Cryptocurrencies May 1, 2023
Grayscale Bullish About Ordinals’ Impact on Bitcoin
The number of daily bitcoin transactions hit a fresh high over the weekend, just days after Grayscale published a report praising the effect of Ordinals on the crypto network.
On Saturday, the average number of daily transactions over the previous seven days stood at 396,350, highlighting the growing usage of the blockchain which powers the world’s leading digital asset. A day later, Ordinals set its own milestone with over 300,000 inscriptions recorded.
Late last week, the asset management company tackled the thorny topic of Ordinals, which has elicited a mixed response from the bitcoin company. The ‘Market Byte’ article said the protocol represents “one of the larger opportunities for bitcoin adoption, especially as the bitcoin network has historically been viewed as a rigid blockchain ecosystem.”
Bullish on bitcoin
Despite its short lifespan, the Ordinals protocol that lets users create NFTs on bitcoin has already made a significant impact on the network, with the number of inscriptions recently soaring past 2.5 million.
Despite its enormous success, many hard-line bitcoiners are opposed to the protocol, arguing that it clutters the blockchain and detracts from its primary use-case as a peer-to-peer digital currency.
While the Grayscale blog acknowledges these criticisms, it contends that bitcoin-based NFTs are positive for two key reasons. Namely, they boost mining fees and “potentially contribute to a cultural transformation within the bitcoin community.”
The point about mining fees is inarguable: according to Dune Analytics, miners have pocketed over $6.6 million from the trend since Ordinals launched in January. But how might Ordinals positively transform the bitcoin community, according to Grayscale?
The asset manager predicts that the success of Ordinals is “likely to promote a development-oriented community and culture in support of the bitcoin network.” In short, more interest and activity should result in better network security and an improved long-term outlook for the top cryptocurrency.
Ordinals enables users to ‘inscribe’ elements like images, text, PDFs, video, and audio files onto satoshis, the smallest denomination of bitcoin, giving those particular satoshis NFT-like status. The emergence of Ordinals has given rise to the term ‘BRC-20’, a token standard that stores a script file on the bitcoin network and permits token transactions between users.
Bitcoin’s recent hot streak
Bitcoin has enjoyed a healthy start to 2023, having climbed for four straight months through April – its longest such streak since a six-month advance to March 2021.
The top cryptocurrency has gained around 70% since last year’s low, and is hovering in the $28.5k range at the time of writing.
BRC-20 started as a late-night twitter thread that theorized a crazy idea of how to do fungible tokens on Bitcoin via the ordinals protocol.
Here we are 54 days later and BRC-20 tokens have a combined market cap of over $150M.
Building on Bitcoin is cool again. pic.twitter.com/TmKdaBpLm4
— Leonidas.og (@LeonidasNFT) May 1, 2023
Grayscale isn’t the only entity bullish on BTC. At last week’s Consensus 2023 conference, ex-Coinbase CTO Balaji Srinivasan reiterated his optimistic stance, having previously predicted the currency’s value could reach $1 million by June 17. Though he rowed back on that projection, he said government money printing would continue to boost bitcoin’s value.
Geoff Kendrick, head of FX research at Standard Chartered, is a little more restrained than Srinivasan: he says the price of bitcoin could surge to $100k by the end of 2024, a consequence of banking turmoil, the next bitcoin halving, and the forecasted end of Fed rate hikes.
Floki Inu (FLOKI) Volumes Surge 300% on China Metaverse Game Plans
The price of Floki Inu (FLOKI), a memecoin inspired by Elon Musk’s pet dog, jumped 15% on Sunday and trading volumes soared over 300% on Monday. The rally came as traders and investors bet on the project, which is pushing to attract more users for its Valhalla metaverse game in China.
FLOKI surged from $0.00003120 to $0.00003587 over the weekend, according to CoinGecko data. Trading volume for the token climbed to $99 million on May 29, up nearly 300% from the previous week’s average of $25 million.
As of writing, however, the price of FLOKI fell 2% on the day to $0.00003291 and average 24-hour trading volume dropped to $17.12 million. The token is down more than 90% since its all time high of $0.00033651 on Nov. 4, 2021.
Chinese flock to FLOKI
Floki is a cryptocurrency that began life as a memecoin but has evolved to become a fully fledged web3 project. Created in Sept. 2021 by an anonymous team of developers, the Floki ecosystem now includes a decentralized exchange, an NFT marketplace, and Valhalla.
In February, the team announced it would be targeting China in its latest push to attract more players for Valhalla, a play-to-earn (P2P) metaverse game that allows players to earn FLOKI tokens by completing quests and battling other players.
Also read: BBC’s Doctor Who and Top Gear Coming to the Sandbox Metaverse
Since the announcement, Floki now has a Chinese website and its technical documents, including the whitepaper, are available in the language. Floki is working with Btok, a popular web3 social network in China, to “introduce FLOKI to 10 million Chinese crypto users.”
Floki has also been running ads for Valhalla during some of the biggest sporting events in China such as the Chinese Super League and the Chinese Basketball Association. It also sponsored the just-ended World Table Tennis Championships Finals in South Africa.
The ads have helped to raise awareness of the metaverse game among Chinese gamers.
“We’ve gotten an influx of Chinese traffic today due to the CCTV-5 [the main sports channel in China] feature, and we want to remind you that FLOKI is strategically positioned for Hong Kong and China opening up to crypto,” said the Floki team in a tweet.
We've gotten an influx of Chinese traffic today due to the CCTV-5 feature, and we want to remind you that $FLOKI is strategically positioned for Hong Kong and China opening up to crypto.
Below is our "China Plan", which highlights our strategy for China:https://t.co/Zn7NDGdQ6q
— FLOKI (@RealFlokiInu) May 28, 2023
Hong Kong eases crypto regulations
The focus on China is a major development for Floki. The Chinese market is one of the largest and most lucrative in the world, and if FLOKI can successfully tap into this market, it could see significant growth in the coming years, observers say.
Floki’s China push comes at a time when the Hong Kong government is expected to legalize crypto trading starting June 1, allowing citizens to invest in assets such as bitcoin (BTC) and ethereum (ETH) on regulated crypto exchanges.
“While FLOKI is a global cryptocurrency our goal is to be the most known/used crypto. That won’t be possible without China and Hong Kong,” the team wrote on Twitter.
The Chinese version of Floki’s play-to-earn metaverse game Valhalla will be released in the second half of 2023 and will feature a variety of gaming experiences like racing, fighting, and role-playing, it added.
On mainnet, users would have to hold a certain amount of FLOKI in their wallet to make a character playable. The game is still in development, but it has already generated a lot of excitement among the Floki Inu community
Hong Kong Police Launch Metaverse Platform to Fight Cyber Crime
The Hong Kong Police Force cybersecurity unit has launched a metaverse platform, CyberDefender, to promote metaverse crime prevention and highlight the risks associated with Web3. The initiative will equip citizens with skills and strategies relevant in tackling technology-related crimes in the digital age.
The city is also ramping up its regulatory efforts to prevent criminals from using crypto to launder money.
Also read: UK Police Record Child Abuse in the Metaverse
To mark the launch, the police force organized an inaugural event titled “Exploring the Metaverse” within the virtual realm.
This is an initiative to raise public awareness regarding the potential risks linked to the metaverse and Web3, at a time when digitalization is fast growing and gaining traction all over the world.
The launch event took place across three virtual venues and was organized on the newly-launched platform with the aim of engaging participants in proactive conversations about ensuring safety within this virtual realm.
During the event, chief inspector IP Cheuk-yu from the Cyber Security and Technology Crime Bureau (CSTCB) presented on the dangers associated with Web3 and urged the public to exercise caution.
Metaverse a breeding ground for criminals
There have been reports on cases of verbal and sexual harassment within VR games that surfaced last year. Later, campaigners said an avatar of a 21-year old researcher was sexually assaulted in Meta’s VR platform Horizon Worlds.
“All crimes in the cyberspace could also happen in the metaverse such as investment frauds, unauthorized access to systems, theft and sexual offenses,” said the chief inspectator.
UK police forces also recorded 45 cases of child abuse in the metaverse while 30,925 individual offences involving indecent images of children on social media platforms were also recorded in 2021-2022, according to figures from the National Society for the Prevention of Cruelty to Children (NSPCC).
The chief inspector further emphasized that the metaverse presents potential dangers such as hacking and theft of digital assets by modern cybercriminals.
“The decentralized nature of virtual assets in Web3 may also increase the likelihood of cybercriminals targeting endpoint devices, virtual asset wallets and smart contracts,” he added.
Attendees at the event were enlightened about the advancements made in combating crypto crime and the ongoing efforts to mitigate its impact, providing valuable insights into the evolving landscape of cybercrime and efforts taken to curb illicit activities involving digital assets.
Increase in cybercrimes
In 2022 alone, the city witnessed a staggering 2,336 virtual asset related crimes, according to the Hong Kong Police Force in a press release that accompanied the launch.
The incidences resulted in financial losses of $1.7 billion for victims. Figures from the police force also show that 663 cases of a similar nature have already been reported during the first quarter of 2023 alone.
These losses amounted to $570 million, an alarming increase of 75% compared to the same period last year. The police stated that most of the cases involved virtual asset investment.
“Criminals took advantage of the public’s lack of knowledge about virtual assets and lured them into non-existent investments,” they warned.
According to the police, such figures underscored the urgent need for proactive measures to address the rising trend in virtual asset-related crimes and protect individuals from significant financial harm.
City gets tough on money laundering
Concurrent with the introduction of the new metaverse platform, the Hong Kong Securities Regulatory Commission (HKSRC) released revised anti-money laundering (AML) guidelines.
The guidelines outline the tactics employed by offenders to launder money through digital assets and offers comprehensive measures for financial institutions to shield themselves from illicit engagements. Changes include enhanced Know Your Customer (KYC) and due diligence requirements.
Enforcing the enhanced KYC rules means Hong Kong is stepping up efforts to prevent dirty money from flowing through the city, which will also make it less attractive for criminals to use crypto for their illicit transactions.
Under the updated guidelines, institutions that facilitate crypto transactions valued at 8,000 RMB or more must collect identifying information about both sender and receiver.
The increase in cyber-related crimes is pushing authorities to aggressively tackle the problem and raise awareness among the public.
Aside from Hong Kong, other jurisdictions adapting their AML guidelines to keep up with the use of digital assets by criminal networks include Japan, which recently announced stricter AML rules for crypto transfers. The country will specifically impose what is known as the “travel rule,” whereby exchanges must ensure details about the sender are shared with other parties.
If effective, efforts to fight crime are expected to be as international as the criminal networks themselves. Last month, reports suggested the International Revenue Service (IRS) would deploy cyber agents internationally to investigate the use of crypto in financial crimes.
Metaverse Token DeepBrain Chain Soars 200% Due to AI Progress
Metaverse token DBC is one of the best-performing digital currencies in the first five months of the year. And its bullish cycle has been sustained by the release of a progress report with an emphasis on many areas including artificial intelligence (AI).
DBC is the native asset of DeepBrain Chain, a platform using blockchain technology to build a scalable, distributed high-performance computing network. Its value has increased by more than 200% in value year-to-date (YTD), data from crypto price tracker CoinMarketCap shows.
On-chain data indicates that DBC was trading hands for $0.0039884 on May 24 after starting the year with a trading price of $0.001145 – a 248% rise in five months.
While DBC has benefitted from positive market sentiment, there are salient price drivers behind its rally.
Progress Report powers DeepBrain Chain’s ascension
Metaverse token DBC’s ability to sustain its gains is down to the work done by the DeepBrain Chain Team.
On May 21, the team released Progress Report Number 133 and provided updates on Product Development Progress, Marketing Progress, and Ecosystem Building.
Under Ecosystem Building, the development team highlighted Haibao GPU Cloud – a platform that allows people from across the globe to rent GPU power at affordable prices.
According to the report, DeepBrain has used its technology to help with artificial intelligence (AI) face-changing application testing. “The platform supports A-series GPU A5000, A4000, and 30-series GPU for trial testing. It can automatically replace human faces according to view screenshot sampling, and provide marketing support for wig customers,” the DeepBrain team said.
AI-Generated Content (AIGC) was also featured in the report. AIGC is where AI is used to automate the information creation process while fulfilling the personalized requirements of users.
Over $4m added to DBCs market cap in May
DBC opened May with a trading price of $0.03007 and reached a month-high price of $0.004202 on May 23.
On the first day of the month, the project’s market value stood at around $8.6 million, and this increased to approximately $13.2 million as of 11:00 UTC on May 24.
Within three weeks, the buying and selling activities of traders improved DBC’s market value by about $4.6 million. This explains the token’s ascension by 40% in May.
DBC is supported by three cryptocurrency exchanges, namely Gate.io, Huobi Global, and BitMart.
In crypto, one of the primary drivers of price is exchange listing. Aside from the aforementioned platforms, some of the largest exchanges by trading volume such as Binance, Deepcoin, Hotcoin Global, Upbit, MEXC Global, Coinbase, KuCoin, JPEX, Kraken, and Gemini are yet to add support for DeepBrain Chain’s novel token.
Should this happen along the way, DBC could conceivably become a top 500 crypto by market value. In the process, it may compete with other metaverse tokens such as ApeCoin (APE), Decentraland (MANA), Alien Worlds (TLM), Internet Computer (ICP), and the Sandbox (SAND).
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