A $14 million QR code

Good morning. Today we've got our Weekend Update, a BlockFi settlement with the SEC, massive flare gas mining success, and more!

Bonus Content Coming Soon: I'm close to having my notes out from Messari's Crypto Theses for 2022. I'll include a link to my notes in this newsletter, however, the full report is definitely worth a read. The report is now in podcast form and can be found here.

Market Update (as of 7:59am ET):

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Top 5:

1. Weekend Update.
Bitcoin traded slightly down over the weekend with the ether and the general altcoin market following similar trajectories. Analysts point to inflationary concerns, potential war with Russia, and the Wormhole exploitation as downward pressures on price.

Updates and other stories from the weekend:
- Kenya considering CBDC...Read More
- Coinbase trading vulnerability exposed by white-hat hacker...Read More
- Crypto-savvy voters may hold key to South Korea's election...Read More
- Intel says its new crypto chip is designed to be energy-efficient...Read More
- Inside the Bitcoin Laundering Case That Confounded the Internet...Read More

Pomp and Dylan LeClair talk Bitcoin:

2. 23-year-olds made $4 million mining bitcoin off flare gas. The two Texas A&M grads started Giga Energy Solutions in 2019 with the idea that flare gas could be used as fuel to mine bitcoin. What is flare gas you may be asking. The simplified explanation is that when drilling for oil occasionally the drillers will hit a natural gas formation and unless they are close to a pipeline it's impossible to capture, transport, and sell. So, Giga steps in by bringing a shipping container full of generators and bitcoin mining equipment out to oil drilling sites. When natural gas is found, the company converts that gas into electricity to power their miners. As an added bonus, Giga says using natural gas to power mining reduces emissions by 63% compared to traditional flaring. The company has exploded with the price of bitcoin and expects to generate $20 million in revenue this year.

SSS (sat-sized summary): Using flare gas to mine bitcoin has becomes extremely profitable for mining companies like Giga Energy Solutions. The mining method converts energy from natural gas that would otherwise be wasted.

3. A $14 million QR Code. The Super Bowl ad from Coinbase was one of many crypto ads that aired during last night's game and reportedly cost the firm $14 million. The resulting traffic to the Coinbase platform temporarily caused the app to crash, which I suppose can be viewed as a success. Surojit Chatterjee, Coinbase's Chief Product Officer, tweeted out that in response to the commercial Coinbase had seen, "more traffic than we've ever encountered." Will Super Bowl LVI result in million of new users onboarded into the crypto ecosystem? I'd love to know how many new users take advantage of Coinbase's offer of $15 in BTC for signing up.

SSS: Coinbase's Super Bowl ad crashed the application and resulted in more traffic than the platform has ever encountered in such a short period of time. The big question: will major ad spending across crypto result in an equivalent spike in new users?

4. BlockFi to pay $100 million in settlement with SEC, state regulators. The company has been under investigation since November 2021 for its high-yield accounts which offer rates as high as 9.5%. According to reports, BlockFi will pay $50 million to the SEC, another $50 million to several state regulators, and cease opening of new high yield accounts. Crypto lending has come under the regulatory microscope over the last year and the SEC is reportedly investigating other crypto lenders including: Voyager Digital, Gemini Trust, and Celsius Network.

SSS: The SEC and state regulators are cracking down on BlockFi and potentially other crypto lenders. The current investigation of BlockFi's high yield accounts is resulting in $100 million worth of fines for the company. Further details on the cause of the fine have yet to be released.

5. NFT marketplace suspends sales due to plagiarism. An overwhelming wave of plagiarism has forced NFT marketplace, Cent, to suspend sales on the platform. In recent weeks, Cent has seen a large increase of NFT mints and sales by individuals other than the owners. Plagiarism is not just an issue for Cent. In January, OpenSea announced that 80% of NFTs minted using their free minting tool were either fake, plagiarized, or spam. Dealing with these issues is a major hurdle for the NFT world, specifically when dealing with collectibles or art.

SSS: It appears the "right-click and save" critics may have a point. Cent, an NFT marketplace was forced to suspend NFT sales while dealing with a flood of plagiarism on the platform and there's no clear solution to the problem of plagiarism in the industry at large.

Top Sharers of the Crypto Top 5:
1. Donna Y. - Nashville, TN
2. Jake Y. - Greenville, SC
3. Forrest H. - Evansville, IN

External Resources:
1. Cryptopedia from Gemini - if you see a word, acronym, or phrase in this newsletter that you don't understand, there's a good chance you can find an explanation here
2. Crypto Explainer+ - intro level courses on Bitcoin, Ethereum, decentralized finance, NFTs, and more
3. Crypto Jobs! - looking for a new job? Check out this page from Anthony Pompliano with hundreds, if not thousands of listings

Disclaimer: The information contained in this newsletter shall not be understood or construed as financial advice. I am not an attorney, accountant or financial advisor, nor am I holding myself out to be, and the information provided is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation.