Welcome to my newsletter! This first entry will be rough as I attempt to improve my writing and figure out what it is people want to learn or talk about. Enjoy the first of many.
Bitcoin’s new ATH
So the last couple of weeks have been eventful to say the least. Bitcoin jumped ~$20k in value and reached an all-time high of $66,974. This is another major recovery in the lifetime of bitcoin, with some of the previous highlights being a drops like:
$20 → $2
$1150 → $178
$19,700 → $3250
However, if the past can indicate anything about what can potentially come (yes, yes, past performance does not predict future results) then we are in for a wild ride and this is only the beginning. Q4 is far from over!
Coinbase NFT
Coinbase investing in the NFT space is not surprising given its strong customer base (68M users) and the crazy transaction volume seen on OpenSea ($3.4B in August alone) for NFT's. They have huge potential to take a large slice of this segment of the crypto market. As of today (21st Oct) over 1 Million users have signed up to the waiting list for Coinbase NFT, to put this in context OpenSea had ~440K users in the last 30 days or so.
The hype around NFT's continues to grow as more influential figures show their support (Mark Cuban, Jack Dorsey, and even Snoop Dogg) by investing in various NFT projects. The bragging rights and sense of community that comes from owning an NFT is a huge draw to internet-investors. Twitter is even looking to implement a feature in the future that will validate a user as the owner of their NFT on the blockchain when it's set as their profile picture.
As Coinbase looks to take market share from OpenSea, it appears like it will continue with its current model which made them successful in the crypto investment space, simplicity. Currently users would have to install MetaMask or other tools to purchase Ethereum and then purchase an NFT, Coinbase however will more than likely streamline this process through integration with its core service to offer a simpler interface and transaction process for its customers.
A big issue for NFT creators at the moment are the high gas prices. Gas prices are the cost of the computing energy required to process and validate transactions on the Ethereum blockchain and this is raising the barrier of entry for artists looking to make money off their work. Coinbase could potentially look to shift some of this cost off the users themselves with the aim of increasing transaction volume through its platform. However given the amount of people who are looking to use their platform (1M Users) then they may not even need to offer anything more than a streamlined application for users to move from OpenSea.
Coinbase’s entrance into this market might not be all good news. Seasoned crypto investors know that security and storage is a major issue surrounding the protection of your investments. For example, between 2011-2018 it was estimated that $1.65B worth of cryptocurrency was stolen. Casual or new investors might not ensure that they have the correct security measures in place (complex passwords and 2FA). They will have to do their due diligence and choose an appropriate storage option for them.
Users must ensure not to leave their NFT’s sitting on exchanges and should move them to cold storage (Ledger wallet for example). It wouldn’t be surprising if you see an increase of phishing and hacking attacks around the time it goes online.
One thing regarding this announcement that I have noticed is that people on twitter are discussing whether it is “wrong” to create a competitor when you are invested in something. Coinbase is an investor in OpenSea and although some may see it as such, I disagree. You can invest to help get a project off the ground but if that project isn’t fulfilling what you expected of it (or you believe you can deliver a better product to customers) then there is nothing stopping you from doing that. In the end Coinbase monitored the market until they saw enough of an opportunity to capitalise and utilise their large customer base.
Overall this is a great win for the NFT space, this expansion adds another layer of “credibility” for those who have invested a lot of time, effort, and most importantly, money. It will be interesting to see what way Coinbase takes this and what the outcome of that decision will be for the NFT market as a whole.
CreatureToadz Theft (& return)
In what was a crazy couple of hours, a hacker managed to gain access to the CreatureToadz community discord by compromising an admin user and sending out a fake announcement regarding the minting of Toadz. The users ended up sending a “fee” of 0.1ETH to the hackers wallet and no Toadz were actually minted. Although the discord admins regained control quite quickly, the damage was done and around 88ETH (~$330,000) was stolen. The vulnerability that was exploited was found to lie in a discord web-hook vulnerability so if you are part of a discord community I’d recommend disabling it for now.
You can read the full investigation below:
To give a TLDR; the hacker turned out to be a 17 year old who was “bored”. In a crazy turn of events, during a Twitter Spaces call, the hacker reached out to an admin and returned all the stolen ETH. Now whether this was out of goodwill, or fear of the consequences, we won't know. But this story does go to show the power and the pitfalls of crypto and its communities.
The reaction of the community, coming together to find and expose the hacker, showcases why NFT’s and NFT projects are the future. You are not just buying a piece of digital art, but rather access to a community of like-minded people.
It’s important to finally note that although I am highlighting this particular case, other large projects like NBA Topshots, IMX Bears and MaskByte were also targeted by the same exploit too.
Final Thoughts
From everything I have seen the last while I believe we will see another ATH hit before the year is out, bitcoin is going to follow the trend is has previously after a dip and grow exponentially.
As for NFT’s, the market is new and extremely volatile, but I believe it will continue to revolutionise art and how artists can interact with fans. This is something I will be researching a lot more before I commit to any particular NFT projects myself.
Oh, and if you spotted any grammar errors here, no you didn’t. Thanks for reading.