some months later for $1,000, the artist will double their earnings to $200. Even more exciting, a $100,000 sale will net the artist $10,000 even years after the original sale, and the artist’s great grandchildren could theoretically benefit from the sale of the art a hundred years after the fact. In this new order, artists have a lifelong relationship with and ambassadorship to their pieces. “When you buy one of my NFT’s, it’s the beginning of us having a relationship,” says Winkelmann.
There are several platforms in which NFT’s can be traded. Winkelmann prefers Nifty Gateway, owned by the Winklevoss twins, for his sales. He’s far from a cryptocurrency maximalist, preferring instead to make his blockchain-enabled artwork as widely accessible as possible.
“The things I liked about Nifty is that they accept credit card payments. And again, I look at the NFT’s and the blockchain as sort of a means to an end, and not like the end. It’s one of these things where nobody really cares how credit cards work. They just work, they make your life easier and that’s how I look at NFT’s”
He adds: “Nobody’s going to give any shit about how NFT’s work or what blockchain they’re on.”
Until recently, a large portion of NFT art has been decidedly close to the ideas surrounding cryptocurrency and blockchain, giving them a sort of meta-quality. Winkelmann believes this will change, as NFT’s are merely “the mechanism used to make these, prove provenance, prove ownership. I don’t think moving forward it’s going to have as much to do with crypto.”
Crypto- themed art will certainly continue to exist, he says, but as “a subset of digital art”.
Winkelmann believes that everything is being digitized, and our lives will soon revolve around virtual and augmented reality. This recalls the concept of The Metaverse, which refers to an ongoing, shared 3D space that connects various virtual worlds together. It was originally described by Neil Stephenson in 1992.
This future may be closer than we think. Twenty 1/1 NFT’s in Beeples latest auction were purchased for $2.2 million by an NFT fund (yes, such things exists) for the purpose of launching VR digital art galleries in several virtual words including Cryptovoxels, Decentraland and Somnium Space. The pieces were bundled together along with virtual land and museums, and tokenized as the B.20 token so that anyone can own a piece of NFT history. Winkelmann says we’re only just getting started exploring the possibilities:
“I think we will look back fondly on the days when we were just glued to our phones as the ‘good old days’. The alternate realities that people are living in now will be nothing compared to the alternate reality people will be living in when AR really becomes a very viable thing and people are wearing these headsets all day. I think you’re gonna see some f—ing crazy shit happening.”
Blockchain2 days ago
ETH mining still highly profitable despite upcoming Eth2 upgrade
Blockchain1 day ago
Former MLB star sells $1M worth of NFTs in one minute
Cryptocurrency1 day ago
South Korean PC Gaming Rooms Rely on Crypto Mining to Profit During the Coronavirus Pandemic – Mining Bitcoin News
DeFi1 day ago
Craig Wright Threatens to Sue and ‘Bankrupt’ Bitcoin Developers, Demands Access to Mt. Gox’s Stolen Coins
Bitcoin22 hours ago
Altcoins bounce to new highs as Bitcoin price trades sideways under $50K
Ethereum1 day ago
Ethereum exodus continues as Binance ‘helps,’ Feb 17–24.
DeFi3 days ago
Skrill to Allow Withdrawals Direct to Crypto Wallets
Cryptocurrency3 days ago
Federal Reserve Appoints Pro-Bitcoin Chief Innovation Officer – Regulation Bitcoin News