Blockchain Bites: Magic's Raise, Compound's Distribution and Trump's Twitter War

In the war between Trump and Twitter, decentralized systems may win.

AccessTimeIconMay 29, 2020 at 4:54 p.m. UTC
Updated Dec 11, 2022 at 7:30 p.m. UTC

The case for decentralized platforms has never been clearer, as President Donald Trump goes on the offensive against big tech platforms like Twitter and Facebook, said lawyers and technologists surveyed by CoinDesk.

Meanwhile, decentralized identity service Magic has raised $4 million from heavy-weight investors including Naval Ravikant, SV Angel and Placeholder, and the Digital Dollar Project is making its case for updating the U.S. dollar with its first white paper. Here's the story:

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Top Shelf

Big Tech
U.S. President Donald Trump signed an executive order Thursday targeting Twitter and other social media platforms after Twitter fact-checked two of the President’s tweets, which seeks to amend Section 230 of the Communications Decency Act. Lawyers and technologists think the order is likely to fail, though it could have positive effects for the emerging decentralized web. Meanwhile, Twetch's Twitter account was suspended Thursday without warning, according to Twetch co-founder Josh Petty, and has since been reinstated without a follower count. Twetch offers alternative microblogging platform and actively markets itself against the San Francisco firm run by bitcoin enthusiast Jack Dorsey. 

Digital Identities
Magic raised a $4 million seed round from investors including Naval Ravikant, SV Angel, Placeholder, Lightspeed Venture Partners and Volt Capital to build a decentralized online identity and log-in service. Nuggets, a digital identity and payments platform, has developed a way to accept deliveries without needing a physical signature, using biom

Regulatory Matters
The Digital Dollar Project is proposing a framework for the creation of a U.S. central bank digital currency (CBDC). The group published its first white paper detailing how a digital dollar could help the U.S. maintain the dollar’s status as the world’s reserve currency. Around a dozen companies have a Gibraltar distributed ledger technology license, though the process is difficult, ZUBR, a crypto exchange, said. ZUBR’s approval is conditioned on addressing some of the regulator’s feedback by the time it gets its license. Meanwhile, Gibraltar Stock Exchange (GSX) Group’s digital securities platform has tokenized the shares of a client for the first time.

Open Finance
Users of the Compound lending platform will begin earning COMP tokens in mid-June, pending the public review of the decentralized finance firm’s distribution plan. Roughly 42% of the total supply of the governance COMP tokens will move into a reservoir pool and begin daily distributions to users of the protocol for the next four years. Coinbase Pro is adding support for MakerDAO’s native MKR (Decrypt) and expanding its Tezos staking service to the U.K., Spain, France and the Netherlands.

Crime Doesn’t Pay
BitClave, a California startup whose Ethereum-based search engine raised $25.5 million in a 2017 token sale, will pay back its 9,500 investors in a settlement with the SEC. A New York City man has been indicted for allegedly stealing and selling reams of payment card data, the proceeds of which he laundered in bitcoin.

Funded Through Crypto
Telegram messenger founder and CEO Pavel Durov reportedly donated about 10 bitcoin, approximately $90,000, to help alleviate the financial burden of the COVID-19 pandemic in Russia. A new series about blockchain project Dragonchain is premiering on Discovery, and it’s been fully financed with $1 million in crypto. Production house Vision Tree Media said Friday that its new “Open Source Money” documentary series, which will track crypto project Dragonchain, would debut on Discovery Science, a U.S. TV channel run by Discovery Inc., who also owns the Discovery Channel.

Opposite Editorial

How Contact Tracing Can Be Effective While Guarding Privacy
Vipin Bharathan, chair of the Hyperledger Identity Working Group, looks to decentralized technology as a solution for contact tracing’s divisive debate between public safety and privacy. “To preserve the privacy of users and to be useful at the same time is a challenge. Privacy is enhanced by decentralization, by key schedule design and minimal collection of data,” he said. 

What Goldman Gets Wrong About Bitcoin (From Someone Who Used to Work There)
Jill Carlson, a CoinDesk columnis and co-founder of the Open Money Initiative, examines all the ways Goldman Sachs abandons reason when denouncing bitcoin as a suitable investment. “It’s not worth detailing every misconception or failed bit of logic in the report. But a few are worth mentioning. Goldman’s argument that cryptocurrencies are not a scarce resource due to the ability to fork into “nearly identical clones” represents a shocking failure of research into the immense technical and cultural differentiations between the three examples that they offer (bitcoin, bitcoin cash and bitcoin sv),” she said. 

Market Intel

Consolidating Gains
Bitcoin’s bulls are taking a breather amid jitters in the traditional markets over rising tensions between the U.S. and China. The world’s biggest cryptocurrency is trading near $9,400 at press time, having posted an eight-day high of $9,620 on Thursday. Prices have gained 8% so far this week. While bitcoin looks to be consolidating on recent gains, major European stock markets are flashing red for the first time this week. Leading the way lower is Germany’s DAX, down 1.5% on the day, followed by France’s CAC, which is reporting a 1% decline. Across the pond, futures tied to Wall Street’s equity index S&P 500 are down 0.5%.

Exchange Exodus 
The total number of bitcoins held in cryptocurrency exchanges wallets dropped to an 18-month low just above 2.3 million on Monday. The decline marks an 11% year-to-date reduction in the number of bitcoins held by exchanges. “People are accumulating aggressively, and the market participants seem to have a higher time preference these days,” said Avi Felman, head of trading at BlockTower Capital.

COVID Relief


Crypto vs COVID Charity Poker Tournament
Hold ‘Em for a cause on May 31, when crypto figureheads come together to play poker for charity. Buy in with fiat or crypto for a chance to play against Ryan Selkis, Brock Pierce, Hailey Lennon, Ran NeuNer, Charlie Lee and more for a chance to win 2 bitcoin. 

Ante up at least one hour before first bet. 

CoinDesk Podcast Network

Too-Strong Dollar?
Brent Johnson has argued the big economic issue of our time isn’t inflation of the U.S. dollar due to excess money printing, but the havoc caused by a global system where the dollar keeps getting stronger and sucks up liquidity from the rest of the world. He joins The Breakdown to discuss the dollar’s role in a post-COVID world.


The Breakdown: Money Reimagined
As clarity emerges amid the COVID-19 crisis, what have we learned about the battle for the future of money? Does the dollar reign supreme, are the euro or China’s digital yuan gaining ground, or does an alternative like bitcoin stand a chance? 

The fourth and final episode of The Breakdown: Money Reimagined poses the big questions this podcast microseries has explored with speakers and panelists from Consensus: Distributed, CoinDesk’s virtual summit held May 11-15. 

These voices include former Treasury Secretary Lawrence Summers, the Winklevoss brothers, former CFTC Chair Christopher Giancarlo, Binance CEO Changpeng Zhao, YouTube influencer and beauty mogul Michelle Fan, The Chainsmokers, esteemed economist Calota Perez and more. Subscribe here.

Who Won #CryptoTwitter?

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