• Grayscale Investments LLC participated in oral arguments on Tuesday in the US Court of Appeals for the DC Circuit, arguing to get its popular Grayscale Bitcoin Trust (GBTC) converted to a spot bitcoin ETF.
• The SEC has rejected previous attempts at introduction of a spot bitcoin ETF and Grayscale is suing the SEC for what it sees as arbitrary and inconsistent decisions.
• During the oral arguments, judges Chief Judge Sri Srinivasan and Judge Neomi Rao questioned Emily Parise from the SEC about why it had denied approval for spot bitcoin ETFs without providing evidence.
Grayscale Argues for Spot Bitcoin ETF
Grayscale Investments LLC argued in an oral hearing on Tuesday before the United States Court of Appeals for the DC Circuit that its popular Grayscale Bitcoin Trust (GBTC) should be converted into a spot bitcoin exchange-traded fund (ETF).
SEC Has Repeatedly Denied Approval
The U.S. Securities and Exchange Commission (SEC) has repeatedly denied previous attempts at introducing a spot bitcoin ETF, leading to Grayscale suing them alleging their decisions have been arbitrary and inconsistent with their approval of Bitcoin futures ETFs.
Judges Question SEC Senior Counsel
During these oral arguments, judges Chief Judge Sri Srinivasan and Judge Neomi Rao prodded Emily Parise from the SEC about the difference between a futures ETF and a spot bitcoin ETF, asking “Where’s the gap, in the Commission’s view?”. Parise responded that correlation does not equal causation and without empirical proof that fraud or manipulation in one market affects another there can’t be surety that CME surveillance would approve a spot ETF.
SEC Lacking Evidence
Judges were unsatisfied with this response, with Rao telling Parise that “The SEC has not offered any explanation that the petitioners are wrong.” This implies that they are lacking sufficient evidence to back up their decision making process.
Full Record Available Here
For those interested in further details of these discussions, you can listen to a full record of questioning here.
• Bitcoin Core Developer Luke Dashjr has disavowed any project associated with his name.
• Dashjr was offered a 90% donation of the auction proceeds but refused it.
• Dashjr wants to limit the damage caused by this confusing behavior.
Bitcoin Core Developer Disavows Projects
Prolific Bitcoin Core developer Luke Dashjr has publicly declared his disavowment of any Ordinal project associated with his name. In a post on the decentralized social media platform Nostr, Dashjr clarified his involvement in the projects, saying that “I have not consented to the use of my code or my name for this purpose.”
Bribe Offered To Silence Developer
Dashjr also noted that the sellers of the NFTs have reached out to him in what he interprets as a bribe, writing that “The public should also be aware that the seller and/or auction site offered me a donation of 90% of the auction proceeds ‘should I choose to accept’ it. I feel this is a clear attempt to: (1) bribe me into silence; and/or (2) obtain my consent after the fact. I will not accept such payment at the expense of the public who are being misled.”
Developer Expresses Frustration
The Core developer has previously expressed his dislike and frustration with the Ordinals project, calling it spam and an attack on Bitcoin. Dashjr expressed his strong desire for the proceeds of the purchase to be refunded to the buyer. He concluded with a message addressing both his situation and what he feels may impact other figures in the Bitcoin space, saying “I felt obligated to speak out, not just for myself, but for other Bitcoin devs who are being placed in similar situations.”
Rights & Ownership Of What Is Uploaded To Blockchain Questioned
Dashjr’s post may be a sign of necessary conversation in regards to rights and ownership of what is being uploaded to the Bitcoin blockchain via Ordinals protocol. The developers hope is that people will become aware where he stands on this issue and take it upon themselves protect their own projects from malicious actors attempting similar schemes.
Developer Calls For Refunds Of Auction Proceeds Dashjr ended by calling for refunds of all auction proceedings if possible, noting that “the amount of money we have been offered as ‘donations’ for acquiescing to what is taking place is considerable. I do not condone it…I want whatever I can do limit damage which will inevitably be caused by this confusing and misleading behavior”
• Public mining holdings of bitcoin have decreased 32% in the past 10 months.
• The hash rate across public miners has increased 129% in the last year, and now makes up 25% of the total network hash rate.
• Companies like Marathon Digital, Hut 8, and Riot Platforms are selling a portion of their bitcoin to fund monthly operating costs and other general corporate purposes.
Public Mining Update
Bitcoin holdings across public miners have been declining since April 2022, dropping 32% from 46,930 BTC to 31,892 BTC by January 2023. Despite this decrease in holdings, the public miner’s hash rate has grown significantly; increasing 129% over the past year to reach a total of 25% of Bitcoin’s total network hash rate. The largest contributors to this growth are Bitfarms, Core Scientific, Northern Data, Marathon Digital, Hut 8 and Riot Platforms.
Marathon Digital Statement
Marathon Digital made a statement about their decision to sell some mined bitcoin for “operating expenses and for general corporate purposes” as well as plans for further expansion stating they expect to have approximately 23 EH/s capacity installed by mid-2023. Similarly HIVE announced that it sells all its mined Bitcoin (with a focus on HODLing green Bitcoin mined from ASICs) while Riot Platforms shared their planned delay due to infrastructure damage with an expected completion date later this quarter.
Hash Rate Expansion
The growth in hash rate across public miners has been a significant driver contributing towards overall network growth; with the recent hash rate reaching 300 EH/s. This is even understated because not all public miners such as Cipher and Terawulf are included within these numbers.
Selling Bitcoin Production
Public mining companies such as Marathon Digital are selling some of their mined bitcoin in order to cover operational expenses and other general corporate purposes. Furthermore HIVE is focusing on selling mined Bitcoin earned from GPU mining while holding onto green Bitcoin earned from ASICs.
Public miners’ contribution towards total network hashrate has seen significant growth over the last year despite decreasing levels of bitcoin holdings over time; currently representing 25% of all hashrate on any given day with plans for further expansion anticipated later this quarter by companies such as Marathon Digital and Riot Platforms who will be selling some of their bitcoin production in order to cover operational costs.
• This article discusses the concept of Ordinals and Inscriptions, two made-up conventions for tracking sats across Bitcoin transactions.
• The Bull Case for these concepts is that they provide a fun, rich art experience on the Bitcoin network which is more secure than other crypto NFTs.
• However, there are concerns about reduced accessibility to transact on Bitcoin due to transaction backlogs and increased storage and bandwidth requirements.
What Are Ordinals And Inscriptions?
Ordinals are a made up way of tracking sats (a fraction of a bitcoin) across transactions. It’s a convention of numbering sats in the order they’re mined into existence and tracking them in a first in, first out (FIFO) method. An inscription is another made-up convention where sats can be inscribed with arbitrary content, a kind of Bitcoin-native digital artifact or NFT.
The Bull Case For Ordinals And Inscriptions
The pro Ordinals and inscriptions case could broadly be understood as: “Come for the fun, rich art, stay for the decentralized digital money.” Bitcoin inscriptions are immutable, always on chain, simpler and more secure than shitcoin NFTs.
Concerns Raised With Inscriptions
The main concerns raised around inscriptions include reduced accessibility to transact on Bitcoin because of transaction backlogs and increased storage and bandwidth requirements; as well as the possibility of illegal material being recorded into Bitcoin’s blockchain that might discourage some users from using it.
Overall, while Ordinals and Inscriptions offer an interesting experience to those who use it – there are certain risks associated with its usage that need to be taken into consideration before doing so.