Inflation Watch

Good morning. Big Friday news is that November CPI numbers are scheduled to be released at 8:30am ET (about the same time as this newsletter). Outside of inflation, we've got Bitcoin network recovery to almost all-time highs, funding for a crypto-derivatives platform, and the third edition of Altcoin Friday!  

What this is:
A "Top 5" of crypto, digital asset, and other blockchain related news sent to your inbox on a daily basis

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Top 5:

1. Bitcoin Hashrate Approaches Full Recovery From China Crackdown
Back in May, China decided to effectively ban almost all crypto mining in the country. At that time, China accounted for 71% of the Bitcoin network's global hashrate, which is a measure of all the computing power supporting the network. After the ban, the Bitcoin network's hashrate dropped about 50% as Chinese miners shut down their operations or took time to relocate. The network's hashrate has continued to recover since a June low and over the last three days the hashrate has averaged 182.83 exahashes/second, only slightly below the all-time high of 190.55 exahashes/second reached in May, right before the ban took place in China.
Bitcoin network hashrate since April:

2. WhatsApp starts testing currency payments with Meta’s Novi wallet
Meta is integrating its cryptocurrency wallet, Novi, into the WhatsApp platform with initial transaction testing already in flight. The feature has been rolled out to a "limited number of people" in the U.S. and allows users to send and receive money instantly with no fees. The only cryptocurrency currently being supported in the WhatsApp integration is the Pax Dollar (USDP) stablecoin. WhatsApp currently has over 2 billion users worldwide (~25% of the global population).

3. Altcoin Friday #3 - $ZEC

Overview:
- Current price (as of this writing) of $166.69
- Market capitalization of $2.2 billion (62nd overall)
- Zcash (ZEC) is a cryptocurrency focused on providing enhanced privacy to its users
- It was built off of the Bitcoin codebase and therefore shares similarities to Bitcoin such as the finite supply of 21,000,000 units

Purpose:
- Zcash can allow users to transact with anonymity, something that Bitcoin and most other cryptocurrencies, do not provide.

How it Works:
Within the Zcash protocol there are two types of addresses. A "z-address" is a private address, while a "t-address" is a transparent address. When transacting between two z-addresses, the transaction can be kept private while still posting to the public blockchain for validation that it occurred. This type of transaction is only possible through a set of proofs called "Zero-Knowledge Succinct Non-Interactive Argument of Knowledge" or zk-SNARKs. These zero-knowledge proofs allow for anonymous transactions to occur on the public blockchain. A "T-to-T" transaction (made between two transparent addresses) works exactly like Bitcoin with all details of the transaction being visible on the blockchain. The two addresses are interoperable as show in the diagram below.

Diagram of basis transactions from Zcash:

Note: a solid overview of Zcash from Binance can be found here.

4. Crypto derivatives platform Paradigm nabs $400 million valuation
Another day, another massive valuation for a crypto firm. Paradigm, a platform for dealers and market makers to execute large trades in options and futures, raised $35 million at a $400 million valuation with the funding round led by Jump Capital and Alameda Research. The firm currently facilitates $10 billion in trading per month and captures approximately 30% of the crypto options market. CEO Anand Gomes lays out their business model as such:

"Our primary role is to serve as a liquidity access point for crypto derivatives. We solved this problem for options first but our ambition has always been to scale this solution to other assets and venues."

The firm is now targeting integration with DeFi options protocols to provide further exposure for their institutional customers.

5. Have a great weekend!

Top Sharers of the Crypto Top 5:
1. Cameron S. - New York, NY
2. Jake Y. - Greenville, SC
3. Lauren A. - Nashville, TN

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.