?????Kalam Crypto #20: Ethereum 2.0 delayed, Bitcoin lightning network to disrupt global payments, and more
"The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust." Satoshi Nakamoto
Ahlan wa sahlan, and welcome to the 20th edition of CoinMENA’s weekly newsletter, Kalam Crypto. Every week we will bring you the latest news and developments from the exciting world of cryptocurrencies. This week, the Ethereum 2.0 upgrade is delayed, the Bitcoin lightning network aims to disrupt global payments, and stablecoins are on the rise. All that and more, so let's dive into this week’s letter, and talk crypto:
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Global News ??
Ethereum “merge” delayed: The much-anticipated upgrade to the Ethereum blockchain has been delayed from June till the end of the year. The “merge” is a fork event that will change Ethereum’s consensus mechanism from proof of work to proof of stake. The move is expected to reduce Ethereum’s energy consumption by 99%. This is not the first announcement of a delay, as the original target completion date was in 2019. On a positive note, this week, Ethereum developers successfully tested proof of stake on mainnet in what’s called a shadow fork. Shadow fork is an experimental exercise occurring on the mainnet instead of a test net. The tests were successful, with only some minor issues identified. A second shadow fork test will occur on April 22nd, and the outcome will be key in deciding the timing of the merge.
Keep an eye on ??
Stablecoins: Stablecoin's market capitalization is growing rapidly and has reached almost $200 billion, up from $40 billion last year. March alone saw a 26% increase in the on-chain volume of stablecoins compared to February.?
Record high inflation in the United States: The Consumer Price Index (CPI) soared to 8.5% this month, the highest inflation rate in over 40 years. This means the US Dollar is 8.5% less valuable today than what it was this time last year.
Luna acquired more bitcoin (again): The Luna Foundation Guard (LFG) acquired an additional $100M in BTC and now holds over 42 thousand bitcoin, worth $1.72B, making them the 19th largest HODLer of BTC.
Deep Dive ??
Lightning network aims to disrupt global payments: During the 2022 Bitcoin Conference, the CEO of Strike Jack Mallers, announced that they have partnered with Shopify, Blackhawk, and NCR to power transactions across the bitcoin payment rails using the bitcoin lightning network. It is important to understand that this innovation does not require the customer or the merchant to own or hold any bitcoin. Instead, dollar payments are being processed over the Bitcoin network.?
For example, a customer walks into a store to buy shawarma for $2. Previously, their options were to pay in cash or via card, but now you can pay via the Bitcoin lightning network. The customer scans the QR code to pay, the customer’s dollars are converted to bitcoin, transferred at the speed of light to the merchant, then converted back to dollars, and reach the merchant's account as dollars. Both the customer and the merchant don’t hold bitcoin for any amount of time. The dollar payment simply uses the Bitcoin network to transfer the value at the speed of light from customer to merchant, instant cash finality, with almost zero fees.
This is the first significant innovation in retail payments since the introduction of credit cards over 50 years ago! Currently, merchants pay Visa or Mastercard anywhere from 1.5% to 3% per transaction. The Strike announcement means that approximately 85% of all retail merchants in the United States, including McDonald’s, Walmart, and Starbucks, will be able to accept US dollars, euros, bitcoin, or any other currency without having to pay credit card fees to Visa or Mastercard.?
领英推荐
This announcement highlights the important fact that bitcoin is not just an asset that people hold as a store of value, it is also a payment network. It allows anyone in the world to send value to anyone else instantly and for almost zero fees.?
If you are a merchant, what would you prefer? Accepting payments instantly while paying almost zero fees, or the old legacy system of paying up to 3% in fees and waiting days for the intermediary banks to transfer the cash to your account?
CoinMENA News ??
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Tweet of the week ??
Quiz corner ?
Last week’s question: What percentage of the current Bitcoin supply has not moved in over a year? Answer: Around 60%
This week’s question: What is the second-largest stablecoin in terms of market capitalization?
See the answer in next week’s newsletter.