Myth Of Money: I'm an ETH Convert
Welcome to this week’s edition of Myth of Money, a weekly newsletter on the digital asset markets read by 12,000+ investors.
Disclaimer: The following is not intended as investment advice. Do your own research.
Greetings from the Maldives 🇲🇻
After a jam-packed month in Dubai, I am taking a weekend break before heading to Lagos (April 12-14) and Nairobi (April 15-21). If you are in the area on those dates, give me a ping.
As we near the launch of ETH 2.0, I want to dedicate this week’s newsletter to Ethereum, what it does, where it’s going, and why you should care.
I would like to preface this edition by stating that I hold zero Ethereum in my portfolio at the moment. Yes, I know that’s nuts. But if you’ve read any of my other letters, you would not know that invest in crypto in 3 ways: (1) Bitcoin, (2) Infrastructure (mostly in private sales), and (3) I treat everything else like a short term trade. And so at some point, I sold all over my Ethereum, somewhere above $3k feeling like we were near the top.
What is Ethereum and what does it actually do?
According to Wikipedia:
Ethereum is a decentralized, open-source blockchain with smart contract functionality. Ether (ETH or Ξ) is the native cryptocurrency of the platform. Among cryptocurrencies, Ether is second only to Bitcoin in market capitalization.
Ethereum was conceived in 2013 by programmer Vitalik Buterin. Additional founders of Ethereum included Gavin Wood, Charles Hoskinson, Anthony Di Iorio and Joseph Lubin. In 2014, crowdfunded development work began; the network[clarification needed] went live on 30 July 2015. Ethereum allows anyone to deploy permanent and immutable decentralized applications onto it, with which users can interact. Decentralized finance (DeFi) applications provide a broad array of financial services without the need for typical financial intermediaries like brokerages, exchanges, or banks, such as allowing cryptocurrency users to borrow against their holdings or lend them out for interest. Ethereum also allows users to create and exchange NFTs, which are non-interchangeable[clarification needed] tokens connected to digital works of art or other real-world items and exchanged as a variety of digital property. Additionally, many other cryptocurrencies operate as ERC-20 tokens on top of the Ethereum blockchain and have utilized the platform for initial coin offerings.
As most other L1’s have adopted the proof-of-stake method, Bitcoin and Ethereum continue to be the most utilized proof-of-work networks, which is slow, expensive, and creates an unnecessary environmental impact. ETH 2.0 proposes to change this.
Given that this is an unprecedented event, it is sure to bring with it a lot of media coverage - especially around that 99.98% energy use reduction - as the mainstream narrative around Proof of Work is currently very bad and many people believe that PoW is horrendous for the environment.
There is actually an amazing summary of everything happening currently in Ethereum on Twitter. You can check it out <here>, but I will provide a TLDR below.
(1) Galaxy Exec Jason Urban believes Ethereum could flip Bitcoin (in market-cap that is)
In a recent interview, at the Bitcoin Conference 2022, Urban explained that while the ‘flippening’ will not be imminent, he expects the soonest Bitcoin-Ethereum flip in the next two to three years. “Ethereum is the copper, Bitcoin is the digital gold. It allows for the ecosystem to be built in so many ways, as do the other layer ones,” he stated.
Ethereum’s transition from a PoW to a PoS consensus brings an upside for the project, a potential 220% spike in current valuations, which leaves ETH at over $9,300.
(2) No DeFi 1.0 token has outperformed ETH the past 365 days
Sigh. If only I bought more ETH at $80 in March 2020.
(3) The Supply Crunch is Coming
(4) Layer 2 networks are picking up steam, which is evidence of demand for the potential ETH 2.0 functionality
(5) What is the MERGE?
More on this here - You Don't Own Enough ETH - The Daily Gwei #469
(6) For the Culture
Ethereum Network is working hard to fulfill its promise of being the next “super-computer.” To that end, Vogue released an interesting piece on why Brand.eth is the new Brand.com.
Public Ethereum wallet names are similar to email addresses and Instagram handles. As brands approach Web 3.0, they should be thinking about owning their presence in the metaverse.
There is so much more to say about ETH. But if you are a newb in this space, I hope this thread is enough to get you started down your own rabbit hole ;)
This Week By the Numbers 📈
As global instability continues, markets appear to be very confused. Stocks and crypto are both in a dip. Oil is down, but wheat is up. As are yields. Inflation shows no signs of slowing down, yet… current investment principles seem to be going out the window as investors worry about a potential economic correction.
My advice is - to be patient. It is better to be late to enter an investment position, but enter it when a trend is confirmed, rather than rush in out of fear. I am still holding the majority of my personal position in Bitcoin and Cash.
It is also worth mentioning that the $DXY is getting close to an all-time high, which could mean a much wider market correction.
Top Stories 🗞
Strike Announces Shopify Integration, Partnerships With NCR And Blackhawk Bringing Bitcoin Lighting Payments To Major Merchants
Strike, a digital payments platform built on Bitcoin’s Lightning Network, announced an integration with e-commerce company Shopify. U.S. Shopify merchants will be able to receive bitcoin payments from customers globally as U.S. dollars, announced Strike CEO Jack Mallers speaking at the Bitcoin 2022 conference in Miami. The integration offers an alternative to traditional card networks such as Visa and MasterCard by leveraging the Lightning Network, a second layer built on top of the bitcoin blockchain that allows users to send or receive cryptocurrency quickly and cheaply by moving transactions off of the main blockchain. The service will be accessible to any consumer in the world with a Lightning Network-enabled wallet, including more than 70 million CashApp users. Most notably, the app also allows users to pay with the currency of their choice (and for sellers to receive their preferred currency) while the transaction and the exchange are done using the Bitcoin network.
Justin Kan is building a town square for gaming NFTs – with a bevy of big-name backers. Fractal, the platform for game-related non-fungible tokens (NFT), has raised $35 million in a seed round led by Paradigm and Multicoin Capital. Other investors include Andreessen Horowitz (a16z), Solana Labs, Animoca Brands, Coinbase Ventures and Terraform Labs CEO Do Kwon, among others. The platform functions as a marketplace for players to buy Solana-based NFTs directly from game companies as well as a secondary marketplace for peer-to-peer trading.
Meta Platforms (FB), Facebook's parent company, has put together preliminary plans to release virtual coins, tokens and lending services on its apps. Meta Financial Technologies has been exploring the creation of a virtual currency for the metaverse, or “Zuck Bucks” as it’s being referred to by company employees, the FT reported, citing several people familiar with the matter. The latest move comes not long after the company’s ill-fated move into cryptocurrency. What was left of Meta’s Libra/Diem stablecoin project was sold to Silvergate Bank earlier this year. Meta doesn’t envision a blockchain-based digital currency, but in-app tokens that are centrally controlled by the company.
ESPN and Autograph, the non-fungible token (NFT) company founded by Tom Brady, announced Wednesday a multi-year deal to mint the sports network’s first NFT collection. The collection coincides with the release of the docuseries “Man in the Arena: Tom Brady” on ESPN+ and Disney+, which follows Brady’s path from unheralded draft pick to arguably the greatest quarterback in professional U.S. football history. The series is available to view on Autograph.io and for sale on the marketplace of sports betting company DraftKings. “As the first NFT partner for ESPN, the possibilities across sports and technology are endless, and we couldn't be more excited to get this content out to the world in a massive way,” Autograph CEO Dillon Rosenblatt said.
Thank you for reading this week’s edition of the Myth of Money.🚀
Until next week,
By Tatiana Koffman
Hi there and thanks for reading. If you stumble upon my newsletter, you will notice that I write about money, economics and technology. I hold a JD/MBA and spent my career in Capital Markets working across Mergers & Acquisitions, Derivatives, Venture Capital and Cryptocurrencies. I believe in empowerment through closing the financial education gap and creating equality of opportunity for the next generation.
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