Weekly Web3 Workout — 14th Aug 22
$BTC $24,114 +0.01%
$ETH $1,897 +5.50%
$YOP $0.085 +1.34%
$USDT Market Cap $67.43Bn
$USDC Market Cap $53.55Bn
Welcome back to the Weekly Web3 Workout. Lots going on this week with Solana, Tornado Cash, and The Merge so without further ado, let’s get started.
In an unsurprising move, the regulators have gone after Tornado Cash. I say unsurprising because Tornado is a mixer. A product that is designed for anonymity in crypto. It has well known links as highlighted by the media to North Korea, so again I’m sure this is a red flag for regulators. I assume, if Tornado did KYC, they might not have this problem, but KYC and anonymity are very hard to achieve. Solve the KYC problem and mixers can operate all the hundreds of legitimate use cases mixers have https://www.bloomberg.com/news/articles/2022-08-08/crypto-mixer-tornado-cash-sanctioned-by-us-treasury-department. What is surprising is the noise this has generated. Everyone saying web3 is the future and an unstoppable wave, seemed to forget that the foundations are built on web2, and this is anything but decentralised, and they aren’t as liberal as the web3 movement. So when these US sanctions were imposed on Tornado, web2 dropped Tornado like a ball of fire! GitHub, AWS, and Google closed down everything Tornado was using of theirs.
Of course, with Tornado being very popular, this obviously caused a backlash. All of a sudden, a host of well-known crypto enthusiasts were being sent 0.1 $ETH. People like Shaq, Ben Horowitz, Brian Armstrong, were all suddenly thrown into the middle of this very big mess.
This is not over yet, there will be a lot of fallout over this whole sanction on Tornado, and it could be an interesting one. Crypto is a stubborn beast and I’m excited to see if any KYC innovation comes out of this https://www.bloomberg.com/news/articles/2022-08-08/crypto-mixer-tornado-s-accounts-are-disabled-after-us-sanctions?sref=aEBHOlzK
More news continues to come out from the Solana hack, and after the initial panic of it being a blockchain issue, it turns out it was a problem with the wallets. So much for Your Keys, Your Coins! Slope, who built these wallets, were storing the users’ private keys in plaintext in their logs. So, it sounds like a rooky design flaw resulting in a multi-million dollar hack.
After they realised that it wasn’t a good idea to leave your front door key taped to the front door, they decided they should have a bug bounty program in place, just in case someone hacks them, and takes their …. oh wait!! Why do we repeatably see this happen, people launching bug bounty programs after a hack. If you had it there in the first place this probably wouldn’t have happened, and would be a lot cheaper and a lot less public if you were doing everything you can to protect the consumers from day one.
In case you want to see if there are anymore bugs, here Slope offering to pay people to find them https://twitter.com/slope_finance/status/1555653747077877760
A quick one on NFTs, but as this Twitter thread shows https://twitter.com/cryptocomnft/status/1556731977960677377, you can own an NFT but it doesn’t necessarily mean you own the picture associated to it. If an NFT has no utility other than the picture, as long as you can enjoy it knowing the original is yours but there might be copies, everything can be good in the world (obviously this is very different if the copy is being masqueraded as the original).
As an example, in a similar industry called IRL art, selling replicas is a revenue stream all in itself https://www.handmadepiece.com/.
We spoke a lot about Coinbase and their troubles last week, but in a bit of good news for them, here we have Blackrock coming to their rescue, a bit. https://www.ft.com/content/7de55762-8082-4e5d-b125-32cff23e1907?shareType=nongift. Either way, they are clearly not toxic just yet and that can only be positive for Coinbase, and the market as a whole.
And Finally … The Merge
We are nearly there, years in the making and we can almost taste it. Vitalik has spoken and confirmed the date of The Merge as 15th Sept 2022.
The Goerli test has been successful and we are full steam ahead. The Goerli test is a test network that mimics Ethereum Merge. On the 11th Aug this test was successfully completed and confirmed by Vitalik.
Two days later, Vitalik confirmed that the current Ethereum chain based on Proof of Work (PoW) has now been configured so that it only has a roughly, fixed number of hashes left to mine, and that should conclude on or around 15th Sept 2022 https://twitter.com/VitalikButerin/status/1558072902972473344
OK, that’s it. Thanks for reading the Weekly Web3 Workout and I look forward to sharing my thoughts and learnings with you next week. Please share this with all the web3 and crypto curioso out there.
Have a great week! 🚀🚀🚀