The competition around staking is heating up, and the latest entrant is Binance.US, who will begin to offer staking on two assets with plans to roll out more in the future.
On this episode of The Breakdown, Catherine talks with NLW about:
How the company prioritizes both new features and which audiences to build for
Why staking is important both for allowing people to do more with their crypto assets as well as help build and secure the networks those assets run on
How staking is part of a much larger mission around education, financial literacy and lowering the barriers to entry for participation in crypto.
We’re over $9,000! That means a lot of good things, of course. But any price increase brings with it increased scrutiny and, yes, increased FUD. The question for this time around is whether the FUD is the same old same old or something new.
In this episode, @nlw looks at three emergent (and continued) areas of FUD, including: 1) accusations that the bitcoin community is rooting for calamity as the safe haven narrative takes hold; 2) an updated “crypto is for criminals” narrative with more emphasis on state-level enemies; 3) a new, more economically vindictive green/energy waste narrative.
Importantly, the question isn’t so much whether these new categories of FUD will come to fruition, but what can be done about them.
The best Sundays are for long reads and deep conversations. Earlier this week, the Let's Talk Bitcoin! Show (Adam B. Levine, Andreas M. Antonopoulos, Jonathan Mohan and Stephanie Murphy) gathered to discuss Lightning Network technology and two innovative approaches at the wallet level which simplify the new-user experience at a tangible, but seemingly minimal cost.
On today's podcast we zero in on the challenge of "Channel Management", an until-recently-mandatory part of connecting to and utilizing the still-nascent Lightning Network.
Until recently, the way Andreas sends a payment to Stephanie through Lightning is either through a direct channel to her or through a route of hops that can eventually reach Stephanie.
But if a user is brand new to the Lightning network, how do they go about receiving their first payment? - This question has been answered by both ZAP wallet and Phoenix wallet, using different techniques.
Phoenix wallet is made by ACINQ, the makers of Eclair wallet. Eclair offers more advanced/technical users a deeper look behind the hood of the inner workings with channel management being a manual operation.
With Phoenix, ACINQ has taken this away, with the aim of it being a more user friendly wallet for the end user - A more Mom and Pop style wallet.
When Stephanie, a new user of Phoenix wants to be paid by Andreas, she will create an invoice on her phone, just like any other wallet. Andreas will then scan that QR code, send the payment, and it will look just like any other Lightning transaction to Andreas.
If Stephanie currently has channels open with enough inbound capacity - Then it will complete successfully. But what happens when there is not enough inbound capacity, or no channels at all?
This is where Phoenix differs. Phoenix wallet offers no channel management to the end user, it is all done under the hood. The wallet ONLY connects to the ACINQ node, initially through a ‘fake channel’ and when an incoming payment is detected by ACINQ, the ‘routing hint’ that was contained in the QR code points to Stephanie’s wallet through this fake channel.
[Andreas → Node X → Node Y → ACINQ Node -*-*-> Stephanie]
Stephanie will then get notified that she has an incoming payment and be asked if she would like ACINQ to open a channel with her and push her the balance due (Turbo Channel). This comes at a cost though, 0.5% of the amount received. [Phoenix state that this is to cover the cost of opening the channel and allocating additional liquidity on their side]
POINTS OF INTEREST
Is the ease of use factor worth the cost involved?
If only connecting to the ACINQ node, will this create centralisation?
Phoenix claims to be “trust-minimized, but not trustless”
Lightning node runs directly on the phone
Phoenix offers no on-chain balance. All monies on the wallet are contained in channels.
There is also the ability to send and receive on-chain bitcoin using swaps (this also comes with a fee)
ZAP takes a different approach to onboarding new users. Their aim is for users to be able to use their debit card to have bitcoin sent to them on the Lightning Network, even when they have a fresh wallet with no channels. Then the user has the ability to make payments on the Lightning Network.
The creator of ZAP, Jack Mallers has started a new services which he calls OLYMPUS. This service is standalone and can be implemented by other Lightning wallets, with there being no requirement for the Lightning wallet used to be ZAP.
Quoting from the Zap blog on what Olympus is:
“Olympus is an external service that clients make requests to. The service is responsible for the hard parts: onboarding users, processing payments, managing market risk, streaming quotes, and delivering bitcoins.”
Once payment has been received by Olympus, it will then open a Turbo channel to the user, with the pushed amount that they have just purchased with their debit card. With the use of a Turbo channel, the user is able to spend straight away. Jack Mallers has also stated that in the future Olympus will not only push the amount to the user but will also have some funds on their end of the channel. The amount to be staked by Olympus will vary depending on the users usage.
Currently Olympus is in Beta and available to only a few select users in the United States with a plan to roll out publicly and eventually to other countries
POINTS OF INTEREST
Olympus requires KYC/AML
If you are a business using the Olympus service will this mean that when the channel is opened to you, Olympus will open a channel with much higher funds on their end as opposed to if you are only an individual?
NOTES
ZAP is non-custodial
ZAP is available for Windows, Mac, Linux and mobile (iOS and Android)
ZAP can connect through a remote node on Mobile - On Desktop offers remote node and own neutrino node.
Using ZAP wallet does not require KYC/AML - But using Olympus does
ZAP has the ability to offer a version of their wallet that doesn’t contain the Olympus feature\
That’s a wrap! The World Economic Forum is over, and the key ideas coming out of Davos for our industry are: 1) a continued ‘blockchain, not crypto’ narrative; 2) a believe in the inevitability of cashless futures (without much concern about the negative implications); and 3) the rise of CBDCs.
On the CBDC front, the WEF put out a toolkit for governments that are considering their own currency; Japan announced a project to explore a digital currency as a counterweight to the influence a digital yuan might bring China; and a BIS study says 1 in 10 governments anticipate having a digital currency within 3 years.
Finally, we close asking prolific bitcoiner and artist Brekkie von Bitcoin about the state of bitcoin art and why even the hardcore financially-minded folks in the space should care.
Topics Discussed
The WEF wraps up and it’s all ‘blockchain not crypto’ and cashless futures
There is an ongoing debate in the crypto community about where mainstream adoption. One point of view is that it will be the slow steady acceptance of digital assets. On that front, Bakkt president Adam White said in Davos yesterday that the company is on track to launch their app this year.
Another perspective is that the main use case of crypto is to enable otherwise censored transactions. Lending credence to this perspective is the case of Pornhub, which saw payouts to its more than 100,000 performers blocked unexpectedly by PayPal in November, and which announced cash outs via Tether (USDT) today.
In this episode, @nlw breaks down these two arguments and asks whether they’re mutually exclusive.
Also discussed is the new BCH mining group (cartel?) insisting on a 12.5% block reward dev fund, as well as interesting insights and data from research from CoinDesk and The Block today.
News broke yesterday that the Libra Association had seen it’s eighth high-profile defection, this time from the telecom giant Vodafone. In today’s episode of The Breakdown, @nlw argues that Association members are far less of a factor in Libra’s success than key regulatory questions around domiciling, the value peg and the US’s fear of a Chinese digital currency.
Also in this episode, Square Crypto announces its plans for a 'Lightning Development Kit' while Square also announced a new patent that could make crypto easier to use. In regulatory battles, meanwhile, both the Blockchain Association and the Chamber of Digital Commerce have filed amicus briefs around the SEC-Telegram lawsuit.
Ever since announcing their fourth round of grants, Gitcoin has been a major subject of conversation across the Twittersphere. In addition to all the excited buzz from both technical projects and media creators vying for grants matched based on E. Glen Weyl and Vitalik Buterin’s quadratic funding model, there has been controversy. Some of that controversy has been from outside the Ethereum community, pointing to Consensys and Ethereum Foundation support as an example of centralization. Some of the controversy has come from within, as debates rage about what is or isn’t an acceptable use of “public” resources.
No matter what one’s position, it’s hard to deny that Gitcoin is one of the most interesting experiments in open source funding to date. Listen as @nlw askes the projects founder Kevin Owocki about the history of the project, the controversy, and what makes this round of grants such a big jump forward.
The best Sundays are for long reads and deep conversations. Earlier this week, the Let's Talk Bitcoin! Show gathered to discuss decentralization in blockchain projects, the historical context of decentralized organizations, the robustness it conveys but also the difficulties it engenders.
On today's podcast we apply concepts and stories from "The Spider and the Starfish: The Unstoppable Power of Leaderless Organizations", a formational book on pre-blockchain decentralization written in the early 2000's, as the centralized US military struggled to effectively dispatch a much smaller decentralized force in Afghanistan. While the battlefield is different, the insight is perhaps even more relevant to the world of blockchain projects, their decentralized origins and ambitions.
Later, we discuss the similarities between decentralized organizations and the Buddha's concept of self.
One man. Three piping hot takes. In this special interview episode of The Breakdown, financial advisor and crypto advocate Tyrone Ross shares his thoughts on:
Why Financial Advisors are the key to bringing in the next wave of crypto investors
Why DeFi is an even bigger deal than you think - and not just to the hackers and entrepreneurs building on it
Why Square’s CashApp - not Binance, not Coinbase, not any one else - is the most important company in Crypto
As Libra continues to spur discussions among regulators around the world, and China’s digital yuan comes ever closer to fruition, the U.S. Federal Reserve seems disinclined to look seriously at a digital dollar. Ex-CFTC Chair Chris Giancarlo - aka “Crypto Dad” - isn’t waiting around. He has teamed with Accenture to launch the nonprofit Digital Dollar Foundation.
As crypto continues to evolve, it does so in sometimes divergent directions. Gemini announced a new insurance company designed to make big institutions more comfortable with the space. Zcash, meanwhile, released an updated SDK to make it easier to shield transactions via mobile. Can the privacy-preserving side of crypto co-exist, ultimately, with the sanguine institutional side?
Finally, we revisit our discussion of personal tokens and ISAs, as well as look at the latest research from Coinmetrics on whether bitcoin is behaving like a safe haven asset.
