Crypto platform Coinbase Global COIN, -6.40% is set to issue highly anticipated quarterly results Thursday after the close of regular trading.

Although, there aren’t expected to be a ton of surprises from the digital-asset company—it offered an early glimpse of its results before its mid-April listing on Nasdaq Inc. NDAQ, -0.86% —strategists are looking for more insights on how it manages fees and grows as competition increases in the nascent crypto space that seems in the midst of a boom.

“While Coinbase has been able to rely on its first mover advantage and brand familiarity so far, margins will continue to compress from competition with both ‘CeFi’ brokerages like BlockFi and ‘DeFi’ alternatives like Uniswap,” wrote Matthew Wheeler, global head of market research at Forex.com, referring to traditional centralized financial, or CeFi, and decentralized financial, DeFi, platforms.

Back in early April, Coinbase estimated that its first-quarter profit surged, exceeding its entire performance for 2020, on the back of rabid appetite for the No. 1 and 2 crypto in the world, bitcoin BTCUSD, -7.01% and Ether ETHUSD, -1.79%.

“Bulls are hopeful that these halcyon, high profit margin days can continue for a bit longer, so any signs that profit margins are already falling could lead to a selloff in the stock,” Wheeler wrote.Investors expect Coinbase to report earnings per share of $3.07 on revenue of $1.814 billion, according to a consensus of analysts estimates polled by FactSet, as of May 12.Coinbase shares are down over 30% from its intraday peak of $429.54 on its debut on April 14.

The company’s stock is down by about 16% from its closing price on its first day of trading on the Nasdaq, bringing its market value to $57.3 billion.Part of Coinbase’s recent slump has been blamed on the threat of increased competition from the likes of traditional banks and other crypto exchanges offering similar services.

CNBC reported earlier this week that Goldman Sachs GS, -1.53% was seeing activity pick up in a newly created cryptocurrency unit. This comes as Morgan Stanley MS, -1.46% has said that it intends to offer crypto services to its wealthy clients, and other firms appear ready to follow suit.

David Trainer, CEO of New Constructs, an investment research firm, speculated that Coinbase could see its shares fall by 65% from current levels due to new entrants.

“Coinbase is not likely to fulfill the profit expectations baked into the stock’s current valuation of $58 billion due to rising competition in the cryptocurrency trading space, which should reduce the company’s market share and pricing power,” the analysts wrote in a reported dated Tuesday.

MoffettNathanson analyst Lisa Ellis, who maintains a price target for Coinbase at $600, told MarketWatch that Coinbase bears will be looking for any signs that so-called price compression will eat into the exchange and trading platform’s revenues.

“It’s extremely easy to be negative on Coinbase,” she said. However, she said it was likely too early to think that competition would hurt the company’s business soon.

She said lackluster user growth, however, could deliver a bigger hit to sentiment in the company’s stock, at least in the near term.Last month, Coinbase said it had 56 million verified users on its platform, including 6.1 “monthly transacting users,” or MTUs.

Ellis said that the 6.1 million figure relates more to Coinbase’s professional clientele but the MTUs could be damped by PayPal and other venues also offering basic crypto-trading services to average folk.

Oppenheimer’s Owen Lau initiated coverage of Coinbase on Tuesday at outperform, the equivalent of a buy recommendation, and set a price target at $434, based on his view that the company is an “enabler of crypto innovation.

”BTIG analysts Mark Palmer and Andrew Harte, reaffirmed their “buy” rating for Coinbase and held their price target at $500. The BTIG analysts say that Coinbase pessimists have been too narrowly focused on the “company’s retail trading commissions” and not focused enough on the potential for Coinbase to serve institutional investors and hedge funds.

Indeed, back in February, Coinbase’s institutional trading wing handled electric vehicle-maker Tesla’s TSLA, -4.42% $1.5 billion bitcoin investment, according to a report by The Block.

The Block also noted that Coinbase has a number of corporate clients that use its platform for crypto purchases, a growing phenomenon as bitcoin prices strengthen.However, bitcoin values have stalled after hitting a recent record at $64,829.14, with the No. 1 crypto down by about $10,000 since that peak.

Meanwhile, Ether prices were trading above $4,100 and had recently touched a record at $4,382.73, as the crypto known for its smart-contract protocols, gains more traction on the back of growing DeFi platforms and nonfungible tokens, or NFTs, which use Ethereum’s blockchain as a platform.

Growing appetite for dogecoin DOGEUSD, -5.91% has reportedly fueled transaction volume in crypto brokerages but Coinbase doesn’t offer doge on its platform.

Still, investors might looked to see how the company has performed in the face of increased volatility in alternatives to bitcoin, known also as altcoins.

Dogecoin prices have been unwinding steadily since hitting a peak on Saturday near 75 cents, but are still up over 9,500% so far in 2021. Dogecoin was trading hands, at last check, at 44 cents. Bitcoin prices are up 88% so far this year, but down 4% over the past 24 hours. Ether has gained 462% in the year to date.

By comparison, traditional assets are seeing far more muted returns this year. Gold prices GC00, -0.09% were down nearly 4% in 2021 thus far. The Dow Jones Industrial Average DJIA, -1.99% was up 10.5%, the S&P 500 index SPX, -2.14% was up 8.8% so far this year and the Nasdaq Composite Index COMP, -2.67% has gained 1.7% over the same period.Shares of Coinbase were nearly 5% lower on Wednesday afternoon.

A Goldman Sachs managing director has left the investment bank after reportedly making millions investing in cryptocurrency dogecoin DOGEUSD, -6.90%.

A spokesman for Goldman GS, -1.53% confirmed Aziz McMahon, a managing director and head of emerging market sales based in London, has left the investment bank where he has worked for 14 years. But the spokesman told MarketWatch he had no knowledge of the investment in dogecoin.

Read: Biggest risk for crypto? ‘Its own success,’ says founder of world’s largest hedge fund Ray Dalio The Guardian newspaper reported 

McMahon made the money investing on his own personal account and wasn’t involved in trading cryptocurrencies for Goldman Sachs. While not much is known about the amount McMahon reportedly made, the newspaper cites unnamed sources claiming it was a “substantial sum.

”It is thought McMahon, who says he studied at Trinity College Dublin on LinkedIn, may be starting a hedge fund, according to efinancialcareers, which was first to report the story.McMahon has been contacted for comment.

Read: Dogecoin price flops as Elon Musk hosts ‘Saturday Night Live’Dogecoin is a cryptocurrency, like bitcoin BTCUSD, -7.18%, but it was started as a joke and named after a dog meme.

It fell by up to 35% at one point over the weekend after a highly anticipated appearance by crypto fan Elon Musk, the Tesla TSLA, -4.42% chief executive, on the “Saturday Night Live” television show.

• When asked about the rising value of cryptocurrencies, Bank of England Governor Andrew Bailey said: “They have no intrinsic value.”
• “I’m going to say this very bluntly again,” he added. “Buy them only if you’re prepared to lose all your money.”
• The prices of digital currencies from bitcoin to dogecoin have climbed wildly this year.

In this article

• BTC.CM=-6,212.37 (-10.96%)

Bank of England Governor Andrew Bailey.

Simon Dawson | Bloomberg via Getty Images

LONDON — Cryptocurrencies “have no intrinsic value” and people who invest in them should be prepared to lose all their money, Bank of England Governor Andrew Bailey said.Digital currencies like bitcoin, ether and even dogecoin have been on a tear this year, reminding some investors of the 2017 crypto bubble in which bitcoin blasted toward $20,000, only to sink as low as $3,122 a year later.

Asked at a press conference Thursday about the rising value of cryptocurrencies, Bailey said: “They have no intrinsic value. That doesn’t mean to say people don’t put value on them, because they can have extrinsic value. But they have no intrinsic value.”

“I’m going to say this very bluntly again,” he added. “Buy them only if you’re prepared to lose all your money.”Bailey’s comments echoed a similar warning from the U.K.’s Financial Conduct Authority.“Investing in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investors’ money,” the financial services watchdog said in January.“If consumers invest in these types of product, they should be prepared to lose all their money.”

Bailey, who was formerly the chief executive of the FCA, has long been a skeptic of crypto. In 2017, he warned: “If you want to invest in bitcoin, be prepared to lose all your money.”

Bitcoin is up over 90% this year, thanks in part to rising interest from institutional investors and corporate buyers such as Tesla. The electric car firm bought $1.5 billion worth of bitcoin earlier this year, and the value of its holdings have since risen to nearly $2.5 billion.

Proponents of bitcoin see it as a store of value akin to gold because of its scarce supply — only 21 million bitcoins can ever be minted — arguing that the cryptocurrency can act as a hedge against inflation as central banks around the world print money to relieve coronavirus-battered economies.

However, skeptics view bitcoin as a market bubble waiting to burst. Michael Hartnett, chief investment strategist at Bank of America Securities, said bitcoin’s rally looks like the “mother of all bubbles,” while Alvine Capital’s Stephen Isaacs said there are “no fundamentals with this product, period.”

BOE’s Bailey: UK economy will have ‘bounce back,’ then return to balanceAlternative digital currencies have made even larger gains than bitcoin. Ether, the native token of the Ethereum blockchain, has seen returns of more than 360% year to date, while meme-inspired crypto dogecoin is up a whopping 12,500%.

Analysts have attributed dogecoin’s rise to tweets from celebrities like Tesla’s Elon Musk and Mark Cuban, as well as retail investors buying the token on the free-trading app Robinhood.

David Kimberley, an analyst at U.K. investing app Freetrade, described the dogecoin rally as “a classic example of greater fool theory at play,” referring to the practice of selling overvalued assets to investors who are willing to pay a higher price.

At the same time, central banks are considering whether to issue their own digital currencies. Last month, the Bank of England launched a joint taskforce with the Treasury aimed at exploring central bank digital currencies, or CBDCs.

 Such a currency would exist alongside cash and bank deposits rather than replacing them, the bank said.

Tesla CEO Elon Musk said Wednesday on Twitter that Tesla has “suspended vehicle purchases using bitcoin,” out of concern over “rapidly increasing use of fossil fuels for bitcoin mining.

”The price of bitcoin dropped about 5% in the first minutes after Musk’s announcement.

In an SEC filing in February, Tesla revealed that it bought $1.5 billion worth of bitcoin and it may invest in more of bitcoin or other crypto currencies in the future.

At that time, the company said it would start accepting bitcoin as a payment method for its products.Support for cryptocurrency from Tesla contributed to the prices of cryptocurrencies, including bitcoin and dogecoin, skyrocketing in recent months.

Here was Musk’s full announcement:

“Tesla has suspended vehicle purchases using Bitcoin. We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel. Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment. Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy. We are also looking at other cryptocurrencies that use <1% of Bitcoin’s energy/transaction.”

Mainstream investors and some corporate buyers including Tesla, Square, Metromile and Nexon have flocked to bitcoin, viewing the digital currency as a potential inflation hedge while central banks print money to relieve coronavirus-distressed economies.

SpaceX accepts Dogecoin as payment for DOGE-1 moon missionMajor Wall Street banks like Goldman Sachs and Morgan Stanley have also sought to provide their wealthy clients with bitcoin exposure.But some investors, like Softbank founder Masayoshi Son, still aren’t buying in to the crypto craze.

“There’s a lot of discussion over if it’s a good thing or a bad thing, what’s the true value or is it in a bubble. Honestly speaking, I don’t know,” Son said at a recent earnings conference.

While Tesla said it would not accept bitcoin for vehicle purchases on Wednesday, Musk specified that Tesla plans to hold rather than sell the bitcoin it already has, and would be looking into other cryptocurrencies that require less energy for transactions.During the first quarter of 2021, Tesla bought $1.5 billion worth of “digital assets,” then sold $272 million worth.

According to a financial filing from Tesla on April 26, profits from bitcoin sales specifically allowed the company to notch a $101 million “positive impact” toward profitability.

Musk has been a very public fan of bitcoin and dogecoin, tweeting and joking about these with his millions of Twitter followers over the past year.This past weekend, the Tesla chief made his hosting debut on “Saturday Night Live” and devoted part of his opening monologue and one sketch to talking up dogecoin.

 Instead of helping drive up the price of the meme-inspired token, dogecoin actually tanked 30% over the course of the hour that Musk was hosting SNL.

During a frenzied sell-off at that time, the popular trading platform Robinhood experienced an outage in its crypto trading.

Following Musk’s announcement on Thursday, Dallas Mavericks owner Mark Cuban said that the team will continue to accept bitcoin and other crpytocurrencies because “we know that replacing Gold as a store of value will help the environment.”

Bitcoin price drops by $2,000, Tesla shares decline about 1% in after-hours trading following announcement on Musk’s Twitter account

Tesla Inc. will halt sales of cars using bitcoin due to the effects on the environment that cryptocurrency mining can have, Chief Executive Elon Musk said Wednesday, and prices of Tesla shares and the cryptocurrency dropped immediately after.

“Tesla has suspended vehicle purchases using bitcoin,” Musk posted on Twitter.

“We are concerned about rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”

“Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment,” he continued.

Musk did say that Tesla would not sell any of the bitcoin owned by Tesla currently, and would use it again “as soon as mining transitions to more sustainable energy.

” In the meantime, he said Tesla will look at other cyrptocurrencies that use less energy to mine.

Bitcoin prices BTCUSD, -8.24% fell by roughly $2,000 after the tweet, from about $54,700 to roughly $52,600. Tesla shares TSLA, -4.42% declined about 1% in after-hours trading.

Tesla purchased $1.5 billion worth of the cryptocurrency in early February, after Musk signaled his interest in bitcoin on his Twitter account. Soon after, Tesla officially told the SEC that Musk had a new title of “Technoking” and Chief Financial Officer Zach Kirkhorn would henceforth be known as Tesla’s “Master of Coin.

”See also: Why did Tesla buy bitcoin?When Tesla reported first-quarter earnings last month, executives revealed that Tesla had sold about 10% of its bitcoin holdings for a profit of more than $100 million. Musk and Kirkhorn said the sale was just a test of the market’s liquidity and said they did not plan to sell more.

For more: Tesla turns a profit on bitcoin sale, but its ‘Technoking’ and ‘Master of Coin’ say it won’t become a habit

The University of Cambridge’s Centre for Alternative Finance reported not long after the Tesla purchase that the news had caused a severe spike in the amount of electricity used to mine bitcoin.

While it is an estimate, the group at the time estimated that bitcoin was using as much energy an on annualized basis as countries like Argentina and the Netherlands, about 121.9 terawatt hours.

As of Wednesday afternoon, that estimate had grown to 147.8 terawatt hours, similar to the annual energy usage of Malaysia or Sweden, according to the Centre for Alternative Finance.

The majority of bitcoin is mined in China, with Xinjiang a major center for mining that is also fueled largely by coal, according to previous reports.

EBay EBAY, -1.64% users can now buy digital tokens on the e-commerce giant’s platform.

Senior Vice President of eBay Jordan Sweetnam announced in a blog post Tuesday the company will now permit sales of non-fungible tokens, or NFTs, from approved eBay sellers, with plans to expand the pool of sellers in the future.

“In the coming months, eBay will add new capabilities that bring blockchain-driven collectibles to our platform,” Sweetnam said. 

See also: Here’s where Jeff Bezos’s superyacht ranks among the world’s most expensive boats

Prior to today, selling on eBay was limited to physical items, with some exceptions.

“All listings on eBay must offer either a physical item or a service for sale,” according to the site’s policy.An NFT is a verifiable digital asset vouchsafed by blockchain technology.

NFTs are not exchangeable like currencies, as each is unique and can’t be replicated.

NFTs use blockchain, the technology ledger backing cryptocurrencies like bitcoin BTCUSD, -0.81%  and ethereum ETHUSD, -0.12%,  which are databases of linked information to record ownership or transactions of a product.

See also: Golden State Warriors become first pro sports team to release its own NFTs

NFTs have exploded in popularity of late, spearheaded by the support of celebrity business figures such as Mark Cuban and Gary Vaynerchuk.

In the past few months, people have spent hundreds of millions of dollars in totality on these digital assets, such as the “Disaster Girl” meme, NBA Top Shot and digital art like one from the artist known as Beeple, which sold for $70 million.

A bill seeking to “pause” crypto mining for three years in New York was referred to the state's Environmental Conservation committee on May 3.

Crypto miners in New York may be subject to a forced three-year hiatus if the latest environmentally-focused bill passes in the state senate.

The New York Senate Bill 6486 was proposed by Democrat senator Kevin S. Parker, the Chairman of Committee on Energy and Telecommunications, and co-sponsored by fellow Democrat senator Rachel May, the Chair of Committee on Aging, Chair of Legislative Commission on Rural Resources.

The bill is yet to receive widespread backing from other senators, however the Democrats do control the lower house and senate.

The bill seeks to “establish a moratorium on the operation of cryptocurrency mining centers,” to slow the environmental impacts of fossil-fuel-backed crypto mining in particular.It also aims to enforce stricter regulations for mining centers, such as the requirement to undergo an environmental impact review, which would prevent crypto mining if the facility does not comply with New York’s climate change targets.

The Bill was referred to the Environmental Conservation Committee on May 3 and claims to be acting in accordance with New York’s “Climate Leadership and Community Protection Act,” with that bill stating that:

“A single cryptocurrency transaction uses the same amount of energy that an average American household uses in one month, with an estimated level of global energy usage equivalent to that of the country of Swede.”

“It is reasonable to believe the associated greenhouse gas emissions will irreparably harm compliance with the Climate Leadership and Community Protection Act in contravention of state law. ” the bill adds.

The Climate Leadership and Community Protection Act was passed in 2019 and set targets such as 70% renewable energy by 2030, 100% zero-emission electricity by 2040, and 22 million tons of carbon reduction through energy efficiency and electrification.

Crypto mining is already a hot topic in New York, such as the proposed expansion of Greenbridge’s gas-fired Bitcoin plant on Seneca Lake. The plant reportedly has plans to power up to 27,000 computers that will run 24/7 to mine Bitcoin.

The Environmental Group Seneca Lake Guardian are outraged with the proposal, and stated in a call to action published on Feb. 1 that: “Cuomo can’t lead on climate change, and support Bitcoin expansion on Seneca.

”Speaking in response to the Greenbridge’s potential crypto mining operations, Yvonne Taylor, Vice President of the Environmental Group Seneca Lake Guardian, noted that:

“We’re talking about burning more fossil fuels to make fake money in the middle of climate change, which we view as insane.”

There are moves around the world to regulate crypto mining in light of carbon targets, and especially in China which accounts for an estimated 65% of the world’s Bitcoin hashing power.

On April 27 Beijing sent an “emergency notice” to conduct checks on data centers involved in crypto mining, with the CCP reportedly moving to impose stricter supervision on crypto mining in the nation, amid concerns of failing to meet China’s climate change-focused “five-year plan.”

For anyone who still thinks Dogecoin is a joke, there are some 90 billion reasons that say it’s not.That’s how much the digital token is nearly worth in dollar terms after jumping again in Wednesday trading. Useless or not, the coin has been swept up in the crypto mania that’s gripped markets awash in central bank largesse.

KEEP READINGFor the ruined, Turkey’s crypto crackdown comes too lateWho let the Doge out? Crypto frenzy crashes Robinhood appSotheby’s links up with Coinbase to accept crypto for BanksyMove over Bitcoin, Ether tops $3,000

It’s the latest milestone in a year of speculative excesses for a market Nouriel Roubini once described as “the mother of all bubbles”.

While in the past, trillions of dollars in stimulus by governments and central banks might have triggered a rush into gold for the inflation-wary and risky stocks for the intrepid, a deluge of cash this time round is flooding into the nascent crypto market.

Few illustrate this better than Dogecoin, a so-called memecoin that’s become the destination for a horde of day traders egged on by Internet buzz and a self-propelling buying frenzy.

A potential trigger for the latest leg up: Tesla Inc. co-founder and crypto fan Elon Musk is appearing on Saturday Night Live this weekend, spurring speculation he may talk up Dogecoin again on the comedy show.

“When you think about the full spirit of what this crypto revolution is, there’s something pure in what Dogecoin has done,” Mike Novogratz, founder of Galaxy Digital Holdings, said on CNBC.

“I worry that once the enthusiasm rolls out, there are no developers, there’s no institutions coming in. But it’s got the moniker of the people’s coin right now and it’d be very dangerous to be short.

”The overnight gain took Dogecoin’s one-week advance to 118% and its value to $87 billion in Wednesday trading, according to CoinMarketCap.com data, eclipsing the largest exchange-traded gold fund and even stocks like Fedex Corp. and Snap Inc. A year ago, the asset was worth just $315 million.

It’s all the more remarkable given that other retail favorites from bullish stock options to Cathie Wood’s tech fund have all seen activity dip from the highs earlier this year.

Now, cryptomania might even be hurting gold, according to some analysts. The precious metal has suffered outflows in recent months even as a deluge of stimulus cash drove the value of the world’s crypto market to a $2 trillion record.

“At some point, something is just real,” said Sam Bankman-Fried, the Hong Kong-based chief executive officer of the FTX crypto exchange.

“If Dogecoin is stupid and valueless, it shouldn’t be worth $90 billion. How about gold or Bitcoin or euros? Our collective imagination has given them value, and now we just think about them having value.

”Dogecoin, started in 2013 as a joke based on the Shiba Inu breed of dog, may become so accepted by the mainstream it might evolve into a payment option at retailers, Bankman-Fried said.

At Blockfolio, a firm owned by FTX that helps users manage their crypto portfolios, trading volumes are spiking with Dogecoin’s every gain, a sign it’s become essential to the whole ecosystem.

Dogecoin buying got so fevered Tuesday, Robinhood’s trading app briefly crashed. Other so-called altcoins surged, with Dash spiking 11% over a 24-hour period through the New York morning on Wednesday and Ethereum Classic rising 25%.

While it’s difficult to assign firm reasons to Dogecoin’s ascent, a few factors have fueled the gains. On April 20, a day normally associated with pot, some users got #DogeDay trending to push up the price. Celebrities from Musk to the Dallas Mavericks’ billionaire owner Mark Cuban also jumped on the bandwagon.

The Gemini crypto exchange backed by the Winklevoss twins announced Tuesday it will soon enable trading of the coin.

“As the economy reopens, a lot of these Covid-related movements in various assets will experience some volatility,” said Tony Bedikian, head of global markets at Citizens Bank.

“But I think they are going to become a permanent part of the currency markets as central banks have continued to print money at astronomical levels.”(Adds context throughout and comments from Novogratz, Bedikian)

–With assistance from Yakob Peterseil, Vildana Hajric, Claire Ballentine and Anchalee Worrachate.

Dogecoin, the cryptocurrency that began as a joke when it launched in 2013, is now worth more than General Motors (GM), the American carmaker founded in 1908, based on market cap value.

On Wednesday, Dogecoin's market cap value—the total market value of the circulating supply of a cryptocurrency—hit a reported $87.1 billion, according to CoinMarketCap.

The meme cryptocurrency's market cap value was higher than that of GM, which was recorded to be around $80.3 billion on the New York Stock Exchange (NYSE)/Nasdaq at the time of reporting.

Dogecoin (listed as DOGE on the cryptocurrency market) was priced at around $0.66, marking around a 53 percent rise in the last 24 hours. The price reached as high as just over $0.69 at one point in the same time period, according to CoinMarketCap.

NEWSWEEK NEWSLETTER SIGN-UP >The graphic below, produced by Statista, shows the price changes of selected cryptocurrencies in 2021.



STATISTAREAD MORE

• Dogecoin Price Hits New High After eToro Exchange Lists Crypto
• Dogecoin Spikes After Elon Musk Tweets, Mark Cuban Endorses Crypto on Ellen
• Petition Asking Amazon to Accept Dogecoin as Payment Hits 200K Signatures

Its 24-hour trading volume was at over $52.3 billion on Wednesday, marking a 271 percent increase in the same timeframe, according to CoinMarketCap.NEWSWEEK SUBSCRIPTION OFFERS >


Dogecoin's latest market cap value was also more than double that of Twitter. The social media platform's market cap was listed at around $43.4 billion on NYSE at the time of reporting.

The joke cryptocurrency ranked 138th in a list of top assets by market cap on AssetDash, a leaderboard for assets. GM ranked 155 and Twitter ranked 290.

The price of dogecoin has seen a series of surges in recent months, including in mid-April.

The cryptocurrency hit a new all-time high, as the value of a single dogecoin surpassed 20 cents for the first time on April 15.Its value soared from late January, rising by more than 800 percent at one point.

The price flattened out from mid-February and climbed on a sharp incline from early April, according to data from CoinMarketCap.Its price surge has been helped by social media buzz, with nods from public figures such as Tesla CEO Elon Musk and several celebrities, as well as more recently from Slim Jim, the American snack brand.


Dogecoin's price hike on April 15 reportedly came after a shout-out from the CEO of Conagra Brands, the parent company of Slim Jim. The meat stick brand has been tweeting about Dogecoin from early March.

The Twitter account of Slim Jim saw a 160 percent increase in followers after it began engaging with Dogecoin content. Its tweet impressions also soared, receiving 35 million impressions in 25 days, according to Conagra CEO Sean Connolly, CoinDesk first reported on April 15.

"We've seen a market uptick in audience interaction, including direct engagement and advocacy from the person that created Dogecoin," Connolly said on an earnings call at the time.

The dogecoin (DOGE) army is not the only one making a killing this year. Miners responsible for generating the Shiba Inu-themed cryptocurrency may also be laughing their way to the bank.

• The daily revenue of dogecoin miners rose to a record high of $3.6 million on April 26, marking a 4,575% rise from the New Year's day tally of $77,000, blockchain data provided by ByteTree shows.
• Revenue estimates assume miners, who operate predominantly on cash, sell their coins immediately.
• Miners receive newly created coins and transaction processing fees as a reward for mining blocks and processing transactions on the distributed ledger.

Dogecoin daily miner revenueSource: ByteTree

• The price of dogecoin has rallied by 7,000% this year, sending miner revenue skywards.
• The meme-based cryptocurrency reached a record high of 45 cents on April 18 and was last seen changing hands near 32 cents, up nearly 20% rise on a 24-hour basis.
• Data provided by Coin Metrics shows a 60-fold increase in daily transaction fees this year alongside several brief spikes in the number of daily transactions.
• However, transaction fees brought in just $23,200 or 0.64% of the total miner revenue of $3.6 million on April 26.

Dogecoin: Daily transaction fees and transaction countSource: Coin Metrics

• "Transaction fees have risen, but price overwhelms," ByteTree CIO Charlie Morris said.
• "The market has been squeezed higher. I suspect many people who owned it a few years ago have forgotten, leading to tighter supply than perceived," Morris added.
• Some observers fear the ongoing price rally is a bubble that can burst easily as 98 wallets are holding nearly 65% of all coins. Besides, the cryptocurrency is heavily influenced by Tesla and SpaceX CEO Elon Musk’s usually humorous tweets.
• Bitcoin bull and CEO of Galaxy Digital Mike Novogratz recently called dogecoin's rally a sign of speculative retail frenzy.
• However, DOGE's real-world adoption is gaining traction with the Dallas Mavericks basketball team, medical supplier CovCare and several others adopting the cryptocurrency as a payments alternative.

Germany’s Financial Supervisory Authority BaFin has warned investors the cryptocurrency exchange Binance may have violated European securities rules with the launch of its stock tokens.

• In an announcement Wednesday, BaFin said the Binance stock tokens tracking the movement of shares in Tesla, Coinbase and MicroStrategy have been identified as “suspicious” and require a prospectus that wasn't issued prior to trading.
• BaFin said the cryptocurrency exchange has violated the prospectus obligation under Article 3 Paragraph 1 of the European Prospectus Regulation.
• According to BaFin, the violation of the prospectus constitutes an administrative offense and can be punished with a fine of up to €5 million ($6 million) or 3% of Binance’s annual revenue.
• Elsewhere red flags have already been raised by Hong Kong law firms regarding the Binance stock tokens launched earlier this month.
• On April 22, the Financial Times reported that U.K.'s regulator, the Financial Conduct Authority, is “working with the firm [Binance] to understand the product, the regulations that may apply to it and how it is marketed.”
• The stock tokens allow Binance customers to purchase as little as one-hundredth of a regular share using Binance USD (BUSD), a U.S. dollar stablecoin issued by the exchange.
• Binance was contacted for comment, but didn't immediately respond at the time of publication.

Read more: Binance’s Tesla, Coinbase Stock Tokens Under Scrutiny From UK Regulator: Report

Non-fungible tokens, or NFTs, are all the rage. But their popularity may have already peaked. Prices of NFTs, the digital certificates that have taken the art and collectibles world by storm this year, have plunged about 70% from their high point in February.

The average price for an NFT on April 5 was about $1,256 -- down from more than $4.000 in late February, according to market research site NonFungible.com.

Data from The Block, another crypto research firm, shows a similarly large decline for both prices and NFT sales as well.

NFTs have been an investing and pop culture mania for the past few weeks, leading some to wonder if the frenzy is a market bubble fueled by the wealthy and younger traders flush with stimulus money.A JPEG file by the digital artist Beeple recently sold for $69 million at Christie's. NFTs have helped boost the price of sports trading cards. Rock group Kings of Leon released their most recent album as an NFT.





NFTs are suddenly everywhere, but they have some big problems

There was even a recent "Saturday Night Live" skit about NFTs.

And several CNN Business staffers have also wrote about how they've dabbled in the NFT market with the purchase of cartoon cats.

The NFT craze has helped boost the value of ethereum, the cryptocurrency whose blockchain network is used for a large number of NFT transactions. Ethereum prices are up more than 180% so far this year, a surge that exceeds the spike in bitcoin's price (XBT).

 maker Funko (FNKO) and Hall of Fame Resort & Entertainment (which owns an NFL themed village in Canton, Ohio) have also soared thanks to partnerships to develop non-fungible tokens. 

Funko announced last week that it was buying a majority stake in TokenWave, LLC, the developer of the TokenHead app and website that tracks NFTs.

Hall of Fame Resort & Entertainment inked a partnership late last month with marketing firm Dolphin Entertainment (DLPN) to develop football NFTs,
Proponents of NFTs point out that each token is unique and can't be replicated, which creates a scarcity value that is good for both the artists that make them as well as collectors.




NFTs: Fad or future? 2 experts weigh in


Funko CEO Brian Mariotti noted that in the release about the TokenWave deal, saying that the investment in NFTs marries the digital and physical collectibles business.

"The NFT world is all about content," Mariotti said.That may be true, but the sharp, sudden rise in the value of NFTs and more recent pullback is reminding some of other similar historic market bubbles, such as tulip mania in the 1600s, the dot com/tech crash of 2000 and bank stocks and housing prices in 2008.NFTs may be here to stay, but they just may not be worth the staggering sums of money that some people have shelled out for them in the past few weeks.

Even Beeple, aka Michael Joseph Winkelmann, joked with CNN's Julia Chatterley in March that he might be the biggest winner of what could turn out to be an NFT bubble.

• Bitcoin's three-month realized volatility has fallen to 86%, after its rise to above 90% in February.
• While volatility drops for the leading cryptocurrency, institutions could see this as a green light to enter the crypto space.
• Former SEC chairman Jay Clayton warns of new regulations that could come for Bitcoin. 

Institutions have been entering the cryptocurrency space, as Goldman Sachs and Morgan Stanley are two of the latest large banks to join in providing Bitcoin-related products and services to their clients. Researchers from JPMorgan Chase & Co. believe that other institutional investors will follow as Bitcoin’s volatility levels have declined.

Bitcoin funds inflow at the expense of gold

JPMorgan strategists, including Nikolaos Panigirtzoglou, noted a three-month realized volatility for Bitcoin has fallen to 86%, after its rise to above 90% in February. The six-month realized volatility has declined to roughly 73%. As Bitcoin’s volatility levels decrease, institutions could find the leading cryptocurrency more appealing. The strategists explained:

These tentative signs of Bitcoin volatility normalization are encouraging. In our opinion, a potential normalization of Bitcoin volatility from here would likely help to reinvigorate the institutional interest going forward.

Bitcoin’s volatility has long been a primary concern for institutional investors, as the higher volatility an asset has, the more risks are associated with it. The pioneer digital currency’s correlation structure relative to other traditional assets could also boost its popularity. As JPMorgan strategists explained, Bitcoin is a more attractive asset from a diversification point of view. 

The world’s largest cryptocurrency has been less correlated with traditional assets such as stocks and gold, which bolsters arguments that the new asset class could offer portfolio diversification benefits. In the past two quarters, as JPMorgan strategists suggested that $7 billion of inflows into Bitcoin funds have come at the expense of gold, which has seen the $20 billion of outflows from exchange-traded funds that track the precious metal.

If Bitcoin were to match the total private sector investment in gold, the leading digital currency would reach the price of $130,000. 

Bitcoin could be more regulated in the future

While institutions are just starting to offer Bitcoin and crypto-related products, the new asset class could be more regulated in the future.Former US Securities & Exchange Commission (SEC) chairman Jay Clayton expects regulation for cryptocurrencies to come in the future, both directly and indirectly.


Clayton, currently an adviser for One River Asset Management on cryptocurrencies, believes that the regulatory environment around the new asset class would eventually evolve. 


Although Clayton clarified that Bitcoin had not been clarified as a security for a long time, its status does not earn protection from new regulations, which he hinted — could be coming soon. 

The former SEC chairman’s remarks on Bitcoin also shed light on the SEC v. Ripple case, as the regulator filed its $1.3 billion lawsuit against the blockchain company and its executives, Brad Garlinghouse and Chris Larsen, for allegedly selling XRP illegally since 2013. 

In the case, the SEC argued that XRP tokens have characteristics of securities and that the company failed to register them as such. Since both Bitcoin and Ethereum were not considered as securities by the SEC, Ripple relied on this stance for one of its main lines of defense. 

Tesla is not making it attractive to pay for a model S, 3, X or Y in BTC.

This week, CEO Elon Musk announced via Twitter (where else?) that his upstart automaker had begun letting interested buyers pay for their electric vehicles in bitcoin.

It’s part of a corporate push to acquire as much of the original cryptocurrency as possible – or at least that’s how it seems – as the manufacturer has no plans to convert the cryptocurrency to fiat. 

But the idiosyncrasies of crypto make it difficult to take advantage of this option.

For example, according to the company’s Bitcoin Payment Terms and Conditions, bitcoin transactions must be completed within a certain window of time, or else the price in BTC expires and the buyer must ask for a new one. “You have about 30 minutes to make a payment,” a Tesla representative for the northeast region said Thursday.

While that condition is not surprising given bitcoin’s infamous volatility – depending which direction the exchange rate moves, either the car buyer or Tesla could get hosed by a wide swing – it underscores how even in a roaring bull market, crypto still struggles to gain widespread acceptance as a payment method. 

The fault lies with the native complexities of the Bitcoin system, the U.S. tax policy around cryptocurrencies and, in this case, a paucity of information available from Tesla’s customer support team. At least, if you’re a member of the press looking for answers.

No BTC discount

Tesla is notoriously media-shy, after disbanding its PR department late last year. So after calling headquarters in Palo Alto and getting bounced around, and then separately emailing CFO Zach Kirkhorn and the black-hole address for press inquiries, this reporter phoned a number of Tesla retailers based in the northeast and along the West Coast … and learned very little about purchasing a vehicle with bitcoin. 

“It’s very simple. If they ask about purchasing it, we can assist them with making an appointment,” the northeast Tesla representative said, unhelpfully. To be fair, a New Jersey resident who is actually in the market for a vehicle said she called a Tesla branch and got all her questions answered. 

She told CoinDesk that the Paramus-Route 17 gallery accepts bitcoin – though was told flat-out there was no early-adopter’s discount. 

But we were able to glean a few telling insights, including the 30-minute payment window.


A Tesla(Cam Bradford/Unsplash, modified by CoinDesk)

Another is that Tesla will only accept exact amounts and will not reimburse payments sent to an incorrect alphanumeric address. 

In fact, bolded passage punctuate the company’s Bitcoin Payment Terms & Conditions document with warning including:

"IF YOU INPUT THE BITCOIN ADDRESS INCORRECTLY, YOUR BITCOIN MAY BE IRRETRIEVABLY LOST OR DESTROYED.” 

And… 

"YOU MUST EXERCISE CARE WHEN INPUTTING THE BITCOIN ADDRESS INTO THE RECIPIENT FIELD BECAUSE BITCOIN TRANSACTIONS CANNOT BE REVERSED. WE ARE NOT RESPONSIBLE FOR ANY FAILURE TO ACCURATELY INPUT THE ALPHANUMERIC CODE INTO THE RECIPIENT FIELD.”

‘Not quite sure’

That document says nothing about tax liabilities, though this is another consideration for U.S. buyers. Under current policy, a purchase of goods or services made with cryptocurrency is a taxable event – even if it’s just a cup of coffee. 

This means that car buyers must account for potential gains or losses if their bitcoin is worth more or less now than when they first purchased it. 

Finally, there are the deflationary incentives in the Bitcoin ecosystem that may discourage potential buyers from spending their coins on cars, or anything.

A hard cap of 21 million coins, a decreasing rate of issuance and a growing number of buyers create favorable conditions for the price of BTC to rise over the years, all else equal.


A Tesla showroom in Miami.(Joe Raedle/Getty Images)

While Lamborghinis have long been the objet petit a for many Bitcoiners, those that have made the purchase – or any purchase – often come to regret it. In 2013, someone purchased a $103,000 Tesla Model S Performance for 91.4 BTC. Those coins today would be worth $4.7 million.

Asked whether there has been any interest from HODLers since Musk tweeted this week, the Tesla representative said, “Not quite sure if anything sold yet in bitcoin.”

But another employee sounded excited: “I don’t really know that much, and don’t want to take on the liability of speaking to the press, to be frank. It’s great news,” this Tesla representative said.

Ray Dalio, founder of the $150 billion hedge fund Bridgewater Associates, believes bitcoin (BTC, -3.33%) has “proven itself” in the last 10 years but still sees a “good probability” that it will be outlawed by governments.

Speaking to Yahoo Finance’s Andy Serwer on Wednesday, the billionaire investor said it was “very likely under a certain set of circumstances” that bitcoin would be “outlawed” as gold was in the 1930s.

Under the U.S. Gold Reserve Act of 1934, it became illegal for individuals to own gold because, according to Dalio, governments did not want gold to compete with money or credit as a store of value.

“Every country treasures its monopoly on controlling the supply and demand. They don’t want other monies to be operating or competing, because things can get out of control,” Dalio added, citing India’s proposed ban on crypto as an example.

Read more: Indian Government Officials Give Mixed Signals Over Planned Crypto Legislation

He added that bitcoin has “proven itself over the last 10 years,” having not been hacked and building a significant following.

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Dalio has previously warned about the possibility of cryptocurrency bans by governments.

On other occasions, he expressed positive sentiment about bitcoin’s role as a diversifier in investment portfolios.

In November, prior to BTC’s staggering run-up to $50,000 and beyond, Dalio said if bitcoin or other cryptos become “material,” governments will “outlaw” it. “They’ll use whatever teeth they have to enforce that,” he said at the time.

Cryptocurrency exchange Crypto.com will launch a non-fungible token (NFT) platform on March 26 featuring content from the likes of Snoop Dogg, Lionel Ritchie and Boy George.

• The Hong Kong-based exchange announced the launch Tuesday, claiming it will be the "world's largest and most user-friendly NFT platform."
• The platform will be invite-only and will feature collaborations between mainstream and digital artists.
• Boy George's, for example, will mix his music with animated and still versions of his artwork.
• Crypto.com partner the Aston Martin Cognizant Formula One team will be marking its return to F1 after 60 years with a collection of NFTs on the site.
• Other sports team and leagues will be announced in the coming weeks.
• The venture is being led by Crypto.com's new global head of NFTs, music industry veteran Joe Conyers III.

Since NFTs became ubiquitous enough on the global art market to spark near-instant backlash and controversy, the question still remains whether the Non-Fungible Tokens, sold and exchanged via the Ethereum blockchain, will catch on with the general public like MP3s once did in the past.

With that said, however, new milestones are being struck with alarming frequency: on Tuesday evening, Sophia the robot will become the first robot to ever auction its own digital NFT artwork via an auction on Nifty Gateway. Sophia was created in 2016 by the Hong Kong-based company Hanson Robotics, and her NFTs were made in collaboration with the artist Andrea Bonaceto.

Bonaceto is also a partner with the blockchain technology investment company Eterna Capital, which should give you an idea of just how much of a boon the NFT explosion is for longtime supporters of blockchain innovations.

Because collectors are free to buy and flip NFTs however they see fit within the non-regulated cryptocurrency space it’s possible to rack up huge profits in no time at all, as most elegantly demonstrated by Beeple’s recent $69,346,250 victory at Christie’s.

“We created Sophia herself as a work of art, as well as an AI development platform,” Dr. David Hanson said in a statement. “Her intelligence is a collective of algorithms and humans working together like a hive.

For this show, Sophia created the art entirely using neural networks and symbolic AI, responding to her perception of Andrea Bonaceto’s works, as well as to data from her ‘life’ experiences, under guidance from the Sophia team’s designers and programmers.”




NFT artwork made by Sophia the robot and Andrea Bonaceto. Sophia the Robot

The artwork that’s been produced by this collaboration is certainly intriguing; swirls of paint and disjointed eyes and lips blur together to created a muddled final result.

But with NFTs, it seems like the imagery is entirely besides the point, and that money and novelty are ultimately dictating every innovation that’s to come.

While much of the recent wave of relentless hype around NFTs — or non-fungible tokens — has been most visibly manifested in high-dollar art auctions or digital trading cards sales, there’s also been a relentless string of chatter among bullish investors who see a future that ties the tokens to the future of social media and creator monetization.

Much of the most spirited conversations have centered on a pre-launch project called BitClout, a social crypto-exchange where users can buy and sell tokens based on people’s reputations.

The app, which launches out of private beta tomorrow morning, has already courted plenty of controversy inside the crypto community, but it’s also amassed quite a war chest as investors pump tens of millions into its proprietary currency.

Early backers of the platform’s BitClout currency include a who’s who of Silicon Valley investors, including Sequoia Capital and Andreessen Horowitz, the startup’s founder tells TechCrunch.

Other investors include Chamath Palihapitiya’s Social Capital, Coinbase Ventures, Winklevoss Capital and Reddit co-founder Alexis Ohanian. A report in Decrypt notes that a single wallet connected to BitClout has received more than $165 million worth of bitcoin deposits suggesting that huge sums have already poured into the network ahead of its public launch.

BitClout falls into an exploding category of crypto companies that are focusing on tokenized versions of social currency. Others working on building out these individual tokens include Roll and Rally, which aim to allow creators to directly monetize their internet presence and allow their fans to bet on them.

Users who believe in a budding artist can invest in their social currency and could earn returns as the creator becomes more famous and their coins accrue more value.

“If you look at people’s existing relationships with social media companies, it’s this very adversarial thing where all the content they produce is not really theirs but it belongs to the corporation that doesn’t share the monetization with them,” BitClout’s founder, who refers to themselves pseudonymously as “diamondhands,” tells TechCrunch. (There’s been some speculation on their identity as a former founder in the cryptocurrency space, but in a call with TechCrunch, they would not confirm their identity.)

The BitClout platform revolves around the BitClout currency. At the moment users can deposit bitcoin into the platform, which is instantly converted to BitClout tokens and can then be spent on individual creators inside the network. When a creator gets more popular as more users buy their coin, it gets more expensive to buy denominations of their coin.

Creators can also opt in to receive a certain percentage of transactions deposited into their own BitClout wallets so that they continue to benefit from their own success.The company’s biggest point of controversy hinges on what has been opt-in and what has been opt-out for the early group of accounts on the platform.

Most other social currency offerings are strictly opt-in. Users come to the platform in search of a way to create tokens that allow them to monetize a fanbase and build a social fabric across multiple platforms. The thought being that if the platforms own the audience then you are at their mercy.

BitClout has taken an aggressive growth strategy here, turning that model on its head. The startup has pre-populated the BitClout network with 15,000 accounts after scraping information from popular public Twitter profiles. This means that BitClout users can buy shares of Kim Kardashian’s social coin or Elon Musk’s without those individuals ever having signed up for a profile or agreeing to it.

This hasn’t been well-received by all of those who unwittingly had accounts set up on their behalf, including many crypto-savvy users who got scooped up in the initial wave of seeding.

The startup’s founder says that this effort was largely an effort to prevent handle squatting and user impersonation, but he believes that as the platform opens, a sizable pre-purchase of creator coins reserved for the owners of these accounts will entice those users to verify their handles to claim the funds.

Perhaps BitClout’s most eyebrow-raising quirk is that the platform is launching with a way to invest into the platform and convert bitcoin into BitClout, but at launch there’s no way to cash out funds.

The project’s founder says that it’s only a matter of time before this is resolved, and points to Coinbase and the Winkelvoss twin’s status as coin holders as a sign of future exchange support to come, but the company has no specifics to share at launch.

While the founders and investors behind the project see a bright future for social currencies on the blockchain, many in the decentralized community have been less impressed with BitClout’s early efforts to achieve viral adoption among creators in a permission-less manner.

“BitClout will make a great case study on how badly crypto projects can mess up incentive engineering when they try to monetize social networks.” Jay Graber, a decentralized platform researcher involved in Twitter’s bluesky effort, said in a tweet.

“Trust and reputation are key, and if you create a sketchy platform and mess with people’s reputations without their consent it is not going to go well.

”If BitClout comes out of the gate and manages to convert enough of its pre-seeded early adopter list that there is value in joining its closed ecosystem version of a social token, then it may have strong early momentum in an explosive new space that many creators are finding valuable.

The concepts explored by others in the social currency space are sound, but this particular execution of it is a high-risk one. The network launches tomorrow morning so we’ll see soon enough.

• Bitcoin conditions are "similar to the second half or later stages of a bull market," Glassnode said.
• Analysts pointed to signs of long-term holders spending coins and to a reduction in big wallets.
• Talk of a bitcoin price plunge has grown; a crypto entrepreneur said there could be a 90% drop.
• Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Bitcoin may be entering the second half or later stages of a bull market, crypto analysts at Glassnode said on Monday, as nervousness grows in some quarters about a plunge in the price.

Glassnode's weekly analysis found that there had been a pickup in "wealth transfers" from long-term bitcoin holders to newer speculators, which the company said was reminiscent of market peaks.

The report said bitcoin bull markets eventually reach a "euphoric top" that materializes as big holders increasingly spending their coins to realize profits.Glassnode estimated that long-term bitcoin holders had reactivated about 9% of supply so far in 2021 by spending coins, though this was below the 17% reactivation before the market's crash in 2017.

"These studies suggest conditions are similar to the second half or later stages of a bull market," Glassnode said.The bitcoin price was down 6% on Tuesday, to $54,294, well off a high of $62,000 earlier in March but still up by about 700% from a year ago.Glassnode also said on Tuesday that the biggest players - wallets with 1,000 to 10,000 bitcoins - had cut their holdings by 307,000 bitcoins since December.

Read more: Hedge funds are ramping up bets against Chamath Palihapitiya's SPACs and have already taken home $40 million this year. Here's a detailed look at the wagers they're making.

Timothy Peterson, an investment manager, tweeted that falls in big holdings "are often but not always associated with bear markets."

On Monday, Bobby Lee, the founder of the crypto exchange BTCC, told CNBC that 2021 would be a bull market for bitcoin, of the sort that comes around every three or four years. He said the bitcoin price could go as high as $300,000 this year.

But Lee said that the "bubble" was likely to pop. "People should be aware that it could fall as much as 80% to 90% of its value from the all-time peak," he said.

However, many bitcoin advocates have pointed to growing institutional interest as a reason bitcoin is unlikely to crash as it has in the past. Visa, Morgan Stanley, and JPMorgan are some of the latest big names to get involved.

KEY POINTS

• Twitter CEO Jack Dorsey’s first tweet, offered for sale as a nonfungible token, was sold on Monday for 1,630.58 ether.
• That’s equivalent to about $2.9 million based on ether’s price at the time of sale.
• Dorsey said he will convert the proceeds to bitcoin and will then donate that to Give Directly’s Africa Response fund.

Twitter CEO Jack Dorsey addresses students during a town hall at the Indian Institute of Technology (IIT) in New Delhi, India, November 12, 2018.Anushree Fadnavis | Reuters


Twitter CEO Jack Dorsey’s first tweet, offered for sale as a nonfungible token, was sold on Monday for 1,630.58 ether, a cryptocurrency. That’s equivalent to about $2.9 million based on ether’s price at the time of sale.

The tweet, which said “just setting up my twttr,” was first published on March 21, 2006. It was listed for sale as an NFT on March 6. By March 9, the highest offer was from Sina Estavi, CEO of Bridge Oracle.

Estavi won the auction, though his bid was worth about $2.5 million it was placed.

Ownership of these assets is recorded on a blockchain — a digital ledger similar to those that underpin bitcoin and other cryptocurrencies.

But a person can’t exchange one NFT for another as they would with dollars or other assets. Each NFT is unique and acts as a collector’s item that can’t be duplicated, making them rare by design.

OpenSea has been one of a handful of NFT marketplaces to explode in popularity in recent weeks as collectors wade into the trading of nonfungible tokens on the blockchain.

While new startups have been popping up everyday, platforms that launched in crypto’s earlier times are receiving rampant attention from investors who see this wave of excitement for cryptocurrencies and tokens as much different than the ones that preceded it.

Today, the startup announced that it’s closed a $23 million round of funding led by Andreessen Horowitz with participation from a laundry list of angels and firms including Naval Ravikant, Mark Cuban, Alexis Ohanian, Dylan Field and Linda Xie.

OpenSea launched back in 2017, announcing a $2 million round a few months later from Founders Fund and a few crypto centric firms. At the time CryptoKitties mania was most of what Ethereum had to offer and early NFT projects were being slowly embraced by a community that was enthusiastic but more curious than anything.


Fast forward to 2021 and NFTs are certainly having a moment, and while the specific shades of that moment may be heavily focused on high-dollar artwork sales from traditional auction houses or NFT memes being tweeted out by Elon Musk, proponents see a future for the tokens that upends the economics of content creation and influence on the internet.

The enthusiasm accompanies a months-long rally in the value of cryptocurrencies themselves that have taken Ethereum and Bitcoin to multiples of previous all-time highs.

The market for digital goods expanding widely may depend heavily on further adoption among gaming giants and larger media organizations, but early on there’s hope that digital-first creators can use these marketplaces to connect more directly with fans and begin to bypass the massive platforms they depend on now.

There are still some early hiccups as the tech develops. While Ethereum has committed to moving from its energy-intensive proof-of-work standard to a more efficient proof-of-stake one eventually, the existing structure has been far from efficient, which has opened many of the early NFT artists to criticism surrounding climate change concerns and whether the stakeholders in crypto tokens should be prioritizing environmental worries over the specific challenges of certain proofs.

In February, OpenSea announced support for more efficient Tezos-based NFTs.

A more nebulous challenge for marketplaces like OpenSea may be cutting through the noise of speculation and providing a marketplace for more users that are actually buying to own, an especially difficult proposition given the breakneck pace of growth for the digital currencies being used to purchase the digital goods themselves.

A fun thing about living in modern times is now we have to know what the hell NFTs are in order to keep up with news about pizza. Pizza Hut Canada has announced it is releasing “1 Byte Favourites,” aka digital images of pizza, as non-fungible tokens.

“Pizza Hut believes no world should exist without pizza, especially their pan pizza. That’s why they wanted to make sure it was enshrined in the digital universe,” they said in a release. Each week the company will release a new image of a pizza slice, each of a different recipe, for purchase on Rarible.

The first-ever “slice” was listed for $0.0001 ETH (a cryptocurrency the equivalent of 18 cents), but wound up being sold for $8,824.So, what the hell does this mean?

A non-fungible token is essentially a unique digital asset available for purchase with cryptocurrency on the Ethereum blockchain.

Once an artist or company uploads this digital asset, “the NFT will exist permanently on the blockchain, so long as the chain remains in operation. As a result, no two NFTs are purely identical, since each piece contains unique digital properties,” explains Vox. This idea of rarity is driving a collecting boom, with people paying millions for essentially unique jpegs.

Instead of paying money for a slice of pizza, you’re paying money for a one-of-a-kind digital picture of pizza, even though that doesn’t include IP rights, so is it even yours?

Also, people have already been hacking and stealing NFTs. Honestly this tweet probably explains it best:

On top of all this, NFTs are absolutely destroying the planet. Memo Akten estimates a single NFT’s ecological footprint “is equivalent to a EU resident’s total electric power consumption for more than a month, with emissions equivalent to driving for 1000Km, or flying for 2 hours.

” Some artists have already used the equivalent of an EU resident’s energy consumption in an entire lifetime in NFT transactions.

Pizza Hut made a big deal of its environmental push in the past years, pushing plant-based meat toppings and a round pizza box that used less packaging, and with parent company Yum Brands boasting it saved 1.3 billion gallons of water in 2017.

Obviously there’s no purely sustainable transaction, but it reveals Pizza Hut’s dedication to the environment for what it is: a hypocritical marketing ploy.Pizza Hut isn’t the only one getting into the NFT market. 

Taco Bell has sold NFT gifs of tacos. And the guy who went viral over the summer for drinking Ocean Spray while skateboarding to Fleetwood Mac’s “Dreams” is selling the original video clip as an NFT, but without the Fleetwood Mac song because, surprise surprise, he doesn’t have the rights to that song.

 And of course you’ll still be able to watch that video literally anywhere. So congrats to whoever thinks they own these things. Hope your slice of digital pizza that you can’t eat brings you a lot of joy!

Non-fungible tokens (NFTs) have rocketed out of obscurity in recent weeks to become a global phenomenon. Amid this hysteria, France has staked a surprising claim as an epicentre of this virtual gold rush.

Last week NFT startup Arianee, which certifies ownership of virtual luxury goods, raised €9m in VC.

That came just two weeks after NFT-based fantasy football platform Sorare raised a €40m round of VC led by international A-list investors such Benchmark and Accel.Both French companies have been percolating for several years, putting in place the infrastructure and deals needed to lay a foundation. Yet timing is everything, and the pair seemed to have sufficiently matured at just the right moment. 

“I think that we are riding a wave.”

“I think that we are riding a wave,” said Sorare CEO and cofounder Nicolas Julia. “It’s not just gaming people talking about this. All the verticals are literally exploding right now on the NFT market.

”A non-fungible token is a digital identifier that can be used to verify ownership of a virtual item on the blockchain. Attaching an NFT to such items as artwork or playing cards allows them to be bought and sold, often through bidding, while ensuring the identity of the creator and the owners.

That digital guarantee of ownership has, in turn, has allowed creators to sell their works for sums in recent weeks that have stunned those with only a passing knowledge of blockchain or cryptocurrency.




Beeple’s collage, Everydays: The First 5000 Days, sold at Christie’s. Credit: BeepleIn February, an NFT-enabled GIF of the animated Nyan Cat, a classic internet meme, sold for roughly $580k. Just last week, Christie’s auctioned a series of digital images by artist Beeple for $69.3m.

This week, London-based roboticist Dr. David Hanson announced that his Sophia the Robot would work with artist Andrea Bonaceto to create NFT digital artworks that would be auctioned later this month.Naturally, there are some fears of a bubble.

But for those working in the blockchain space, NFTs are a natural evolution that is rewriting the fundamental economics of how digital content is valued. The problem with digital works historically is that they can be copied infinitely, making any single one worthless.

By verifying the uniqueness, NFTs create a scarcity online that is causing the value of coveted items to soar. And that has triggered a stampede of creators, investors, and entrepreneurs who are looking for ways to profit from the trend.

“What we’ve seen so far is the very earliest stages of mainstream adoption by artists,” said Mati Greenspan, CEO of cryptocurrency investment advisory firm Quantum Economics. “It’s evolving extremely quickly. And there’s no doubt that this market is hot.”

French timing

Even for founders like Julia of Sorare, the sudden attention is dizzying. He cofounded Sorare in 2018 after first hearing about NFTs. Sorare allows users to collect the trading cards of their favourite football players. These cards are attached to an NFT and can be bought and sold on a marketplace via bidding that drives up their value.

The cards can then be used to assemble teams and play in fantasy football leagues.“We were fascinated because as human beings, people have been collecting things in the physical space for centuries,” Julia said. “With this technology, they have an opportunity to collect in the digital world.

”Refining the technology and the service took a couple of years, and the company managed to raise a pre-seed round of funding in 2019 of €550k. Julia recalled how difficult it was to explain the concept to investors at the time.

Along the way, Sorare began attracting an impressive array of partnerships with football teams. That led to a €3.5m seed round last summer with French and European investors. Even as Julia felt the momentum building, he’s surprised by how quickly the world turned in the company’s direction.In January 2020, the company booked €40k in sales.

By February 2021, the monthly figure had grown to €11m as Sorare added another 130 clubs. The sports world has become a major pillar of this trend. Players, clubs and leagues are now salivating at a potential revenue from licensing partners from a market for digital sports collectibles that Julia estimates to be worth more than €10bn.

In the US, the NBA’s Top Shots, which uses NFTs to sell video highlights of players, has grossed more than $230m in sales. 




Even Sophia the Robot is making digital artBy late last year, investors were banging on Julia’s door. In November, the company had €10m in the bank and was profitable. But it was hard to turn away money that could accelerate its scaling.

Particularly when offers were coming from people such as Benchmark Venture Partner Peter Fenton, known for his investments in Twitter and Yelp.Within 48 hours of Julia’s first meeting with Fenton, Julia had received a term sheet. Eventually, a host of notable angels also joined the round, including Reddit cofounder Alexis Ohanian, Vayernmedia CEO Gary Vaynerchuk, and French football star Antoine Griezmann.“That was kind of crazy for us,” Julia said.

“The level of conviction from Peter and the partnership was crazy. That was something that I never imagined was possible before.

”While NFTs can be a difficult concept for many to grasp, the key for a company like Sorare is to “abstract” the technology or essentially make it invisible to users. No one who wants to trade cards has to know anything about blockchain technology or distributed ledgers or cryptocurrency.

That’s also the goal of Arianee, which has followed a similar journey.“The blockchain technologies and NFTs and all these kinds of things are not supposed to be mainstream,” said Arianee cofounder Frederic Montagnon. “In the same way that the very core layers of the internet are not mainstream.”




Credit: Arianee

Founded in 2016, Arianee assigns NFTs, or what it calls ‘digital passports’, to digital copies of luxury goods such as watches and clothes that can be used to certify that the item is authentic and not a counterfeit or knockoff. That allows the owners to guarantee the value and the origin should they decide to resell them or pass them along.

But it also potentially reinvents the relationship between the brand, the customer and the product.For instance, Vacheron Constantin, which makes watches that can cost over €70k, is working with Arianee to use NFTs for its products.

Should a customer sell the watch, the NFT goes with it, and the company will know the identity of the new owner allowing them to establish a relationship. In addition, customers who authenticate their watches will be able to join a new digital platform called The Hour Club which will offer exclusive access to content and experiences.

“You start to imagine what can be unlocked online in a digital experience when you can prove that you’re the legitimate owner,” said Arianee CEO Pierre-Nicolas Hurstel.

“You can be granted access to anything with a digital key of ownership that’s used as a sign-in for services, communities, and online experiences.”The Arianee cofounders said the timing of the NFT craze makes sense because of the time it has taken to develop the underlying technology.

They spent several years creating their own protocol, then turning that into an open source project, and then building the first version of its commercial SaaS platform which debuted in 2019.




Arianee Token


While they are excited about the wave of NFT interest, they also worry that the focus on mind-bending sales figures for digital artworks will obscure the broader potential of the technology.

They decided to focus first on luxury items given France’s historical strength in this sector. But they are betting long term that every item purchased will have a digital twin. 

The virtual versions of items may seem ephemeral at first glance. But Montagnon said as people live more of their lives in virtual environments, the financial and emotional attachments to digital items are becoming more meaningful. 

“What’s happened over the past 25 years is that we went from no screen to probably 85% to 90% of our time spent on a screen or with a screen in your hands,” Montagnon said. “We are living connected all the time now.

And the existence of real assets, when you spend most of your time in a digital environment, has no sense anymore. What we are trying to do is to bring all these real assets into your digital life.”

• In the European Securities and Markets Authority's (ESMA) "Trends, Risks and Vulnerabilities Report," published Wednesday, the three bodies that make up the European Supervisory Authorities (ESAs) said some cryptocurrencies are "highly risky and speculative."
• There's a risk investors could lose "all their money" in the largely unregulated market, they said.
• The ESMA report cited "significant risks" presented by the recent all-time highs of bitcoin (BTC, +3.24%) and other crypto assets.
• The ESAs pointed to the "continued relevance" of their previous warnings.
• More generally, global stablecoins remain under regulatory scrutiny even if there is positive sentiment around central bank digital currencies, the report said.
• It also highlighted the large energy consumption of proof-of-work mechanisms like bitcoin's, and the importance of incentivizing less resource-intensive blockchain mechanisms such as proof-of-authority.

See also: European Commission, ECB Unite to Consider Potential Pitfalls of the Digital Euro

• Mark Mobius told CNBC the market could face a "major" correction if bitcoin prices crash.
• The Mobius Capital Partners founder said bitcoin's rally could be a force behind the recent gains in other assets like stocks.
• He said investors who have made large gains off of cryptocurrency are now putting money and even "gambling" in other assets.
• Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Veteran investor Mark Mobius told CNBC on Wednesday he "hopes and prays" the price of bitcoin doesn't crash because the broader market could face a large downturn if that were to happen.

During a CNBC Pro Talk, the Mobius Capital Partners founder suggested the rise in cryptocurrency prices could be partially responsible for the stock market's recent gains, as investors who have made money in crypto - some of them even "cryptocurrency billionaires" - have taken on more risk in other assets.

"This is probably one of the reasons why the market is doing so well, is that people who have bought, let's say bitcoin at $1 or $10, now are feeling rich," Mobius said.

Mobius added that investors who are feeling rich are "more willing to throw money in the market and even gamble."

"I hope and pray that the bitcoin prices do not crash because if they do, I think we are going to see a major market correction," said the investor.

Bitcoin is currently trading around $55,000 after reaching an all-time high above $61,000 earlier this week.In an interview with Bloomberg last week, Mobius said he fears a decline bitcoin prices could hit tech stocks "very badly."

"I think the relationship between bitcoin prices and the tech market is very close," he said in a Bloomberg interview. "So watch that indicator.

I vividly remember the moment I realized NFTs were a thing. I was talking to a friend who's into cryptocurrency. He was regaling me with a particularly turbulent crypto tale.

He'd invested $300 into an altcoin, one of the thousands of tokens not named Bitcoin or Ether, but the developer vanished. Then, after months of silence, the developer returned, revealing they had been working on the coin the whole time.

That coin became the hot ticket in crypto town, and my friend's $300 became $30,000. Just typical crazy crypto shit.  "I'm not going to sell," he told me. "If you hold the coin for a certain number of days, the developer gives you an NFT.

So I'll wait for that." I was staggered. I knew NFTs to be nifty-but-worthless pieces of digital art, but my friend was willing to risk a once-in-a-lifetime jackpot to get one. Then he explained that someone had bought an NFT for 800 ether, or $1.2 million, the week before.

Ah. Nonfungible tokens, or NFTs, are digital products whose authenticity has been certified on a blockchain. They can be pretty much anything digital: Kings of Leon are selling tokens that give owners access to their new album. A gif of the Dogecoin cryptocurrency mascot (pictured above) sold as an NFT for $69,000, and Christie's last week auctioned a digital art NFT for $69 million.


By signing up, you agree to our Terms of Use and acknowledge the data practices in our Privacy Policy. You may unsubscribe at any time.This is where "nonfungible" comes in. A fungible asset is one that's interchangeable with others of its kind -- like money.

There are 1.8 billion $50 notes in circulation, and all of them are worth $50. Assets that aren't fungible, like houses, cars or paintings, aren't interchangeable and are valued on a case-by-case basis.

At this point, you're probably confused and maybe even beating yourself up for not getting it. But actually, there's nothing to get. It's incomprehensible that clips, memes and gifs are selling for six, seven and even eight figures. Know what else is incomprehensible?

Cryptocurrency, but that hasn't stopped it from becoming a trillion-dollar market. Just because NFTs are crazy doesn't mean they won't be around for a long time.

NFTs and you

There are a few reasons people are buying NFTs. NFTs are all about ownership. Take Jack Dorsey auctioning off his first tweet as an NFT:

Everyone can see that tweet, but only the person who buys its NFT will own it. That ownership will be certified unchangeably on a blockchain, which is a digital ledger that records transactions for all to see.

It's the difference, NFT buyers will tell you, between having a print or an original painting.Others buy NFTs because they believe in the technology. One of the dominant criticisms of cryptocurrency is that it's a solution searching for a problem.

Some are flocking to NFTs because they're true believers in blockchain. They see nonfungible tokens, which are proof of ownership, as a real-world application of that technology.There's something to this. What NFTs really do is create scarcity.

It's artificial scarcity, but that's nothing unusual: Nike and Kanye West created artificial scarcity when they decided to only produce 200 Yeezy Red October sneakers, which is why that particular pair of sneakers runs over $10,000.

 When the Kings of Leon released their new album as a $50 NFT, they only made it available in that form for two weeks, essentially making a blockchain-powered limited edition.

So the simplest way to think about NFTs is as collectibles. Just like a small group of people are willing to drop six figures on a mint-condition, first-edition Charizard, there's a small group of much richer people willing to pay eight figures to "own" a piece of digital art -- even if you or I can freely see that art with a quick Google search. 

Sometimes, NFTs are completely silly. An NFT of the Bad Luck Bryan meme sold for $36,000. Other times, they're less so. You may have seen that Christie's, a high-end art auctioneer, sold an artist's NFT for $69 million. On the face of it, that sounds like the height of insanity.

But it's not that much crazier than, say, a blue canvas selling for $40 million at a similar auction. But what's less ambiguously bad about NFTs is their environmental impact.

Blockchain technology is extremely inefficient. Cryptocurrencies are created by powerful PCs that mine blockchains, done via the solving of increasingly complex equations.

This process means that more carbon emissions come from Bitcoin mining than the entire country of Switzerland.NFTs are similarly costly to produce. Spurts of energy will be exerted when an NFT is minted and then again each time someone buys that NFT, since its ownership change is reflected on the blockchain.

The sale of a set of NFTs recently consumed 8.7 megawatt hours, reports Wired.That's a lot of energy. The average US household consumes 10.6 megawatt hours -- per year.

Confused? You should be

Even with that explanation, it's galling to see NFT sales in the headlines. Someone recently spent $20,000 on an NFT clip of Logan Paul opening a pack of Pokemon cards. It's hard to see that and not wonder, at your core:

Why?

There's a precedent for this in cryptocurrency, the blockchain cousins of NFTs. Cryptocurrency markets don't make sense, so in a way it makes sense that NFTs don't either. Both are born out of speculation. 

The first Bitcoin was mined in 2009, but it took a few years for the cryptocurrency to become the headline-grabbing craze it is today. Ethereum, the second biggest cryptocurrency, was launched in 2015. In many ways, it's more important than Bitcoin.

Right now, Bitcoin is like gold in that all you can do with it is buy it or sell it, but developers use the Ethereum blockchain to build other coins and applications. NFT is one such application:

Most nonfungible tokens are written on the Ethereum blockchain. As quaint as it sounds, the cryptocurrency world went agog when Bitcoin first hit $1,000 back in 2013.

 It's around then that the quest to find "the next Bitcoin" became an obsession on both sides of the community:

Developers wanted to make the next Bitcoin, punters wanted to find it early and mint their fortune. In the years since, with Bitcoin now hovering around $50,000, that impulse has only grown stronger. The cryptocurrency market operates similar to a stock market.

There are thousands and thousands of tokens to buy. Some replicate real-world financial tools -- there are tokens that work like hedge funds or lending platforms, for instance -- while others claim to work faster or more reliably than Ethereum. Some, like the famous Dogecoin, are billion-dollar memes.
A piece by the artist Beeple was sold at a Christie's auction for over $69 million.Christie'sCryptocurrencies have yet to find meaningful real-world applications, so at this point it's all speculation.

But that hasn't stopped hundreds of altcoins from becoming incredibly valuable, and making thousands of people rich in the process. I recently saw a cryptocurrency explode from 27 cents to just over $75 in less than three weeks. That's 275x profit if you bought the low and sold the high.

A Tesla investor would have seen similar gains if they bought in at its all-time low and sold at its all-time high -- 11 years later. 

NFTs, like cryptocurrency, are all about speculation. Just like people buy a useless cryptocurrency for $50,000 strictly for the purpose of selling it at $100,000, people will buy an NFT of Homer Simpson meshed with Pepe the Frog for $38,000 just because they think they can sell it later for more.And they can.

Someone did buy that NFT -- and sold it later for $320,000.So no, NFTs don't make sense. But cryptocurrency has shown that a trend doesn't need to make sense in order to grow exponentially every year.

We're probably witnessing an NFT bubble right now, and as with Bitcoin in 2017 that bubble will probably burst -- but don't expect that to kill NFTs for good.My friend never got his NFT:

The developer vanished again. And while he was waiting, his $30,000 crashed back down to around $500. He won't be the last person to lose a car's worth of money chasing NFT dreams.

A 20th-century avant-garde artwork is being auctioned later this month, with the buyer to receive a certificate of authenticity in the form of a non-fungible token (NFT).

According to a press release shared with CoinDesk on Wednesday, the auction is for a 1926 painting titled “Abstract Composition” by Ukraine-born Wladimir Baranoff-Rossine. The sale will take place on the Mark Cuban-backed NFT marketplace Mintable, which says it has been working closely with the artist’s family as part of a series of sales of his works.

The artwork will be sold in its original frame, signed by the artist and with the NFT certificate that digitally verifies the artwork’s provenance and authenticity using blockchain technology.

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Additional sales, to be solely digital NFT representations of Baranoff-Rossine’s works, will be conducted via three auctions and six limited edition sales beginning March 25.

Mintable CEO Zach Burks told CoinDesk via email the artist’s grandson had reached out to Mintable a few months ago seeking to use NFTs as a means to digitize the family legacy.

See also: Sotheby’s Moves Into ‘New World’ of Digital Art and NFTs

Baranoff-Rossiné was a Ukrainian, Russian, and French painter, sculptor and inventor. 

He was part of the Cubo-Futurism movement before being swept up in Nazi persecution based on Jewish heritage which saw him transported to Auschwitz where he subsequently died.

Non-fungible tokens (NFT) have generated an unprecedented level of mainstream interest in cryptocurrency technology. Believers claim NFTs represent a “paradigm shift” whereas detractors compare NFTs to the “Tulip Mania” and the initial coin offering era. 

We have seen similar polarization of public opinion before with blockchain technology and dot-com stocks, which resulted in several breakthrough innovations and some epic commercial failures. 

Ajit Tripathi, a CoinDesk columnist, is the head of Institutional Business at Aave. Previously, he served as a fintech partner at ConsenSys and was a co-founder of PwC’s U.K. Blockchain Practice. The views expressed are those of the author alone.

In this article, I will explain why I believe NFTs in the form of digital art, music and collectibles represent only the beginning of a much larger wave of real-economy “e-commerce” transactions on public blockchains. 

What are NFTs?

While for a purist, “NFT” stands for any non-fungible token, in popular parlance today NFT is used in the sense of a “digital collectible.”  The New York Times recently described NFTs in somewhat irreverent terms as “blockchain-certified computer files.” In a previous article, the Times wrote, “Most importantly, NFTs make digital artworks unique, and therefore sellable.” 

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See also: What Are NFTs and How Do They Work?

Influencers such as Gary Vaynerchuk, Marc Cuban and Chamath Palihapitya have expressed their enthusiasm for NFTs, triggering a large amount of investment in NFT issuance and trading platforms such as NBA Top Shot and Sorare.

This has been followed by a sudden burst of of products coming to market in a bit of a gold rush.  

For the purposes of this article, we will stick to NFTs as digital collectibles that people love to own, pay for and brag to their friends and strangers about. 

NFTs are valuable objects

If I am part of a community that assigns a value to a digital object, that value is the value of the object. This is why Pokemon cards and baseball cards are valuable, why bitcoin (BTC, -0.81%) and ether (ETH, -0.51%) are valuable and why NFTs such as Aavegotchis, NBA Top Shot, Non-Fungible Pepes and NFTs minted by Beeple are valuable. There is a community of humans that finds the objects valuable and largely agrees on their value. 

See also: Vinay Gupta’s Big Idea: An Identity Layer for Your Things

In my last CoinDesk article, I wrote about the challenges involved in bringing off-chain assets to decentralized finance (DeFi). As it turns out, most NFTs, though digital, are representations of off-chain assets. It’s not surprising, then, that many of the challenges associated with off-chain assets are directly or indirectly relevant to NFTs as well.
çEssentially, an NFT “binds” or maps a unique object, the blockchain native non-fungible token to a digital object, e.g., a document, image, audio or video file or a physical object such as a house or a bicycle or your own private Island.That is the crux of the issue. Most NFTs are not crypto-native assets.

Unlike bitcoin, a non-fungible asset that lives its entire lifecycle on the Bitcoin blockchain, a digital work of art such as Beeple’s $69 million painting, “The First 5000 Days” is not blockchain-native.

This painting was created as a collage made of 5,000 different digital works of art in desktop software and then bound to a non-fungible token created by Beeple on the Ethereum blockchain. That means while the token, i.e., the bytes on Ethereum, are blockchain-native, the underlying work of art is not. 

More valuable than a copy

The distinction between the token and the digital object to which it binds is quite crucial. In the crypto-native world, property rights and ownership are defined by “not your keys, not your crypto” – meaning that (absent certain circumstances) you control the private key that can send (assign) the token to someone else, you own the token (and all associated rights). 

However, in case of a digital collectible, the ownership of a token may or may not mean you own the underlying computer file to which the token maps. Blockchains use a hash function to establish uniqueness but a JPEG file and its copy both produce the same hash. 

See also: Ajit Tripathi – How to Bring Off-Chain Assets to DeFi

Content addressable systems (systems that allow information to be retrieved based on its content rather than location) such as IPFS (a decentralized network) can solve this problem by allowing an NFT to bind with an IPFS URL such that you own the resource but the copy of the JPEG is a different resource. 

In this scenario, the URL bound to the token becomes worth $69 million whereas the URL corresponding to the copy is basically worth $0. Essentially it’s the token minted by Beeple that “makes” the artwork worth $69 million more than a copy of the digital artwork. 

Double-spend scenarios

However, purely from a technical point of view, an artist or another actor can double-spend a digital object on (a) the same blockchain (b) on a different NFT platform (c) on a different blockchain. 

Further, multiple non-fungible tokens can be mapped to the same underlying digital file or IPFS URL or to different copies of the same digital file. Indeed, on-chain ownership is not sufficient for off-chain objects unless the legal framework governing the rights of an NFT owner respects and enforces these rights in the off-chain world.

I might own a Beeple artwork on Ethereum but Justin Sun might mint the Beeple artwork on the Tron blockchain and thus claim ownership of the artwork anyway. A court in the U.S. might enforce MetaKovan’s rights, whereas a court in Macau might decide in favor of Sun. 

NFTs and contracts

So when you buy an NFT, what do you really get? The answer is, it depends. In one of my discussions with Vinay Gupta of Mattereum, he pointed out that in the case of NBA Top Shot, you own a “worldwide, non-exclusive, non-transferable, royalty-free license to use, copy and display the art for personal, non commercial use … or to purchase or sell on a marketplace that meets conditions specified … ” and so on, as described in the NBA Top Shot’s Terms of Use.That means in any of the above double-spend scenarios, what I own could depend on what an NFT marketplace will do to honor and enforce my rights. 

NFTs as Ricardian contracts

It’s unclear what happens if a web-based platform used to buy and sell NFTs updates its terms of use. Does that update alter my rights as I understood them when I paid for the digital collectible? The answer is unclear. It’s possible that if the terms of use themselves are off-chain, such terms of use and therefore the rights they assign are not immutable.  

Fortunately, in the blockchain world there’s already a design pattern called “Ricardian contracts” that provides self-contained enforceable contracts implemented in source code. Ideally, NFTs should be implemented as Ricardian contracts that define the terms and governing law in the preamble and then use these definitions to impart rights and obligations in the source code that follows.

In case of a dispute, courts can refer to the source code itself and not have to rely on the website terms of use and such. 

The long-term value of NFTs

NFT platforms are doing three critical things. First, by creating a large, digitally native market for off-chain assets using on-chain tokens, these platforms are providing a proof of value for bringing other off-chain assets such as land titles, cars, houses and bonds – basically everything of any value on to Web 3.0. 

Second, by building robust, scalable infrastructure for minting, trading and settling NFTs on-chain, NFT platforms are bringing ordinary, nontechnical people to crypto platforms in the way nothing else has so far.

I’d not be surprised if 100 million new people become comfortable with using wallets like Metamask and DeFi products this year and next year because they want to trade digital collectibles. 

See also: Jeff Wilser – How NFTs Became Art, and Everything Became an NFT


Third, by sparking debates such as the one contained in this article, NFTs will force common and civil law frameworks to align off-chain rights with onchain rights. Before NFTs, this has not been the case. If degens lose their bitcoin or USDC (+0.06%), they lose it and courts and legislators aren’t particularly called upon. 

On the other hand, if investors, asset managers, grandma and grandpa lose their Beeples or Top Shots to a double-spend, they will vote and these votes will force legislators to create laws that enforce their rights. 

Essentially, with NFTs we are looking at technical consensus evolving into a market which in turn forces the social consensus. While I may personally prefer to own FLOW and ETH than Beeples and Top Shot moments, it’s the Beeples and Top Shot moments that have suddenly accelerated Web 3.0 like nothing that came before.

This is why I am so excited about NFTs.

Cryptocurrency exchange Coinbase has filed an amended prospectus for its much-anticipated public offering with the U.S. Securities and Exchange Commission.

• The S-1a form, published Wednesday, states Coinbase plans the resale of 114,850,769 shares of Class A common stock for a proposed maximum offering price of $943,218,155.
• That value is only a guide because it will depend on the pricing of the shares at the time of the offering.
• The offering would take place on the Nasdaq Global Select Market with the ticker symbol “COIN.”
• No date has been provided for the offering in the filing, though it is expected within weeks.
• The company will be treated as an “emerging growth company.”
• Bloomberg has put the firm's valuation at near $100 billion.
• In financial details provided in the prospectus, the exchange says it took $1.14 billion in net revenue for 2020 and held assets worth $90.3 billion. It now has 43 million verified users.
• As reported by CoinDesk previously, the firm's prospectus provides a long list of risk factors, including decentralized exchanges and the identify of Bitcoin inventor Satoshi Nakamoto being revealed.
• Rumors first emerged Coinbase was exploring a direct listing on a U.S. stock exchange last summer, though the company didn’t confirm the news until December. 

See also: Coinbase Is Going Public: Everything You Need to Know

• Michael Burry subtly criticized non-fungible tokens (NFTs) this week.
• "The Big Short" investor shared a quote comparing NFTs to "magic beans."
• Burry has blasted Tesla, bitcoin, Dogecoin, GameStop, and other popular bets this year.
• See more stories on Insider's business page.

Michael Burry isn't a fan of non-fungible tokens (NFTs), if his Twitter profile is any indication.The investor has changed his header image to a screenshot of this quote:

"NFTs exist so that the crypto grifters can have a new kind of magic bean to sell for actual money, and pretend they're not selling magic beans.

"The quote is from "NFTs: crypto grifters try to scam artists, again," an article posted by David Gerard on his "Attack of the 50 Foot Blockchain" blog last week. Gerard is the author of a book with the same name as his blog, which tackles bitcoin, smart contracts, and other cryptocurrency topics.The quote shared by Burry is a "correct description of the process," Gerard told Insider in an email.

"The crypto world has always been about creating a new kind of worthless magic bean to sell for actual money - first bitcoins, then altcoins, then ICO tokens, then DeFi, now NFTs."


"You *could* say something is worth what someone will pay for it; but it's *also* fair to state that the intrinsic value of these things is zero," Gerard continued.

 "And you can definitely get rich with them, but you're much more likely to lose your shirt."NFTs serve as virtual certificates of ownership and authenticity for digital items, and are stored securely on a blockchain.

They're getting lots of attention after a digital art NFT was sold for $69 million at a Christie's auction last week.Tesla CEO Elon Musk, Twitter CEO Jack Dorsey, "Shark Tank" star Mark Cuban, and other high-profile figures have also discussed and dabbled with the technology in recent days.

However, critics question the value of NFTs given it's virtually impossible to stop others copying, downloading, and sharing digital images and videos.

Moreover, Gerard argues on his blog that NFT proponents are using artists as "aspiring suckers" to pump cryptocurrencies, and handing them "crumbs" for their efforts.

Burry is best known for his billion-dollar bet against the US housing bubble in the mid-2000s, which was chronicled in the book and the movie, "The Big Short.

" He's slammed popular investments including Tesla, GameStop, bitcoin, and Dogecoin this year, and warned investors against buying into speculative bubbles.

The Scion Asset Management boss recently signaled he was taking a break from tweeting. However, the latest change to his Twitter profile suggests he still wants to have his say.