October 16th, 2023

Israel-Palestine crisis: Navigating the intersection of conflict, aid and blockchain

Top blockchain and crypto news: Gaza tensions, digital tremors, NFTs are not dancing in September, Joe Lubin talks traditional system’s twilight.

In this issue

Gaza tensions, digital tremors
NFTs: not dancing in September
Lubin talks twilight: Traditional system’s eclipse

From the Editor’s Desk

Dear Reader,

It’s a geopolitical conflict with roots stretching back over more than a century. Yet the latest escalation of violence in Israel and Palestine this past week feels particularly shocking. Not least because the Hamas-led attacks throughout Israel over the weekend apparently caught the Israeli government, intelligence services and military — one of the world’s most well-provisioned — completely off-guard.

Reports have emerged suggesting that the militant group Hamas, the de facto political leadership in the Palestinian region of Gaza, used crypto transfers to raise millions of dollars in funds for the weekend’s attacks. It therefore appears we have once again seen financial access weaponized, as it always is in modern day conflict.

The hope now is that crypto steps up to take on a more positive role in what happens next. The blockchain, after all, is advertised as stateless, and permissionless. In its truest guise, it bypasses politics. It could be used here to get much needed humanitarian aid to civilians on both sides of this bloody conflict.

Local Web3 entrepreneurs set up an emergency crypto fund for Israeli victims of the violence — a move that we applaud and recommend readers seek out. But there are also more than 2 million Palestinian civilians inside Gaza who could benefit from financial aid delivered in the form of crypto.

As we have seen in this abhorrent incursion, civilians have cruelly been included in the attack equation. From afar, the complex web of history, politics, and homeland intertwine. On the ground, there are simply lives at stake.

Until the next time,

Angie Lau,
Founder and Editor-in-Chief
Forkast.News

1. Crisis? Bitcoin’s dual response

Israel’s cyber crimes unit, in conjunction with the National Headquarters for Economic Warfare, has announced the freezing of cryptocurrency accounts believed to be instrumental in raising funds for the Gaza-based Palestinian militant group, Hamas.

Israeli authorities have reportedly urged Binance, the world’s largest crypto exchange, to transfer the confiscated funds into Israel’s state treasury.
That follows a devastating series of attacks on Israel by Hamas over the weekend. The attacks, which included multiple atrocities against civilians, killed an estimated 1,200 people and wounded at least 2,700 others as of noon Thursday in Hong Kong.
In retaliation, Israeli warplanes have bombarded Gaza, a tiny strip of land some 40 km in length and home to over 2 million people. The air strikes have reduced large parts of the area to rubble, with 900 people reported killed and 4,500 injured. Reports indicate that the Israeli military has called up 350,000 reservists and may now be preparing for a ground assault on Gaza.
In response to this humanitarian crisis, a consortium of Israeli crypto companies has launched Crypto Aid Israel. This emergency fund aims to support Israeli citizens affected by the ongoing conflict. It is spearheaded by local crypto industry figures and companies such as Fireblocks, 42Studio, Market Across and CryptoJungle. They have teamed up with non-profit organizations to receive and deliver humanitarian aid to affected Israeli communities using cryptocurrencies such as Bitcoin, Ether and stablecoins like USDT and USDC.

Crypto has been used in conflict before. On-chain data shows that combatants and civilians on both sides of the Russo-Ukrainian war make use of cryptocurrencies as a way to receive and send funds. The use of crypto on both sides of the divide reveals crypto’s dual-edged nature as a tool designed to increase financial access, regardless of political affiliation, location, or intended use.

Six months into the conflict with Russia, Ukraine had already raised US$54 million in crypto donations, channeling it towards the provision of military essentials, medicine, and vehicles for their armed forces. On the flip side of that, pro-Russia militias also received over US$20 million in cryptocurrencies in the first year of the conflict.

Forkast.Insights | What does it mean?

The Middle East, as a pivotal hub for global oil production and transit, has long been a focal point of geopolitical tension reverberating through the global economy. When conflicts arise in the region, the immediate concern for markets is often the threat to oil supply chains. Physical infrastructure can be damaged, while fear of wider escalation stokes market uncertainties. Locations like the Suez Canal and the Strait of Hormuz become choke points for global oil supply.

However, the market impact is felt beyond the oil sector. Rising oil prices lead to higher transportation and production costs. As these costs surge, consumers feel the pinch, leading to inflationary pressures. Central banks, in a bid to stabilize economies, adjust monetary policies, which in turn further fuel inflation.

In the midst of these economic fluctuations, investors begin to search for stability. Historically, this stability was sought in gold, a time-tested “safe haven.” However, the digital age has ushered in another contender: Bitcoin.

Dubbed “digital gold” by some, Bitcoin offers certain features that make it attractive in times of uncertainty. Its capped supply makes it a potential hedge against fiat currency depreciation, especially at times of high inflation. Additionally, in regions with limited banking, the decentralized nature of Bitcoin can offer an alternative means of accessing financial services.

But Bitcoin’s journey amid geopolitical unrest is not a straightforward one. While some investors view it as a refuge, others might liquidate volatile assets like cryptocurrencies to cover losses or rebalance portfolios. This duality in investor sentiment can lead to sharp, unpredictable price movements in the Bitcoin market. On top of that, as Bitcoin’s ecosystem intertwines with the broader economy, significant spikes in global oil prices could impact the energy-intensive process of Bitcoin mining, affecting its network dynamics.

2. Wake me up when September ends

The NFT production on Ethereum reached an all-time low of US$17.55 million in September, marking a 12.4% decline from August’s US$20.05 million, according to data from Forkast Labs.

Prestigious NFT collections like Bored Ape Yacht Club and CryptoPunks saw a significant drop in their valuation, pointing to a potential shift in the broader market sentiment.
Forkast ETH NFT Composite, an index tracking the top 250 NFTs on Ethereum, plunged 48% year-to-date, hitting its low of 715.22 points in September.
Polygon’s NFT production experienced a dip, with September’s figures at a seven-month low of US$4.7 million. That was, nonetheless, an overall year-to-date increase of 219%.
Anndy Lian, NFT author, suggests the NFT hype from 2021 has tapered off, leading to a selective and realistic approach from buyers.
Major NFT marketplaces like OpenSea and Blur reported drops in monthly trading volumes by 31.8% and 38.3% respectively in September.
While the market faces challenges, global brands like Starbucks are still adopting NFTs, showcasing new innovative use cases that could reignite interest in the sector.

Forkast.Insights | What does it mean?

There has been a fundamental shift in the way NFT investors collect and trade. They’re finally looking for real value.

Where they aren’t finding value is in new mints, currently at all-time low NFT production levels. Those new NFT mints typically represent run of the mill profile picture collections, which can make creators enormous profits in an instant during a bull market. Today, you’ll be lucky to flip a new mint for what you paid.

After major projects like the CyberKongz’ Genkai, and NWay’s Wreck League failed to sell out their primary sale over the summer, creators hit the brakes on minting new collections.

Still, even with declining primary sales and plummeting value for NFTs on secondary markets, some NFT collections are proving resilient even today. Those collections offer more tangible value, like the Pudgy Penguins NFTs who offer royalties on toy sales to select NFT holders.

Similarly, the Winds of Yawanawa collection by Refik Anadol offers a more abstract, but equally attractive value as pure art. Refik’s art has been featured both on the Las Vegas Sphere, and now in the Museum of Modern Art as the first NFT creator to have his NFT backed digital art welcomed into their collection.

Even more value has been uncovered in new SoFi (social finance) platforms, which have themselves been a main contributor to the decline of the NFT markets. Total new users of the new Friend.tech platform have climbed to over 299,000 unique users, up from 130,000 on Sept. 1. Total locked value in the platform also rose from around 3,260 ETH to approximately 29,200 ETH over the month of September.

Innovation is for now mostly coming from outside NFTs. Until it returns to the non-fungible token market, expect to see September’s trend of all-time-low sales to continue well into October and beyond.

3. Monetary system’s impending sunset

Joe Lubin, chief executive of blockchain technology platform Consensys and a co-founder of Ethereum, spoke to Forkast during the recent Token2049 conference in Singapore. He discussed the parallels between today’s crypto bear market and the dotcom bubble of the late ’90s. Lubin attributes the current crypto downturn to similar waves of unbridled enthusiasm followed by market corrections. He predicted that a marriage between AI and blockchain could be the crypto industry’s route back to prominence.

Amid escalating global financial challenges, such as inflation and interest rate hikes, Lubin said that traditional monetary systems might be approaching their twilight.
Regulators in the U.S. are scrutinizing the crypto industry. Lubin sees this as a veiled effort to either “slow-roll” or outright suppress the budding industry.
Looking abroad, regions like Europe, Asia, and the Middle East are painting a contrasting picture. Those regions, he said, see decentralized tech as an equalizing force against the might of U.S. financial power.
A tech marriage is on the horizon, Lubin said. He highlighted the importance of weaving artificial intelligence into the fabric of blockchain technology — and vice versa.
There’s no need for society to be overly concerned about artificial intelligence, according to Lubin. He remains buoyant about AI’s potential, particularly in collaboration with decentralized protocols that prevent the concentration of AI control in a small number of hands.

Forkast.Insights | What does it mean?

Lubin is no AI doomer. He made that clear during his interview with Forkast. But while the blockchain mogul and Ethereum godparent outlined a lot of the good that can come from AI’s impending global takeover, he touched on some of its more dystopian aspects also.

Tech is never inherently bad, was the primary thrust of Lubin’s argument on artificial intelligence. The Consensys boss should know. He graduated from Princeton with a degree in computing and electrical science before kicking off his working life in the university’s robotics lab. So he enjoys a pretty solid grasp on the nascent field.

The only danger of artificial intelligence, he said, is if those now working on it allow its power to become entirely concentrated in a small number of hands — the bevy of private companies driving much of today’s AI advances. That would be “failure mode for humanity,” he said, without so much as a flinch.

The remedy for that, Lubin argued, is open source building and the incorporation of decentralized blockchain protocols. That way, the capabilities explored on the back of large language models (LLMs), generative pretrained transformers (GPTs) and the like will remain visible for all to see and make use of.

Your next open source coding tutor? Look no further than AI.

“We need to level up humanity in a big way,” Lubin said. “Our AI allies are going to get better and better at that.”

Source: https://forkast.news/israel-palestine-navigating-conflict-aid-blockchain/

Anndy Lian

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com

j j j

October 10th, 2023

Addressing the US debt crisis: The role of crypto and regulatory clarity

The US faces a debt crisis that threatens to undermine its economic stability and global leadership. The national debt has surpassed US$30 trillion, and interest payments are projected to become the largest expenditure by 2051, surpassing even Social Security.

The debt-to-GDP ratio is expected to rise to 136 per cent by 2028, a level that many economists consider unsustainable. The causes of this fiscal imbalance are manifold, but they include wars, recessions, tax cuts, pandemic relief, and infrastructure spending. The consequences could be dire, as the US could face higher borrowing costs, lower growth, reduced public investment, and diminished credibility.

In this context, the crypto industry offers a potential alternative to the traditional financial system, one that is more decentralised, transparent, and innovative. Crypto assets, such as Bitcoin and Ethereum, are powered by blockchain technology, which allows for peer-to-peer transactions without intermediaries.

Crypto platforms, such as Coinbase and Binance, provide users with access to a variety of digital assets and services, such as trading, lending, staking, and gaming. Crypto enthusiasts argue that crypto can empower individuals, foster innovation, and create new economic opportunities.

However, the crypto industry also faces significant challenges, especially in the US. The regulatory environment for crypto is unclear, inconsistent, and hostile. The Securities and Exchange Commission (SEC) has sued several crypto platforms, such as Coinbase and Binance, for allegedly operating illegally as brokers, exchanges, and clearing agencies without proper registration.

The SEC has also rejected numerous proposals for crypto exchange-traded funds (ETFs), which would provide investors with easier access to crypto assets. The SEC claims that it is protecting investors from fraud and manipulation, but many in the crypto industry accuse it of stifling innovation and creating uncertainty.

Coinbase, the largest crypto exchange in the US with over 100 million customers and billions of dollars in daily trading volume, has launched a campaign to bring regulatory clarity to the crypto industry in the US.

The campaign, dubbed “Stand With Crypto,” urges the 52 million Americans who own crypto to contact their government representatives and push for an overhaul of the financial system and a clear regulatory framework for digital assets.

Coinbase argues that the current “enforcement only” approach by the SEC is putting jobs, innovation, and global leadership at risk. Coinbase calls for legislation that allows fair rules for the road to be developed transparently and applied equally.

They are also expanding their presence in other jurisdictions that have more favourable regulations for crypto. Coinbase announced that it obtained registration with the Bank of Spain to act as a crypto exchange and custodian wallet provider.

This follows similar registrations in Germany and Ireland earlier this year. Coinbase said that it is “encouraged” by regulatory developments in the European Union and UK and will continue to invest in Europe and the UK. Coinbase hopes to offer its customers more products and services in these markets, such as crypto ETFs.

Coinbase is not alone in seeking regulatory clarity and diversification. Many other crypto platforms are looking outside the US for growth opportunities. For instance, Binance has established regional subsidiaries in Singapore, Australia, Jersey, Uganda, and Brazil. Kraken has applied for a banking license in Wyoming. Gemini has partnered with a UK bank to offer crypto savings accounts.

The US government should take note of these developments and reconsider its approach to crypto regulation. The US has the potential to be a leader in the crypto space, but it risks losing its competitive edge if it continues to stifle innovation and create uncertainty.

The US should embrace crypto as an opportunity rather than a threat and work with the industry to create a balanced and clear regulatory framework that protects investors while fostering innovation. The US should also address its debt crisis before it becomes too late and hard. Crypto could be part of the solution rather than part of the problem.

How crypto can help solve the debt crisis

Crypto can help solve the debt crisis in several ways. First, crypto can provide an alternative store of value and hedge against inflation. As the US government prints more money to finance its spending, the value of the dollar could decline, and inflation could rise.

This would erode the purchasing power of savers and investors and increase the cost of living. Crypto assets, such as Bitcoin, have a limited supply and are not controlled by any central authority. They can preserve their value and offer protection against currency devaluation and inflation.

Second, crypto can enable more efficient and inclusive financial services. The traditional financial system is plagued by high fees, slow transactions, intermediaries, and barriers to entry. Many people are unbanked or underbanked, meaning they lack access to basic financial services, such as savings, credit, and insurance.

Crypto platforms, such as Coinbase, Bybit and Binance, can offer low-cost, fast, and secure transactions without intermediaries. They can also provide access to a variety of digital assets and services, such as lending, staking, gaming, and NFTs. Crypto can empower individuals, especially those in developing countries or marginalised communities, to participate in the global economy and improve their financial well-being.

Third, crypto can foster innovation and growth. The crypto industry is one of the most dynamic and creative sectors in the world. It attracts talent, capital, and ideas from diverse backgrounds and disciplines.

It constantly experiments with new technologies, protocols, and applications. It creates new markets, products, and business models. Crypto can drive innovation and growth in other industries as well, such as energy, healthcare, education, and entertainment. Crypto can also generate tax revenues and jobs for the US government and economy.

Final thoughts

The US is facing a debt crisis that could have serious consequences for its economic stability and global leadership. The crypto industry offers a potential alternative to the traditional financial system, one that is more decentralised, transparent, and innovative.

However, the crypto industry also faces significant challenges in the US due to unclear, inconsistent, and hostile regulation. Coinbase has launched a campaign to bring regulatory clarity to the crypto industry in the US and has expanded its presence in other jurisdictions that have more favourable regulations for crypto.

The US government should take note of these developments and reconsider its approach to crypto regulation. The US should embrace crypto as an opportunity rather than a threat and work with the industry to create a balanced and clear regulatory framework that protects investors while fostering innovation.

The US should also address its debt crisis before it becomes too late and hard. Crypto could be part of the solution rather than part of the problem.

Source: https://e27.co/addressing-the-us-debt-crisis-the-role-of-crypto-and-regulatory-clarity-20231006/

Anndy Lian

www.anndy.com

j j j

March 9th, 2023

¿Qué han aprendido los bancos de la crisis de Silvergate Bank?

El impacto de esta crisis no se ha limitado solo a Silvergate Bank. La industria criptográfica en general también se ha visto afectada, con participantes importantes como Coinbase Global y Ebang International experimentando una caída notable de alrededor del 1% cada uno. Además, incluso las criptomonedas populares Bitcoin y Ethereum se han visto afectadas, experimentando una disminución de aproximadamente el 4,8% durante la última semana.

La crisis en Silvergate Bank comenzó cuando el banco retrasó la presentación de su informe anual. El retraso provocó una venta masiva de acciones de Silvergate, lo que provocó un efecto dominó en el criptomercado. La situación empeoró cuando Silvergate Bank anunció que había tomado una decisión basada en el riesgo de descontinuar Silvergate Exchange Network, su red de criptopagos. Esto provocó que las acciones de Silvergate cayeran casi un 50% en la bolsa de valores de Nueva York el jueves.

La caída de las acciones relacionadas a las criptomonedas es un recordatorio de que el mercado criptográfico sigue siendo muy volátil y susceptible a cambios repentinos. El hecho de que la crisis de un banco pueda tener un gran impacto en todo el mercado es preocupante. Sin embargo, vale la pena señalar que esta crisis no indica necesariamente una falla fundamental en el criptomercado. En cambio, puede ser una indicación de que algunos exponentes, como Silvergate Bank, no estaban adecuadamente preparados para los riesgos asociados con el mercado.

El incidente de Silvergate Bank destacó algunos problemas importantes con el enfoque de gestión de riesgos e informes financieros del banco. Una de las principales revelaciones de la crisis es que las deudas incobrables de Silvergate no eran sus activos sino sus depósitos. En términos simples, esto significa que Silvergate había estado utilizando los depósitos de sus clientes para invertir en activos de riesgo en lugar de mantener esos depósitos en inversiones más seguras y estables. Esta es una señal de alerta importante para cualquier banco, y se refiere particularmente al contexto de un banco que se enfoca en activos digitales y criptomonedas.

Se ha hecho evidente que Silvergate, una institución financiera que se ocupa de activos digitales, no estaba adecuadamente preparada para manejar el mercado volátil. Como resultado, sus clientes e inversores han sufrido pérdidas significativas. Para evitar tales situaciones, la gestión del riesgo es fundamental para tratar con activos digitales y criptomonedas. Los bancos deben permanecer atentos a la hora de identificar, evaluar y mitigar los riesgos potenciales. Hay varias áreas clave que los bancos deben considerar en su enfoque de gestión de riesgos.

En primer lugar, los bancos deben identificar varios riesgos de los activos digitales y las criptomonedas, incluidos los riesgos de mercado (como la volatilidad de los precios), los riesgos operativos (como las infracciones de seguridad), los riesgos legales y regulatorios (como el cumplimiento de las normas AML y KYC) y los riesgos reputacionales (como publicidad negativa). Una vez que se han identificado los riesgos, los bancos deben evaluar el impacto potencial y la probabilidad de cada riesgo.

Este enfoque permitirá a los bancos priorizar los riesgos y asignar los recursos en consecuencia. Los bancos deben tomar medidas para mitigar los riesgos mediante la implementación de medidas de seguridad sólidas, la diligencia debida con los clientes y las contrapartes y la diversificación de sus carteras de activos digitales. Asimismo, las instituciones financieras deben monitorear los riesgos continuamente y ajustar sus estrategias de gestión de riesgos en consecuencia. Esto puede implicar el uso de métricas de riesgo, la realización de pruebas de estrés y mantenerse actualizados sobre los desarrollos de la industria.

Junto con la gestión de riesgos, también deben considerar cómo informar sus libros cuando se trata de activos digitales y criptomonedas. Necesitan informar con precisión sus tenencias y transacciones en tiempo real porque el valor de estos activos puede cambiar rápidamente. Esto puede requerir un software de contabilidad especializado y el desarrollo de procesos internos para rastrear y reportar transacciones de activos digitales. Además, seguramente los bancos deban adaptar sus prácticas de informes para reflejar las características únicas de los activos digitales y las criptomonedas.

Por ejemplo, es posible que los bancos deban informar sobre los activos digitales específicos que poseen y los riesgos particulares asociados con esos activos. Probablemente, también deban proporcionar divulgaciones más detalladas sobre sus tenencias y transacciones de activos digitales para garantizar la transparencia con los clientes y los reguladores. Las prácticas de gestión de riesgos e informes son vitales para los bancos que se ocupan de activos digitales y criptomonedas. Los bancos deben identificar, evaluar y mitigar los riesgos de manera proactiva mientras desarrollan sólidas prácticas de informes que reflejen con precisión sus tenencias y transacciones de activos digitales.

En última instancia, la crisis del banco Silvergate sirve como advertencia tanto para los bancos como para los inversores. Destaca la necesidad de una adecuada gestión de riesgos, informes financieros y diversificación, particularmente en el contexto de los activos digitales y las criptomonedas. Si bien el mercado de las criptomonedas y los activos digitales sigue siendo volátil e impredecible, aquellos que estén preparados para tomar las precauciones necesarias e invertir sabiamente aún pueden tener éxito y crecer en esta industria emocionante y en rápida evolución.

En tiempos de crisis, es fundamental recordar la importancia de la diversificación. Los inversores que han diversificado sus carteras pueden estar mejor preparados para capear la tormenta causada por la caída de las acciones criptográficas. Enfatizando esto nuevamente, también vale la pena señalar que la caída de las acciones de criptomonedas no significa necesariamente que las criptomonedas en sí mismas sean inversiones inherentemente riesgosas. Si bien el criptomercado puede ser volátil, también ha experimentado un crecimiento significativo en los últimos años y se espera que continúe expandiéndose en los próximos años. Como tal, los inversores interesados en invertir en el criptomercado pueden considerar hacerlo a través de una cartera diversificada que incluya una variedad de activos diferentes.

También es importante que los inversores lleven a cabo una debida diligencia exhaustiva al seleccionar inversiones en el criptomercado. Esto incluye investigar los antecedentes y el historial de las empresas e individuos detrás de las inversiones y analizar las tendencias del mercado y los riesgos potenciales. Al adoptar un enfoque cuidadoso e informado para invertir en el criptomercado, los inversores pueden protegerse mejor de los cambios repentinos del mercado y las crisis como la experimentada por Silvergate Bank y la industria criptográfica en general.

Source: https://es.finance.yahoo.com/noticias/aprendido-bancos-crisis-silvergate-bank-070000997.html?guccounter=1