Below is the latest edition of #w3w, my free newsletter about decentralization. If you would like to receive it in your inbox every Sunday, please subscribe here.
Dealmaking is taking off in the crypto space. My hunch is this represents a mixed blessing, for reasons I'll describe further on. But first let's cover some details:
- Robinhood bought the crypto exchange Bitstamp for $200 million Thursday. The acquisition effectively moves Robinhood into closer competition with Coinbase and Binance. It also deepens Robinhood's footprint in crypto despite recent warnings from U.S. regulators about how it has operated its existing digital-assets business. (Wall Street Journal)
- Bloomberg News reports that the publicly listed trading platform Bakkt is exploring a potential sale or breakup. Bakkt, which launched in 2018, is majority-owned by Intercontinental Exchange, operator of the New York Stock Exchange.
- Bloomberg also says the exchange Kraken is pursuing a new funding round of more than $100 million by year end, with an eye toward doing an initial public offering later.
- Deutsche Bank said it will work with Vienna-based broker Bitpanda to process customer deposits and withdrawals. Getting such a large banking partner is significant for Bitpanda at a time when some crypto asset managers have had trouble accessing such services due to rising regulatory worries. (Reuters)
Why all this matters: For the crypto industry, it's welcome news at this point that there is still "smart money" in the conventional finance space jockeying for position amongst its ranks. That's important validation considering retail investors' appetite for crypto is still well below its fevered pre-FTX levels, and artificial intelligence has been stealing some of crypto's PR shine lately.
For anyone who cares about the broader principle of decentralization, though, I think there are also some risks inherent to the current wave of dealmaking.
Remember, the tokenized economy (aka web3) is built primarily upon two networks that are fully transparent and open source by design. But the companies and services that sit atop those networks often aren't.
If those companies then further consolidate, we could end up neatly replicating the sins of web1 and web2, in which massive companies use proprietary software to act as choke points on what was intended to be a more egalitarian internet.
I don't think we're at that point quite yet with web3, or that such a fate is inevitable. But we should definitely guard against it while we're still in early days.
Week in Review: June 2-8, 2024
- The New York Times tech reporters Kashmir Hill and Tiffany Hsu (who are definitely real people) chronicled the rise and fall of BNN Breaking, an AI-enabled "news" organization whose work was chock full of fabrications and errors. Yet it managed to garner millions of readers and get its stories linked on MSN.com and other major sites. Yikes.
- The U.S. added 600,000 new millionaires in 2023, many of them minted by the AI boom. (CNBC)
- Decentralized social network FriendTech announced it will migrate from Coinbase’s Layer-2 blockchain Base to a proprietary Friendchain network built in partnership with infrastructure provider Conduit. (The Block)
- Nuklai, which is building a new data-focused layer-1 chain, announced it has launched a new testnet, dubbed HelixVM. If you're a developer interested in building an application on it, fill out this form to notify the Nuklai team.
- Unstoppable Domains and Blockchain.com have partnered to register a new .blockchain domain with ICANN, the body that governs web addresses and naming globally. The new .blockchain site addresses are expected to be available by the second quarter of 2026. (Cointelegraph)
- Galaxy Digital announced it has tokenized a 316-year-old Stradivarius violin.
Odds & Ends
- Apollo-era astronaut William Anders died at the age of 90 in a plane crash northwest of Seattle. A U.S. Air Force veteran, Anders famously became the first person to orbit the moon, in 1968. During that mission, he snapped the iconic Earthrise photo that has since become a powerful symbol of mankind's exploration of space.
- Serious question: People who use and/or rave about the awesomeness of Apple's AirPod earbuds... How do you not lose them on a weekly basis? I know they've been out for years now, but I will confess I still don't get it. Seems like a massive scam to me. 🤷
That's it for now. Thanks for reading the newsletter today!
To reach me directly with feedback, a story suggestion, or something else, email peter[at]w3w.media.
Best wishes for a healthy and productive week ahead. 😉