💊 Elon is buying Twitter...Let that sink in! 🚰
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Here are your 💊’s for today:
Elon is buying Twitter
Bitcoin mining company warns of bankruptcy
NFT of the day
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ELON IS BUYING TWITTER…LET THAT SINK IN!
After months of back and forth, and a storyline that felt straight out of a movie, it appears that Elon will be closing his deal to buy Twitter for $44 billion by the end of the week.
In anticipation of his acquisition, Elon visited Twitter HQ in a way that only Elon can. He tweeted a video of himself walking into the offices carrying a sink with the caption “Entering Twitter HQ — let that sink in!”
If you’ve been keeping up with crypto over the past few years, you’ll recognize that Elon has been one of THE most influential people in crypto. For instance, back in February of last year, Tesla bought $1.5 billion in BTC and announced they would be accepting BTC as payment.
This move immediately sent the price of BTC skyrocketing, and kicked off a massive bull run in the crypto markets.
However, it wasn’t just Bitcoin that Elon has shown an appreciation towards. For years, Elon has supported the Dogecoin community by regularly making references to its cryptocurrency DOGE and even referred to it as “the people’s crypto”.
DOGE has pumped on multiple occasions off the back of comments he has made, including before his appearance on Saturday Night Live last year. He’s even gone so far as to suggest that it “would [be] sickkk” to update the Twitter to a doge, and to begin accepting tips on Twitter in DOGE.
Beyond the impact on cryptocurrencies, an even more meaningful outcome of Elon’s acquisition may be on the social media landscape.
Is decentralized social media next?
In a previous edition, we highlighted how the future of Twitter may become more decentralized with Elon’s acquisition. In leaked texts with Twitter founder Jack Dorsey, it was revealed that the two talked about the idea of an “open source protocol” for social media, an idea Elon called “super interesting”.
There’s recently been an increase in projects pursuing the concept of decentralized social media. These range from crypto-focused projects like DeSo, Farcaster and Lens protocol, to Jack Dorsey’s pet project ‘The AT Protocol’ from the Bluesky team.
As for the direction Elon decides to take Twitter post-acquisition, is anyone’s best guess. However, it is clear that he is in this for more than just money. Elon has stated that he believes it’s “important to future of civilization to have a common digital town square where a wide range of beliefs can be debated.”
This would suggest he is against wide-scale censorship and other dangers of centralized social media.
Whether or not he uses blockchains or crypto to solve these problems remains to be seen. Either way, this should be a VERY entertaining storyline to watch play out.
BITCOIN MINING COMPANY WARNS OF BANKRUPTCY
The Bitcoin network is maintained via a consensus mechanism known as “Proof of Work”. This means that network participants can spin up hardware that attempt to solve difficult math problems to earn the right to append a new block of transactions to the existing chain of transaction blocks.
As it turns out, participating in this consensus system can be highly rewarding, especially if it’s done at scale and during bull runs. This observation is what has led to the creation of the Bitcoin mining industry, where entire companies were formed with the sole purpose of creating large mining operations.
However, the economics of this system have come under strain this year, and Bitcoin mining operations are feeling the pain.
Yesterday it was announced that a large Bitcoin mining company by the name of Core Scientific, is on the brink of declaring bankruptcy. This comes on the heels of the company announcing that they had decided to skip upcoming payments to creditors that are due in October and November.
There are a few factors that are contributing to the problems for Core Scientific. The first, is the costs have risen significantly. This has been due to the rise in the price of electricity (which they need to run their mining rigs) and the increase in the global bitcoin hash rate (which determines how difficult it is to mine Bitcoin).
Furthermore, revenues have also been hit as the value of Bitcoin has taken a beating over the past year, dropping from a high of $69,000 down to $20,000.
This combination of high hash rate + low BTC price is a nightmare for Bitcoin mining operations as it eats into their margins and has thrown them into financial turmoil.
To add insult to injury, the value of mining rig prices have also decreased substantially in 2022 (largely driven by Ethereum’s move to Proof of stake). This means the creditors will likely have to restructure the debt as opposed to taking possession of the collateral.
The longer the Bitcoin price and hash rate remain at these levels, the more likely we are to see more Bitcoin mining operations run into financial troubles.
That being said, the Bitcoin networks has repeatedly shown itself to be one of the most resilient networks in history. It’s been through worse struggles and it will almost certainly survive this difficult period as well.
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[The Defiant] Ether Issuance Goes Negative as Merge Delivers on Deflationary Promise: Shrinking Supply is Attracting Institutional Investors.
NFT OF THE DAY
If I told you that this colorful squiggly line in the image above is valued at $1.4 million, would you believe me?
Well, believe it or not, that’s the current value in USD that the buyer of Chromie Squiggle #7583 paid for this NFT last year.
For those that are not deep in the NFT space, this may seem like a preposterous amount to pay, so what gives?
In order to understand this purchase, you need to understand how the art world works. Ultimately, a piece of artwork is as valuable as what someone is willing to pay for it. The Art Blocks NFTs have been able to fetch a high price, because they have established themselves as a highly sought-after and respected collection in the digital art world.
Each piece is generated by a piece of creative code created by top artists. The collection represents the intersection of fine art and technology. To the untrained eye, this looks like something that was made in Microsoft paint. But to a professional art collector, this represents the future of digital artwork.
Art Blocks are proving not to be a flash in the pan, as trading volume has surged for this collection in the past 30 days. The longer the Art Blocks are around, the more respect I expect this collection to garner in the digital art world.