Dispatch #112: What Elonโs Twitter Acquisition Means for Crypto
In this patch of your weekly Dispatch:
- Twitter 2.0 at the intersection with crypto
- A rough patch for Bitcoin miners
- Solidity devs making bank ๐ฐ
The Big Idea
Twitter+Crypto?
With a tweet, Elon Musk declared โthe bird is freedโ and the long saga of whether or not he was buying Twitter came to an end.
Much of his first week as โChief Twitโ has been cleaning house. The CEO and CFO were fired. Tesla engineers were brought in to review the code. He even dramatically changed how blue checkmark identity verification works, opening it up to everyone for $8 a month.
But what weโre interested in is some of the crypto subtext.
One of the big funders of the deal was Binance which contributed $500M to help finance Muskโs endeavor. The support was partly motivated by a belief in free speech and partly by the return they expect from Musk. Weโre not going to go into the details of how Elonโs struggling to fund the deal but weโre only going to say this (another surreal element in the whole acquisition process) โ heโs now reduced to selling it himself via text to folks like Larry Ellison.
Anyway, many have also speculated that a big driver for Musk is his continued interest in payments technology. Leaked documents reported by the New York Times show that Elon believes that by 2028, Twitter will see $1.2B in annual payments revenue.
And if nothing else, Elonโs favorite coin Doge has benefitted massively from the deal going through. The doggy coin was up by as much as 100% after Elon took over. Bizarre.
The Latest Inโฆ
Bitcoin Mining
One of the parts of the crypto industry that is being hardest hit by the bear market is the Bitcoin mining space. Hashrate and difficulty are near all-time highs. While in a bull market that would be good news, in the context of this bear market it means mining is less profitable than usual. This week, several big crypto miners have revealed their struggles. Core Scientific revealed in recent filings that it is considering bankruptcy. Argo Blockchain also revealed that $27M in expected capital had fallen through and might need to curtail operations if it canโt find new investors. Could this be the beginning of miner consolidation?
The Latest Inโฆ
DeFi Regulation per Vitalik
As the regulatory debate rages on, Vitalik shed light on what he sees as productive solutions for regulating DeFi. In a thread, the Ethereum co-founder suggested three ways of achieving two policy goals: 1. consumer protection and 2. making it harder for baddies to move large amounts of money around.
His three-way proposal includes:
- limits on leverage
- transparency about what audits were done on contract code
- restricting access based on knowledge tests instead of net-worth minimum rules
To meet requirements like these, Buterin suggested using zero-knowledge technology. Do you agree?
The Latest Inโฆ
Happy Birthday, Bitcoin Whitepaper
On October 31, 2008, Satoshi shared the Bitcoin Whitepaper for the first time, setting the symbolic birthdate for our entire industry. 14 years later, here we all are! Thanks, Satoshi, who and wherever you might be.
The Weekโs Most Interesting Data Story
Crypto Devs Get Paid
Crypto Devs Get Paid
According to developer employment resource Devjobsscanner, of all the various coding languages a programmer could select, right now it is Solidity devs who are making the most on average. The site found that the language thatโs used to write smart contracts has an average salary offer of $151,000, with some offers reaching $1M. If youโre the type of person who thinks what developers are choosing to spend their time building is a powerful long-term indicator of an industryโs health (we are!), this is pretty bullish.
Hot Topics
What the Community Is Discussing
People are pretty stoked about this institutional news.
Crypto = the future, says everyone.
Donโt let the door hit ya on the way out.
What to Watch for Next Week:
- How will US midterm results change the political landscape for crypto?
- Will the market continue to view the Fedโs new language as dovish?
- Will the next difficulty adjustment bring some relief to miners?
