📝 Web3 Field Notes #21 – Bitcoin, EU & Nike Deliver

Bitcoin at all-time highs. Nike delivers with OurForce1. Gensler's spectacle at the Senate. Coinbase might leave the US. Circle moves to Paris. SEC to regulate DeFi. $100m worth of gold stolen & more.

Marc Baumann

Apr 21, 2023

Hey, it’s Marc. I write about Bitcoin, Web3, and technology. ✌️

Welcome to another issue of my obsessively curated field notes.

⏱️ Reading time: 4 min

“An optimistic civilization is open and not afraid to innovate, and is based on traditions of criticism.”

― David Deutsch

📚 Key Reads

What the anti-influencer movement means for luxury. The trend towards hyper-nice influencers who tab into subcultures and communities is closely related to Web3's community-first ethos. Remember what Erika Wykes-Sneyd from Adidas said? “We don’t want the Yeezys of the world, we want to work with the community and bring out the next-generation Yeezys of the world.” By Vogue Business. Link
What is a brand? A look at the Nouns Project. By Alex Stein. Link
How will Ethereum's multi-client philosophy interact with ZK-EVMs? By Vitalik Buterin. Link
The real problem with Ethereum L2s. Guess what? It’s the lack of decentralization. Link
The EU's new MiCA framework for crypto-assets - the one regulation to rule them all. By
Paddi’s Substack
Link

🚨 What caught my eyes

✨ Web3 + NFTs

Nike continues to deliver on its community-first Web3 strategy. This week, the brand revealed its first digital collection, named “Our Force 1” (OF1), “a tribute to the first 50 years of Nike, built for the digital generation”. The collectibles will ship in virtual OF1 boxes. A few days later, users can participate in a “community reveal moment”. Each box comes with a 3D file that you can use to, say, export to other platforms (if compatible) and more. Wow. Nike is executing this so well on so many levels: brand legacy, naming, community integration, reciprocity of offline and online, etc. This warrants a separate case study that I will publish soon. At this point, it’s almost a no-brainer that Nike brings the most popular OurForce designs into retail stores around the world and creates exclusive physical products or experiences for NFT holders. Link

🌎 Crypto & Macro

Bitcoin mining difficulty and hash rate reach all-time highs. Mining difficulty determines the computational power required to mine a block on the blockchain. Miners’ revenue has experienced nearly 70% growth since the beginning of the year. Tick, tock. Next block.
Gary Gensler, SEC Chair, had his first House oversight hearing in 18 months and it was mad. You can skip the 5 1/2 hours and watch this instead: Is Ether a security? And this is another clip worth seeing. Gensler’s answer summarizes the current state of crypto in the US: Officially, the answer is “unclear”. Unofficially it’s quite obvious by now that the SEC wants to treat most crypto assets (and services) as securities. What would be the implications of this?
- Exchanges might leave the US. This week, Coinbase threatened to move abroad and revealed plans for an offshore exchange. Of course, they also want to increase political pressure against the SEC. Last month, Circle, the company behind the second-largest stablecoin USDC, announced plans to move its headquarters to Paris.
- Exchanges could not offer staking services anymore.
- Non-US crypto providers would gain market share and crypto hubs in Europe, the Middle East and SEA would profit.
The timing for the EU parliament to approve MiCA, likely the most comprehensive framework for crypto assets globally, couldn’t be better. While the most liberal crypto folks might argue against most regulation, many see MiCA as a big win for the European digital asset space as it provides clear guidelines. And in this case, clarity is indeed better than uncertainty.
The SEC plans to start regulating DeFi platforms by amending the definition of an “exchange”. This might end the dreams of “permissionless, decentralized” DeFi – at least in the US. Projects such as Swiss-based Polimec are actively building on “regulatory compliant DeFi”.
- Meanwhile, SEC Commissioner Hester Peirce dissents the SEC’s proposal in one of the boldest statements I’ve read from her so far. Link
Societe Generale has launched its Euro-pegged stablecoin on Ethereum. Apparently, every ERC-20 transfer must be approved in a separate ETH transaction submitted by a centralized registrar. Ups. Link
NYT article on Bitcoin mining’s electricity pollution made waves. Some of it was simply incorrect. Here’s what’s key:
- Daniel Batten corrected the article on Twitter. Link
- The Bitcoin Policy Institute's response. Link
- One of the most comprehensive pieces on Bitcoin and energy by Lyn Alden. Link
- Sustainable Bitcoin Protocol, a US start-up, helps miners mine “green” bitcoins and earn money for that. Worth checking out.
Apparently, $100m worth of gold was stolen at Canada airport. Luckily, you don’t need to transport Bitcoin through airports. 🤭 Link

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💡Word on the street:

This week was a lot about regulation. 🥵

Many of us are passionate about innovation, creation, and culture. But in the long run, regulation will impact our industry more than any other factor. NFTs continue to be a legal conundrum, and treating digital assets as securities has extensive implications for business models and brands, even outside of “money crypto”.

That’s all for now, folks.
Back to building! 🚀

– Marc

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