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Crypto, Bitcoin


#335
BTC Chop

Published:

May 09, 2020


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Posted In:

Crypto, Bitcoin

Published:

May 09, 2020


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Powered by millions of decentralized computing nodes around the world, energy consumption for Bitcoin mining has eclipsed that of Chile – a country of 17m people – and is expected to continue to increase.

As implied, miners are rewarded with BTC for every block their “energy-guzzling” high-powered computers confirm on the blockchain network. However, the reward mechanism is about to change - actually get chopped in half! The next “halving” of Bitcoin, which sounds like a biblical event, occurs programmatically after 210,000 blocks have been confirmed and is expected to occur the week commencing 18 May 2020.

Miners will face a dilemma at this halving. Do they find more energy-efficient ways to mine Bitcoin or shift their effort to other cryptocurrencies?

Before the first halving, the reward for each block was 50 BTC - but after the upcoming third halving, the reward is only 6.25 BTC. This mechanism is designed to increase mining difficulty and limit supply to ensure it maintains network rewards and security without reaching the total of 21m Bitcoin too fast (we’re at 18.3m now). If smaller miners with high unit energy costs, churn out, larger miner “pools” will likely fill the void – increasing the concentration of the “nodes” which in turn decreases the decentralized nature of the network.

At a time when governments around the world are printing unlimited money, this deflationary mechanism in BTC is helping solidify it as a store-of-value asset. The price of Bitcoin has surged back above $10k - thanks in part to Paul Tudor Jones’ foray into the asset class and the trove of miner activity before the chop.

Portfolio News


Cointelegraph Talks: Bitcoin's block reward halving – Portfolio company TradeBlock’s director of institutional research John Todaro was on a panel and joined by representatives from Bitfinex and Poolin. The panel discussed the upcoming halving and the impact of the pandemic. Read more

OXIO connectivity-as-a-service platform goes live with Optiva BSS - The Optiva deployment was accelerated to support a relief effort called Oxígeno2030, which leverages at-cost mobile connectivity to help Mexico's most impacted individuals stay connected amid the pandemic. Portfolio company Oxio helps mobile subscribers around the world pay less for data and stay connected so that they can actively participate in the global digital economy. Read more

Migo featured in Innovation in Finance, by BBC StoryWorks - Portfolio company Migo has been profiled by BBC to discuss how they are uniquely enabling consumers and businesses to access credit in Brazil and Nigeria. Read more

Option Clearing House (OCC) taps Axoni in shift to DLT for securities lending infrastructure - Equity derivatives clearing organization OCC has selected portfolio company Axoni to help it replace its securities lending infrastructure with distributed ledger technology. Read more

BTC Chop


Paul Tudor Jones buys Bitcoin as a hedge against inflation - Macro investor Paul Tudor Jones is buying Bitcoin as a hedge against the inflation he sees coming from central bank money-printing, telling clients it reminds him of the role gold played in the 1970s. Read more

A team from the University of Cambridge has released a new bitcoin data tool for the concentration of mining - The Cambridge Centre for Alternative Finance (CCAF) shows China making up 65% of total global hash rate, with the U.S. and Russia back on 7%. While China is still way out in front, its share of the hash rate has dropped roughly 10% since September. Read more

Bitcoin pre-halving hash rate volatility to shake up the mining sector - The March bitcoin crash meant that roughly 2.3m miners had gone offline and the hash rate was its lowest since September 2019. Since then, the hash rate has reached all-time highs, which also means increasing the difficulty of mining new coins. Read more

Industry News


Samsung will launch a Samsung Pay debit card this summer - Samsung is partnering with personal finance company SoFi to launch the new card and cash management account. Both products are expected to arrive in the U.S. this summer. Read more

Europe’s digital banks off to slow start in the US market - Europe’s largest challenger banks are seeing slow user uptake in the US. The European cohort is led by German N26 with 3.55% of the US digital-bank market, London-based neobank Revolut has secured 0.97% of the US digital market, and Monzo has 0.23%, made up of 20,000 waiting list downloads and its beta launch. Read more

The Libra Association has named HSBC Chief Legal Officer Stuart Levey as its first CEO - Libra is shoring up its talent to work with governments and regulators. Prior to the role with HSBC, Levey served the U.S. government as Under Secretary of the Treasury for Terrorism and Financial Intelligence under Bush and Obama. Read more

The financial world’s nervous system is being rewired... By China - With America readier than ever to close the liquidity taps on rivals, China is investing time and money in building a private track. It has rolled out its own payments messaging system to complement SWIFT, and Alibaba and Tencent have already built “parallel banking systems” with over 1bn wallets (users) each that account for half of in-store payments and nearly three-quarters of web sales in China. Read more

The small-business die-off is here - A deeply depressing read from the Atlantic. Transaction volumes, a decent-enough proxy for sales, show Travel agencies are down 98%, photography studios 88%, day-care centers 75%, and advertising agencies 60%. Will this mean high streets filled with banks and 24-hour pharmacies rather than independent retailers? Read more

A turbulent stock market is a boon to investing-focused fintech startups - According to mobile app data provider, App Annie, finance apps are crushing it both at home and abroad. The US recorded 55% growth in time spent in finance apps overall from the week of Jan 1 to peak week April 18, Japan and South Korea saw 85% and 90% jumps, and Germany and UK seeing 30% and 10% respectively. Read more

Coronavirus boosts digital banking as Argentines lose fondness for cash - SoftBank-funded fintech challenger Ualá expands rapidly amid the pandemic. It has issued more than 1.9m debit cards and is signing up almost 0.5% of Argentina’s population every month. Read more

Franklin Templeton buys AdvisorEngine in bigger play for advisor desktop - AdvisorEnginer offers integrated wealth management technology to 1,200 advisory firms, placing Franklin Templeton at the helm of core financial advisory technology. Read more

Google and Gates Foundation will help spread digital payments in developing countries - Alongside a wider coalition, they announced the Mojaloop Foundation, which will develop a free, open-source real-time payments platform intended for nations and central banks.  Read more

Japan to ease investment rules to push bank-fintech partnerships - The rationale is to make it easier for banks to take stakes in fintech firms, thereby spurring the lending sector to drop its outdated business model and embrace new technologies. Read more

Brazilian Central Bank foresees open banking in full operation at the end of 2021 - Despite the pandemic's effect on the country, implementation will be carried out in four phases, until October 2021, with open banking fully functioning at the end of next year. Read more

U.S. lags behind 7 leading 5G countries in download speeds - Opensignal reveals that average U.S. 5G download speeds are still hovering below the country’s typical Wi-Fi speeds, an issue mostly attributed to the continued scarcity of U.S. mid band 5G spectrum. Read more

Select Financings


Banked - London based real-time payments startup raised £2.35m in Seed financing led by Force Over Mass. Read more

Bought By Many - London based digital pet insurance provider raised £78m in Series C financing led by FTV Capital. Read more

Countingup - London based business banking and accounting platform raised £4m in pre-Series A financing led by ING Ventures. Read more

First Dollar - Texas based consumers healthcare savings platform raised $5m in Seed financing led by Next Coast Ventures. Read more

Knock - Seattle based property management platform raised $12m in Series B financing led by Madrona Venture Group. Read more

N26 - Germany based consumer challenger bank raised $100m in an extension of its Series D round at a valuation of $3.5b. Read more

Proxymity - London based online shareholder voting platform raised $20m from JPMorgan Chase, HSBC and Deutsche Bank. Read more

Robinhood - California based consumer finance and investing app raised raised $280m in Series F funding at an $8.3b valuation led by Sequoia Capital. Read more

Stilt - San Francisco based challenger bank for immigrants and the underbanked raised $7.5m in Seed financing from Hillsven Capital and Streamlined Ventures. Read more

Treasury Prime - San Francisco based API software for banks raised $9m in Series A financing led by QED, SaaSts, and NYCA. Read more

Zeitgold - Germany based automated bookkeeping platform for SMEs raised €27m in Series B financing led by Vintage Investment Partners. Read more


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