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Blockchain This Week – The Benefits and Perils of Decentralization

It was an unprecedented week in all sense. From Bitcoin smashing past US 40K to rioters storming into the US Capitol, several unparalleled events happened this week for the first-ever time. Interestingly, Blockchain and Crypto featured in both of them. These and many more in this week’s newsletter. 

Blockchain to Track Coronavirus Vaccination

The Mediterranean Hospital of Cyprus is backing up the coronavirus vaccination records on VeChain’s Thor Blockchain. On Tuesday, the hospital announced that it had vaccinated over 100 doctors and nurses.  Those immunized received a digital certificate on their Blockchain-based mobile app – E-HCert. This hospital happens to be a large healthcare facility in Cyprus.

Vietnamese Bank Issues Letters of Credit on Blockchain

HDBank, based out of Vietnam, is now issuing letters of credit (L/C) using Blockchain. As per the report, it is the country’s first bank to do so. The participants were a local fiber importer, a Taiwan-based yarn manufacturer, and a L/C advising bank in Taiwan.

Decentralized Streaming Platform Faces Ire for Its Role in the Capitol Insurrection

Crypto and the underlying Blockchain is often called out when the term “Liberation”  is used. Liberation, however, is dangerous when misused. A decentralized streaming platform realized the consequences when its platform was used for live-streaming nefarious acts. 

DLive, the crypto-powered video streaming platform, was reportedly used by the far-right extremists to live stream the riots as they marched towards and later stormed into the US Capitol on Wednesday. According to the Southern Poverty Law Center, a nonprofit organization, the “white supremacists and neo-fascists” used this platform due to its lack of moderation. As per their blog, as many as five different accounts live-streamed the attack. Additionally, these protesters allegedly raised donations during the broadcast, mostly in crypto. Charles Wayn founded this site in 2017. It is now owned by the peer-to-peer file sharing service BitTorrent and run by Justin Sun of Tron fame. DLive has issued a statement condemning the act.

US banks Can Act as Blockchain Network Nodes and Support Stablecoins

This week, the Office of the Comptroller of the Currency (OCC) issued a letter exhibiting its stance on how banks can function with Blockchain and Crypto. As per the letter, the US banks are now authorized to transact stablecoin payments on behalf of their customers. Furthermore, the banks can also act as validator nodes in the independent node verification networks (INVN). They, however, have to comply with the AML laws and adopt fair banking principles.

Ukraine Government to Build CBDC on Stellar

The government of Ukraine officially chose the Stellar Blockchain network to build the country’s sovereign digital currency. Ukraine has been toying with the idea of a CBDC since 2017. As per the announcement, the Ministry of Digital Transformation has signed an MoU with the Stellar Development Foundation to build out a virtual assets ecosystem and national digital currency of Ukraine.

Shenzhen Doubles Down on Digital Yuan Giveaway

Digital Yuan giveaway has become a popular way for the Chinese government to test its digital currency periodically. On Jan 1, the officials of the Shenzhen launched yet another red envelope lottery program. This program gives the residents of the city a chance to win 20 million digital yuan. The citizens have to register on the government’s i Shenzhen portal. Around 100,000 of them will receive these red envelopes with 200 digital tokens. They have to spend this money by Jan 17 in any of the 10,000 merchants who are part of the program. 

Iran Cracks Whip on Illegal Mining Farms

Iranian authorities have shut down 1,620 illegal crypto mining farms that collectively used 250 megawatts of electricity since July 2019. These miners allegedly used the power supplied by Tavanir, the state-run power company. According to Tavanir, they plan to disconnect these unlicensed miners from the national power grid. These miners will also face prosecution charges.

Telos “Treasury” Tokens

The Blockchain platform Telos has issued digital tokens that function similarly to the US Treasury bonds. Crypto projects that buy these non-fungible tokens (NFTs) named T-Bond, can sell them until maturity. They can sell or trade these tokens on secondary markets.

ShapeShift Shifts to DeFi to Circumvent KYC Process

ShapeShift, the Colorado-based noncustodial crypto exchange, announced this week that it will now route the customers’ orders through DeFi applications. This move is aimed to enable both the company and the users to avoid the KYC processes mandated for the company to be legally compliant.

And Finally, Bitcoin and Altcoins Shoot to the Moon

Bitcoin Marches Past the US $40,000 Milestone

On Jan 3, 2009, the world witnessed a historical moment – the creation of the first-ever block of Bitcoin. What cost nearly zero cents then was valued at $34,000 on its twelfth anniversary. Within two weeks of crossing the 20K mark and a week since soaring past 30K, the world’s first crypto reached an unprecedented US $40,000 milestone. Late last week, the price catapulted to $30,574.25 for the first time in history. Within 24 hours, it crossed $34,366.15. There was, however, a short slump after this feat, and the price dropped below $30K. But, Bitcoin quickly recovered and reached $35,060.07 by the middle of the week. The unbridled currency did not stop yet, and by the end of the week successfully shot past the 40K pennant and reached an all-time high of $41,528.79. At the time of the writing, one Bitcoin was worth $40,226.29.

As a result, the market cap of Bitcoin surpassed that of Tesla and made it the fifth-largest currency in the world. Only the USD, EUR, CNY, and JPY have a larger money supply than Bitcoin.

Ether and Other Altcoins Follow

Several altcoins, including the beleaguered XRP, joined the Bitcoin rally. The price of Ether rose steadily past its 2018 highs and reached $1009.33 earlier this week. Notwithstanding the brief dips, the second-largest crypto rallied past $1200 by the end of the week. At the time of writing, one Ether was costing $1,225.20. This meteoric rise, however, had consequences. The increase in the price resulted in a higher demand on the Ethereum network. As a result, the transaction fees on the network shot up 400 percent since the beginning of the year. This volatility caused several Dapp developers to withhold their product launches. The decentralized gaming platform, Aavegotchi, said it is postponing the Jan 4 launch of its NFT game due to the “insanely high gas costs” and “extreme volatility” of the network. It is even planning on migrating to Matic Network to offset the transaction costs.

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