The industry is also waiting for Elon Musk to unveil the forthcoming Web3 version of Twitter, an analyst said.
Cryptocurrency prices were mixed Monday as investors braced for another week of earnings reports and the Federal Reserve’s upcoming interest rate decision.
Bitcoin was up 2.5% to $38,893, according to CoinGecko, while ethereum advanced 2.5% to $2,827 and dogecoin was off 1% to $0.13084.
‘De Facto Town Square’
Winston Ma, managing partner of CloudTree Ventures, Author of “The Digital War – How China’s Tech Power Shapes the Future of AI, Blockchain and Cyberspace”, said the crypto industry is waiting for Tesla (TSLA) – Get Tesla Inc Report CEO Elon Musk to unveil the forthcoming Web3 version of Twitter (TWTR) – Get Twitter, Inc. Report.
Twitter recently agreed to Musk’s $44 billion takeover bid to buy the microblogging site and take it private. Musk has described Twitter as the “de facto town square” of the internet.
“One potential change Musk floated was making the Twitter feed algorithm ‘open-source’, as open-source coding is the key to the decentralized ethos underpinning many blockchain applications,” Ma said.
He added that Twitter has already been funding a decentralized social media project called Bluesky, which is building a “decentralized protocol for public conversations” that will allow users to control their relationships with audiences and let developers innovate on top of the protocol without needing permission.”
Bluesky said recently in a tweet that it is “an independent company focused on decentralized social network R&D.”
“Twitter’s funding of Bluesky is not subject to any conditions except one: that Bluesky is to research and develop technologies that enable open and decentralized public conversation,” Bluesky said.
‘Demand Quickly Overwhelming Supply’
“Web3 developers are working on decentralized social media projects, so the question is whether Twitter will soon become the leading decentralized player in the space?” Ma asked. “Days before the sale, Twitter announced USDC stablecoin payments for the platform’s content creators. Twitter’s recent crypto integrations also include NFT profile photo verification and BTC tips for creators.”
Ma added that the potential for a “decentralized Twitter” would inspired crypto players to innovate at the town square.
Meanwhile, David Lesperance, managing partner of immigration and tax adviser at Lesperance & Associates, said energy hungry crypto miners are increasingly scrambling to stay ahead of dwindling available electricity resources.
“Even with a move from ‘proof of work’ to ‘proof of stake’ gathering momentum, jurisdictions such as Texas and even Patagonia are warning about demand quickly overwhelming supply,” he said.
The Electric Reliability Council of Texas said recently that it expects crypto miners to increase electricity demand by up to 6 gigawatts by mid-2023, Bloomberg reported, more than enough to power every home in Houston.
Geo-Political and Sovereign Risk
Lesperance said major crypto mining operators should be planning on establishing themselves in jurisdictions that offer renewable green energy sources which are scalable to meet current and future needs.
The jurisdiction should have a rule of law to protect the significant capital investment required and should not be subject to geo-political or sovereign risk, he said.
“Geo-political and sovereign risk is the most obvious and immediate, having dramatically impacted crypto miners in China, Kazakhstan and Russia in the last year alone,” Lesperance said. “However, moving to jurisdictions where domestic non-crypto consumption needs may leave crypto-miners without a guarantee steady electricity supply are still a major constraint on long-term viability.”
He said this is why countries which have geo-thermal energy are increasingly attractive.
“That leaves the miner’s opinion of the stability of the rule of law as the decider between Central American jurisdictions like El-Salvador, Costa Rica and Nordic countries like Iceland or Norway,” Lesperance said.
