Daily Digest 1/18
Insight on the biggest stories of the day. “Neither this post nor any other on cryptofal.com should be taken as financial advice. It is not.”
Coinbase Partners With Mastercard to Make NFT Purchase Easy
Coinbase is looking to do its best to compete with OpenSea as a top NFT marketplace but it will be adding a key feature that makes it a lot more accessible to the general public. The announcement confirmed a partnership between Coinbase and Mastercard that will allow users to purchase NFTs with a debit or credit card. This makes it a lot simpler for people that are not the most crypto savvy.
OpenSea is a great platform but since it is a Web3 application there are some borders to entry that are both knowledge and financial-based. It can be a bit of a process to get your wallets set up and transfer money between applications as well as the fees associated with using Ethereum. Having this feature directly benefits new users or non-crypto holders that are looking to get into their favorite artist’s work.
As part of the partnership, both Mastercard and Coinbase will be classifying NFTs as “digital goods” as a means of compliance and clarity that will make the user experience easier. This could mean a whole new wave of investors getting onboard through a trustworthy exchange that also does not have the inherent risks that defi platforms have.
“Thanks to our work with Mastercard, we’ll be able to provide a better customer experience on Coinbase NFT, and plan on working to find ways to bring this opportunity to the broader ecosystem through Mastercard’s scale and global network,” the crypto exchange said.
Mr. Wonderful plans to invest in mining company stocks
Kevin O’Leary has been vocal recently in his support for Bitcoin and cryptocurrency as a means of diversifying your portfolio. It is a growing asset class and that should be accounted for if you have an appetite for risk. O’Leary is now laying out his plans to broaden his crypto exposure even more but in a less direct way.
Mr. Wonderful noted in an interview with Anthony Pompliano that he had recently traveled to the Middle East in an effort to find ways to invest in Bitcoin mining. According to him, investors in the Middle East are looking into “sovereign mining operations.” O’Leary also believes that over the next couple of years we may see some sovereign funds investing in Bitcoin mining which is the basis for his new investment strategy and would even consider opening his own mining operation.
The reason this is indirect exposure to BTC is that you are now buying shares of a company who’s revenue is directly tied to the performance of BTC therefore you technically do own BTC through you equity in the mining company. The one knock on BTC mining is that some believe that it is bad for the environment. Since this is the case we would need to see more research proving that it is not bad for the environment before any large jumps are made.
“If you're investing in, for example, Google or Microsoft, what are you investing in? You're investing in software. Why wouldn't you invest in crypto? It's software too," said O’Leary.
Solana Could Become the Visa of Digital-Asset World: Bank of America
Bank of America is giving high praise to Solana by saying that they can be the “Visa of the digital asset ecosystem”. Solana has had some issues recently since they had to shut down their blockchain or slow down the features as they were being overrun by bots. Users were also affected by this for a period of time that saw some having their transactions fail to go through for up to 4 hours.
The reason Bank of America thinks that Solana is capable of doing this is that they claim to be able to handle thousands of transactions per second. In 2021 Solana processed a total of 50 billion transactions in comparison Visa processed 164.7 billion transactions. BoA thinks that Solana is perfectly optimized for customers by having low fees making micropayments and even gaming.
“Solana prioritizes scalability, but a relatively less decentralized and secure blockchain has trade-offs, illustrated by several network performance issues since inception,” analyst Alkesh Shah said. “Ethereum prioritizes decentralization and security, but at the expense of scalability, which has led to periods of network congestion and transaction fees that are occasionally larger than the value of the transaction being sent.”
This is not the first endorsement that Bank of America has given out to Ethereum competitors. They also mentioned Avalanche earlier in the month as a viable alternative to ETH because of its solidity smart contract compatibility and side-chain capabilities. This shows that even BoA realizes that there will be many blockchain solutions for different use cases.
Wash trading has been prevalent in the NFT space since its inception and is one of the black marks on the space. LooksRare is a new platform that was released last week and saw an immediate rise in volume due to an airdrop, lower fees than OpenSea, and rewards for traders.
This is all good as we need competition for OpenSea but the activity that is going on as of right now is a bit shady. The best part about NFTs is that the original owner gets a royalty fee on each sale no matter what. This is also how we can tell that wash trading volume is so high because royalties are not being paid out.
Once there are more regulations in the space people will have a harder time getting away with this but until then it is basically a free game that people will continue to take advantage of.