Ten31 Timestamp 771,058
This week marked both a new year and the 14th anniversary of bitcoin’s Genesis Block, which is an opportunity to appreciate the remarkable achievement of the bitcoin network. Through counter-party failures, mining bans, political and corporate criticism, tumultuous financial markets, internal squabbles, a deluge of altcoin noise, and untold other headwinds, the network has consistently produced a new block approximately every 10 minutes to settle nearly $40 trillion in cumulative change-adjusted volume, all in truly decentralized fashion. Going into its fifteenth year, bitcoin continues to prove itself to be the most dependable and robust foundation for building the financial infrastructure of the future.
As a reminder, Ten31 will participate in next week’s Nashville Energy & Mining Summit at Bitcoin Park, which will be packed with great discussions and will include representatives from several of our portfolio companies.
Selected Portfolio News
Fedi launched a hackathon with a prize of 2.1 bitcoin for developers building modules for Fedimint:
Through the end of January, Fold is offering rewards (including a free year of Spin+ membership) for buying bitcoin through the Fold app:
Zaprite was featured in this month’s issue of Blockstream’s Layer 2 Roundup:
Media
Ten31 Advisor Parker Lewis published a new entry in his Gradually, Then Suddenly series. The latest installment dispels misconceptions of bitcoin as a traditional financial “hedge.”
Representatives of Ten31 portfolio companies Hodl Hodl, Start9, Strike, and Fedi all made appearances on a marathon episode of Why Are We Bullish? with BTC Sessions.
Jeff Vandrew of Unchained Capital made an appearance on the Bitcoin Review podcast to discuss bitcoin estate planning and inheritance considerations.
Oshi founder Michael Atwood joined the Bitcoin Boomer Show to discuss the genesis of Oshi and the power of bitcoin for local communities.
Market Updates
Hashrate recovered in a dramatic turnaround following the arctic blast that ended 2022, leading to a downward difficulty adjustment of only 3.6% vs the ~12% estimated over the holidays.
Bitfarms announced CEO and co-founder Emiliano Grodzki has resigned and will be replaced by Geoffrey Morphy, the company’s COO.
Core Scientific said it would unplug 37,000 ASICs it was previously hosting for the bankrupt “crypto” lender Celsius.
Celsius made additional headlines this week when a bankruptcy judge ruled that $4.2 billion in platform deposits are the property of Celsius rather than their ~600,000 depositors, the latest reminder of the critical importance of self-custody.
Silvergate Bank announced that it experienced withdrawals of $8.1 billion during the fourth quarter of 2022 amid the turbulence touched off by FTX’s collapse. The company also announced it had cut 40% of its staff, but pointed out in a separate release that the bank was able to endure significant deposit outflows while maintaining balance sheet cash in excess of digital asset related deposits.
It was a big week for Digital Currency Group (DCG). Three Gemini Earn users filed a request for class action arbitration against DCG and its subsidiary Genesis due to the latter’s November decision to freeze withdrawals, which in turn led to the suspension of Gemini Earn.
Meanwhile, Gemini co-founder Cameron Winklevoss posted an open letter to DCG CEO Barry Silbert alleging DCG has sandbagged the resolution process for Gemini Earn.
Separately, Genesis announced it would cut 30% of staff and consider bankruptcy, and DCG made the decision to shutter its wealth management division.
At the end of the week, sources reported that the SEC and the DOJ are in the process of investigating financial transfers between DCG and Genesis, though neither entity has been accused of any wrongdoing.
Regulatory Update
A group of major US bank regulators (the Federal Reserve, FDIC, and OCC) issued a joint statement about the “crypto” industry’s interaction with traditional financial institutions.
Coinbase agreed to pay a $50 million fine for insufficient KYC as part of a settlement with the New York state government. The exchange also agreed to invest an additional $50 million into customer surveillance.
Bitcoin Magazine published an overview of recent adversarial regulatory trends for mining in Canada, including British Columbia’s decision to suspend new mining connections to the province’s electrical grid for 18 months.
Noteworthy
Total bitcoin transfer volume amounted to nearly $15 trillion in 2022, another all-time high for the network despite unfavorable price action for most of the year.
A new client for Samourai Whirlpool written in Rust was released, which will allow for easy Whirlpool integration into Rust-based bitcoin wallets.
Travel
Nashville BitDevs, January 10
Nashville Mining and Energy Summit, January 12-13
Austin BitDevs, January 19
Austin Ten31 Tribe event, March 16
Nashville Ten31 Tribe event, June 14