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The Last Fortnight in Crypto - April 2022

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Elliott Lyons
Elliott Lyons

The past two weeks have seen interesting developments for the Ethereum blockchain, with the network finally looking ready to make the switch to proof-of-stake (PoS) and major U.S. investment bank Goldman Sachs adding Ethereum OTC trading options.

Meanwhile, a considerable effort by Bitcoin to break above US$50,000 was met by tough resistance this week, pushing the leading crypto back down to sub-$45k levels. The losses could have been initiated by the seizure of $25 million in BTC by y German authorities following the successful shutdown of the Russian darknet marketplace, Hydra.

Top News
Russia Darknet Marketplace Hydra Sanctioned, BTC Addresses Blocked

Authorities in the U.S. imposed sanctions on a Russian darknet marketplace Hydra and identified 100 wallet addresses connected to it. With annual revenue of over $1.3 billion, it's the largest darknet market in the world, with over 17 million customers and 19,000 sellers.

Following sanctions by the U.S., German authorities managed to seize $25 million worth of BTC from the site before shutting down its servers. The site has allegedly facilitated up to $8 million in ransomware payments and processed 86% of illegal Russian Bitcoin transactions.

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Forbes Lists World's Leading Crypto Billionaires Forbes Magazine has published a list of the world's leading crypto billionaires, with Binance CEO Changpeng 'CZ' Zhao at number one, worth $65 billion. In second place with $24 billion in net value is 30-year-old Sam Bankman-Fried, co-founder and CEO of the FTX trading platform.

Finishing off the top three is Brian Armstrong, founder and long-running CEO of major U.S. crypto exchange Coinbase. His 19% stake in the $100 billion company takes his worth up to $6.6 billion.

Goldman Sachs to Add OTC Ethereum Trading Desk
Major U.S. bank Goldman Sachs has announced plans to offer over-the-counter (OTC) trading options for Ethereum (ETH). The news comes hot on the heels of the bank's equivalent Bitcoin OTC service launched last month in partnership with Galaxy Digital.

Ethereum has become more popular lately after it went it ahead with plans to move to a proof-of-stake (PoS) consensus model. PoS blockchains use only a fraction of the energy consumed by proof-of-work (PoW) blockchain's, making them more attractive to institutional investors.

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War-torn Ukraine Hopes to Raise Funds Through NFT Sales As Ukraine continues its fight against the Russian invasion, crypto-enthusiasts have donated over 300 NFTs to support the war-torn nation. Now, the Ukrainian government plans to sell the NFTs on the OpenSea marketplace in an effort to raise much-needed relief funds.

The move follows last weeks sale of Ukrainian 'museum NFT's', a collection of images depicting Russia's invasion of the country. The sale aims to raise over $1,000,000 in support of rebuilding Ukrainian national monuments that have been destroyed by the Russian army.

Latest Crypto Trends

Ethereum's 'Merge' Upgrade

Ethereum is almost ready for the final step of an upgrade to the second phase of its existence. Recently rebranded as 'The Merge' in favour of ETH 2.0, the upgrade will migrate Ethereum to a proof-of-stake (PoS) rather than proof-of-work (PoW) consensus method.

As one of the world’s most crowded blockchains, Ethereum is often criticized for its high gas fees, which is the cost the user pays for each transaction. When the network is very busy, these fees are often higher than the amount of money being transferred. Recently, the rise in the popularity of NFTs on the Ethereum blockchain has caused gas fees to hit a record high of $69 on average. The migration to a PoS consensus method removes the need for mining and drastically increases Ethereum’s scalability, increasing the number of transactions per second and hopefully reducing gas fees (although some ETH developers say this won’t necessarily happen).

Benefits of the new Ethereum PoS network:

  • Deflationary asset

Ethereum will effectively become a deflationary asset after the Merge as fees previous sent to miners will now be burned, which reduces the amount of ETH in circulation.

  • Less energy usage

Proof-of-stake uses almost no energy when compared to a proof-of-work network like Bitcoin. This will reduce Etheruem’s energy use by almost 99.99%, making it a more environmentally friendly crypto.

  • Staking

Users will be able to earn interest by 'staking' their Ethereum coins on the network. This method of ‘locking up’ your coins is similar to a fixed savings account and helps to secure the PoS network.

Fortunately, the initial stage of the migration has already begun, with Ethereum launching a live PoS test network known as the Beacon chain. Now, developers say the network is almost ready to migrate to a fully live PoS environment, although an exact date has not been provided.

For more details on Ethereum’s proof-of-stake consensus mechanism, read this post from ethereum.org

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