The Weekly Wrap - 10 September 2021

1. Bitcoin becomes legal tender in El Salvador

The Facts:

• On Tuesday, El Salvador became the first country to adopt Bitcoin as legal tender.
• Salvadoran citizens received $30 in BTC upon registering in the official Chivo wallet.
• In preparation for the law coming into effect, El Salvador has installed 200 Bitcoin ATMs.

Why it’s important:

• As roughly 70% of El Salvador’s citizens are unbanked, Bitcoin could play an important role in democratizing access to digital banking.
• This move could set precedence for other nations to evaluate the possibility of adopting Bitcoin.

2. Bitmain sends mining hardware to Georgia

The Facts:

• Bitmain, one of the largest mining hardware manufacturers, has entered a Bitcoin mining hosting deal with Bit5ive and ISW Holdings.
• The agreement will bring 56’000 mining rigs to Georgia, with the deployment to be completed in October 2022.
• The rigs represent a hash rate of about 5.6 exahashes per second (EH/s) according to estimates, which would currently amount to about 4.3% of the entire network.

Why it’s important:

• In reaction to China’s crackdown on Bitcoin mining, many mining companies are moving their infrastructure to other jurisdictions.
• The Bitcoin network’s hash rate is rising again after the decrease throughout May and June, indicating more mining hardware going online again.

3. Coinbase responds to SEC notice

The Facts:

• Coinbase published a blog post reacting to the SEC’s intentions to sue the exchange over their planned yield-generating product Coinbase Lend.
• On Twitter, CEO Brian Armstrong shared his views on the actions by the SEC.
• With the launch of the product planned in a few weeks, Coinbase will have to postpone this offering.

Why it’s important:

• In an unusual move, Coinbase publicly criticizes the lack of communication and clear guidance from the regulator.
• The SEC’s stance on Coinbase Lend could also have an impact on other US providers’ offerings related to yield-generating products.

4. FTX launches NFT marketplace

The Facts:

• FTX has launched an NFT marketplace that enables users to mint and trade NFTs.
• Founder Sam Bankman-Fried announced that the NFTs will support both Ethereum and Solana.
• Currently, the NFTs may only be traded on FTX, with support for deposits and withdrawals arriving in a few weeks.

Why it’s important:

• FTX is the third major cryptocurrency exchange to launch an NFT platform, following the lead of Binance and OKEx.
• This step increases consumer choice by offering more options for cross-chain transactions.

5. Daily ETH issuance negative for the first time

The Facts:

• On September 3, the daily net emission of new ETH was negative for the first time.
• Since the change to Ethereum’s monetary policy in the beginning of August, over 200’000 ETH have been burned.
• This negative daily issuance is connected to higher gas fees, partially caused by the NFT hype.

Why it’s important:

• The new burning mechanism, which has a direct impact on the available supply of ETH, is based on block space demand.
• With Ethereum’s planned migration to proof-of-stake, ETH issuance is expected to decrease further, possibly causing ETH supply to become deflationary.

In other news

• SEC investigates Uniswap Labs (via The Block)
• dYdX trading platform launches governance token (via The Block)
• Ukraine legalizes cryptocurrencies, removing legal uncertainty (via CNBC)