Two decades ago, on Oct. 31, 2004, a short note appeared on the front page of this newspaper along with stories about Yasir Arafat’s health and the looming election between George W. Bush and John Kerry. It read: “Modern Love: Introducing a new …
Two decades ago, on Oct. 31, 2004, a short note appeared on the front page of this newspaper along with stories about Yasir Arafat’s health and the looming election between George W. Bush and John Kerry. It read: “Modern Love: Introducing a new weekly column about love and relationships. Today, Steve Friedman says he is just fine after getting dumped. Just fine. Really.”
So began my long, strange trip editing Modern Love, talking to strangers every week about the most intimate details of their romantic, familial and platonic entanglements — and then publishing their stories for hundreds of thousands or even millions of readers.
I never dreamed I would still be doing this job 20 years and some 200,000 submissions later, but it has been a wonderful run. Over time, with the help of my colleague, Miya Lee, Modern Love has grown to include a podcast, books, live performances, another weekly column of 100-word Tiny Love Stories, and television shows in the United States, India, Japan and the Netherlands.
Modern Love began the same year as Facebook, three years before iPhones, eight years before Tinder, and 11 years before same-sex marriage became legal nationwide. The world has changed a lot in two decades, and my life changed, too. When this column started, I was 41, married for 12 years, with two children in grade school. Now I am 61, separated for three years, my two children having long left home for jobs and lives of their own.
I published hundreds of stories about separation, divorce, online dating and blended families without ever thinking they might one day apply to me.
I read tens of thousands of essays about the death of a loved one without having experienced that myself — until earlier this year when my father died.
Digital assets and crypto are rapidly changing the investing landscape. We’re here to help financial advisors find their way.
Danışmanlar için Kripto değişiyor. Ben Sarah Morton, bu haber bülteninin yeni editörüyüm. Gelişen kripto ekosisteminde devam eden bir yolculukta beni tur rehberiniz olarak düşünün. Müşterilerin sorduğu acil soruları yanıtlamanın yanı sıra zamanında, alakalı ve düşündürücü içerikler düzenlemek için buradayım. Ama önce: Neden ben?
Kripto dünyasına öğrenme yolculuğum altı yıldan uzun bir süre önce başladı. Blockchain teknolojilerine ve şimdi finans sektörü için yeni dijital para (“kripto” olarak da bilinir) dediğimiz şeyin yönlendirdiği yeni fırsatlar beni cezbetti. Bu yolculuk beni, müşterilerin kripto ve dijital varlıklara yatırımla ilgili sorularını yanıtlarken karşılaştıkları zorlukları anlamak için danışmanlar, finans uzmanları ve çeşitli dijital varlık topluluğu oyuncularıyla her gün çalıştığımız MeetAmi Innovations’ın kurucu ortağı olmaya götürdü.
CoinDesk’in finansal danışmanlar için dijital varlıkları ortaya çıkaran haftalık haber bülteni olan Crypto for Advisors’ı okuyorsunuz . Her Perşembe almak için buradan abone olun .
There is no question that current and next-generation investors are interested in digital assets (cryptocurrencies, tokens, smart contracts, and other digital representations of value). Just yesterday, BlackRock CEO Larry Fink suggested: “Bitcoin could revolutionize finance.” If he’s right, it would amplify demand from investors (recently surveyed by BCG) and their financial advisors for guidance on how to think about investing in this emerging asset class. And it’s not a simple answer.
Recent news adds to the complexity. In just the past couple of months
A recent Coinbase study showed that over 50% of Fortune 100 companies have started crypto, blockchain and Web3 projects. Such studies raise bigger questions like: How will these advancements affect digital assets? How will advisors navigate the complexities and rapidly changing nature of digital assets?
Advisors have a significant opportunity to support today’s clients and meet the needs of the next generation of investors – as long as they have a roadmap to navigate the digital-asset landscape.
This newsletter is here to help point the way. Each week Crypto for Advisors will share thought leadership from the industry, answer common and pressing questions from clients, and point to resources to better understand this rapidly evolving asset class.
If you have questions for our advisor network – or have topics you’d like to see covered – simply reply to this email, and we’ll try to answer them in future newsletters.
Thanks for subscribing – your readership means a lot to us.
Ask an Advisor
I educate financial advisors about digital assets. Here are the three most common questions they ask about digital asset investing.
– Adam Blumberg
Q: Is investing in digital assets secure? I’ve heard of people losing all their money.
A: It can be secure if you know how to hold the assets and do your homework regarding custody.
Digital assets and crypto are based on self-custody, meaning I hold my own assets in my own wallet(s).
However, we often use centralized custodians – such as an exchange – to hold assets for ourselves and clients, as they take on much of the technology’s heavy lifting. For both you and your clients, it’s important that you research the custodian to ensure they don’t commingle assets and are solvent.
Q: Do digital assets have real value?
A: Each crypto asset has its own value proposition and investment thesis. For example, bitcoin is often viewed as a hedge against inflation, government and banks. Ether is used to run applications on the Ethereum network. Other tokens derive their value from cash flows.
Advisors should understand some of the investment theses and value drivers of various crypto assets to properly evaluate them for client portfolios.
Q: What are the risks of investing in digital assets?
A: We’ve already talked a bit about custodial risk. Cryptocurrencies are also volatile, which poses allocation risks in client portfolios, especially with clients who may need liquidity. Many of the projects and protocols the tokens represent carry their own risks, which can be deeply technical and complicated to understand.
We don’t expect advisors to evaluate all the risks on their own, and we’re seeing more models and services which help determine crypto-asset risks as they relate to client portfolios.
Adam Blumberg is the co-founder of Interaxis, a company dedicated to educating financial professionals about digital assets.
Keep Reading
News of impending rejection from the SEC over language concerning surveillance agreements have led to a wave of updated refilings
Bitcoin ETF’leri geliyor mu? SEC, başvuranlardan netlik talep etti, ancak “hayır” demedi.
Finansal Hizmetler ve Piyasalar Yasası, Kral Charles tarafından Kraliyet Onayını vererek, kripto ticaretini Birleşik Krallık’ta düzenlenmiş bir finansal faaliyet haline getirdi.
Birleşik Krallık, sabit paralar ve kripto para birimleri için yasalar uyguladı. Hangi ülkeler bu çerçeveyi takip edecek ve ne öğrenebiliriz?
Y Kuşağı olarak tehlikede olan 84 trilyon dolarlık servet transferi, X Kuşağı kriptolara bakıyor: BofA çalışması
Nesiller arası zenginliğin en büyük transferi, Web3 ortaya çıkarken gerçekleşiyor. Yeni nesil yatırımcıların ihtiyaçlarını karşılamak istiyorsanız, dikkate alınması gereken çok şey var.
Brett Harrison’s new firm, Architect, aims to be an one-stop platform for institutional-grade crypto trading.
Pek çok insan, yapay zekanın (AI) hemen hemen her sektör üzerinde derin bir etkiye sahip olacağına inanıyor ve kripto ticareti de bir istisna değil. Ana şirketi çökmeden sadece aylar önce istifa eden FTX.US’un eski CEO’su Brett Harrison, AI kullanmanın algoritmik ticaret stratejilerini kodlamayı kolaylaştırabileceğini düşünüyor.
Harrison bir röportajda CoinDesk’e verdiği demeçte, yeni girişimi Architect’in resmi olarak Ocak 2023’te Coinbase Ventures ve Anthony Scarmucci’den 5 milyon dolarlık bir başlangıç turu ile başladığını ve bireysel tüccarlara ve büyük kurumlara yatırım araçları getirmeyi amaçladığını söyledi. Architect’in platformu, Mayıs ayından bu yana belirli müşteriler için beta modunda kullanıma sunuldu.
Around February or May, when interest in AI was at its zenith, Architect saw an opportunity to write algorithmic trading code for crypto, using generative AI tools such as ChatGPT – the chatbot created by Sam Altman’s OpenAI. Often the hardest part about creating such algorithms is the initial step, going from zero to one, because it requires specialized skills and knowledge that not all trading firms have in-house, he said.
“Our idea was to leverage the OpenAI API’s [application programming interfaces] and combine them with our internal trading API’s that we’ve built on top of all these different protocols to make it possible to use natural language probes to generate trading strategy code,” Harrison said. For example, using Architect’s platform, traders could set up software that buys bitcoin on Coinbase (COIN) when its price drops below what it is on other crypto exchanges.
Early stages
But Architect is still in the “early exploration” phase of AI tools, and envisions it as part of a suite of features on its platform. Another AI-powered tool it is considering based on customer feedback is actually using large language models (LLMs) for advanced market indicators, or actually embedding LLMs directly into the trading process, Harrison said.
LLMs such as OpenAI’s ChatGPT and Google’s Bard are artificial neural networks trained on large datasets of language, such that they can understand and generate human-like texts. Due to their proficiency with language, LLMs can understand complex concepts and explain them to users in an approachable way.
“The main thesis is to build good software that helps enable institutions to be prepared for a world that mixes traditional and digital assets seamlessly,” Harrison said. “But we do think that AI is going to be a critical component of most businesses going forward, and we didn’t want to miss the opportunity to be able to leverage AI tools for our users.”
Ultimately, the success of the trading strategies depends on the team behind it, not just the generative AI used to build it. The results you’re going to get from something like OpenAI’s Chat GPT are only going to be as good as the prompts that you’re giving it, Harrison noted.
“You definitely need to review the strategy, make sure it’s working, tweak it, test it,” he said.
The FTX connection
Regardless of the new trading platform, the shadow of FTX – the company that saw one of the crypto world’s most highly publicized collapses – has followed Harrison and Architect.
Harrison resigned from the position of CEO at FTX.US in late September 2022, just months before the exchange’s collapse. Six of eight Architect employees listed on its website used to work at FTX US.
FTX ile bağlantısı ve bağış toplama hakkında sorulan Harrison, bazı yatırımcıların bunu sallayamadığını, ancak diğerlerinin yapabildiğini söyledi.
“Çökmeden önce Sam’in sektör üzerinde nasıl gerçek bir güce sahip olduğu ve bunun benim zam sürecimi bile nasıl etkilediği hakkında halka açık bir şekilde konuştum ve insanlar, Sam’in çöküşten önce şirketle nasıl bir bağlantısı olacağını sordu. Ve sonra, çöküşten sonra, aynı yatırımcılardan bazıları benim FTX ile ilişkim konusunda endişelendi. Ama bunlar konuştuğu herkesten sadece birkaçı” dedi.
“Aslında endüstrinin en zor zamanlarından bazılarında, sadece kriptoda değil, VC [risk sermayesi] manzarasında genel olarak para toplamak için çok başarılı bir şekilde toparlamayı başardık.” dedi Harrison.
BTC and ether both lost ground in May, the first monthly decline of 2023. LTC and RNDR were among the month’s big gainers.
May gray turned to June gloom on Thursday as crypto prices veered slightly into the red.
Bitcoin, the largest cryptocurrency by market capitalization, was recently trading at about $26,950, down 0.5% over the past 24 hours and the second consecutive day BTC dropped below $27,000, according to CoinDesk Indexes. The inauspicious beginning to June carried over the downward trend from May when bitcoin’s price dipped almost 4% to break a four-month streak of gains.
Bitcoin soared more than 60% from January, reaching to about $31,000 at one point in mid-April as crypto regained its luster as a safe-haven asset following a string of U.S. bank failures that raised concerns about traditional finance.
“Anytime you have an asset that has a significant volatility such as cryptocurrency, any real monthly move that is under a safe flat fee of 5% is relatively muted,” CoinDesk Head of Index Research Todd Groth told CoinDesk’s “First Mover” program on Wednesday. “The broad CMI was down about 2% to 3%. In the context of how much these assets can move over historical basis, it’s really a bit of a choppy month. Now we’re looking for that next big narrative to move higher.”
Groth noted optimistically that markets had recently priced in a resumption of more hawkish monetary policy after hopes rose in early May amid encouraging signs that inflation was waning enough to allow the U.S. central bank to halt its nearly year-long campaign of interest rate increases.
“We have repriced interest rate expectations to not be so dovish without any sort of big market correction lower, so that has been positive,” Groth said but added that the “repricing interest rates higher” has also been a sort of a headwind.”
Ether, the second largest crypto in market value, was recently trading at about $1,870, up slightly from Wednesday, same time. Other major digital assets were mostly down, albeit not by much, although litecoin was an exception as it recently rose more than 7% with investors seemingly buoyed by the network’s halving in two months and a jump in activity in May.
Groth noted that LTC and RNDR, the token of the Render Network, a provider of decentralized graphic processing units-based rendering solutions, ranked the CoinDesk Indexes biggest gainers for May. LTC and RNDR have risen roughly 20% and 7.5% over the past 30 days. “We’ve seen the narrative of GPUs broadly repurposed to be these big AI (artificial intelligence) clusters and Render is effectively a decentralized AI cluster,” Groth said. “So there’s no surprise that on a relative basis, it outperformed, given the buzz and hype over Chat GPT, all these LLMs. That caught some of that Nvidia bump up.”
The CoinDesk Market Index, a measure of crypto markets performance, recently sank 0.4%.
Meanwhile, stocks rose a day after the U.S. House of Representatives passed a bill to raise the debt limit ensuring the government could meet its financial obligations at least for the near-term and avoid a shutdown. The tech-heavy Nasdaq Composite and S&P 500, which has a hefty technology component, both rose about a percentage point. Gold inched up 0.6% to above $1,995, although it remains well below its near record high of nearly a month ago.
In an email to CoinDesk, Leo Mizuhara, CEO of institutional crypto management platform Hashnote, wrote that crypto markets had “dodged a bullet, thanks to the resolution to the debt ceiling crisis and a growing embrace of digital assets in Asia, particularly in Hong Hong, which has been trying to create easier access for retail investors.
But he added that he is “not expecting a huge breakout for Bitcoin at the moment, and compared the current stasis in markets to 2019 when investors were recovering from an extended bear market.
“We’re basically in a builder’s market,” Mizuhara wrote. “A lot of interesting protocols and companies are being launched. Venture funding is creeping back in. So, like in 2019, we’re likely in this build-up phase that sees a lot of positive energy flowing into the space that in turn sets the foundations for the next bull cycle. Despite the difficulties facing the crypto industry in the United States, what’s happening globally makes it hard not to feel optimistic right now.”
In some European countries, we will need to stop thinking that we have an automatic right to cheap, plentiful water which we can use to clean our streets, wash our cars, or fill our swimming pools whenever we wish, Mark Smith writes.
Last Thursday, the Spanish government held an extraordinary meeting about the economic impact of the drought currently ravaging the country.
Spain has experienced drought more severely and for longer than other European counties, but the whole of Europe is set for a worse summer drought than that of 2022, already its worst for 70 years.
On the face of it, it might seem obvious that our leaders should be looking at this drought as a pan-European problem or even a pan-European, Middle Eastern and African one.
East Africa is currently ravaged by drought, with 700 million people in the region anticipated to be displaced by water shortages by 2030.
Meanwhile, low-lying desert countries like the United Arab Emirates are being menaced by rising sea levels and increasing their reliance on high-emitting desalination programmes.
Is water in Europe really that abundant?
Climate change is increasingly manifesting itself as a water crisis; in the case of Spain, it is droughts, but we’re also experiencing more floods and storms.
People in Andalucia are certainly experiencing the climate crisis for what it is — a water crisis.
Until we reverse the global emissions that are causing climate change, the medium-term solution for Spain and Europe involves managing water. This is where the solution becomes much less global.
When it comes to water management, we hear a lot about water scarcity issues. But in fact, what we mostly have is overconsumption combined with water access problems.
There is a prevalent attitude in Europe that water is plentiful and cheap, which persists right up until it is no longer available.
An old boat is photographed half-buried after the water level has dropped at the Sau reservoir, about 100 km north of Barcelona, 20 Marrch 2023
Indeed, there is a prevalent attitude in Europe that water is plentiful and cheap, which persists right up until it is no longer available.
There are definitely parts of the world that are genuinely running out of water. Andalucia, home to the only desert in the EU, is one of them.
But even in southern Spain and in other desert regions such as parts of East Africa, water exists, and we know its location. We just don’t have access to water — or rather, we don’t have clean access to it.
Drought is not resolved by pumping more groundwater
For example, in Andalucia — where the reservoirs are at record low levels – communities are increasingly looking to exploit groundwater reserves to maintain their current consumption levels.
There is a proliferation of private wells being drilled and exploited to maintain lifestyle choices.
The groundwater is pumped and consumed, but since the resources are not recharged during drought, the groundwater is continually being depleted.
Typically, the reaction to this situation is — rather than addressing the politically and socially difficult topics of ever-increasing demand — to continue to pump the groundwater.
Rather than talking about how to handle the water crisis at a European level … we need to be talking about what the water crisis looks like in the specific local areas we are dealing with.
Local residents carrying an image of Jesus Christ take part in a procession asking for rain in Perelada, a rural village in the northeast of Catalonia, Girona, 27 April 2023
This ultimately means the water table goes down, and the water becomes more contaminated, especially near the coastal regions with saline intrusion.
Eventually, the water either dries up or becomes untreatable and is no longer drinkable and then there really is a water crisis.
In turn, rather than talking about how to handle the water crisis at a European level, or even at a national level as Spain is now doing, we need to be talking about what the water crisis looks like in the specific local areas we are dealing with.
You can’t simply zap it from one part of the country to another, either
This is mainly because even with the best water infrastructure in the world — something which Japan has the privilege of possessing, though the Netherlands comes a close second — water cannot be easily moved around between regions.
Water is heavy: every time you push it, it costs money and burns fuel. Unlike electricity, you can’t just zap it from Madrid to Malaga.
For this reason, all local communities need to look at what water actually exists in the area where they are. Communities have to tackle demand as well as supply.
If the demand is too high for the region, difficult decisions need to be made because we cannot solve the problem through endless large desalination plants and pipelines.
View of La Baells reservoir in Berga, about 112 km north of Barcelona, April 2023
If the demand is too high for the region, difficult decisions need to be made because we cannot solve the problem through endless large desalination plants and pipelines.
In Spain, plans are afoot to create a 100-kilometre transfer pipeline from Manilva and a 142-km pipeline from the Cordoba province to supply water to Costa del Sol.
However, these projects are expensive and disruptive, will take years to build, and will inevitably contribute to Spain’s greenhouse gas emissions.
Our right to plentiful water is not a given
It is crucial that the solution to a community’s water crisis must not in itself contribute to the underlying cause of that crisis, climate change.
Thankfully, in most parts of the world, there is sufficient water for everyday use, but it’s often undervalued and overexploited, and it ultimately becomes polluted and unusable.
What we have is not a planet-wide water shortage problem but a geographically sensitive clean water access problem, and this problem is growing globally.
Now, every region of Europe needs to be looking urgently at what water resources are available and how they can be managed, cleaned and accessed, all at the local level.
A tourist walks crossing a stretch between the mainland and the San Biagio island in Manerba, on the Garda Lake, April 2023
Now, every region of Europe needs to be looking urgently at what water resources are available and how they can be managed, cleaned and accessed, all at the local level.
This may well mean that in some European countries, we will need to stop thinking that we have an automatic right to cheap, plentiful water which we can use to clean our streets, wash our cars, fill our swimming pools or water our decorative municipal floral displays whenever we wish.
Otherwise, what is happening in Spain will cease to be the exception and become the norm.
Mark Smith is a strategic business development director for the water sector at the environmental and engineering business, the RSK Group. He is a former chief executive of the UK’s Water Research Group and chair of the Future Water Association.
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The loss in finality meant that blocks could have been tampered with, and while it isn’t supposed to affect end-user experiences, it did lead to some inconveniences for some applications.
The Ethereum blockchain suffered two brief episodes last week where blocks weren’t finalizing – an unwanted bout of instability that presents risks to the blockchain’s security but isn’t considered dire.
There was a lot of confusion in terms of what the delay in “finality” meant for the functionality of the blockchain, prompting discussions about security concerns. So, it bears unpacking a bit.
You’re reading The Protocol, our weekly newsletter exploring the tech behind crypto, one block at a time. Sign up here to get it in your inbox every Wednesday.
The cause of the temporary loss of block finality remains under investigation, though Prysm, a provider of client software used to run a node on the blockchain, just released a new version, describing it as “the first full release following the recent mainnet issues,” with “critical fixes.”
When data blocks don’t finalize, there isn’t supposed to be any downtime or difference in end-user experience. That said, a loss in finality can lead to some security issues like reorgs.
Reorgs occur when a blockchain produces more than one block at the same time, usually because of a bug or an attack. This means that a validator node temporarily creates a new version of a blockchain, which makes it difficult to properly verify if a transaction has been successful, while the old version of the blockchain continues to exist.
However, snowball effects from this incident led to some end-user jolts. DYdX, a leading crypto exchange platform, had to temporarily pause deposits because of one of last week’s incidents, and Polygon’s zkEVM also experienced some delays with deposits.
The chart shows a spike in missed validator slots last week as the Ethereum blockchain temporarily stopped finalizing transactions. (Glassnode)
So how does finalization work?
In a proof-of-stake blockchain like Ethereum’s, validators first have to propose a block that contains transactions. Once those are proposed, other validators have to sign off on the block to permanently add it to the blockchain, which takes about 15 minutes. Once it is approved, or “attested,” by two-thirds of validators, the block eventually becomes finalized.
Thus, finality is the point where transactions on a blockchain are considered immutable. Finality is supposed to guarantee that transactions within a block cannot be altered.
If finality cannot be guaranteed, the blockchain enters an emergency state called the “inactivity leak,” where validators receive penalties for not reaching finalization. When the state is triggered, it acts as a way to incentive the blockchain to start finalizing again. The incident last week triggered Ethereum’s first-ever inactivity leak.
The Ethereum community has acknowledged that the current timeframe for blocks to be finalized is too long.
“Having a delay between a block’s proposal and finalization also creates an opportunity for short reorgs that an attacker could use to censor certain blocks or extract MEV,” the Ethereum website shared in a blog.
Ethereum co-founder Vitalik Buterin was writing about finality seven years ago, an indication of just how important an issue it is.
When the first loss of finality occurred on May 11, developers immediately shared it over Twitter, saying they were going to deploy extra help to figure out what was going on. After 25 minutes, the issue seemed to have been resolved and the chain resumed finalizing.
Roughly 24 hours later, the chain stopped finalizing again for about an hour, which caused outages for some infrastructure providers.
In the past, finalization has temporarily stopped because of bugs in client software used to run the blockchain. Ethereum has multiple clients in the event that there is a flaw or glitch in the software, so there are other options, and the activity on the blockchain can keep running.
How did this affect the applications?
Tim Beiko, protocol support lead at the Ethereum Foundation, told CoinDesk the incident is “definitely significant, but it’s not something where Ethereum’s security or soundness is at risk or compromised.”
“Within minutes, things were corrected and within like a day or two clients had software patches to make sure that this specific case did not come up again,” he said.
The developers are still looking to understand what caused the blockchain to stop finalizing, and are expected to discuss a post-mortem report in their upcoming Consensus Layer call.
Beiko told CoinDesk that the incident did not get to a point “where we began to test the very extreme fallbacks in the protocol to deal with this stuff.”
The incidents did affect several applications that run on top of the Ethereum blockchain.
Jordi Baylina, technical lead at Polygon, said that the finality stoppage meant that deposits onto the Polygon zkEVM chain were delayed, and since the chain relied on Infura, an infrastructure provider which also temporarily had an outage as a result of the loss in finality, issues for individuals using the zkEVM compounded.
“You need to wait for the finality in layer 1 deposit to be available in layer 2,” Balyina said. “So until you don’t have finality, you cannot use [the chain] or you have the risk of double spending in layer 2.”
DYdX paused its deposits temporarily today due to the lack of Ethereum finality and said it was “continuing to monitor and investigate this issue.”
Despite this, Ethereum developers emphasize that the network did not go down.
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“Today’s incident has been a great fire drill. It looks like two or three issues came together (as is often the case). The chain recovered gracefully and we discovered a few other issues that could be improved to make Ethereum more resilient,” tweeted Marius van der Wijden, a developer at the Ethereum Foundation.
