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Happy Friday•February•17 to our 115,133 readers. We're here with Masterworks — the first investment platform for buying and selling shares of valuable artwork: masterworks.com

Rushe Brady, Jon Selzer, Linda Pacheco

STAKING

Staking is not a security . . . as explained by Coinbase

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The Securities & Exchange Commission [SEC] of the United States has started doing what many already expected—heavy-handed regulation.

And the agency chose ‘staking on centralized exchanges’ as a target.

But Brian Armstrong [CEO at Coinbase] argues that the SEC's rules to identify a security don't apply to crypto staking.

1) Staking is not an ‘investment of money’.

Users may be getting a return on their staked crypto, but they’re not losing what they deposited, and they own the same thing they did before.

2) Staking does not have a ‘common enterprise’.

That’s a term to describe how investors’ returns depend on the company offering it. But a blockchain doesn't dictate which staker gets chosen. Instead, a protocol randomly chooses a validator [staker] based on the tokens they have staked.

3) There’s not a ‘reasonable expectation of profits’.

People buy an asset for 1 of 2 reasons: they want to make money from it, or they want to use it or consume it. But staking is unique because people can also stake their crypto as payment for validating transactions on a blockchain.

4) Staking rewards do not depend on the ‘efforts of others’.

Staking rewards don’t require that other people do something, but rather the rewards are automated by a blockchain protocol (or a smart contract).

Continue reading cryptoslate.com

BITCOIN

El Salvador will soon open a Bitcoin Embassy in Texas

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El Salvador is set to open its second Bitcoin Embassy—this one in Texas—following the opening of its first in Lugano, Switzerland.

El Salvador's Ambassador to the U.S., Milena Mayorga, met with representatives from Texas to discuss the expansion of commercial and economic exchange projects, as well as the opening of the embassy.

El Salvador made history by becoming the first country to adopt bitcoin as legal tender and has since made moves to create the world's first bitcoin-backed sovereign debt bonds and host successful conferences.

Continue reading bitcoinmagazine.com

Q&A

What is «Liquid Staking»?

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If you don't want to lock up your crypto, «liquid staking» is the answer because you can earn a derivative token [receipt for your deposit] that can be used in other DeFi applications.

An example. When users stake Solana on Marinade Finance, they earn Marinade SOL [mSol], a yield-bearing token they can use on other DeFi platforms for increased yield. It's like earning interest on interest.

In liquid staking, you are not subject to early withdrawal penalties as with ‘locked staking’. If locked staking is like a 12-month CD, liquid staking is like a savings account that lets you deposit and withdraw any time.

• Liquid staking lets you buy and sell when the market makes sudden movements.

Staking provides the benefit of “having your crypto work for you” by using your money to make more money.

Continue reading finoa.io

THIS WEEK WITH MASTERWORKS

WiFi + 7 Minutes = Profit

Beeeeeeeep—that's not a typo. It’s the sound of your investments flatlining from a stagnant stock market, crypto winter, and the worst inflation in 40 years.

Time to shock it back to life

Try an asset that the wealthy use to boost their earnings—contemporary art. In the last 25 years it outpaced the S&P 500 by 164%.

• But wait, we're not talking about buying an entire piece of artwork for millions of dollars.

You just need the Masterworks platform where you can buy and sell shares of the artwork. Since launching, Masterworks has delivered a 29% average net realized return.

It's time to try a different investment.

HEADLINES

UK law enforcement and regulators will dismantle illegal crypto ATMs

UK authorities raided properties around Leeds that operate illegal crypto ATMs. The raids were conducted by the Financial Conduct Authority [FCA] and West Yorkshire Police's Digital Intelligence Unit. No crypto ATM operators in the UK have FCA registration.

Arbitrum surges ahead as Ethereum’s Layer 2 landscape takes shape

Arbitrum is the fourth-largest blockchain in terms of total value locked [TVL] into its network. It has seen a surge in growth due to its decentralized nature and perpetual exchange, GMX, which accounts for 30% of Arbitrum's TVL.

WORLD

Portugal. ‘Block 3000: Blockchain Battle’ is a large conference taking place July 6-7 at Altice Arena in Lisbon, Portugal. It will include speakers from various fintech and blockchain companies, influential media figures, and blockchain thought leaders. New blockchain projects will be announced.

United Kingdom. The 6th Edition of the Blockchain Economy Summit is scheduled for February 27-28 in London with more than 3,000 attendees from 65 countries. The crypto & blockchain conference will discuss topics such as investing, security, DeFi, Bitcoin, and Blockchain Gaming.

CHART

DICTIONARY

Cold Wallet

A «cold wallet» is a cryptocurrency wallet that's not connected to the Internet [not online]. «Cold wallets» typically come in the form of hardware wallets, which are small physical devices that store your crypto private keys.

VIDEO

What is a Cryptographic Hashing Function?

7min : 7sec

What is the math and algorithm that is occurring when someone mines for a bitcoin?

This video explains how cryptocurrencies offer security and trust through some very complex math. . .

Video by Whiteboard Crypto

TUTORIAL

Understanding Blockchain Consensus Algorithms

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Summary

This PDF tutorial explores the different types of blockchain consensus algorithms and their advantages and disadvantages.

Key Concepts

1. Proof-of-Work [PoW] is the earliest consensus algorithm used to secure Bitcoin.
2. Proof-of-Stake [PoS] and Delegated Proof-of-Stake [DPoS] were originally created as alternatives to PoW.
3. Proof-of-History (PoH) is a consensus algorithm that seeks to reduce the burden on network nodes.

Key Objections

1. PoW is computationally intensive and requires a large amount of energy.
2. PoS is less secure than PoW and can lead to centralization of the network.
3. DPoS is fast and efficient but is considered less secure than PoW or PoS.

That's your intro. Now keep going with this tutorial from Cryptopolitan.

Read the 4-page PDF.

CRYPTOCURRENCY

Polygon [MATIC] announced that its ‘zero-knowledge Ethereum Virtual Machine [zkEVM]’ beta main network will go live on March 27. Polygon's zkEVM testnet went live last October, enabling Ethereum developers to move their smart contracts from the main blockchain without needing to reprogram them.

Bitcoin [BTC] Ordinals, a Bitcoin-based non-fungible token protocol, has been active for two months and has earned miners $600,000 in BTC transaction fees. Ordinals is the first non-monetary use-case for the Bitcoin blockchain, and occupy 50% of its block space, causing an increase in active users.

NON-FUNGIBLE TOKEN [NFT]

[Blur] Escalates royalty fight with OpenSea as it launched a ‘royalty-optional model’ and expanded royalties to permission NFTs. Now, to collect full royalties, creators must blocklist OpenSea, which enforces full royalties for new projects. Artists cannot receive royalties from both OpenSea and Blur at the same time.

[BAYC] Bored Ape Yacht Club Owner burned a $169,000 NFT to move it from Ethereum to the Bitcoin blockchain. The burn used a newly developed feature for Ordinals named Teleburn. Teleburn allows users to assign an existing asset from another network to a Bitcoin Inscription while removing it from circulation.

"I am always doing that which I cannot do, in order that I may learn how to do it."

Pablo Picasso

Spanish Painter (1881-1973)

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 Editor: Rushe Brady

 Writers: Jon Selzer & Linda Pacheco

 Research: Avory Gallegos

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