Snippings

The approximate daily volume of bitcoin that PayPal processed in January ranged from $7 million to $71 million, according to Coinglass, a cryptocurrency analytics platform. Assuming trading volume hovers around the midpoint of that range for the rest of the year, the value of annual bitcoin trading volume would be roughly $14.2 billion in 2022. PayPal earns a transaction fee of up to 2.3% on the value of cryptocurrency transactions, meaning it would take in approximately $327 million in bitcoin-related revenue this year at the high end of that fee range.

Based on the $29 billion in revenue analysts estimate the company will earn in 2022, according to S&P Global Market Intelligence, bitcoin-related revenue would account for just over 1% of revenue. 

That percentage may expand over time. Executives said Wednesday the company was shifting its strategy to focus less on growing the number of PayPal accounts, and more on encouraging existing customers to use the platform more. The booming trade in cryptocurrencies could certainly be part of that strategy. 

But for payments companies, cryptocurrencies simply aren’t that profitable. Block (formerly Square), for instance, attributed nearly 60% of its revenue to bitcoin transactions in the 12 months trailing September, but that segment accounted for just 5% of its gross profit. Shares of Block are down more than 30% this year, compared to the S&P 500, which sank 4%.  

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Cash is no longer king in the U.S., but will it ever go away?

From Cash is no longer king in the U.S., but will it ever go away? | American Banker:

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When Francois Reihani opened La La Land Kind Café in Dallas three years ago, he knew immediately that it would be cashless.

“The main reason was for sanitary purposes,” Reihani said. “I’m a bit of a germaphobe, and cash is a very dirty thing. I wanted to keep it away from where we prepare food and drinks.”

Fewer than two miles away at the edge of Dallas’ nightlife neighborhood of Deep Ellum, Sky Rocket Burger had a different reason for refusing cash earlier this year. The place had two break-ins when the register was taken both times.

A nearby pizza joint, Serious Pizza, a common late-night spot wedged into a string of bars, has also switched to cashless payments in part to move the line of club goers along at a quicker pace.

From Cash is no longer king in the U.S., but will it ever go away? | American Banker:

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The Federal Reserve Bank of Boston (Boston Fed) and the Massachusetts Institute of Technology’s Digital Currency Initiative (MIT DCI) are collaborating on exploratory research known as Project Hamilton,

From Project Hamilton Phase 1 Executive Summary – Federal Reserve Bank of Boston.

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Despite using ideas from blockchain technology, we found that a distributed ledger operating under the jurisdiction of different actors was not needed to achieve our goals. Specifically, a distributed ledger does not match the trust assumptions in Project Hamilton’s approach, which assumes that the platform would be administered by a central actor. We found that even when run under the control of a single actor, a distributed ledger architecture has downsides. For example, it creates performance bottlenecks, and requires the central transaction processor to maintain transaction history, which one of our designs does not, resulting in significantly improved transaction throughput scalability properties.

Well, I imagine that the core of their discovery was that a blockchain is a very specific solution to the problem of forming consensus in the presence of untrusted third parties but in a Federal Reserve digital currency of any kind there would be no such parties.

 

 

 

CBDC design choices are more granular than commonly assumed. Currently, CBDC designs are categorized as direct, two-tier, or hybrid models, with “token” or “account” access models 1 2 7 12 15. We found these limited categorizations lacking and insufficient to surface the complexity of choices in access, intermediation, institutional roles, and data retention in CBDC design 10. For example, wallets can support both an account-balance view and a coin-specific view for the user regardless of how funds are stored in the database.

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One surprise the researchers found is that the blockchain technology underlying cryptocurrencies was an inferior platform, creating bottlenecks as it requires a complete record of transactions in the order in which they were processed.

From Boston Fed, MIT Test Digital Dollar | PYMNTS.com.

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Nonetheless, an interesting story emerges: Most NFT wash traders have been unprofitable, but the successful NFT wash traders have profited so much that, as a whole, this group of 262 has profited immensely overall.

From Crime and NFTs: Chainalysis Detects Significant Wash Trading and Some Money Laundering In this Emerging Asset Class – Chainalysis.

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An artificial intelligence tool developed by Google beat thousands of seasoned programmers in a series of coding competitions.

From Google DeepMind’s AlphaCode system beats thousands of human experts in coding contest | News | The Times.

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most of the bitcoin associated with the Bitfinex hack is widely tracked and blacklisted. Thus, hackers will have a tough time cashing out on prominent centralized exchanges.

From Hackers Move $3.55B Worth of Bitcoin From 2016 Bitfinex Hack:

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In one post, a fake account for Rep. Marjorie Taylor Greene, R-Ga., who is closely aligned with Trump, shared a fake story on a fake Fox News website about a fake tweet by a fake Elon Musk, falsely claiming that Tesla’s CEO would soon accept Trump coins as payment.

From How Trump Coins Became an Internet Sensation:

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“Because so many cross-border transactions have a dollar leg, unilateral US sanctions would achieve 75 per cent of combined US-European sanctions,” reckons Brian O’Toole, a senior fellow at the Atlantic Council, a Washington think-tank.

From Shutting out Russia from Swift system would not be a surgical strike | Financial Times:

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