The Weekly Wrap: Bitcoin mining, Musk acquires Twitter, Optimism launches token, BTC legal tender in the Central African Republic

Apr 29, 2022

1. New York State Assembly passes bill on Bitcoin mining

The Facts:

  • New York State Assembly passed a bill (95 in favor and 52 against) that prevents the expansion of current carbon-based crypto mining facilities and blocks new mining based on non-renewable energy.
  • As the bill advances to a full vote of the legislative body, it also tasks the Department of Environmental Conservation (DEC) with conducting a General Environmental Impact Statement.
  • The bill furthermore imposes a two-year moratorium on new crypto mining firms that use a carbon-based energy source therefore essentially freezing the current state of crypto mining.
  • Existing facilities will not be impacted nor are such that leverage renewable resources.

Why it’s important:

  • After exponential growth in US hashing power partly based on China’s mining ban last year, the new bill primarily aiming at new mining facilities comes with firm opposition from the crypto industry.
  • It labels it as too discriminatory toward a certain type of technology bearing the risk of impacting jobs and relocation of miners.
  • As environmental concerns regarding crypto mining rise, the bill will likely push solar and hydroelectric power in New York.
  • However, the recent Bitcoin Mining Council report proves that the mining industry is rapidly adopting sustainable energy sources as green power usage for BTC mining surges 60% YOY.
  • At the same time, Riot announces plans to develop a 1GW facility in Navarro County, Texas.
A social media platform’s policies are good if the most extreme 10% on left and right are equally unhappy.

Elon Musk on free speech (via Twitter)

2. Musk buys Twitter in $44 billion takeover deal

The Facts:

  • Announced Monday, Twitter’s board accepted Elon Musk’s $44b offer to take the social media company private at $54.20 per share.
  • The takeover deal was finalized before the company announced its quarterly earnings on Tuesday, reporting a slight miss of Q1 revenues, while mDAU rose 15.9% and earnings per share increased, at 4 cents, adjusted compared to 3 cents expected.
  • Twitter’s board initially sought to fight off a hostile takeover by adopting a “poison pill”, a limited duration shareholder rights plan.
  • According to Twitter, Musk is providing about $21b in equity financing and has secured $25.5b of debt and margin loan financing from Morgan Stanley Senior Funding and other firms, yet if the financing fails, he owes a $1b break-up fee to Twitter.

Why it’s important:

  • Despite offering many criticisms toward Twitter, Musk shared almost no details about who will lead the company, who will be on the board, and how much control Musk will actually exert.
  • Musks aims to improve Twitter by pushing free speech, tackling spam, bot accounts, and additionally, he plans to open-source Twitter’s algorithm.
  • However, Musk’s free speech advocacy might be subjective to some degree as he shows little tolerance for his employees’ free speech and repeatedly aimed to control and censor the output of journalists, bloggers, and researchers.
  • As Musk’s business is closely tied to China, Bezos points out that Chinese influence might increase following the deal.
  • When it comes to “Crypto Twitter” (CT), Musk might set a rapid end to the newly introduced NFT features on Twitter, since he does not hide his stance toward the new asset class.
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New ATH in monthly ENS registrations

3. Ethereum scaling solution unveils the Optimism Collective

The Facts:

  • The Ethereum Layer 2 network Optimism is launching a token along a governance structure upgrade.
  • The token will be launched via several airdrops and therefore new users might be eligible for future airdrops.
  • Optimism is a layer 2 optimistic rollup that tries to achieve scalability for Ethereum**.**

Why it’s important:

  • While Ethereum still dominates the developer scene, alternative smart contract platforms are growing at a higher pace as Ethereum’s DeFi share in TVL (currently at 53.59%) is steadily declining.
  • The launch of the OP token might be an event to turn tides again, as other scaling solutions such as Arbitrum, the rollup with most economic activity on Ethereum, are likely to launch tokens as well in order to boost their ecosystem by incentivizing adoption.
  • Since these airdrops can be highly lucrative, a new wave of bots aiming to airdrop-farm might hit the ecosystem.
4. Bitcoin becomes legal tender in the Central African Republic

The Facts:

  • Central African Republic lawmakers passed a bill making Bitcoin legal tender alongside the Central African Republic franc (CFA).
  • With that, the global south continues its crypto adoption as the Central African Republic becomes the second nation after the Republic of El Salvador to make bitcoin legal tender.
  • The bill also provides a legal and regulatory framework for cryptocurrencies.

Why it’s important:

  • With a population of 4.83m, only around 11% of which have access to the internet, the impoverished and poorly developed country tries to open up opportunities by adopting new technology, a step that might yield great results and bootstrap payments in the country.
  • As cryptocurrencies become a popular store of value in inflation-ridden countries such as the Central African Republic, there is now a viable alternative to escape the eroding CFA, which monetary policy is controlled by western powers.
  • As the CFA is used by a multitude of countries in Central Africa such as Cameroon, Chad, Equatorial Guinea, Gabon, and Congo, it might influence these countries in their approach toward cryptocurrencies.
  • Moreover, the West African CFA franc, that is of equal value to the Central African CFA franc, is used by an additional eight independent states: Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal, and Togo.
In other news
  • Fidelity now allows clients to put Bitcoin in 401(k) accounts (via Investopedia)
  • Study shows that most Salvadorans stop using the Chivo wallet after Bitcoin incentives (via CoinDesk)
  • Meta’s Reality Labs loses $2.9 billion in Q1 2022 (via The Block)
  • Opensea buys NFT aggregator Gem (via TechCrunch)
  • USN stablecoin goes live on Near Protocol (via NEAR Protocol)
  • Evmos launches in the Cosmos ecosystem (via The Block)

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