ProBit Bits — ProBit Global’s Weekly Blockchain Bits Vol. 3

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 ETH, BTC Lead 2021 Gains for Crypto Investors

Ethereum earned investors a total of $76.3 billion in 2021, outpacing Bitcoin’s $74.7 billion, according to Chainalysis. In a new report, the blockchain analytics firm ties the gain to increased demand for Ether (ETH) due to Ethereum’s leading role in supporting DeFi protocols and ETH as its transaction currency.

The geographic segmentation shows investors in the US leading with the highest YOY margin following a jump from $8.1B in 2020 to $47B in 2021 followed by the UK, Germany, and Japan. Out of the top 5 countries, China saw the smallest YOY increase among the top 5 countries with a total of $5.1B in 2021.

Based on all cryptocurrencies tracks, it says investors around the world realized total gains of $162.7 billion in 2021, a 5-fold increase from the $32.5 billion in profits investors were able to extract in 2020.

While the firm also highlights some existential risks that the industry needs to mitigate, it determines that 2021 was another strong year for cryptocurrency. It notes that the data shows how crypto asset prices are growing, as well as proves that the emerging asset class continues to provide economic opportunities for users in developing markets.

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 First Russian Crypto Mining Company Added to US Sanctions List

The U.S. has added a Russian cryptocurrency mining firm to its sanctions list for the first time.

Through its Office of Foreign Assets Control (OFAC), the U.S. Department of the Treasury labeled 10 Russia-based subsidiaries of Bitriver AG operating in the virtual currency mining industry alongside Russian commercial bank Transkapitalbank and a global network of more than 40 individuals and entities led by U.S.-designated Russian oligarch Konstantin Malofeyev as either evading, attempting to evade, or aiding the evasion of U.S. sanctions against Russia following its invasion of Ukraine.

These companies operate vast server farms that sell virtual currency mining capacity internationally and help Russia monetize its natural resources, OFAC notes. It adds that considering Russia’s comparative advantage in cryptocurrency mining due to energy resources and a cold climate, the mining companies are vulnerable to sanctions as they use imported computer equipment and fiat payments. Russia is reportedly the third-largest cryptocurrency mining country after the U.S. and Kazakhstan.

The development in Russia comes as lawmakers from New York presented and passed a bill that could see cryptocurrency mining driven out of the state. The bill has put a hold on the use of a carbon-based energy source for cryptocurrency mining, making New York the first state in the U.S. to do so as a measure to curb energy use.

 First BTC, ETH ETFs in Australia Miss Launch Date

The two funds that were to offer direct access to cryptocurrency investments in Australia for the first time have missed their expected listing date.

Both the 21Shares Bitcoin ETF and ETFS 21Shares Ethereum ETF, the world’s first Bitcoin and Ethereum ETFs in Australia, were set to go live on April 27 but were unsuccessful, citing a need for further preparations.

Both funds will list on CBOE Exchange and will track the prices of Bitcoin and Ethereum in Australian dollars.

Their creators, Swiss-based issuer of crypto Exchange Traded Products (ETPs), 21Shares, and ETF provider, ETF Securities (ETFS) cite Bitcoin as the best-performing asset over the past 10 years and Ether as one of the top-performing in five years hence could be used as “side bets in a portfolio” or for diversification as they “are uncorrelated to shares, bonds, and commodities.”

Together with ByteTree AM, 21Shares also launched BOLD, a new exchange-traded product (ETP) that tracks a mix of Bitcoin (BTC) and gold, to connect traditional finance and crypto.

The news comes as Simplify filed a registration statement with the U.S. Securities and Exchange Commission (SEC) for a Bitcoin Strategy Risk-Managed Income ETF. The Fund will enter into reverse repurchase agreements — whereby the Fund sells securities to buy them back at a specified time and price — to increase its income-producing portfolio through leverage.

 Optimism Protocol Opens a New Chapter for L2 and Ethereum Scaling

Ethereum layer 2 protocol Optimism said it has onboarded over 300,000 unique addresses and deployed over 6,800 contracts in the past year as it recapped related activities.

It also facilitated over $17.4 billion in transaction volume, generated over $24.5 million in revenue, and saved users over $1.1 billion in gas fees over the period. The protocol seeks to help run any Ethereum contract cheaper as part of efforts to help meet the network’s scaling needs.

Since April 2021, Optimism says more than 50 apps have been deployed on the protocol resulting in over 60,000 ETH bridged in and more than $900 million in total on-chain value. It claimed that upgrades have improved the experience for users and reduced transaction fees by 40%.

Optimism removed its deployment whitelist in December 2021 to allow unrestricted access to all participants.

It has now introduced a governance token, OP with over 260K qualified for the airdrop slated for Q2 with a strategic focus on getting the token into the hands of early adopters ranging from Optimism users, DAO voters, as well as former Ethereum users who may have migrated to other chains due to being priced out by gas fees.

A total of 5% of the total 4.294B max supply has been reserved for airdrop #1 with an additional 14% reserved for additional batches.

 US Issues Advisory for North Korean Hackers’ Crypto Theft, Tactics

The U.S. government has stated that North Korean cyber actors continue to target various blockchain technology and cryptocurrency businesses. Three U.S. agencies issued a joint Cybersecurity Advisory about crypto thefts and tactics used by a North Korean state-sponsored advanced persistent threat.

The Federal Bureau of Investigation, the Cybersecurity and Infrastructure Security Agency, and the U.S. Treasury Department said the group — tracked as Lazarus Group, APT38, BlueNoroff, and Stardust Chollima — engages in social engineering of victims through various communication platforms to trick them into downloading cryptocurrency applications infected with trojans on their operating systems.

They then use the applications to gain access to the victim’s computer, propagate malware across the victim’s network environment, steal private keys, or exploit other security gaps to initiate fraudulent blockchain transactions.

Targets include exchanges, DeFi protocols, play-to-earn video games, trading companies, venture capital funds investing in cryptocurrency, and individual holders of large amounts of digital assets or valuable NFTs.

According to blockchain firm Chainalysis, Bitcoin makes up less than a quarter of all cryptocurrencies stolen by North Korea.

 Adidas Rolls Out Products in Metaverse

Adidas Original is releasing physical products into Metaverse for NFT holders with the guide of gmoney, PUNKS Comic, and Bored Ape Yacht Club. Aside from the NFT value and the ongoing exclusive access they grant, the holders are guaranteed access to 4 free exclusive physical products throughout 2022.

The Into The Metaverse limited edition digital collectible comes in four phases — or product redemption periods — during which holders will receive a physical product and a replacement NFT of a higher phase and corresponding color.

For example, a Phase 1 token has to be burnt to receive a physical product as well as the sequential Phase 2 token. Participants in the final product redemption period have to burn their Phase 1, 2, or 3 ERC-1155 tokens to receive a Phase 4 ERC-721 token.

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