Blockchain Bites: Canaan’s Plunge, Revolut’s Control and Lightning Nodes in Africa

Canaan Creative’s stock dipped below $2, its lowest price since the firm went public in November. Experts say demand for new mining equipment may have weakened after the Bitcoin network’s halving event in May.

Meanwhile, the U.S. Air Force is using a blockchain startup to monitor its supply chain logistics, and an IT professional released a Bitcoin and Lightning node tool kit to spread the technology throughout Africa. Here’s the story:

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Emerging Markets
BlockSpace Technologies Africa Inc., run by IT guru Chimezie Chuta, has released a kit for a Bitcoin and Lightning node, including all the hardware pieces for assembly, called SpaceBox, in the hopes of expanding the technology’s use across the continent. According to Lightning Network Explorer, there are eight nodes total in the second most populous continent. Meanwhile, WhatsApp rolled out a Facebook Pay feature in Brazil, two years after it beta tested the feature in India, which makes sending and receiving money “as easy as sharing photos.” It’s unknown how this will affect the development of Libra, the stablecoin also bolstered by Facebook. (TechCrunch)

Equities
Tokensoft, a digital securities platform for enterprises and financial institutions, has partnered with New York-based Signature Bank in a bid to make security tokens click for real estate investors. Most of Tokensoft’s customers are mid-sized funds, meaning the platform will be handling larger transactions with lower volumes. Meanwhile, shares of Canaan Creative, one of the few publicly traded crypto miner manufacturers, plummeted below $2, its lowest price since going public in November. The Nasdaq-listed stock has been steadily falling since the bitcoin halving on May 11, which likely softened demand for new bitcoin mining machines.

Crypto Trading
Revolut, a FinTech bank, said it will cede its status as the “legal owner” of the five cryptos it offers to clients who purchase them next month. There’s a catch: Users “can’t transfer cryptocurrency to anyone who is not a Revolut customer,” the updated terms and conditions read, detailing that while users “have complete control” of their crypto, they “will not be able to carry out transactions” themselves. Meanwhile, Capital One Services, a subsidiary of U.S banking group Capital One, said its newly patented artificial intelligence (AI) system would save human crypto traders from potential pitfalls by “analyzing [the] credibility of cryptocurrency-related information.”

Blockchain Services
SIMBA Chain, a blockchain-as-a-service company with ties to the Department of Defense, has two years and $1.5 million to research and develop a blockchain for supply chain logistics for the U.S. Air Force. The firm will stand up a Hyperledger Fabric node at Oklahoma’s Tinker Air Force Base as part of the agency’s risk management strategy. Separately, blockchain payments provider Bitpay has launched a prepaid debit card enabling U.S. customers to spend their crypto holdings as fiat currency. Elsewhere, Alex Masmej unveiled “control my life,” a way for holders of his personal cryptocurrency, $ALEX, to vote on what he does with his time. (Decrypt)

Institutional Interest
Over a recent 30-day period, the total open interest for CME bitcoin options increased more than tenfold, from $35 million on May 11 to $373 million on June 10. Moreover, open interest made a new all-time high on six consecutive days from June 5-10. Significant growth in CME futures points to rapidly growing interest by institutional investors in trading regulated bitcoin derivatives products. Elsewhere, MakerDAO and Lightning Labs are in World Economic Forum’s list of tech pioneers for 2020 (The Block)

US Supreme Court’s Computer Fraud Ruling Has Big Implications for Crypto
Andrew Hinkes, attorney with Carlton Fields, spells out how the U.S. Supreme Court’s hearing this summer on a key interpretation of the 1986 Computer Fraud and Abuse Act will affect the crypto industry. This law bars “accessing a computer without authorization.” A broad or narrow interpretation could criminalize common conduct or lead to increased protections for crypto users in cases of insider theft. “The outcome could have big implications for the cryptocurrency industry, which increasingly relies on legally enforceable privacy rights and the power of the law to ensure that intermediaries properly secure their customer’s digital assets,” Hinkes said. 

Going Negative Could Be Positive 
Whether or not the Federal Reserve eventually cuts interest rates to negative levels, it might be a case of heads, bitcoin wins; tails, bitcoin wins. Cryptocurrency analysts have said negative rates are a form of ultra-loose monetary policy, which should push inflation higher, potentially catalyzing interest in bitcoin, seen as an inflation hedge. But bitcoin might trade higher even if the Fed rejects negative rates outright because the U.S. central bank would instead probably just inject trillions more of freshly-created dollars into the financial system. Get the full First Mover report in your inbox.

Tracking Stocks
Bitcoin clocked highs near $9,600 this morning, having trapped bears on the wrong side of the market with a brief dip below $9,000 on Monday. Analysts say a risk reset in the traditional markets fueled bitcoin’s rise from $8,900 to $9,580 in the last 24 hours, as traditional equities also turned green. “Bitcoin has regained poise, possibly tracking the recovery in global stock markets,” said Asim Ahmad, co-chief investment officer at London-based Eterna Capital.

Dormant Coins
In other news, more than 60% of all bitcoins have not moved in at least a year. This suggests bitcoin ownership is consolidating, and investors who bought at the cycle bottom in 2018 have been reluctant to take profits and relinquish their bitcoin holdings. It’s been over four years since a percentage of supply this large has been inactive. 

Sorry, Bloomberg: Here Are 6 Reasons Why 2020 Is a Great Year for Bitcoin
Yesterday, a Bloomberg senior editor examined the “six reasons why 2020 was bad for bitcoin.” NLW responds with his own reasons why a year that saw economic uncertainty and new industry entrants has proven bitcoin’s resilience.