Weekly Flip Thru: BlockFi Files for Bankruptcy, New York Law Takes Aim at Crypto Mining, Polygon Makes Deal with NFT Marketplace Magic Eden
Greetings! Hope you saved room after the Thanksgiving feast for crypto updates. The juiciest morsels of crypto news this week include New York state implementing a law that takes aim at bitcoin mining operations and ethereum-based Polygon network signing a deal with a major NFT marketplace.
Here are the top crypto news stories for the week of November 28, 2022.
Crypto Lender BlockFi Latest to Declare Bankruptcy in FTX Fallout (CNBC)
Crypto firm BlockFi filed for bankruptcy on November 28, 2022, making it the latest victim in the wider fallout from the FTX insolvency that’s rocked the crypto world. BlockFi has been distressed since another prominent crypto hedge fund, Three Arrows Capital, went under during the summer of 2022. FTX had swooped in to acquire BlockFi, but that potential rescue turned into a millstone as FTX’s swift collapse began in early November 2022. More developments are on the way, so stay tuned to the Weekly Flip Thru for more news on BlockFi.
New York Governor Signs Law Cracking Down on Non-Renewable Energy in Bitcoin Mining (CNBC)
New York Governor Kathy Hochul signed a law that imposes a moratorium on proof of work mining powered by non-renewable energy. The law, which passed the New York State assembly in April of 2022, will impact both existing and new crypto mining operations. Any crypto mining operation (and existing miners) seeking to attain or renew licenses to mine crypto in New York must use energy from 100% renewable sources. Proof of work is the process by which new units of bitcoin and other cryptocurrencies get added to the blockchain, and it’s been around a long time.
One recurring criticism of proof of work is the energy consumption that comes along with it, as supercomputers need to run constantly in order to crack complex cryptographic equations that yield new bitcoin and place them on the blockchain. The world’s second-most valuable cryptocurrency by market capitalization, ethereum (ETH), recently migrated away from proof of work to an eco-friendlier method known as proof of stake.
Ethereum-based Polygon Network Partners with NFT Marketplace Magic Eden (TechCrunch)
Polygon, a layer 2 scaling solution built on the Ethereum network, is flexing its deal-making muscle by announcing an integration with NFT marketplace Magic Eden. Polygon is known for its support of decentralized applications (dApps) that range from crypto wallets to mobile games. Polygon played matchmaker of sorts throughout 2022 with high-profile partnerships across gaming, media, and entertainment companies. The aim of Polygon’s prodigious partnerships? Getting more companies into web3. Instagram announced that they would be supporting NFTs created on the Polygon blockchain in November of 2022, while Disney tapped Polygon as part of its Accelerator class (its future-focused business development program) in July of 2022.
NFTs and digital collectibles are proving to be a pathway for people to get into crypto. Prices may have fallen off more than 90% for some of the most attention-grabbing NFT sales from 2021, but utility for non-fungible tokens has wider potential outside of digital art collections. Gaming companies have been testing the waters of using NFTs as in-game rewards. This way, gamers who complete milestones can earn rewards that live on the blockchain instead of being saved on the gaming company’s servers, so if a gaming studio shuts down or takes servers offline, all that work will still be memorialized by an NFT.
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