Cointelegraph By Cointelegraph Consulting
To better understand user behavior and sentiment regarding transactions and privacy on the blockchain, Manta Network ran a survey in December 2020 studying user trust regarding privacy on the blockchain, as well as centralized and decentralized exchanges.
The 2021 Privacy & Trust on Cryptocurrency Exchanges report examines the drivers behind user trust and activity surrounding blockchain transactions and exchanges.
The 404 participants in the survey all demonstrated some level of activity in the blockchain space. The majority of respondents identified as researchers and investors, and leaned toward crypto-maximalist views.
Despite their positive outlook on the future role of cryptocurrency, though, most respondents highlight concerns over their privacy as it related to blockchain activity. 73% of respondents have either hesitated or completely avoided making a transaction in the past because they were worried about the privacy implications around those transactions (e.g., their wallet address would be revealed and linked to their identities).
Furthermore, 84% of respondents expressed at least some level of concern that wallet addresses do not offer enough privacy. Wallet addresses act as a pseudonymous solution for maintaining privacy, but once the identity is linked to the individual, then all of the assets and transaction history of that wallet address are identified as well.
Respondents disagree that wallet addresses provide enough privacy. One user provided a personal example: “My friend made a lot of money in DeFi. He asked me to guess how much he made. I told him the exact number; he was shocked. It was because he transferred ETH to me before.”
Regarding trust and use of exchanges, opinions varied between centralized and decentralized exchanges. 29% of respondents indicated that brand reputation of centralized exchanges was a factor that positively impacted their trust and usage of those exchanges.
For decentralized exchanges, respondents indicated control of their assets as a driving factor. On the other hand, the gas fees on existing DEXs are an inconvenience that cause users to avoid trading on decentralized exchanges.
Crypto in a post-pandemic world
Cointelegraph By Diogo Monica
Everyone knows the story. When the first block of Bitcoin (BTC) was mined, the protocol itself entered a world of grave economic uncertainty. Not long before the market would hit its lowest point of the 2009 recession, Bitcoin was quietly created, dropped like a life raft alongside a then-sinking economy. The now infamous phrase “Chancellor on brink of second bailout for banks” was cribbed from the headlines, immortalized in code in the origin story of one of the most compelling, innovative, best-performing assets of the last decade.
But Bitcoin did not immediately take root beyond a small community of true believers. Bitcoin and digital assets, in general, have been a lot of things in their relatively short histories, from purely speculative investments and “magical internet money” to a crisis-time safe haven and an attractive hedge against “the great monetary inflation.”
In the face of the COVID-19 pandemic, an associated market meltdown and huge amounts of central bank stimulus, cryptocurrencies have proved themselves to be remarkably resilient.
But as we watch vaccines being distributed around the country, cautiously optimistic that the end of the pandemic is within reach, where will crypto fit in a post-pandemic world? If its history of resilience shows us anything, we expect crypto to adapt to whatever the next few years will bring — crisis or not.
Related: How has the COVID-19 pandemic affected the crypto space? Experts answer
Just three years ago, leaders of some of the largest banks in the world refused to even talk about Bitcoin in interviews, calling the asset itself a “fraud” and referring to those who would buy it as “stupid.”
Today, the general sentiment across banks is markedly different. On the heels of the United States Office of the Comptroller of the Currency’s Interpretive Letter #1170, which made explicitly clear that federally chartered banks can provide banking services to legally operated companies in the digital asset space and custody digital assets on behalf of their clients, banks have been looking for the best way to get their clients the crypto exposure they demand. We anticipate legacy financial players’ interest in crypto to only grow in the coming years, with crypto becoming a mainstream requirement of financial services.
In the short term, banks will almost certainly rely on subcustody relationships with digital asset specialists to safely and effectively get crypto into their clients’ hands. And this is because the complexity is easier to address from the crypto-native side than the other way around.
Related: The need for a dialogue between crypto businesses and regulators
We also anticipate some number of acquisitions to occur, with some crypto service providers being swallowed up by banks with pockets deep enough to buy them. As demand for crypto services grows, and as regulatory clarity comes, more and more institutions will enter.
Proliferation of decentralized apps
Just as Bitcoin was built in response to the failings of a legacy system, decentralized finance has emerged as crypto’s answer to financial intermediaries. Until recently, though, entire portions of this ecosystem have been unavailable to institutions, mostly for lack of a secure means to participate.
Slowly but surely, institutional-grade DeFi tools are coming to market, and we anticipate this trend to continue. Not only will we see a continued proliferation of DeFi growth, but institutional-grade tools will make institutional participation far more accessible.
Related: Was 2020 a ‘DeFi year,’ and what is expected from the sector in 2021? Experts answer
Despite its significant growth, the DeFi space is still very much fragmented. Cross-chain interoperability — or lack thereof — is still a problem. Institutions want to be able to put their assets to use across the DeFi ecosystem. We anticipate significant growth in this area, with more and more layer-one protocols being bridged to DeFi and the broader Ethereum ecosystem — a development that also has the potential to improve liquidity along with market stability and efficiency.
Corporate treasuries and lowered barriers to entry
Against a backdrop of seemingly endless monetary stimulus, a significant number of private companies are treating digital assets as an inflation hedge. Some of these, like Square and MicroStrategy, have taken significant positions in recent months. We’ve seen MassMutual buy up $100 million in Bitcoin. And with Tesla’s $1.5-billion dollar Bitcoin purchase this month, the trend shows no signs of slowing. In the coming years, we expect digital assets to become an instrumental part of private-company balance sheets.
Related: Tesla, Bitcoin and the crypto space: The show Musk go on? Experts answer
Another factor at play is the lowered barrier to entry on the retail front. With tools like Celo’s Valora coming to market, Diem expected to launch in 2021 and firms like PayPal making it easy for their clients to buy crypto, we expect to see more of crypto as a tool for banking the unbanked — for putting financial tools into the hands of the millions without access to traditional banking services.
Related: Will PayPal’s crypto integration bring crypto to the masses? Experts answer
Beyond the crisis narrative
By virtue of being built in response to one economic crisis, crypto seems to be locked into a crisis narrative. In reality, digital assets have more than proved to be resilient in even the most challenging economic times. Just this past year, crypto proved itself in the grips of a once-in-a-century global emergency, earning a place in the portfolios of institutional and retail investors alike.
As the pandemic (hopefully) fades into the rearview, it’s exciting to think about what crypto can do without being forced into a defensive posture — without being defined against legacy assets like gold. It would be naive to say that crypto will never face another crisis — it almost certainly will. But from here, at what feels like the tail end of the pandemic, it’s exciting to think about what crypto can do in whatever “new normal” comes next.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Diogo Monica is a co-founder and the president of Anchorage. Before co-founding Anchorage, Diogo was the security lead at Docker — an open platform for building, shipping and running distributed applications. He has a B.Sc., an M.Sc. and a Ph.D. in computer science, has published several papers in peer-reviewed security conferences on the topic of distributed systems and information security, and is the author of several patents in secure communications, encrypted hardware and payment systems.
NFTs based on STARZ show ‘American Gods’ coming soon from Curio
Cointelegraph By Benjamin Pirus
Curio, a platform which sells non fungible tokens, is helping to bring to life NFTs based on the TV series American Gods. The show is based on a novel of the same name by author Neil Gaiman.
“We are working with Fremantle on creating officially licensed digital collectibles for the hit TV show American Gods, which airs on STARZ in the U.S. and Amazon Prime Video internationally,” Curio’s CEO, Juan Hernandez, told Cointelegraph, adding:
“This is a first-of-its-kind use of NFTs with mainstream media, and it shows how larger marquee brands are starting to embrace them as an integral piece of their broader digital strategy. Curio enables Fremantle to modernize how they engage with fans, to develop emotional connections for a more digital native generation of viewers who are hardwired to do more with the things they love. Now they can own a piece of the action wherever they go, in a manner that is certified and authentic.”
Fremantle, a media production company, and Canada Film Capital serve as the producers behind the American Gods tv show, according to IMDB.
What is an NFT though? NFTs are non-fungible tokens, meaning they provide a provably unique sense of ownership over the property they represent. Fungibility refers to an item’s uniqueness, or lack thereof. If something is fungible, it can be traded or act interchangeably one-for-one with another item of its kind.
“Technically speaking, an NFT uses blockchain technology to prove that a digital item is unique (scarcity), or that it is what it says it is (verifiable authenticity),” Hernandez explained, adding:
“But many people simply think about NFTs as ‘digital Beanie Babies,’ with limited utility outside of collecting. However, we see the potential for NFTs to create unique digital experiences that weren’t previously possible before the advent of the technology; to modernize fan engagement. This is what we’re excited to enable for our brand partners.”
Last fall, a digital artwork NFT called “Right Place & Right Time” by artist Matt Kane fetched over $100,000. In the months since, NFTs have become an even hotter market. Bidders recently paid millions of dollars for NFT’s based on a former Major League Baseball second baseman’s artwork. Other NFTs have also recently hit multi-million dollar price tags as well.
Why is the crypto market’s interest in NFTs on the rise? Hernandez said the world is going more digital. “There are generational trends on the shift away from physical to digital, and certainly the COVID pandemic accelerated these trends as people have been forced to stay home,” he said.
“Philosophically, the same elements of verifiable scarcity and immutability that have given rise to Bitcoin’s market dominance are at play with NFTs,” he added. “The ability to have full sovereignty over a digital asset is a new experience for many, and it causes you to truly rethink your ‘ownership’ of goods within the digital economy.”
Delphi Digital launches Labs wing to bolster portfolio company development
Cointelegraph By Andrew Thurman
Why wait for one of your investments to release a new feature when you can just build it yourself?
Delphi Digital’s newly announced expansion aims to do just that. The cryptocurrency investment, media and research company is now adding a Delphi Labs department that will be focused on contributing to Ventures portfolio company development.
0/ We’re happy to announce the next stage in @Delphi_Digital‘s evolution: Delphi Labs
Our goal with Delphi Labs is simple: to become the leading contributor helping to build out the decentralized futurehttps://t.co/DEmgfPORmQ
— Delphi Digital (@Delphi_Digital) February 26, 2021
The move will help expand Delphi’s current developmental wing, which presently houses nine employees, according to Delphi Digital analyst José Macedo. Before it branched off from Research, the Labs team assisted with tokenomics design for multiple projects, and it is currently spearheading an overhaul of Aave’s $1.4 billion Safety Module.
According to Macedo, the impetus for the new company wing is the lack of developmental and smart contract engineering resources endemic to the space.
“I think what led to this model was working with top projects and witnessing first hand how much work needs to be done and how there just isn’t the talent to do it. We realised the IP we’ve gained compounds and can be leveraged across the entire space.”
While Labs’ current focus will continue to be on tokenomics and governance proposals, as it expands it will eventually help to incubate younger projects, and potentially launch entirely new protocols under the Delphi brand, per a two-year timeline in the announcement.
Big money governance
Delphi isn’t alone in taking a more active role in the protocols it invests in. How venture capital funds interact with decentralized autonomous organizations has been a hotly debated topic as of late, with some crypto community members arguing against preferential treatment (and/or governance token investment terms) for deep-pocketed investors, while others say that funds are welcome, like any other participant, to become a part of public good governance.
So far, protocol founders remain resolutely in favor of venture capital involvement, particularly when the firms make material contributions. Uniswap founder Hayden Adams argued as much in a long Twitter thread two weeks ago:
I’ve seen a lot of negativity and propaganda so I think it’s worth sharing my personal experience.
— Hayden Adams (@haydenzadams) February 12, 2021
Likewise, earlier in the month, Synthetix announced a $12 million raise from three venture capital funds, noting that the institutions would help with protocol development and participate in governance where able.
It’s a model Macedo said makes sense: Projects can leverage Delphi’s research and developmental heft, and Delphi will, in turn, see its investments flourish:
“We only want to work with projects whose tokens we intend to hold for several years and our goal is to be long-term participants with aligned incentives.”
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