The Future of Money: The 3 New Ideas You Need to Know this Week (Issue 39 - 18 April 2021)

Dear Friends, 

Welcome back to my weekly newsletter where I share some of the major developments on the future of money that you need to know about!

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1. Coinbase’s Secret Message on the Blockchain

This past week’s Coinbase listing was obviously a major milestone in the history of digital assets.

Yet what may have slipped by under the radar is that Coinbase also published a secret message on the Bitcoin blockchain that references the record level of money printing going on around the globe. 

Coinbase revealed that it had asked Bitcoin mining pool F2Pool to embed a secret message that appeared in block 679,189 of the Bitcoin blockchain on the same day as its listing. 

The secret message refers to a recent title of the New York Times that reads “TNYTimes 10/Mar/2021 House Gives Final Approval to Biden’s $1.9T,” referring to the U.S. Congress greenlighting a $1.9 trillion stimulus program.

Source: Blockchair

Coinbase noted that their secret message is a bit of an homage to Satoshi Nakamoto, who also embedded a secret message (which refers to the UK bank bailout in the wake of 2008 banking crisis) in the very first Bitcoin block that he mined on January 3, 2009, which read:

Both hidden messages make rather oblique references to massive levels of quantitative easing and government spending, which many in the crypto community believe will lead to the continued devaluation of fiat paper money and an increase in the price of Bitcoin.   

Although Satoshi started the trend, other crypto miners have also used hidden messages to mark notable events in Bitcoin history. 

For instance, on the final block right before the Bitcoin reward halving in May 2020, a secret message was added to the coinbase that read:

There are numerous ways to encode messages on the blockchain, from fake Bitcoin transaction recipient addresses to miners inserting them in the coinbase field that provides for 100 bytes of arbitrary data. 

Messages over the years have varied from marriage proposals to Nelson Mandela tributes. 

Ultimately, this week’s message from Coinbase will remain in the Bitcoin blockchain forever, and sends a strong message about the vision of the future of money that many believe in. 

Source: Henri Arslanian GIF page

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Pic of the Week

2. Why the Fact That the New SEC Chair Used to Teach Crypto Matters

The US SEC has a new chair after Gary Gensler was confirmed by the Senate this past week. 

Many may already be familiar with Chairman Gensler from his long career as a banker (he was a partner at Goldman Sachs) and as a regulator (he led the CFTC from 2009 to 2014). 

There are also many interesting facts about him that the public might not be aware of.

For example, he wrote a book that argues that mutual fund managers consistently underperform the market and he also happens to be an avid marathon runner. 

But probably the most interesting takeaway for those focused on the future of money is that Chairman Gensler happens to be a Professor of the Practice of Global Economics and Management at the MIT Sloan School of Management and has been heavily focused on blockchain and crypto in recent years. 

In fact, you can find several of his lectures on these topics on YouTube:

This is extremely relevant, as crypto regulations have become a very hot topic and having an SEC chair who is well versed on these issues is obviously a big plus. 

In addition, there are a number of critical decisions that need to be made by the SEC in the coming months, from the potential approval of a Bitcoin ETF to the ongoing investigation against Ripple and some of its executives. 

And Gensler is not alone!

Some of the commissioners surrounding him, including Hester Peirce, also known as the Crypto Mom, have been very vocal supporters of the crypto ecosystem in recent years. 

(Fun fact, Commissioner Hester Peirce was the first person to receive a copy of my last book as I was meeting her literally 10 minutes after I received the first hard copies of my book!)

Whilst the U.S. has been seen as a laggard in recent years when it comes to crypto regulations, some of the developments in recent months, from the clarity provided by the OCC on allowing banks to hold stable coins to giving a bank charter to a crypto firm have definitely put it back in the leading pack.

This latest appointment may reinforce that position. 

Money Quote of the Week

 “I’m tired of hearing about money, money, money, money, money.

I just want to play the game, drink Pepsi, wear Reebok.”

Shaquille O’Neal

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3. How Many Times Has Bitcoin Been Declared Dead?

Many people have declared the death of Bitcoin. 

There have actually been so many “deaths” that there is a website that keeps tracks of them. 

Bitcoin's "death" can be tracked at Bitcoin Obituary, a parody website that collates news articles and blogs.

The digital asset has already been declared dead nine times this year and 14 times overall in 2020.

But the highest number of "deaths" it recorded (124) was in 2017, when its market cap hit $100 billion for the first time. 

Interestingly, the first time it was declared dead was when it was worth $0.23. 

As surprising as this may sound, Bitcoin has even been declared dead numerous times this year!

For example, in January 202, 82-year-old investor Jeremy Grantham said on Bloomberg that the asset has nil value (when Bitcoin’s price was around $33,000).

And in February, when Bitcoin was worth over $52,000, Nouriel Roubini argued that Bitcoin’s fundamental value is zero. (You can watch my FinTech Capsule interview where he also argues that here).

This drastic divergence of opinions is something that we should continue to expect for the coming years.

But that makes following this space even more exciting!

My Crypto Capsule Commentary This Week

My Upcoming Virtual Speaking Engagements

21 April - TMI - The Questions Every Treasurer Should Be Asking - Register here)

28 April - OMFIF (Digital Monetary Institute)

6 May -Financial markets Association of Singapore

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See you all next week!

Henri Arslanian

*Please note that this newsletter reflects Henri’s personal views and not those of any organisation he is involved with.

Who is Henri?

Passionate and focused on the future of finance and money, Henri Arslanian is the PwC Global Crypto Leader, the former Chairman of the FinTech Association of Hong Kong and an Adjunct Professor at the University of Hong Kong, where he teaches the first FinTech university course in Asia.

Henri advises many of the world’s leading crypto exchanges, investors, financial institutions and tech firms on their FinTech and crypto initiatives as well numerous governments, regulators and central banks on Fintech and crypto regulatory and policy matters.

 With over 500,000 LinkedIn followers, Henri is a TEDx and global keynote speaker, a best-selling published author and is regularly featured in global media, including Bloomberg, CNBC, CNN, the Wall Street Journal and the Financial Times.

Henri was named by LinkedIn as one of the global Top Voices in Economy & Finance and is the host of the FinTechCapsules? and CryptoCapsules? social media series.

Henri was recently named by Onalytica as the #1 most influential individual on Finance globally on LinkedIn out of 50k+ individuals working at the top professional services and management consulting firms in the world. 

Chambers Global also named Henri the “highest profile FinTech consultant in Hong Kong” and Asian Private Banker awarded him the “FinTech Changemaker of the Year” award.

Henri’s latest book, The Future of Finance: The Impact of FinTech, AI and Crypto on Financial Services, published by Palgrave Macmillan, was ranked as one of Amazon’s global top 10 best-sellers in financial services and was recognized as one of the “Best FinTech Books of All Time” by Bookauthority.

Before joining PwC, Henri was with a FinTech start-up and previously spent many years with UBS Investment Bank in Hong Kong. Henri started his career as a financial markets and funds lawyer in Canada and Hong Kong.

You can learn more about Henri on his website (www.henriarslanian.com) and you can reach him at [email protected]