Here’s what’s in our orbit of crypto and bitcoin news. 💫👨‍🚀☄️🪐🔭

What’s Discussed

1. Starkware Successfully Explored “OP_CAT” in a Recent Test

Active Advocacy: Starkware, an Ethereum Layer-2 player, is closely monitoring and advocating for the OP_CAT function as a potential enhancement for Bitcoin Layer-2 solutions.
Drawing Developers: More positive push for the OP_CAT update can signal better infrastructure for builders to advance the Bitcoin ecosystem.

2. Trump’s Effect on Crypto: Boon or Bane

Uncertainties introduced: While Trump's market influence is undeniable, the long-term implications of his policies and promises remain uncertain.
Nashville Speech: Trump is scheduled to speak at Bitcoin Nashville on July 27, and the community speculates that he might announce the creation of a Bitcoin Strategic Reserve.

3. TON Teleport BTC: Bridging Bitcoin for (Possibly) a Billion Users

Seamless Onboarding: With Telegram amassing close to a billion users, TON just needs to onboard 1.6% of those users to surpass Solana.

Enhancing Microtransactions: Microtransactions in tap-to-earn games are a force to be reckoned with, and crypto systems must adapt to accommodate these changes.

4. Mt. Gox & Germany: Post-Selling Spree

Continued Selling: Mt. Gox recently transferred close to 60,000 BTC out of their 140,000 BTC for creditor distribution, leaving approximately 80,000 BTC in their wallet for future distributions to remaining creditors.
Germany’s Sell-Off: Germany sold all of its Bitcoin reserves, amounting to $3 billion, contributing to selling pressure in the market.

1. Starkware Explored the “OP_CAT” Function with its New STARK Verifier

July 17, 2024

A major Ethereum Layer-2 player is shifting its focus towards Bitcoin Layer-2 solutions. Starkware, known for its Ethereum L2 innovations, has generated significant anticipation with its recent activities surrounding the “OP_CAT” function, indicating a potential shift in the Bitcoin ecosystem.

What is OP_CAT?

OP_CAT is an older Bitcoin function designed to concatenate transaction data. Initially disabled by Bitcoin’s creator Satoshi Nakamoto due to security concerns, the function holds promise for enabling more complex smart contracts on the Bitcoin network. This capability is particularly significant as it can address the existing limitations in Bitcoin's scripting language, opening up new possibilities for decentralized applications and advanced financial instruments.

Why is OP_CAT Important?

The reintroduction of OP_CAT is pivotal for Bitcoin, as it enables advanced smart contracts and enhances Layer-2 solutions. This development makes Bitcoin more appealing for complex projects and developers. Additionally, OP_CAT supports trustless rollups, increasing transaction throughput without overloading the network.

What is Starkware Doing?

Active Advocacy

Starkware has been actively pushing for OP_CAT since June and has launched an OP_CAT research fund

Future Demonstrations

Starkware plans to showcase a wide range of computations that could form the basis of a virtual machine. These demonstrations are intended to highlight the practical applications of OP_CAT, illustrating how it can be used to create more dynamic and powerful smart contracts on the Bitcoin network.

Signet Demo Code

StarkWare’s verifier, developed with Weikeng Chen from the venture firm L2 Iterative. Starkware has made their demo code available on GitHub. This transparency allows developers to review and contribute to the ongoing work, fostering a collaborative environment for innovation.

What’s Next for the Bitcoin Ecosystem?

BTC's Scalability Potential

Starkware's exploration and advocacy of OP_CAT signal a significant step forward in Bitcoin's scalability and functionality. Scalability is a challenge for Bitcoin, and many projects in the community, including Fractal Bitcoin, are exploring options like OP_CAT to enhance Bitcoin's scalability.

Attracting Developers

The potential reintroduction of this function could attract a new wave of developers to the Bitcoin ecosystem, addressing the existing challenges in coding on the platform.

Further Reading:

BIP420 (OP_CAT) Proposal on GitHub

2. Trump’s Effect on Crypto: Boon or Bane

Jul 16, 2024

Trump Odds on Polymarket Hit ATH After Vance VP Pick

On Polymarket's presidential election contract, "Yes" shares for Trump were trading at 72 cents on July 16, suggesting that the market believes the Republican nominee has a 72% chance of victory.

While critics question prediction markets' validity, supporters argue they benefit the public by incentivizing thorough research and honest opinions, potentially making forecasters more reliable.

However, Trump's odds have since decreased after Biden stepped down and was replaced by Kamala Harris joined the presidential race.

Trump’s Influence on Crypto

Shifting Crypto Stance

Trump’s stance on cryptocurrency has been notably inconsistent, creating both optimism and uncertainty within the industry. In 2019, Trump expressed his disapproval of Bitcoin and even called it a “scam” in 2021, stating he preferred the US dollar as the world’s dominant currency. This skepticism cast doubt on his support for digital assets and left the crypto community wary.

However, recent events have seen a significant shift. This endorsement has created significant buzz, with speculation that his support could lead to favorable regulatory changes. His backing might boost cryptocurrency adoption and integration into mainstream finance, impacting market dynamics and investor sentiment.

Trump’s Recent Pro-Crypto Statements

In June and July 2024, Trump made several significant statements:

Pro-Crypto Stance: Since the assassination attempt in July 2024, Trump's vocal support for crypto has generated significant buzz. His running mate, JD Vance, known for his crypto holdings, adds to the optimism.
Mining in the U.S.: In June 2024, Trump stated on Truth Social that he wants all future Bitcoin to be mined in the U.S.. This reveals a dual aspect: Trump’s statements show a lack of deep understanding of cryptocurrency, yet his pro-crypto stance signals support for miners within the country, which could benefit the domestic mining industry.

Strong Voices in the Community

Notable figures in the crypto community have voiced their opinions about Trump, highlighting his significant influence during this election cycle.

Vitalik Buterin: Vitalik has urged the crypto community to be cautious, warning that Trump’s promises could be typical political rhetoric. In his post, he challenges the community to consider, “Are they in it for the right reasons?”
Ryan Selkis: Conversely, Ryan Selkis expressed strong support for Trump. His controversial and politically charged tweets led to his resignation as CEO.

What’s next for the Bitcoin ecosystem?

Monitoring Trump’s Crypto Statements

The market remains cautious despite recent optimism from Trump's pro-crypto stance. While his influence is undeniable, the election result and the actual effects of his policies are uncertain. The industry is closely watching Trump, weighing potential benefits against the risks of his inconsistent stance.

Highly Awaited Trump’s Bitcoin Nashville Speech

Anticipation builds as Trump is set to be a keynote speaker at Bitcoin Nashville on July 27. There is much speculation about whether he will announce a Bitcoin Strategic Reserve.

🚀 We will also be in Nashville. Join us at the SATurday Brunch with UniSat, Satlayer & Fractal.

Further Reading:

3. TON Teleport BTC: Bridging Bitcoin for (Possibly) a Billion Users

July 18, 2024

Telegram has announced plans to bridge Bitcoin to the TON network later this year. This strategic initiative aims to boost BTC accessibility, onboard a larger user base, and enhance engagement with Bitcoin.

While the project holds promise, it remains in the planning stage. The specific technology behind the bridge has not been disclosed. The crypto community will be watching closely to assess its viability and impact.

Despite this, this news is overall optimistic for the Bitcoin ecosystem and for crypto in general. TON blockchain has made significant strides in bringing crypto to the masses based on the impressive volume on their platform and optimism from the community.

Why TON is Poised to Bring Crypto to the Masses

Close to a Billion Existing Users on Telegram

CEO of Telegram announced that Telegram has 950 million monthly active users as of July 22, 2024. This means that even onboarding just 1.6% of Telegram's users would surpass Solana's MAUs. This demonstrates the vast potential of TON.

Rise of Tap-to-earn Games

With Hamster Kombat and other tap-to-earn games, there is a rising trend of higher activity for lighter transactions. Hamster Kombat has onboarded more users this year on its mini-app than some of the top mobile games last year, according to Messari.

Strong appeal to non-crypto native user

User-Friendly Wallets: Easy wallet integration and recovery in Telegram.
Simplified P2P Payments: Send crypto using usernames, not complex addresses.
Full Web3 Functionality: Access DeFi services via Telegram mini-apps.

What’s next in the Bitcoin ecosystem?

Seamless Onboarding for Non-Crypto Users

TON’s impressive growth metrics and the rapid rise of the tap-to-earn phenomenon are key developments to watch. This expansion isn't limited to web3 users; it seamlessly onboards users from outside the crypto space as well.

Enhancing Microtransactions with Faster Transactions and Lower Fees

With TON's capabilities for faster transactions, lower fees, and a broader user reach, developers can create more innovative and functional applications. As Ordinals and Runes gain traction, we might see similar games integrating into the Bitcoin ecosystem. Fractal Bitcoin is poised to support these high-volume, low-fee transactions, ensuring a robust environment for new applications.

Further Reading:

4. Mt. Gox & Germany: Post-Selling Spree for Large BTC Holders

July 16, 2024

The crypto market recently witnessed significant selling pressures from the Mt. Gox liquidation and Germany's Bitcoin sell-off.

Selling Activities in July

Mt. Gox is set to distribute close to 140,000 Bitcoin

The defunct exchange Mt. Gox began liquidating its assets, moving close to $2.8 billion worth of Bitcoin to an unknown wallet. This movement is part of Mt. Gox's ongoing repayment of $9 billion worth of Bitcoin to creditors through five crypto exchanges: Bitgo, Kraken, Bitstamp, SBI VC Trade, and Bitbank. This action understandably caused a temporary dip in prices, affecting market sentiment.

Type of BTC on Mt. Gox	Estimated Bitcoins	Date
BTC lost in 2014	About 850,000 BTC	2014¹
BTC recovered after bankruptcy	About 140,000 BTC	July 2022²
BTC moved to BitStamp	About 2,000 BTC	July 23, 2024³
BTC moved to Bitbank	1,544 BTC	July 5, 2024⁴
BTC moved to an address believed to be Kraken’s	About 48,000 BTC	July 16, 2024⁵
BTC left in the wallet	About 80,000 BTC	July 26, 2024⁶

References: [1] [2] [3] [4] [5] [6]

About 40,000 BTC were shuffled between Mt.Gox cold wallets and new wallets on separate occasions in July. There is a lack of detailed tracking for some transactions as they were shuffled through the new wallets that are not labelled.

Germany's Sold All of Its Bitcoins

Simultaneously, Germany sold off 38,826 bitcoin, all of its Bitcoin reserves in known addresses by July 12. These were close to US$3 billion worth of Bitcoins.

What’s Next in the Bitcoin Ecosystem?

Continued Selling Pressure from Mt. Gox

Mt. Gox continues to exert selling pressure, recently moving $2.8 billion worth of Bitcoins to a new address. Mt. Gox accounts still have almost $6 billions worth of Bitcoins, according to Arkham Intelligence. This does not seem to be an issue as the market has absorbed a combined amount of about $6 million.

Further Reading:

BlockSpaceForce is Building the Bitcoin Ecosystem

At BlockSpaceForce, we are a team looking to make Bitcoin blockspace more interesting. With our contribution to projects like Fractal, Alkimiya, and SatLayer, we hope to make the space more builder-friendly.

We're here to innovate together and keep building.

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July Crypto News Analysis - Week 2

What’s Discussed