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Crypto exchange Binance is kicking off its non-fungible token marketplace this Thursday with a premium auction that will feature NFTs of two artworks by Andy Warhol and Salvador Dali. 

The auction, titled “Genesis,” will feature an NFT of Andy Warhol’s “Three Self-Portraits,” as well as a newly digitized NFT of Salvador Dali’s “Divine Comedy: rebeget.” According to a press release, the theme of the auction is meant to usher in “a new wave of Renaissance with NFTs.”

“NFT technology has revolutionized the world art for good, bringing the concept of digital ownership to life for the very first time,” the press release read. “The ‘Genesis’ auction represents this idea and brings two valuable pieces that represent ‘wind of change’ periods in history.”

The auction will also feature the first-ever Binance NFT “Mystery Box,” a new way for users to access special NFTs. Each box is guaranteed to contain one NFT, and its contents can vary in rarity. The first Mystery Box collection will feature 16 “tokidoki” characters, toys from the Japanese-inspired lifestyle brand created in 2006 by Italian artist Simone Legno. 

The auction is a part of Binance’s recently announced “100 Creators” program which features 100 artists handpicked by the exchange to spearhead the launch of the NFT marketplace. Only these selected creators will be able to sell their artworks in the first week following the marketplace launch. 

The exchange announced it was launching a marketplace for creating and trading NFTs in late April this year, calling it a “strategic move” by the exchange to further its commitment to NFT technology.

“We aim to build the largest NFT trading platform in the world by leveraging the fastest, cheapest, and most secure NFT solutions powered by Binance blockchain infrastructure and community,” a company spokesperson told The Block.

© 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.

Bitcoin hashrate, or the total computational power to mine the cryptocurrency, has dropped by nearly 50% in over a month.

From about 168,000 petahashes per second (PH/s) on May 15, the bitcoin hashrate has dropped to nearly 86,000 PH/s as of June 23, according to data compiled by The Block.

                                                                                                                                                                                   Source: The Block Research, BTC.com

The hashrate has dropped significantly after the government of China moved to shut down bitcoin mining activities in some regions last month, including Xinjiang and Sichuan. These two regions alone estimated to have 50 exahashes per second (EH/s) hashrate or about 30% of the total bitcoin hashrate.

China took harsh action as it aims to reduce its carbon footprint and related impact on the environment.

About 65% of the world’s bitcoin mining took place in China as of April 2020, according to the Cambridge Bitcoin Electricity Consumption Index. Over the months, that dominance has been fading, as The Block reported recently. Market participants at the time said China has less than 50% share of the bitcoin hashrate.

With the latest mining crackdown, that share has been further declining. The bitcoin price plunge in recent weeks is another major reason for the hashrate fall. According to data compiled by The Block, most Chinese bitcoin mining pools now have seen their hashrate fall by over 50%. AntPool and F2Pool, for instance, have seen their hashrate drop by 58% and 56%, respectively, over the past month.

Source: The Block Research, BTC.com

Foundry USA, on the other hand, has seen its hashrate increase by about 15% during the same period. Foundry USA is Digital Currency Group’s (DCG’s) mining subsidiary that publicly opened its pool in March of this year.

DCG founder and CEO Barry Silbert last week tweeted that the Foundry pool was launched at the “perfect time” and suggested that it could soon become a top-five bitcoin mining pool worldwide. Foundry is currently ranked seventh.

Besides the U.S., Kazakhstan, Russia, and Georgia appear to be attractive bitcoin mining destinations for Chinese miners. Earlier this week, China-based BIT Mining, formerly known as 500.com, already shipped some of its bitcoin mining equipment to Kazakhstan. The company is set to send more machines to the country next month.

© 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.

The circulating supply of secondhand bitcoin mining equipment in China has been spiking after state-owned power grids were ordered to cut supply for bitcoin mining farms earlier this month. 

On-chain data shows that about 50 exahashes per second of computing power on the bitcoin network has gone offline since Xinjiang and Sichuan – the two top bitcoin mining regions in China – issued similar shutdown orders to bitcoin mining farms on June 9 and June 18, respectively. That accounted for roughly 30% of the network’s total over the past two weeks. 

Multiple bitcoin mining industry experts in China estimated in a panel discussion in April that China’s bitcoin hash rate dominance over the network’s total already faded to around 40%. It appears that about three fourth of Chinese bitcoin miners have gone offline in the past weeks.

Kevin Zhang, a vice president at U.S. mining firm Foundry, said in a Twitter thread on Wednesday that based on his conversations with miners in China, “roughly 70% of the bitcoin mining capacity in China has gone offline and by the end of this month, it’ll be closer to 90% offline.”

While it’s difficult to break down how many units of bitcoin mining machines have been unplugged exactly, it’s possible to estimate the relative lower and upper bounds based the tech specifications of different mining models.

If assuming the 50 EH/s of computing power that went offline lately came from the newest generation of mining equipment like the Bitmain AntMiner S19 Pro, that means there are at least 500,000 units of such machines. If assuming the unplugged hashing power came from years-old models like the AntMiner S9, then the added circulating supply could be as much as 3.5 million units. The reality could be somewhere in between.

These machines are either looking to be changing hands or on their way to countries outside China such as Kazakhstan, Russia, the U.S. or Canada.

Bitmain reacts

It appears the influx of secondhand bitcoin miners has been so significant lately that is causing Bitmain to suspend the sales globally for the spot orders for its new bitcoin miners. Preorders for future stocks have not been affected.

Executives at Bitmain notified its customers through WeChat messages on Wednesday that the suspension is due to the increasing amount of secondhand bitcoin miners circulating in the markets as a result of the recent shutdown orders in Xinjiang and Sichuan.

Bitmain said it has decided to not add more pressure for the time being on its mining customers who are already having a tough time liquidating their inventories due to the supply influx. The news was first reported by Chinese crypto media BlockBeats. 

Further, it appears the influx of supply for secondhand models and bitcoin’s recent price drop have jointly resulted in a sharp price decline of the spot stocks of bitcoin mining hardware with some by as much as 30%, based on the quotes posted by various hardware resellers on WeChat seen by The Block.

But Foundry’s Zhang added in the Twitter thread that to scoop up and ship these secondhand mining equipment overseas may not be as easy as it seems.

“Before resellers and opportunists get way too ahead of themselves for scooping up discounted electrical equipment, they should consider that most of the gear wont be up to code for established Western countries (not UL Listed or CE Certified, aluminum transformers vs copper),” he tweeted.

© 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.

The Bank for International Settlements (BIS) released Wednesday an extensive new report on central bank digital currencies (CBDCs).

The primary takeaways? As BIS head of research Hyun Song Shin put it, “CBDCs are a concept whose time has come.”

As “the central bank for central banks,” the BIS has been involved in researching CBDCs for years, including putting out an annual survey into the field. Following Facebook’s announcement of then Libra (now Diem) and expanded attention on global stablecoins in 2018, that research kicked into overdrive. This latest report is much more overt in its support for CBDC development and, especially, international interoperability. 

Beyond the report’s new level of optimism about the technology, key takeaways are the BIS’s support for CBDCs that effectively maintain the existing financial system.

“CBDC is not a transformational project for the financial sector,” said Benoît Cœuré, Head of the BIS Innovation Hub, at a press conference on the report. “It’s about making sure that in this new digital world the financial system will remain competitive and open.” 

In particular, the BIS is careful to outline support for the continued existence of the two-tiered system of central banks interacting with private banks, who in turn handle retail users. “CBDCs should therefore be designed to delegate most operational tasks and consumer-facing activities to commercial banks and non-bank payment service providers,” the report reads. 

The people behind the report are, however, careful to draw a distinction between CBDCs and cryptocurrencies like Bitcoin, which, according to Cœuré “has certainly failed the test of becoming a means of payment.”

Stablecoins are a more likely comparison, which has led to speculation as to whether governments issuing CBDCs will allow them to survive. In response to a question from The Block as to whether governments issuing CBDCs would put up with private competition, Cœuré said “What you call competition, I would call it choice for the customer. If you go out after this press conference and buy a beer, you would be choosing between cash, a card, or your mobile phone. That’s exactly the kind of choice that we want to preserve when talking about CBDC — provided that the stablecoin is properly regulated as a means of payment, of course.”

The BIS’s general manager recently spoke similarly positively about CBDCs and their ability to upgrade payments. 

© 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

• Ethereum gas fees reached record highs in the first half of 2021 but have since dropped dramatically in step with reduced on-chain volume
• The reduction of gas token usage and the rise of Flashbots appear to have benefitted network congestion overall, subduing gas fees
• L2 scaling solutions are beginning to increase in adoption and stand to help lower gas fees further in the future with sufficient growth

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Quick Take

• Large corporates are giving bitcoin the cold shoulder amid its price rout.
• The tax headaches of adding bitcoin to a public company’s balance sheet make the move a non-starter for some.

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The U.S. Securities and Exchange Commission (SEC) charged John Wise and his company Loci Inc for allegedly selling an unregistered digital asset and making false statements related to its sale, according to a Tuesday release from the Commission. 

The SEC alleges that, between August 2017 and January 2018, Loci and Wise raised $7.6 million by selling the unregistered “LOCIcoin” token, and that Wise used over $38,000 of the venture funds for personal use. Through these purported actions, Wise and Loci Inc violated portions of the Securities Exchange Act of 1934 and the Securities Act of 1933. 

“Loci and its CEO misled investors regarding critical aspects of Loci’s business,” Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit, said in the statement. “Investors in digital asset securities are entitled to truthful information and fulsome disclosures so they can make informed investment decisions.”

Loci and Wise destroyed any outstanding LOCIcoins and have agreed to not partake in future digital asset offerings. Neither party has yet confirmed or denied the SEC’s allegations, according to the release, though Loci and its leadership must pay a $7.6 million dollar civil penalty. 

According to a recent report from the blockchain analysis firm Elliptic, the SEC leads other U.S. regulators in cracking down on crypto misconduct — mostly in the form of unregistered securities. 

© 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.

Blockchain Capital, the long-running VC firm focused on the crypto space, has closed a new fund with $300 million in backing.

In a Tuesday statement, Blockchain Capital described the raise as “heavily oversubscribed” and backed by “strategic investors, pension funds, major university endowments and family offices from around the world.”

Among the backers named were Visa and PayPal, two payments giants which have increased their footprint in the crypto industry in recent months. These actions include taking stakes in companies across the space.

“Select investors in Fund V will be participating in Blockchain Capital’s strategic partnership program – including PayPal and Visa. Blockchain Capital is able to leverage its industry-leading network, research capabilities and industry contacts to benefit these payments companies as well as Blockchain Capital’s portfolio companies,” Blockchain Capital said. 

Indeed, PayPal signalled that its participation in the fund would help it strengthen those inroads.

“Investing in Blockchain Capital’s new fund allows us to engage with the entrepreneurs driving the future of the decentralized economy and the new wave of financial services,” Jose Fernandez da Ponte, PayPal’s VP for crypto, said in a statement. 

© 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.

Uniswap, the non-custodial cryptocurrency exchange, has added a new member to its ranks as it continues to vie for dominance in world of decentralized finance.

The project — which commands more than 50% in the decentralized exchange market — has hired Mary-Catherine Lader as its first chief operating officer. Lader, who joined the project earlier this month, previously worked at multi-trillion asset manager BlackRock where she led the team building sustainable investing tools for Aladdin, BlackRock’s flagship portfolio management tool. 

As Uniswap’s new COO, Lader will play a key role in working with the DeFi’s project’s community to expand its growth. 

“We are growing the Uniswap Labs team across product, engineering, growth and community,” Lader said in a statement shared with The Block. “We’re working on partnerships to enable the use of the protocol as a neutral source of liquidity and exploring how we can bring DeFi/decentralization to new communities and users.”

Uniswap, along with much of the DeFi market, experienced breakneck volume growth throughout much of the first half of 2021, according to data from The Block. The DEX has seen about $40 billion worth of volumes this month. 

The project — which is backed by top investors including Paradigm and Andreessen Horowitz — recently released and launched Uniswap v3, which is supposed to make the protocol substantially more capital efficient.

© 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.

Shares of exchange operator Coinbase hit an all-time low on Monday as the crypto market sees a slowdown.

The Coinbase stock is currently down 49% from its all-time high of nearly $430, reached on its listing day in mid-April. The stock is trading at just below $220 at the time of writing. It hit a low of $210 on Monday.

Coinbase was listed on Nasdaq on April 14, becoming the first major cryptocurrency company to go public in the U.S. The company’s stock has experienced significant volatility in these two months in the range of $208-$430.

Despite such volatility, asset manager Ark Invest remains very bullish on the stock, as The Block reported recently.

Ark, whose CEO Cathie Wood was called “Wall Street’s hottest hand” earlier this year by the Wall Street Journal, has bought a total of nearly 7 million Coinbase shares to date, worth more than $1.5 billion at current prices.

© 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.