Dispatch #88: China Mining - the Return!

May 20, 2022 3 min read

Dispatch

In this patch of your weekly Dispatch:

China’s underground Bitcoin mining
Buy with Card’s global expansion
Stablecoin redemptions

The Big Idea

The Return of China Bitcoin Mining?

One of the biggest events of crypto in 2021 was China’s Bitcoin mining ban. Unlike with previous crypto crackdowns, that announcement came straight from the Vice Premier level and was taken much more seriously. Over the months that followed, the global hashrate redistributed, with the US being the biggest beneficiary.

This week, the Cambridge Centre for Alternative Finance released some new data about Bitcoin mining at the end of last year.

First, the US has extended its mining lead, and now represents more than 37% of the global hashrate. Interestingly, Georgia is the biggest state for mining, representing a little under ⅓ of the US’s total hash power. Kazakhstan, Canada, and Russia all fell.

But the biggest attention grabber was China, which roared back onto the map with 21.1% of the global hashrate, second only to the US.

For some, this confirms the suspicion that China has had a thriving underground Bitcoin mining scene. Others are drawing a different conclusion – that even when a state as big as China tries to ban Bitcoin, it just doesn’t work.

The Latest In…

This week, lending protocol AAVE announced the public launch of Lens Protocol, a decentralized Twitter-like social platform built on Polygon. But don’t get your hopes up because it is only available to addresses who had signed an open letter by May 5 or community builders. In the existing SM realm, we learned – actually Elon did – that he had violated a nondisclosure agreement amid his bid to acquire Twitter by revealing that the sample size for the social media platform's checks on automated users was 100. If someone can put an acquisition on halt twice, it’s Elon.

The Latest In…

NFT Mainstreamification

Streaming giant Spotify is testing out “NFT galleries”, allowing a selected group of artists to embed and promote NFTs under their songs and albums. Among the first musicians to try out the platform’s web3 bet are Steve Aoki and The Wombats – both big NFT collectors. The move comes on the heels of the Spotify Island launch on Roblox as well as Meta rolling out a limited Instagram feature allowing creators to display their NFTs on their feed. In other NFT news, Madonna dropped a trio of video NFTs where her naked 3D avatar gives birth to a tree. We don’t know what it means, either, relax.

The Latest In…

Nexo

Just a week after we announced that US citizens can now buy crypto with a bank card, we’ve expanded the feature to cover a list of 100+ new jurisdictions, including Germany, Turkey, Nigeria, Indonesia, and more. Expanding this feature to more jurisdictions has been a top priority for us, as we believe it will make buying crypto instantly more accessible than ever. What’s more, the monthly limit for card purchases has now been increased to $450,000 – 15x higher than the previous limit.

The Week’s Most Interesting Data Story

Stablecoin Flight?

With stablecoins drawing the attention in crypto those past few weeks, many Tether critics have FUDed Tether by pointing at its trades of slightly below $1 at various points this week and the $9B in Tether redemptions. But they’re ignoring the fact that Tether is not an algorithmic stablecoin and that it has a totally different model, backed by reserves. Industry proponents fought back, saying that Tether being able to redeem that much quickly is a sign of strength, not weakness. In Q1 reserve attestations, Tether demonstrated that it has decreased its commercial paper holdings and increased its US Treasury reserves, meaning that it’s even more likely to be able to deal with whatever redemptions come its way.