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Bitcoin's Ordinals NFTs Break Usage Records, But Cause Controversy

Are they really deviating from Bitcoin's purpose?


While the Super Bowl grabbed the headlines over the weekend, with Rihanna and Patrick Mahomes taking center stage, the crypto community is buzzing about the news that Sam Bankman-Fried, the former CEO of FTX, is under investigation for allegedly using a VPN during Super Bowl Weekend. 😂



🍿 Quick Snack

  • 🟡 Bitcoin's Ordinals NFTs set record high usage but stir controversy over deviation from its purpose.

  • 🏦 Siemens becomes one of the first companies in Germany to issue a digital bond on a public blockchain.

  • ♻️ "Regenerative Finance" a growing movement focused on building public goods for the long term is starting to make headlines.

  • ⚙️ Bakkt ditches consumer app, shifts focus to B2B crypto solutions, with plans to offer SaaS and API solutions for crypto and loyalty experiences.

  • 😂 Binance survey reveals crypto makes you more attractive.

  • +5 Funding Rounds

🍔 The Full Meal

Bitcoin's Ordinals NFTs Reach Record Usage, Prompting Controversy

  • For the first time ever, a portion of Bitcoin network activity is being used for purposes other than peer-to-peer monetary transfers. This is due to the launch of Bitcoin nonfungible tokens (NFTs) known as Ordinals, which has caused the number of non-zero Bitcoin addresses to hit a new all-time high of 44 million.

  • The Ordinals protocol has brought many "new active users" to the network, beyond the typical investment and monetary transfer use cases. Through the use of the Ordinals numbering scheme, Bitcoin users can assign arbitrary content to satoshis, enabling them to inscribe Bitcoin-native, NFT-like images. This was enabled by the Taproot soft fork, which took effect in November 2021.

⚡️ Hot Takes:

  • Blockstream CEO Adam Back has expressed his dislike for the Ordinals protocol, suggesting it deviates from Bitcoin's purpose as a peer-to-peer electronic cash system.

  • However, Bitcoin bull Dan Held has asserted on several occasions that Ordinals bring more "financial use cases to Bitcoin."

  • Despite this, some are concerned about potential risks, such as illegal data being included in the Bitcoin blockchain, chain bloat, and large blocks making it difficult for new nodes to join.

  • Proponents of the Bitcoin ethos argue that, as long as the rules of the software are followed, it is irrelevant what someone does with their Bitcoin.

Siemens issues €60M digital bond on a public blockchain

  • Siemens has issued a €60M digital bond on a public blockchain, becoming one of the first German companies to do so.

  • Siemens notes that the process of issuing digital bonds is faster and more efficient than traditional bond-issuing methods.

  • The bond was sold directly to investors such as DekaBank, DZ Bank, and Union Investment, without the need for central clearing and paper-based global certificates.

  • Note: This particular issuance was completed using classic payment methods because the digital euro was not yet available at the time of the transaction, but it was still completed in just two days.

⚡️ Power Take: Siemens is not the only one looking to become a pioneer in digital securities. In January, El Salvador's congress passed a digital securities law that would allow the country to issue the world's first sovereign blockchain bond.

  • The securities are intended to raise $500 million to help construct a tax-free coastal town called Bitcoin City. This town would be powered by geothermal energy from a nearby volcano, used for mining digital coins.

  • Additionally, the government's proposal states that another $500 million would be allocated for buying Bitcoin. Any appreciation in the value of the digital currency would be shared with bondholders.

ReFi: The Crypto Movement Prioritizing Public Goods Over Short-Term Profits

  • "ReFi" (short for "Regenerative Finance") is a growing movement within the crypto industry that seeks to build public goods for the long-term, rather than focusing on short-term profits. It is a counter to the "Degen" culture, which is focused solely on making money in crypto, and aims to strip Web3 of its price speculation and emphasize social impact.

  • ReFi is still not clearly defined, but can be thought of as a way to replenish public goods, which can take many forms, such as environmental, social, and cultural projects.

  • Some of the most significant ReFi projects to date include Gitcoin, Regen Network, and Giveth, which have funded open source projects, tokenized carbon credits, and enabled crypto donations to various projects, respectively.

  • As the crypto industry continues to looks for ways to create positive-sum wealth creation, we should expect ReFi to play a bigger role.

⚡️ If you, like me, have been asking yourself where "ReFi" originated, its first mention was in a 2015 paper called Regenerative Capitalism by economist and philosopher John Fullerton.

Bakkt Discontinues Consumer-Facing App to Focus on B2B Crypto Solutions

  • Bakkt, the digital asset platform, will be discontinuing its consumer-facing app on March 16 to focus on business-to-business (B2B) technology solutions.

  • However, current Bakkt app users will still be able to access their crypto and cash holdings through a new web-based platform.

  • Moving forward, Bakkt aims to provide B2B solutions, such as crypto and loyalty experiences, for its customers via software as a service (SaaS) and API solutions on a secure and compliant platform.

⚡️ Reminder: In November, Bakkt agreed to acquire Apex Crypto for $200 million, a turnkey platform for integrated crypto trading. This acquisition reinforced Bakkt's B2B2C strategy and goal of bringing crypto products to a wider client base.

  • In 2022, Bakkt made concerted efforts to grow its B2B presence, focusing on creating experiences that provide crypto access and adoption and drive more utility with assets to deepen loyalty.

  • Through its acquisition of APEX Crypto, Bakkt is accessing a portfolio of fintech firms with attractive customer demographics that will boost trading volume via new products and features, and competitive pricing through multiple liquidity providers.

🍟 Extra Fries

The internet never fails to astound me. Someone discovered a flaw in the original Bitcoin logo.

Also, Binance conducted a survey which found that 83% of participants find cryptocurrency “attractive”. 👀

70% of respondents said they would be more likely to go on a date with someone who is interested in crypto. 😂

83% of participants stated they would prefer a "crypto gift card" over flowers or chocolate for Valentine’s day.

Gotta love crypto.

💸 Funding Rounds

  • Taurus | $65m Series B: building the next-generation platform to trade, invest, and protect digital assets. (link)

  • Monad Labs | $19m Seed: proof-of-stake (PoS) blockchain and decentralized computation platform. (link)

  • Caldera | $9m: the company makes it easy to launch performant, customizable blockchain rollups. No code required. (link)

  • Sesame Labs | $4.5m Seed: building the first marketing platform for Web3. (link)

  • Orb Labs | $4.5m Seed: cross-chain messaging protocols and omnichain applications for both developers and consumers. (link)

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