Crypto traders can be an ungrateful lot. “WHEN MOON?” you see them screech, exhaustively, in Telegram groups—more a demand that moderators find some way to pump the coin’s price than an earnest question.
But this Thanksgiving, as traders sit slumped with their families, flicking Decrypt’s refresh button under the table and try to get out of saying grace, Decrypt has seven things they might give thanks for this year.
1. Decentralized Finance
O Lord, thank thee for DeFi, the upstart industry of non-custodial financial products that paid for the turkey of many a crypto trader this year.
Decentralized finance—mostly exchanges (like Uniswap) and lending protocols (such as Aave, Compound, and Maker)—took off this summer after Compound in June introduced “yield farming.”
Yield farming refers to the extra crypto tokens issued by Compound to anyone who used the service. These tokens, tradable on secondary markets, took off; other protocols followed suit throughout the summer, and annual returns (while highly volatile) were sometimes in the thousands of percent.
Stani Kulechov, founder of DeFi lending protocol Aave, told Decrypt that 2020’s DeFi scene showed that crypto finance “can be more extensive than simple payment transactions that we typically have seen with Bitcoin for the past decade,” and that it “brings the ability to interact with transparent finance without giving up custody with equal access.”
Sergey Nazarov, CEO and co-founder of Chainlink, a decentralized oracle network, told Decrypt, “DeFi’s rapid adoption by existing crypto users signifies a clear need for truly trustless financial products. DeFi is successfully taking the blockchain industry beyond tokenization, into the world of financial services, which is actually a much larger global market.”
2. The Bitcoin Halving
Good things come to those who wait. In mid-May, the Bitcoin blockchain cut the number of Bitcoins it rewarded to miners for processing transactions in half. This measure, designed to constrict the supply of new Bitcoin, cut mining revenue in two. Not to worry. “Halving events are generally considered bullish,” Charles Bovaird, an analyst at Quantum Economics, told Decrypt, since they increase the scarcity of the cryptocurrency.
Indeed, this month, Bitcoin’s price went through the roof. At close to $20,000, Bitcoin has almost doubled in price since the start of last month, when a single Bitcoin was worth about $10,500. Mining revenues picked back up, too. Bitcoin’s halving could, in some way, be to thank.
3. PayPal's Crypto Play
Bitcoiners have gunned for mainstream adoption since Bitcoin’s release in 2008. This summer, prayers were finally answered when PayPal announced it would support cryptocurrency transactions.
In November, the payments giant rolled out the service to its US customers, who can now buy and sell Bitcoin, Litecoin, Ethereum, and Bitcoin Cash.
Mind you, they can’t transfer Bitcoin off of PayPal—instead, PayPal sells something analogous to an IOU note that represents a customer’s ownership of Bitcoin. Still, it’s good for crypto, said Bovaird, since it brings crypto to PayPal’s 300 million users. “PayPal's announcement that it will allow its users to buy, sell and hold digital assets is a great signal of adoption for the broader cryptocurrency industry,” he said.
“However, the largest impact is yet to come,” Joel Edgerton, COO of bitFlyer US, told Decrypt. The full force of PayPal’s move will be felt once PayPal opens Bitcoin up to its merchant network, said Edgerton. “It will reinforce that Bitcoin is not just a trading asset but also a currency with its own inherent value,” he said.
4. Jack Dorsey's Bitcoin Tour And Buy-in
Jack Dorsey, the CEO of Twitter, CashApp, and Square, has spent the year spreading the good word Bitcoin to anyone who’ll listen. He thinks the Bitcoin whitepaper is “poetry” and that the coin should be the “native currency of the Internet.” Dorsey traveled to Africa this year, where he saw ample opportunity for Bitcoin.
Dorsey’s payments company, Square, this summer invested $50 million in Bitcoin. The idea, according to an investment whitepaper, was to hold its wealth across different currencies—as well as fulfill a moral imperative. "We view bitcoin as an instrument of global economic empowerment; it is a way for individuals around the world to participate in a global monetary system and secure their own financial future. This investment is an important step in furthering our mission," it said.
Square’s Cash App, along with crypto firm Grayscale, bought up 50% of all new Bitcoin in the first half of this year. Dorsey only set up Square Crypto last March.
5. MicroStrategy's Bitcoin Spending Spree
Michael Saylor, CEO of tech firm MicroStrategy, has relentlessly tweeted about Bitcoin ever since the company invested $450 million in Bitcoin this summer. To Saylor, Bitcoin is simultaneously “a crypto-powered warp drive,” a “swarm of cyber hornets serving the goddess of wisdom,” and an “ark to avoid drowning in the currency flood.” MicroStrategy’s $450 million investment is now worth close to $1 billion. Bovaird considers Saylor’s decision “to be a strong sign of institutional adoption.”
6. Crypto's Celebrity Crush
Where MicroStrategy brought money, others brought fame. Tesla and SpaceX CEO Elon Musk’s tweets about Dogecoin caused its price to soar and Bitcoin fans lapped up Musk’s words when he called crypto “effectively a replacement for cash.”
“It only takes one tweet from Elon Musk simply saying 'bitcoin' for prices to start moving. Combine this with news reports of price action and the topic of crypto is brought to the forefront of people's minds,” Tomer Niv, eToroX’s Business Development Manager, told Decrypt.
JK Rowling further raised Bitcoin’s profile when she asked her millions of followers to explain Bitcoin. It didn’t go well: “Things like this are white noise to me. I cannot and will not ever understand Bitcoin, but I love you for thinking that I can or will,” she tweeted. Still, all publicity is good publicity.
Recently, Game of Thrones star Maisie Williams asked her fans if she should invest in Bitcoin. Sure, over 50%, or half a million people, said she shouldn’t, but at least Bitcoin momentarily breached the consciousness of her 2.4 million followers. In any case: “I bought some anyway,” she tweeted.
should i go long on bitcoin ?
— Maisie Williams (@Maisie_Williams) November 16, 2020
7. The (Near) Launch of Ethereum 2.0
Ethereum 2.0, the long-awaited and much-delayed update to the sluggish, expensive, and fit-to-burst blockchain network, Ethereum, is finally on the horizon. This week, investors locked up enough ETH in an ETH 2.0 smart contract to start a several-years-long process to upgrade the network.
The upgrade will shift the consensus mechanism from proof-of-work to a more energy-efficient proof-of-stake, increase the capacity of the network, and make it cheaper to use. If successful, this would resolve a major pain point on the network: transactions on Ethereum reached as high as $14 during the peak of this year’s decentralized finance craze.
Now, what will Santa bring?