Smart Contracts Running on Bitcoin? Internet Computer Founder Explains How It’s Possible

Upon its launch, Internet Computer took the crypto market by storm. It’s an ambitious project, supported by some major names in the industry. Designed and created by the DFINITY Foundation, it aims to give more power to the people over the Internet, and it could potentially take it into a new stage powered by its platform.

Now, the Internet Computer has taken another step into the future. Its community recently voted and approved the “Increased Canister Storage” as Internet Computer continues to integrate more features and upgrade its platform.

Next, the community will use the power provided by the Internet Computer governance model to vote on integration with the Bitcoin blockchain. In practice, this will allow Bitcoin to have smart contract functionality (or Canisters, as they are called on Internet Computer) on the Internet Computer network with low-cost transactions and fast finality. Thus, the decentralized ecosystem on both networks could expand into an unprecedented era.

We sat down with Dominic Williams, the founder and Chief Scientist of the DFINITY Foundation to talk about this proposal, its implications for Bitcoin and Internet Computer, and more. This is what he told us.

Q: It has been around 4 months since Internet Computer was deployed, how would you describe the current state of the project and the role the community is playing?

Dom: Developers and entrepreneurs have recognized its potential. As a result, the Internet Computer is experiencing ferocious growth as measured by the number of canister smart contracts running, the number of developers building, and the number of active users the dapps being built have, and arguably it is the fastest growing blockchain when looking carefully at these metrics. Moreover, developers have proven that the Internet Computer can be used to build things that cannot be built on any other blockchain today. For example, one of the most popular dapps on the Internet Computer is “Open Chat”, which already has several tens of thousands of users even though it is still in alpha. This runs entirely from the blockchain, which means that smart contracts are used to process the chat messages, and smart contracts also securely serve the interactive web content users interact with directly into browsers – which only the Internet Computer blockchain is capable of doing today. Therefore, not only has Web 3.0 become real, but the purposes to which blockchain can be applied have greatly expanded.

Q: Internet Computer is a relatively new project in a relatively new industry, why do you think people are drawn into it, what makes the platform unique?

Dom: I think more and more people are coming to the realization that blockchain is the future internet and has immense potential. For that reason, many, many developers, including those who are early in their careers and trying to decide which tech sector to dedicate their lives to, are magnetized to the blockchain. The Internet Computer is one of the oldest original crypto projects but was one of the last blockchains to launch because of the huge amount of R&D work involved in rethinking blockchain architecture from the ground up and developing the new cryptography frameworks that power it. But now that the Internet Computer is available, it offers capabilities completely unlike those of other blockchains.

It is the first blockchain to scale the seamless environment it provides for smart contracts so that it can host any number of smart contracts, and any volume of smart contract computations, and smart contract data, it is the first blockchain to run at web speed (it can finalize transactions in 2 seconds and can serve “query transactions” that don’t modify state in milliseconds), it is the first blockchain to run smart contracts with efficiency comparable to running software on traditional IT systems, and it is the first blockchain that enables smart contracts to securely serve interactive web content directly to those using dapps (today, dapps on all other blockchains have to host their websites on centralized infrastructures, such as Amazon Web Services, which creates all kinds of security and other issues). These capabilities mean the Internet Computer can even be used to create decentralized versions of mass-market social media services, which run entirely from the chain and can be blended with next-generation DeFi services. If you want, it can even be used to build secure enterprise systems, allowing organizations to migrate away from traditional IT to the blockchain. It has the potential to truly uncork the blockchain genie.

Q: Can you tell us more about the process that will allow Bitcoin to operate smart contracts power by Internet Computer? And how it’ll be different from synthesized versions of BTC already operating on Ethereum?

Dom: Today, the Bitcoin network hosts almost a trillion dollars of value, in the form of divisible bitcoins, which play the role of digital gold. However, the Bitcoin network does not currently host “smart contract” software of the kind introduced by Ethereum six and a half years after the launch of Bitcoin. Smart contracts are a new kind of software that is unstoppable and tamperproof, which is guaranteed to run on the blockchain exactly as written and remain secure without the protection of a firewall, can process value in the form of tokens and can even run autonomously without a human or organization controlling them. They allow blockchains to be applied as a new kind of general-purpose platform and have facilitated the DeFi (decentralized finance) revolution that Ethereum pioneered. If Bitcoin gained smart contracts, developers would become able to build all manner of exciting new systems and services that process bitcoins and run from the blockchain, creating immense new value while also adding value to Bitcoin.

The enormous financial value carried by bitcoins has great utility, and so the current practice is to transport bitcoins onto blockchains supporting smart contracts such as Ethereum by “wrapping” them, which is unfortunately very dangerous. It involves bitcoins being sent to an organization running what is known as a “bridge”, which keeps them in its custody and then issues “wrapped bitcoin” on the destination blockchain, which can then be processed by smart contracts. The drawback of this approach is that the bitcoins are passed into the custody of the bridge operators, which must be trusted to correctly redeem the wrapped bitcoins when required later. This is antithetical to the blockchain mission, which aims to remove the need for trust. The approach is consequently highly risky, as demonstrated by the recent hack of the Poly Network bridge on 10 August 2021. This bridge moved bitcoins and other tokens between the Ethereum, Polygon MATIC and Binance Chain networks, and when it was compromised crypto worth six hundred million dollars was stolen (it was later returned by the hacker).

Enter the revolutionary “chain key cryptography” that powers the Internet Computer network. This will enable smart contracts hosted by the Internet Computer to directly maintain, send and receive bitcoins, which actually reside and immediately move on the real Bitcoin network, obviating the need for dangerous bridges and token wrapping. This is possible because the Internet Computer protocol can securely and seamlessly generate the private key ECDSA signatures involved in bitcoin transactions on behalf of smart contracts, using chain key cryptography. Meanwhile, Internet Computer nodes will directly communicate with Bitcoin network nodes, ensuring that transactions and balance information is moved back and forth and is always available. Effectively, the scheme will meld the two networks, extending Bitcoin with arguably the world’s most powerful smart contract capabilities.

Q: Once the smart contract capabilities are implemented, what are the potential use cases that will benefit people using these Internet Computer smart contracts with Bitcoin?

Dom: The possibilities are endless. The Internet Computer scales, and can run unbounded volumes of smart contract computation at web speed. Its smart contracts are also the first to be able to securely serve web content directly to end-users without intermediaries, with support for the new Internet Identity anonymizing blockchain authentication system allowing users to sign-on to dapps (decentralized applications) using devices including fingerprint sensors on laptops, and face ID systems,  as well as hardware keys and wallets such as YubiKey and Ledger. This means that in the future, your Bitcoin wallet might be securely served into your web browser and that you will be able to quickly, securely and conveniently authenticate yourself using your fingerprint sensor, before sending bitcoin to any address you like via the user interface. What is more, the Internet Computer is allowing social media services to be built that run from the blockchain, which can then be blended with DeFi. In the future, your Bitcoin wallet might very well be a blockchain chat app, and you might send bitcoin with messages, or atomically transact for an NFT after negotiations. For many, this will begin to realize the vision of bitcoin being applied within internet services that Satoshi originally described.

Q: Can the same process that will enable smart contracts on Internet Computer to be compatible with Bitcoin be implemented into other networks? If so, which could be the next cryptocurrency to be integrated and why?

Dom: It is possible to integrate the Internet Computer blockchain with Bitcoin because of the new “chain key cryptography” framework that powers its protocols. This enables it to create transactions on behalf of smart contracts, such that they do not need to manage private key materials themselves. Once Bitcoin has been integrated, the same work will be leveraged to directly integrate the Internet Computer with Ethereum. This integration will enable two-way calling between smart contracts on the Internet Computer and Ethereum, enabling, for example, Ethereum DeFi dapps to serve their websites from blockchain rather than centralized cloud services such as Amazon Web Services.

Implementing a blockchain that supports chain key cryptography requires a multi-year R&D effort spearheaded by a strong team of specialist cryptographers. For such reasons, it is unlikely that any other blockchain will be able to pull off the same feat in the foreseeable future.

Q: How do you envision the future of the crypto industry, as one where an “Ethereum Killer” has defeated its competition or one where there are multiple blockchains operating to the benefit of their users? Do you think it’s important for Bitcoin, Internet Computer, and others to be interoperable?

We believe in a blockchain trinity consisting of Bitcoin, Ethereum and the Internet Computer. They all clearly satisfy different niches and complement each other. Although both Ethereum and the Internet Computer support smart contracts, the capabilities provided by the Internet Computer environment are vastly different and much broader. Arguably, Ethereum might become the world’s DeFi settlement layer, and will cede the “world computer” vision to the Internet Computer, which was built specifically to realize that vision through many long years of R&D that cannot easily be replicated.

 

Say Goodbye to the Centralized Metaverse and Hello to the NFT Metaverse

The centralized metaverse is a term used to describe the dominant model of virtual worlds that was developed by companies like Linden Lab. The centralized metaverse has been around for over 20 years and has become a big part of people’s lives.

In the early days of the Internet, there were many different ways to interact with websites. Some people used browsers while others used separate applications like Netscape Navigator or Internet Explorer. Some people even had their own custom-built applications that they would use exclusively for interacting with certain websites.

Eventually, however, all these different interfaces converged into one single interface: the browser. And once this happened, we realized that having multiple interfaces for accessing the same content was not only confusing but also inefficient. So we decided to standardize on one interface — HTML — and build everything else off of it. This is how we standardized on a single web browser and built everything else off of it: email clients, social media platforms, news aggregators…the list goes on and on.

The Metaverse: The Evolution of the Internet

What if instead of building everything else off of HTML we had built everything else off of another technology? What if instead of building email clients and social media platforms off of HTML, we had built them on blockchain? It turns out that having an immutable ledger as your foundation makes a lot more sense, as it means that users maintain complete ownership of their assets.

Next Earth is pioneering the next evolution of the metaverse. It’s a decentralized metaverse that allows users to own and monetize digital assets, via a virtual replica of Earth.

The Next Earth team is working hard to build a better metaverse, one where users can own their digital assets, developers have access to a powerful development toolkit, and value is created for both NFT collectors and creators.

So what does this have to do with the death of the centralized metaverse? Well, in order for us to move from one model — where all our content is hosted by one company — to another model — where all our content is decentralized — we are going to have to abandon some things along the way because they are no longer necessary in a decentralized world.

The Issues With Centralized Metaverses

 The centralized metaverse has been plagued by a number of issues over the years, primarily relating to the lack of self-ownership of your own assets.

The main issue with centralized virtual worlds is that they are controlled by a single entity. This means that one person or group can take complete control of the metaverse and dictate how it operates. In Earth2, for example, there is only one estate owner in the end – Earth2 itself – who controls everything in the game world. This includes all land parcels, buildings, and even where other players can build their own structures. All of the assets have to be hosted on Earth2’s servers and are not their own entities.

This centralized control structure means that malicious actors could access these worlds and use them in ways they never intended. This is why many players prefer decentralized NFT metaverses like Next Earth over centralized ones like Earth2 or Facebook.

Besides the lack of self-ownership, centralized metaverses also suffer from another major problem: censorship. In Earth2, for example, the centralized owners can censor content or remove it altogether if they choose to do so. This means that not only is freedom of speech restricted in these games, but also any and all forms of art and expression.

In fact, centralized firms even have the power to delete other players from their game world entirely, much like how China has been using its centralized social media platforms to purge undesirable citizens over the past few years.

The main issue with centralized metaverses is that they are controlled by a single entity. This means that one person or group can take complete control of the metaverse and dictate how it operates. As more and more people come to this realization, we’ll see the growth of the NFT metaverse.

 

Photo by Executium on Unsplash

Scaramucci raises $100 million to invest in Algorand (ALGO) fund

A few days ago, the Anthony Scaramucci-owned SkyBridge Capital announced at its annual SALT Conference that it had filed an application for a crypto-related exchange-traded fund (ETF) to expand its offerings. This did not come alone, as the announcement also contained the plan to start an Algorand fund capped at $250 million.

Algorand is a self-sustaining, decentralized, blockchain-based network that supports a wide range of applications. As of press time, it is the 18th largest crypto asset by market cap and it is trading for $2.03.

Algorand fund for Scaramucci’s Skybridge

The founder of the firm, Anthony Scaramucci, who is also a former Whitehouse Communications Director, revealed in an interview with CNBC that $100 million had been raised for the recently announced Algorand Fund. He added that his firm’s investment in crypto is worth over $700 million, and it would still go further.

SkyBridge Capital became the latest firm to file a crypto-focused exchange-traded fund (ETF). The said ETF, First Trust SkyBridge Crypto Industry, and Digital Economy ETF would not have direct exposure to cryptocurrencies, as it would be investing about 80 percent of its portfolio in companies interacting with crypto directly.

This means the company has joined the long list of institutions whose exchange-traded fund applications are pending with the United States Securities Exchange Commission. Notably, the firm has had previous applications on both Bitcoin and Ethereum ETFs. 

Since it added Bitcoin to its portfolio in July, the company has recorded significant success. It has also attributed some of the gains the investment firm has seen this year to BTC.

Just recently, Fidelity Digital Asset CEO and some of its executives met with the SEC in its bid to lobby the financial regulator into approving its ETF application.

The post Scaramucci raises $100 million to invest in Algorand (ALGO) fund appeared first on CryptoSlate.

Bitcoin Maintains $48k Amid Another Minimal Trading Volume Weekend (Market Watch)

Bitcoin neared $49,000 for the first time in over a week but failed to breach it and has returned to around $48,000. Most alternative coins are slightly in red, except for Solana, which has jumped by 4% in a day to above $160.

Bitcoin Maintains $48K

After the volatile start of the week, in which bitcoin surged by $1,500 and dropped by $3,000 in minutes, the cryptocurrency enjoyed a steady price increase. In a matter of days, it bounced off the $43,300 low reached on Monday and added more than $5,000 until Friday.

After a brief retracement, the bulls stepped up once again yesterday and pushed the asset north. This time, BTC broke above $48,000 decisively and kept climbing to a daily high of around $48,900 (on Bitstamp).

As bitcoin was preparing to challenge the $49,000 price line, though, the situation changed, and the subsequent rejection drove it down to a daily low of $47,600.

Since then, BTC has recovered several hundred dollars and currently stands above $48,000. This comes even with the minimal trading volume during the weekend. Bitcoinity data shows that the trading volume in the past several weekends has been substantially lower than during the weekdays, and this time is no exception.

BTCUSD. Source: TradingView

Solana Reclaims $160

Most alternative coins have mimicked their leader’s performance since yesterday, with many of them slightly in the red. Ethereum failed at $3,500, and a 1.5% retracement in a day has driven the second-largest crypto to about $3,450.

Cardano, Binance Coin, Ripple, Polkadot, Dogecoin, and Chainlink have also marked minor losses in a day. Avalanche (-5%) has lost the most after two consecutive days of painting price records. However, AVAX is still above $70.

Solana is the only coin with more impressive gains from the larger caps. A 3% daily increase has driven the token above $160.

Cryptocurrency Market Overview. Source: Quantify Crypto

 

The lower- and mid-cap altcoins are also untypically stable. Cosmos is the only double-digit daily gainer with an 11% surge. Moreover, ATOM is up by 40% in a week and is close to $40.

The cryptocurrency market cap has also remained relatively stable in a day at around $2.150 trillion.

Coinbase Secures Another Millionaire Deal With the US Government to Let Them Use Its Blockchain Analytics Software

Coinbase and the U.S. Homeland Security have struck a million-dollar deal to allow the U.S. government to use the exchange’s services to analyze American citizens’ data.

According to official documents, The Immigration and Customs Enforcement (ICE) – a branch of the U.S. Homeland Security Dept. dedicated to cross-border crime and illegal immigration – paid Coinbase $1.36 million in licensing fees for Coinbase Analytics software.

Pay to Trace, Pay to Tell

This would be the juiciest contract for Coinbase, which has a long history of collaboration with the U.S. government.

According to the official documents, there is no word on what information will be analyzed or shared by Coinbase. Data from the SAM.gov database assures that the exchange “is the only vendor who can reasonably provide the services required” by the ICE, and the information available to the public will be minimal due to the sensitive nature of the relationship between the ICE and Coinbase.

Previously, Coinbase had inked a deal with the U.S. Secret Service to license its Coinbase Analytics tools. The contract would last until May 2024 and for $183,750 would entitle the Secret Service to use its blockchain forensics tools.

Others interested in using Coinbase’s analytics tools include the Drug Enforcement Administration (DEA) and the Internal Revenue Service (IRS) which also paid Chainalysis $625.000 to develop a tool to deanonymize Monero.

Coinbase and the US Government: A controversial Relationship

Coinbase has received heavy criticism in the past for its collaboration with the U.S. government. Still, its CEO has never regretted its lucrative relationship with law enforcement.

In a previous Twitter thread, Brian Armstrong assured that the creation of this service is actually positive for the growth of his company and that they do not deliver information other than what is already available on the blockchain:

“Have seen a few articles talking about Coinbase Analytics – figured I would share my thoughts on it, since I don’t think it’s particularly newsworthy – and lots of conjecture out there. Blockchain analytics software is essentially just compiling publicly available data that is already out there on the blockchain … There is an existing market for blockchain analytics software, so we sell it to a handful of folks as well.”

Armstrong later deleted it due to the strong wave of negative comments and criticism, but an archived version is still available.

Generally speaking, many privacy purists argue that Coinbase’s interests are contrary to the very philosophy of cryptocurrencies. Others even claim that Coinbase could facilitate the cross-referencing of its KYC data with that of the tools it provides.

Coinbase collect private information about their customers due to AML regulations, track customer transactions before and after exiting Coinbase, and then onsell that private information and public data to law enforcement, all without ethical remorse. OK, it’s “just business”.

— DJ Booth (@djbooth007) July 12, 2020

The exchange maintains that its customers’ data is handled separately from its analytics tool so there is nothing to fear.

After Targeting BlockFi, State Regulators Now Set Their Eyes On Celsius

Earlier this year, crypto lending platform BlockFi started facing the heat from state regulators in New Jersey, Texas, and Alabama. Other states have joined the fold since then, as well. Celsius this week is now facing similar cease and desist demands from all three of the same states that BlockFi first faced.

Let’s take a look at what we know thus far, and what it could potentially mean for DeFi moving forward.

Regulators Reach: What Celsius Is Facing

It’s becoming quickly apparent that Celsius is joining the fight in facing regulators in the same vein that BlockFi has. On Friday, Texas officials filed a cease and desist order against Celsius. The filing will require Celsius to show the state why it shouldn’t be ordered to stop offering it’s products to state residents. Celsius, like BlockFi, faces accusations that it is offering residents unregistered securities. The Texas hearing is scheduled for February 24.

Both Alabama and New Jersey seemingly issued similar actions on the same day. New Jersey ordered the platform to stop offering select products by November 1. In a similar action, Alabama demanded that the platform show why it shouldn’t be halted from offering products within 28 days.

A Celsius representative told Bloomberg that the firm is “disappointed these actions have been filed and wholeheartedly disagree with the allegations being made that Celsius has not complied with the law,” adding that the platform would not be making any immediate changes in services for clients.

Celsius’ native platform token, CEL, offers more aggressive yield rates – but is not currently offered in the U.S. | Source: CEL-USD on TradingView.com

Related Reading | Analyst Puts New Bitcoin ATH For October As Stablecoins Start Pumping Into BTC

DeFi’s Uphill Battle

The news comes just a couple short weeks after Coinbase released a blog post regarding an impending lawsuit from the SEC, assuming that Coinbase moved forward with it’s anticipated Lend product. Coinbase has since applied for a National Futures Association license. It remains to be seen what happens with the Lend product and SEC.

Meanwhile, Celsius has quietly become a behemoth in DeFi. The platform reportedly holds over $24B in “community assets,” making it one of the biggest – if not THE biggest – crypto lender and interest-account provider. What it means for Celsius customers in the respective states taking action remains to be seen, and BlockFi could end up being a case study moving forward. However, what we’ve seen from BlockFi and regulators thus far hasn’t been much to establish a precedent. Thus far, throughout a handful of states, only new account registration has been restricted. Customers on BlockFi prior to the regulatory action have had no impact.

To date, consumers have largely been left in the dark on what sort of impacts could be seen here moving forward. The optimist in this situation might say that these actions could lead to regulation that establishes good practices and frameworks for crypto lending platforms. However, the pessimistic perspective would be led to believe that more states could join the ranks and that DeFi could face increased pressure from regulators given the impact on traditional banking institutions.

Either way, it seems hard to suggest that through these individual state regulators have consumer protection at the forefront. Where it leads from here remains to be seen.

Related Reading | While Broader Crypto Market Holds Its Collective Breath, Whales Are Loading Up On Bitcoin

Featured image from Pexels, Charts from TradingView.com

The Latest Crypto Adoption: Buyers Can Pay in Bitcoin for Manhattan Retail Properties

The New York-based property management company – Magnum Real Estate Group – would accept Bitcoin (BTC) as a payment method for the sale of three ground-level shops worth nearly $30 million located in Manhattan.

In addition, the Autism Science Foundation (ASF) announced it would allow people to make cryptocurrency donations. Initially, the non-profit organization would accept the following digital assets: Bitcoin (BTC), Ethereum (ETH), Dogecoin (DOGE), Litecoin (LTC), Bitcoin Cash (BCH), USD Coin (USDC), and Dai (DAI).

BTC Invading The Real Estate Industry

According to a recent report, one of the leading American property management firms – Magnum Real Estate Group – would enable buyers to use bitcoin for the purchase of three ground-level shops worth $29 million. BitPay – a bitcoin payment service provider – would process the future cryptocurrency transactions.

The shopping center, also known as CODA, is located on the luxurious part of Manhattan – 385 First Avenue. It covers over 9,000 square feet of space and consists of M&T Bank, clinic ProHEALTH Urgent Care, and restaurant Mighty Pita.

Ben Shaoul – Managing Partner of Magnum Real Estate – pointed out that his firm has experience with digital assets as it has previously sold apartments using this payment method.

In his turn, Sonny Singh – Chief Commercial Officer of BitPay – explained that potential buyers from every part of the globe, including those from Hong Kong or mainland China, can use bitcoin to purchase the property:

“The beauty of crypto is that it is a global digital asset. The buyer simply scans a QR code to pay.”

If someone pays the $29 million in BTC, the deal would mark the most expensive transaction in the real estate industry purchased with crypto. As of the moment, the record belongs to a deluxe penthouse in Miami Beach. In June this year, an anonymous buyer paid a whopping $22.5 million in digital assets to acquire the oceanfront condo.

New York City. Source: Street Easy

ASF Accepts Crypto Donations

Another example of cryptocurrency adoption came from the Autism Science Foundation. The non-profit organization that supports the lives of children and adults suffering from the disease announced that it now accepts donations for its cause in seven different digital assets. Namely, those are Bitcoin, Ethereum, Litecoin, Dogecoin, Bitcoin Cash, USD Coin, and Dai.

Alison Singer – Co-Founder and President of the ASF – raised hopes that the new opportunity could turn to be highly beneficial for the people in need:

“We are thrilled to expand our fundraising mechanisms to now include cryptocurrency, which allows both individuals and corporations yet another way to make a meaningful difference in the lives of people with autism.”

She also mentioned the Wall Street Rides FAR (WSRF) fundraiser. Many prominent crypto companies such as Gemini, BlockFi, FTX, Paxos, and Fireblocks have vowed to sponsor the upcoming annual charity cycling and walking event that has raised more than $2 million for the ASF to date.

Just 10 Days After El Salvador’s “Bitcoin Day”, President Bukele Confirms 1.1 Million Citizens Have Chivo Wallet

El Salvador has now marked its 10th day of bitcoin being legal tender in the country. This is a huge milestone that could not have been predicted to happen this soon. But as with bitcoin, everything is happening on an accelerated timeline. The country had introduced its own government-backed crypto wallet named Chivo in order to enable its citizenry to spend bitcoin in the country.

The adoption of this wallet was incentivized by the El Salvadoran government, which said that it was giving away $30 in BTC to every citizen 14 and above who downloaded the Chivo app. This announcement had come about a month before the law went into full effect and as of September 7th, El Salvador became the first sovereign nation to accept a cryptocurrency as legal tender.

Related Reading | New To Bitcoin? Learn To Trade Crypto With The NewsBTC Trading Course

One important point remained if the citizens of the country would actually assimilate into using bitcoin as a way of buying and selling. This is because BTC is not the only legal tender in the country. It operates alongside the U.S. dollar, which is already familiar to the residents. According to a recent tweet by President Nayib Bukele, it looks like El Salvadorans are adapting to using the crypto as legal tender just fine.

17% Of El Salvadorans Have Downloaded Chivo Wallet

The president took to his Twitter account to announce that 17% of the country had now downloaded the government-backed Chivo wallet. This number translated to about 1.1 million citizens who have already downloaded the wallet.

This comes only 10 days after the country had officially started using BTC as legal tender. The president added that this number was despite the fact that 65% of all of the smartphones in the country do not support the wallet. Yet they were recording an impressive number of downloads.

Related Reading | While Broader Crypto Market Holds Its Collective Breath, Whales Are Loading Up On Bitcoin

El Salvador might not be seeing the smoothest transition to using BTC as a legal form of currency in the country but the current numbers show that its citizens are adjusting to the new normal. The $30 incentive for downloading the wallet is paid after a user registers and confirms their identity on the app.

Paying With Bitcoin

Paying with bitcoin in El Salvador is getting easier as outlets implement bitcoin payments. Big franchises like McDonald’s and Starbucks have already begun accepting bitcoin payments on “Bitcoin Day.”

Another interesting fact about using BTC in the country has to do with the number of crypto ATMs currently installed. Data shows that just behind the United States and Canada, El Salvador now ranks third in the highest number of crypto ATMs installed. The government had installed crypto ATMs across the nation to facilitate ease of use.

BTC trading north of $47K | Source: BTCUSD on TradingView.com
Featured image from Bitcoin News, chart from TradingView.com

Cardano (ADA) boss predicts DeFi bubble will burst, how likely is that to happen?

Cardano founder Charles Hoskinson talks DeFi in his latest interview. Rather than beat the drum of it democratizing finance, he called it a bubble that’s ripe for popping.

But what’s his reasoning for saying this, and what does he think will take its place?

Gensler says big changes are coming

Decentralized finance, or DeFi, is a general term that refers to financial products and services accessible by anyone. More so, it’s a system of financial products written on blockchains enabling buyers, sellers, lenders, and borrowers to interact.

It differs from traditional finance, where middlemen, like banks or brokerages, act as gatekeepers. And participating requires providing government-issued ids, such as social security or passport details.

Since summer 2020, the volume of DeFi tokens and money locked in DeFi has been growing exponentially. Ethereum is the biggest player of them all. But rising stars such as Binance Smart Chain, and newer players of the likes of Solana and Terra, are eating away at Ethereum’s market share.

An important consideration is that regulatory oversight is minimal. However, that may not be for long as SEC Chair Gary Gensler said big changes are coming.

In particular, Gensler said many projects that label themselves as decentralized finance are nothing of the sort. And with “centralized” characteristics, this puts them squarely in the sights of the U.S securities regulator.

Is DeFi going to crash and burn?

Sharing his observations, Hoskinson said he thinks DeFi is in a bubble. Adding that, it’s no different from what was seen with the ICO mania of 2017. Expanding further, he said being in a bubble isn’t necessarily detrimental.

“But just because it’s in a bubble doesn’t necessarily mean it’s in a bad situation. It just means that people recognize there’s value, but the market’s having a very hard time pricing that value.”

In backing up this view, he talked about the proliferation of projects, with small teams and low liquidity, being worth a billion dollars. Saying there’s something fundamentally wrong with this. To him, that’s a signal of the DeFi industry in regression.

Hoskinson also referred to Gensler’s recent comments, in which he said the SEC is looking at ways to bring regulation to the space. How that turns out is anyone’s guess. But the big fear is that the SEC will hamstring the industry, perhaps by forcing projects to track users and requiring identification to participate.

As such, it may well be the case that DeFi, as we know it, is done for. But with that, something else will take its place. And this next generation of DeFi, as Hoskinson put it, is up for grabs.

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