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Senator Pat Toomey is adamant on establishing limits on a potential central bank digital currency, though he has not yet ruled out supporting one.

CBDCs were a hot topic during a hearing before the Senate Banking Committee earlier today focusing on Federal Reserve Chair Jerome Powell’s renomination.

In the past, Toomey, the leading Republican on the committee, has noted his desire to protect private stablecoins over a potential CBDC. Speaking with The Block following today’s hearing, he maintained that he would be open to authorizing the Fed to issue a CBDC, as long as it was not a means of pushing out private operators.

“It all comes down to design,” Toomey told The Block. “If design goes badly, then we’re much better off not having a central bank digital dollar. But if it’s properly designed, then I think it could make sense as long as we allow privately issued stablecoins to exist.”

It’s a critical question at this point. The President’s Working Group has said outright that Congress should tightly restrict stablecoin issuance, with the Financial Stability Oversight Council further threatening to take steps should Congress fail to act. 

Regarding any direct Fed accounts, Toomey maintained that commercial banks still need to act as intermediaries. 

In his final questions to the Fed chair, Toomey sought to confirm such limits on a CBDC. And Powell seemed to be on board, based on the dialogue. Specifically, Toomey did not want the Fed to handle accounts for retail users, nor did he want a CBDC to crowd out private stablecoins. 

“Some have advocated,” said Toomey, “that individual Americans have retail accounts with the Fed. It seems to me there is absolutely nothing in the history, experience, expertise of the fed that lend the Fed to be a retail organization.”

“I would say yes,” agreed Powell.

Toomey continued to ask, given congressional authorization for a CBDC: “Is there anything about that that ought to preclude a well-regulated private stablecoin from coexisting with a digital dollar?”

Powell was similarly in Toomey’s corner, saying: “No, not at all.”

However, Powell himself has been hesitant to throw his support behind any Fed issuance of a CBDC.

At a hearing before the Banking Committee in July, he called himself “legitimately undecided” on the benefits of a digital dollar. While he may have changed his position, he has not made that change public. And despite a great deal of interest in the Fed’s delayed report on cryptocurrencies, in today’s hearing, he cautioned against setting expectations unnecessarily high, calling the pending report “more an exercise in asking questions and seeking answers from the public” than a proverbial Magna Carta for digital dollar issuance. 

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Quick Take

• Tokenised securities first launched in December 2020 but are still struggling to gain traction with users.
• Mirror Protocol historically dominates the competition regarding user activity and trading volumes.
• The market for tokenised securities makes up a relatively small fraction of the equivalent equities markets.

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Quick Take

• GSR’s co-founder and president Richard Rosenblum says the company is developing software to algorithmically trade NFTs.

• The advent of larger, more sophisticated NFT collections — in particular, the generative art peddled by Art Blocks — is what persuaded the firm to expand.

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Authorities in South Africa have launched an investigation into the Africrypt bitcoin (BTC) investment saga, according to Bloomberg on Tuesday, following complaints by people affected by the alleged theft of millions of dollars in BTC.

Raees and Ameer Cajee, the two central figures who ran the Africrypt platform, reportedly disappeared in April of last year after informing investors of an alleged hack. Africrypt victims have now urged South African law enforcement to launch a probe into the matter.

According to Bloomberg, the police in four South African provinces have begun a preliminary investigation.

The Africrypt situation is only one of several high-profile bitcoin-related scams to come out of South Africa. Another such case, Mirror Trading International (MTI), has attracted the attention of law enforcement in the United States over the alleged Ponzi scheme that siphoned 23,000 BTC from victims both in South Africa and across 170 countries.

These high-profile scams have also prompted South African regulators to move towards enacting protective regulations in 2022.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

A solo bitcoin (BTC) miner with only 126 terahashes per second (TH/s) of computing power has become the unlikely winner of a block race on the Bitcoin network.

By successfully mining block 718,124, the lucky miner secured the 6.25 BTC block reward, which is about $260,000 at the current bitcoin price.

With only 126 TH/s in computing power, the lucky miner controlled only 0.000073% of the total bitcoin hash rate, which is over 170 exahashes per second (EH/s). 1 EH/s is equal to 1 million TH/s. As such, the miner only had a 1-in-1.36 million chance of ever successfully finding a block.

All of the major bitcoin mining pools boast hashing potential in the EH/s range with the likes of AntPool and Poolin controlling 26.30 EH/s and 22.19 EH/s as of the time of writing. While it is not known how long the mining node has been on the network, if it was plugged today, it would have taken over 9,500 days for a miner with only 126 TH in hashing power to statistically win the block race based on the current hash rate and difficulty.

Luck or proof-of-work

Describing the feat, The Block Research’s Wolfie Zhao tweeted:

“This is fun. Winning full bitcoin block rewards with only 0.000073% of the current total hash rate. Either extraordinary luck or persistent proof-of-work, or both.”

The lucky miner in question is part of a solo mining pool operated by ckpool, which means 2% (0.125 BTC or $5,200) will go to the platform’s coffers. The miner will also earn the transaction fee reward for the block which is about 0.1 BTC, according to data from BTC.com.

The solo mining pool allows operations to use their own mining equipment to mine new blocks. But it provides a service for them that offers functions such as running the Bitcoin blockchain on their behalf. Hence, it rewards those mining with all of their rewards — minus a fee — rather than sharing all of the rewards proportionally between those using the pool.

The last time a ckpool miner won the block race was on December 2, 2021, at block height 712,217. According to BTC.com data, ckpool ranks number 15 on the list of bitcoin mining pools based on hash rate share with a total computing power of 410.96 petahash per second (PH/s)

“For the miner involved it’s a once in a lifetime chance. Last time a miner this small solved a block on my pool was only a year ago though. It’s usually larger miners that solve blocks statistically but there is no reason even the smallest miner can’t solve one,” tweeted Dr. Con Kolivas, an admin of ckpool.

While major bitcoin miners continue to increase their hashing potential, Tuesday’s events show that it is still statistically possible for even smaller entities to win the mining race for a transaction block on the network.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Chairman of the Federal Reserve Jerome Powell has assured Congress that the Fed’s much-anticipated report on cryptocurrencies will be out “within weeks.”

Powell’s estimated time of publication came during a hearing on his confirmation [link] before the Senate Banking Committee on January 11. Senator Mike Crapo (R-ID) pushed Powell on the report, which the Fed chair had previous said was coming shortly.

“The report really is ready to go and I expect we will drop it — I hate to say this again — in coming weeks,” answered Powell.

However, that report may not provide interested parties with all the answers for which it is looking. Powell explained, “it’s more going to be an exercise in asking questions and seeking answers from the public.”

The report is expected to focus on the outlook for a central bank digital currency or a digital dollar. The potential for the Fed to digitize the dollar has been a subject of great interest to the crypto industry as well as those more broadly interested in the future of monetary policy. That includes seven congresspeople who wrote to Powell at the end of September. 

In November, President Biden renominated Powell for another term as Fed chair. It is in continuation of that nomination that Powell appeared before the Banking Committee today.

Powell, a Republican, has a reputation for stability that has made his renomination fairly uncontroversial, despite several Democratic senators pressuring him to expand the Fed’s work on racial disparities and climate change, which Republicans and Powell himself generally consider outside of the Fed’s mandate.

Several of Powell’s colleagues on the Fed board have announced departure from the board, including Randy Quarles, Chris Waller, and, just yesterday, Richard Clarida, who became a lightning rod for controversy upon revelations that he bought up stock immediately before the announcements of the Fed’s expanded quantitative easing early in 2020. 

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Wall Street’s love affair with high-flying tech stocks and cryptocurrencies has fizzled as anxieties about monetary tightening from the US Federal Reserve adds uncertainty to the market, but one of the riskiest and most nascent corners of the crypto space has been relatively spared. 

Minutes from the Federal Reserve’s December 14-15 meeting that indicated the central bank could hike up interest rates more quickly to tackle inflation than previously expected sent cryptos like bitcoin and ether into a tailspin alongside risk stocks and exchange-traded funds like ARK’s Innovation fund and Tesla. Lower interest rates typically push investors into more risky assets thereby resulting in an appreciation in stocks and other assets. 

“Rising rates are reflexively causing investors to step back,” said Fundstrat’s Tom Lee in a message to The Block. “This has happened every time.”

While the rout reverted during the course of Monday’s trade with the Nasdaq Composite ending the day in the green, the prospect of rising rates could be a headwind for tech stocks and crypto. But those anxieties have not put pressure on non-fungible tokens—a market that covers digital art and collectibles that span projects like Bored Ape Yacht Club and Pudgy Penguins.

The floor price for a Bored Ape has increased by 9% over the last seven days—a period during which bitcoin and ether tumbled by double digits. Meanwhile, Mutant Apes saw its floor price decline by just 1.8%. Over the last 14 days, its floor price has climbed 54%. 

Doodles, another project has seen its price floor increase by 47% over the last seven days. World of Women, another NFT project, has seen its price floor pick up 56% during the same period.

As noted by The Block’s Osato Avan-Nomayo, NFT marketplace OpenSea has seen very strong trading volumes so far this month, putting it on track to potentially set a new monthly record.

In a sense, this goes against conventional wisdom. Indeed, Stephane Ouellette, CEO of crypto platform FRNT Financial Inc, noted in an interview with Bloomberg’s Katie Griefeld that “the Fed getting more and more hawkish” would be detrimental for crypto prices. 

“If they’re going to hike rates three times in 2022 and keep the program, and the era of low rates is over, we’re going to really see how much people believed in their Bitcoin-crypto thesis,” she said.

It appears thatNFT holders are sticking to their thesis. The reason might be tied to the unique nature of these assets. NFTs are not just an investment that you buy with the expectation of a future return (although that certainly may be the case for some holders). They’re also a status symbol that carries more psychological meaning than a bond, stock, or even fungible crypto, as noted by crypto personality “DC Investor.”

“With [crypto tokens], people start to sell just because the assets are fungible, so prices can tank quickly,” the well-followed NFT connoisseur said in a Twitter direct message. “You can’t really do that as easily with NFTs.” 

“There is [definitely] an attachment to NFTs,” he went on to say. “I think we’ve already seen a few waves of “flippers” burn through,” referring to traders who purchase an NFT on a platform like OpenSea to quickly sell it for a higher price in a short time frame. 

Chris Perkins, president of crypto fund CoinFund, noted in an email that NFTs have added functionality in some cases that make it more difficult for holders to sell. In some cases, the NFTs are needed to participate in different apps or game experiences. 

“Innovations like play-to-earn gaming have created additional demand for NFTs that may not be as correlated to macroeconomic inputs like rate increases as other assets classes in the crypto space,” the former Citi managing director noted. 

Still, if asset prices continue to decline, even NFTs won’t be immune in the long run. 

“I do think even within a prevailing crypto and NFT bear, we’ll see continued adoption in certain sectors of NFTs, especially for games / in-game items,” DC Investor said. 

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Crypto accounting firm TaxBit has launched a network allowing users to connect accounts across the crypto ecosystem to generate their transaction history when filing their taxes.

US taxpayers who trade crypto generate Form 8949 to show transaction history for the year when filing with the Internal Revenue Service (IRS). The form illustrates transactions involving capital assets held in the short-term, meaning a year or less. It requires taxpayers disclose a description of the property, the date acquire, the date sold or disposed of, the proceeds and cost basis for every short-term transaction. This allows the taxpayer to generate their gain or loss on each trade.

For those trading crypto on multiple platforms, this can be an onerous process. Some traders can rack up thousands of transactions each year, and for many, the only recourse is to hire an accountant or buy software to parse through the transactions on each platform. TaxBit is looking to expedite this process.

Its TaxBit Network allows users to integrate their data from over 500+ participating sources. Those participating firms include large centralized venues like PayPal, Coinbase, Gemini, Binance.US and FTX.US, as well as decentralized finance (DeFi) and non-fungible token platforms like Uniswap, SuperRare and Nifty Gateway.

Users connect their accounts to their TaxBit account, which through the network they can create for free, and the firm populates a free Form 8949 for each venue the taxpayer has connected. There is no transaction or wallet address limit. Some firms will even include buttons to sign up for a TaxBit account within their own applications. 

Indeed, 2022 is shaping up to be a challenging tax season for the IRS, even without the added challenge of the new and still-debated infrastructure bill tax provision for crypto. The Treasury has already warned that refunds could be delayed and the agency is preparing for considerable backlogs. 

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Crypto accounting firm TaxBit has launched a network allowing users to connect accounts across the crypto ecosystem to generate their transaction history when filing their taxes.

US taxpayers who trade crypto generate Form 8949 to show transaction history for the year when filing with the Internal Revenue Service (IRS). The form illustrates transactions involving capital assets held in the short-term, meaning a year or less. It requires taxpayers disclose a description of the property, the date acquire, the date sold or disposed of, the proceeds and cost basis for every short-term transaction. This allows the taxpayer to generate their gain or loss on each trade.

For those trading crypto on multiple platforms, this can be an onerous process. Some traders can rack up thousands of transactions each year, and for many, the only recourse is to hire an accountant or buy software to parse through the transactions on each platform. TaxBit is looking to expedite this process.

Its TaxBit Network allows users to integrate their data from over 500+ participating sources. Those participating firms include large centralized venues like PayPal, Coinbase, Gemini, Binance.US and FTX.US, as well as decentralized finance (DeFi) and non-fungible token platforms like Uniswap, SuperRare and Nifty Gateway.

Users connect their accounts to their TaxBit account, which through the network they can create for free, and the firm populates a free Form 8949 for each venue the taxpayer has connected. There is no transaction or wallet address limit. Some firms will even include buttons to sign up for a TaxBit account within their own applications. 

Indeed, 2022 is shaping up to be a challenging tax season for the IRS, even without the added challenge of the new and still-debated infrastructure bill tax provision for crypto. The Treasury has already warned that refunds could be delayed and the agency is preparing for considerable backlogs. 

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Luxor, a Washington-based bitcoin mining company, has launched a new service for buying and selling Bitcoin mining machines. Through their new trading desk, the company will purchase and sell specialized Bitcoin mining hardware on behalf of the Luxor team, miners, and investors.

“After moving tens of thousands of machines and serving miners across a few continents, we established a streamlined process for procuring equipment,” said Lauren Lin, operations manager at Luxor, in a statement.

An application-specific integrated circuit or “ASIC” is a chip customized for a specific purpose. An ASIC miner is a piece of hardware that uses these specialized chips for the purpose of mining digital currency. Bitcoin mining machine prices are volatile, based on macro-economic conditions and market cycles. The Luxor ASIC Trading Desk will trade in these opaque markets, taking principal positions to help miners gain access to rigs – hardware elements that have been set up to perform crypto mining – at fair market prices.

Tuesday’s launch comes months after the company raised $5 million in a Series A funding round led by financial services firm NYDIG. Looking ahead, Luxor is eyeing additional products and services related to mining hardware and the production of hashrate, including derivatives.

“For 2022, we’re planning to launch a hashrate derivatives and trading product,” said Colin Harper, head of content and research, to The Block. “In essence, it will be a marketplace where miners and investors can purchase hashrate and/or derivatives tied to Bitcoin’s hashrate.”

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.