40 – The Ethereum Merge brings positive vibes, Binance flips Coinbase and South Park roasts celebs who love crypto

Tracey: [00:00:19] Welcome to the Crypto Curious podcast designed to help you navigate the dynamic world of cryptocurrency. We're here for anyone who's interested in crypto at all. Maybe you've already dip your toe in the water, or maybe you don't know anything about it. And this is a very beginning. We recommend heading back to the early episodes to get your footing. However, if you think you're ready to dive in headfirst, then let's do it. My name is Tracey and I'm joined today by my mates from the bamboo at Blake and Craig. Hey, going today, guys? 

Blake: [00:00:45] Going pretty well, Tracey. How are you?

Tracey: [00:00:47] Yeah, good. Craig, how you going? 

Craig: [00:00:49] Going good. Good to see some relief in the markets finally. 

Tracey: [00:00:53] Yeah, absolutely. There's a bit of green going on. And can you believe that we are in July and it's already halfway through the. So for anyone here in Australia, that means it's tax time. And last week we dropped our tax episode with the help of Denny from the tax app tool coin. So thanks, Denny. We hope that you took away some valuable information from that episode and you're ready to prepare your tax with your crypto portfolios in mind. But as Craig mentioned, there's been a bit of a relief rally in anyone who purchased Etherium maybe even a week ago would probably not realise that we're in a bear market right now because at the time of recording today, Ethereum is about 48% up in the last seven days and even Bitcoin has pumped around 22% in the last seven days. So let's chat about that to start off with guys. Is this a bull trap? What's up here?

Craig: [00:01:46] Craig Well, Etherium did get some positive sentiment around the merge that's upcoming later this year and I believe they've now confirmed a day which will be middle of September. September 19th is what they've said, which would be if all goes well, the final test will will take place and I'll probably leave it to bloke to explain what that actually means because even I don't really know what that means to be honest. 

Tracey: [00:02:09] Chase Yeah, yeah, I think we'll do that because look, we need to understand a bit more black because we keep hearing about this merge and it's one of the biggest events that, you know, Ethereum's ever going to have. So can you give us a quick rundown on what exactly is the merge, you know, abridged version and why does this matter so much? 

Blake: [00:02:26] Yeah, for sure. So this is a long time coming. It's a big network upgrade to move from Ethereum 1.0 to Ethereum 2.0. And there's been many stages of testing and I think they've just successfully achieved the second last test before they go through with the actual merge or the network upgrade. So pretty exciting stuff and many things are going to happen as part of this. But the key thing is that it's moving from proof of work to proof of stake. Now that probably sounds like a bit of mumbo jumbo. We have gone through it here previously. But just in summary, basically it's going to change how they validate transactions on the network, moving from a model where they use miners to a model where they use validators. And basically anyone can be a validator as long as you own Ethereum and then those validators will get paid to lend their computing power to processing, to securing the network and processing transactions. So pretty exciting stuff. It means that transactions are going to be faster, it's going to be far more sustainable and have a better economic model and one step closer to scalability. So pretty exciting stuff there. 

Craig: [00:03:45] What's this I hear about it being deflationary? I don't I've heard about it in the Twitter spaces that Ethereum will be deflationary and this is, you know, comparable to Bitcoin halving. Can you talk about that a bit? Can you explain that? 

Blake: [00:03:59] Yeah, for sure. So today all the miners, they received most of the rewards or the transaction fees that people pay day to day for their transactions. Whereas in proof of stake in the Ethereum 2.0 or a portion of these transaction fees will get burnt. And that means a certain number of Etherium will be permanently destroyed. And they estimate that as a result of this, there will be more Ethereum burnt on a daily basis than is created. So that's pretty exciting because it means that there'll be less and less. ETHEREUM While demand increases. So if we're just circle back to supply and demand dynamics that suggests that you're there could potentially be positive price appreciation. 

Craig: [00:04:50] So I'm guessing you're buying Ethereum then? [00:04:52][1.4]

Tracey: [00:04:52] Well, we're always buying a Ethereum. Okay, that's a really good summary. That was an awesome summary. So. There you have it. So really, it's just sounds like a bunch more reasons to continue my love affair with Etherium, but thank you. Thanks for that, blake. Look, crypto's up, and something else was up last week. The US inflation numbers. But this is not such a good thing. The figures were released on the 15th of July and they showed that inflation hit 9.1% in June, which is officially the highest in 40 years. Blake can attest to this as he's been living in the US and for the past six months he's constantly complaining about his $15 soy lattes. We're not actually joking there. And why is this important to the crypto markets? [00:05:36][44.0]

Blake: [00:05:37] Craig It's not maybe it's not $15. [00:05:39][2.0]

Tracey: [00:05:40] What is it? Seriously, what does it mean? [00:05:42][1.5]

Blake: [00:05:42] It's probably like seven US plus tips. So, like, it's about ten, 11 points. [00:05:47][4.8]

Tracey: [00:05:48] That is still madness for a coffee. What actually makes this news important for the crypto markets, Craig? [00:05:54][5.8]

Craig: [00:05:54] Well, it's important for all markets, really, because inflation data drives interest rate policy, which in turn drives market prices up or down. And as we know, crypto is still in its infancy and is still relatively correlated with the S&P and other equities. So, you know, when there's big sell offs in equity markets, generally, Bitcoin and the other altcoins follow. But what are your thoughts? Like, are you sort of happy to be attempting to skip this inflation hike and coming back down to Perth? Or how are you feeling about it? [00:06:28][34.2]

Blake: [00:06:29] Definitely looking forward to coming back to Australia. Inflation is is not as bad in Australia as it is over here. It's actually affecting people day to day and those those people that are on fixed incomes like your teachers or or public service workers, you know, they're just simply not keeping up with inflation. And the real inflation rates, I suspect a much higher than the 9.1%. You know it feels like it's it is much higher than that. So yeah, not definitely interesting. But you know, traditionally I think crypto has been talked about as an inflation hedge. However, like you mentioned, Craig, it's very, very correlated with the Nasdaq, which is tech equities essentially and other public markets. And because of that, you know, it's not it's not providing very much relief at this point in time. [00:07:24][55.0]

Craig: [00:07:24] And where do you guys think it's going to go from here? I know you love all the macro stuff. Like, do you just think eventually in a few months will this start to ease or do you think, you know, do you think it spikes to something like a 15%? Like where do you see the line being drawn? [00:07:38][13.4]

Tracey: [00:07:38] Oh, look, that's a big, long discussion right there. And I personally think that inflation will not slow down over there, but I think that the Fed will perhaps take it as a win, that this is probably the peak and it'll look like that it's slowing down. It's all about optics over there at the moment. I don't I don't see the inflation slowing down. That's that's my take on it. [00:07:57][19.1]

Craig: [00:07:58] Yeah, there is actually a good episode on the dive and on the Equity Mates podcast about inflation. And it's I think it's called $12 Iceberg Let US Inflation Around the World. So it's a really good episode to upskill your inflation learning. [00:08:11][13.2]

Tracey: [00:08:11] There you go. Check it out. If you want to learn a bit more about inflation, I think we move on to our next story and it wouldn't be a podcast episode without talking about exchanges. Binance has now flipped Coinbase to become the exchange with the most Bitcoin held globally. Coinbase was in the lead up until recently, but Binance has been increasing its public trust through public relations efforts. So perhaps that new brand Ambassador Guy, what was it, Renaldo Craig, was this guy a good pick up in the end? [00:08:41][29.5]

Craig: [00:08:41] Yeah, well, just a young Portuguese soccer player, Renato. Yeah, pretty handy pick up. I'm sure he would have come pretty cheap as well. He would have been pretty cheap to get on board. But I think Renato is actually the NFT marketplace ambassador. So you can tell they're trying to obviously they've caught up to Coinbase now and the probably got their mind set on catching up to Opensea. [00:09:02][21.0]

Blake: [00:09:03] It would be sorry. It wouldn't be hard to catch up to Coinbase I think. [00:09:06][2.8]

Craig: [00:09:07] Yeah, well that they brought on this the Bitcoin proposition, they launched zero fee trading for 13 Bitcoin spot pairs, you know, to put all the concentration onto Bitcoin, which they did around the world. And they've just got full regulatory approval in Dubai, France, Italy and Spain. So they're turning into a global winner, I think. [00:09:29][22.5]

Tracey: [00:09:30] Yeah. And look, sticking with the exchange news, Uniswap and Coinbase now have nearly equal daily volumes. So this happens as the Etherium network fees drop to their lowest levels since 2020. So is this is this news surprising right now? [00:09:45][15.1]

Blake: [00:09:45] It's definitely not surprising. You know, obviously, using a decentralised exchange becomes more accessible to people as the scalability of these networks like Ethereum, you know, improves. So I think that's a. Great trend that we're going to see more and more of over time. As you know, these platforms to get better. [00:10:05][20.0]

Craig: [00:10:05] And it also helps that gas fees are now single digits, whereas I'm sure you would remember in the peak bull market, it was costing 2 to $300 to make a try, whereas now it's, you know, under a dollar. So that definitely helps. Uniswap's case and Ethereum 2.0 will hopefully make that a reality forever. [00:10:23][17.9]

Blake: [00:10:24] Yeah, and it's just becoming easier and easier now to also switch onto layer two solutions like polygon and optimism, whereas previously, you know, the user experience was a bit clunky. So certainly people are going to be leveraging the ease of use of those Sidechains. [00:10:42][18.4]

Craig: [00:10:43] And here's a bit of alpha for the crypto curious listener base. [00:10:47][3.4]

Tracey: [00:10:47] And what Craig means by alpha. [00:10:48][1.3]

Blake: [00:10:49] Everybody is is basically. [00:10:50][1.2]

Tracey: [00:10:51] Fader is really top notch A-grade amazing news that you're all going to be so excited to hear Carry on he's just. [00:10:59][7.6]

Craig: [00:10:59] A hot tip that's a crypto is people smarter than myself have taught me is whenever you hear about a new layer two that is coming out it's always important just to make one transaction on there because if they ever release a token, you could be eligible for an edge off. So I think optimism had an edge the other day and they gave it to the early adopters. Uniswap themselves had an airdrop in 2020. They gave all of that. They gave everyone about how much they give everyone. It's like $12 was worth. [00:11:29][30.2]

Tracey: [00:11:29] Yeah, it were more than if you held on to it. It ended up being cut. The grant. [00:11:32][2.6]

Craig: [00:11:32] Yeah, yeah. Check out the ones that don't have a token. You know, arbitrage is one of them and a bet there's a bunch others, but and this is a middle of the episodes. This is hidden Alpha four. So you guys the guy. [00:11:42][10.0]

Tracey: [00:11:43] And as it is the middle of the episode, I think we will take a break right there. And when we come back, we'll talk about the metaverse and some NFT news. Welcome back to the Crypto Curious podcast. So we've asked the question on the show before, somewhat negatively maybe, but how many metaverse is do we actually need? We can rattle off probably half a dozen now. Probably a dozen, actually. Well, Dubai is getting behind the metaverse in a big way. This week, they've officially launched the Dubai Metaverse Strategy with plans to become one of the world's top ten metaverse economies. So this is a little bit different. The strategy promotes Dubai's ambitions to support more than 40,000 virtual jobs by 2030. So, Craig, I know you're reading a bit more about this story. So what are your thoughts here? [00:12:31][48.5]

Craig: [00:12:32] Yeah, well, Dubai's always been a place where crypto people tend to go to, whether it's founders. There's a bit of a crypto community there. And I think this strategy is going to be trying to bring developers research and development collaborations to, you know, to contribute to the metaverse, whether that's web3 projects or just overall decentralised projects. And, you know, it's designed to utilise incubators and attracts, you know, companies like Bamboo, hopefully to get over to Dubai and, you know, park up and build your company there. And as we all know, Dubai has a pretty good capital gains tax system. I think Dubai and Portugal, they're the two that are really like doubling down on the future of crypto. So I guess they're going large to get some more workers over there. [00:13:22][50.5]

Blake: [00:13:23] Yeah, that's really interesting because I've just seen that Shanghai or China said that they're going to invest $52 billion to build metaverse products over the next three years, which is huge. So it sounds like there's a bit of a race happening here. You know, in the US, for example, it seems to be private initiatives building the metaverse, whereas in other countries that potentially are more centralised, like China and Dubai, it seems to be state funded. So there's certainly going to be a race and it's going to be interesting to see which ones come out on top. [00:14:00][36.3]

Craig: [00:14:00] We've even heard when we spoke to Senator Bragg, he was saying that he wanted he wanted Sydney to be one of those cities that, you know, brought on new web3 projects. So definitely is a race. I think people are just projecting the to the job numbers and saying, you know, let's get let's get ahead of it now. And hopefully we can get 50,000 new jobs in our city. [00:14:18][17.7]

Tracey: [00:14:18] But you're saying you're saying, Blake, Shanghai is talking products. So we talking like VR type things there? [00:14:24][5.8]

Blake: [00:14:25] I'm not exactly sure. I guess they're going to go quite broad if they're spending that much money from hardware to metaverse to web3 infrastructure to tooling to jobs. Yeah, I guess not. Not too sure. [00:14:39][14.6]

Tracey: [00:14:40] So on now to my favourite part of the podcast, which is our short snippets of all the news goodies. And I'm going to go first this week because it's my turn. So this month, South Park just released the newest movie, which is called The Streaming Wars Part two. Now, these guys have always had nice digs at crypto in true South Park style over the last few years. And this one is no different. And I've had a really good dig at the crypto brands and also the celebrities who promoted them in crypto commercials. So it's pretty funny. Find it online. Have a watch. But poor old Matt Damon and Reese Witherspoon and Naomi Osaka have got pretty, pretty well roasted in this. It's pretty funny if you like South Park. So check it out. [00:15:25][45.3]

Speaker 1: [00:15:26] We are living in a severe drought. There simply isn't a choice anymore. We have to find alternate sources for water. Hi. I'm Matt Damon. You've heard me talk about the wonders of cryptocurrency, and now there's a company who can give us that new sauce. PB Water. PE can be used for almost anything. We can water our lawns with it. We can also use urine for our shower water. [00:15:50][24.0]

Blake: [00:15:51] Q Probably an exciting that we wanted to cover upfront was a project called Step In and Step In is an app that you can download and get paid to walk. Now it's an interesting model. I haven't tied into how they fund this through their inflation model, the. [00:16:09][17.5]

Craig: [00:16:09] Aussie by the way, and. [00:16:10][1.1]

Blake: [00:16:11] Yeah, the Aussie and it's massive in the US it's, it's got a lot of press and they just announced that they made $122 million in network fees last quarter, which is huge for an app like this. And it just really goes to show that, you know, these new economic models and products are being developed from the use of, you know, blockchain technology. And, you know, they they're going to use that cash to expand the platform. It's only 12 months old. And I don't know how you guys know how many users they have. I think it's like tens or hundreds of millions of people right now. [00:16:48][37.3]

Craig: [00:16:48] I knew that I had the beta and you had to get an invite only to get on there. And I know Happy Spender, who's Jordan Denby, partner. She was on there. I was trying to get an invite for a while. But I know that you had to buy the shoes, too, in order to. [00:17:02][13.8]

Tracey: [00:17:02] Earn at the very beginning. I think it's a bit easier now. But yeah, that's such a great model and a lot of a lot of PR, a lot of excitement, but it was the only one at the time that was, you know, really promoting you to get out there and move and do something that was very unlike crypto, but good on them. It's a great model. [00:17:18][15.3]

Blake: [00:17:18] Yeah, it says here they've got 3 million users, but that probably needs a bit of fact checking. But yes, certainly. Interesting project and worth checking out. [00:17:27][8.3]

Craig: [00:17:27] Yeah, nice. Another one I wanted to talk about was Reddit. They're getting involved with the NFT marketplace. I think a few months ago we spoke about Instagram were getting involved. So they're now launching a new marketplace sort to let you buy NFT profile pics where you can use instead of your Reddit avatar and you can actually buy them with a debit card. So, you know, they're aiming to on board, you know, they got 400 million monthly active users. So I'm sure they're going to try and pick some of that up and make some cash with Nfts. [00:17:54][27.1]

Blake: [00:17:55] I actually went through this process the other day because I have an avatar on Reddit and I wanted to upgrade him to make it, you know, more reflects my personality. And yeah, it was, you know, there's a heap of ones that you can get for free which are quite basic. But then there's also others that you can pay for to have more flair. And I think it's such a great market for this because everyone on Reddit, pseudo anonymous, right? So people really want to reflect or project a part of their personality into the forums that they're participating in, the communities that are participating in. So it's such a it's actually a I think it's going to be really successful. [00:18:33][37.7]

Craig: [00:18:33] How much did you spend? Like, I. [00:18:35][1.2]

Blake: [00:18:35] Didn't I, I went with the free. [00:18:36][1.1]

Tracey: [00:18:36] One. And for those who are in the NFT space in a big way, they'll be used to interacting with the pre mint site. And this was actually infiltrated by hackers earlier this week, which is pretty sad. So the popular NFT registration platform was compromised and the attackers stole 320 different nfts and more than 400,000 ETH. So it's not a huge amount by way of hacks and and things getting stolen but still not great for a site that's used by, you know, millions of people in the NFT space. So that wasn't such a good one. [00:19:11][34.3]

Craig: [00:19:11] Yeah, it's a bit of a bummer. And last thing to cover off is the UGA Labs, which is the creators of Bot App Yacht Club have now released their first demo for the other side, metaverse. And this is this is a pretty big deal. So they had I think it was four and a half thousand other side land owners into this metaverse at the same time. And they were all talking to each other. They were fighting this Big eight boss. And this is it's been sort of mixed, mixed reactions. I think some people said it was like a poor version of Fortnite where other people said it was the future of Web three gaming. But how's that from UGA Labs? 12 months ago, they minted bored apes and now they've made like a once in an industry metaverse that's first to market. So one of the craziest Start-Up stories, I think, in history, but interesting to see. I think the land the land plots itself, the volume has been going up. People, you know, now, they've proven that the product somewhat works. People have got more trust in the platform, the sign to buy up some more UGA labs assets so guys bit of a keep an eye on that one. [00:20:21][69.5]

Tracey: [00:20:21] Of all the NFT podcasts that I listen to and try and keep my finger on the pulse and when everyone tells you what you know what NFT are still trying to remain as blue chips and what's probably a good buy right now they all do mention the other side plots of land as being a deal that kind of still remains in the top ten at the moment. There's still pretty high prices for me individually. [00:20:43][21.7]

Craig: [00:20:44] Maybe got 2.82.85. We can go halves try. [00:20:47][2.9]

Tracey: [00:20:47] It still it's you know it's not financial advice but you know yeah interesting. I'm still watching all that stuff closely. And just to round out today, we want to give you a quick update on the situation with the market right now. And what I mean by that is where are we at with, say, Celsius BLOCKFI, three Arrows Capital and all of those businesses that had bad situations with the liquidations over the last couple of months. So Blake, do you want to give us a really quick round out there? [00:21:16][28.4]

Blake: [00:21:16] Yeah, for sure. And obviously we've covered it off in previous episodes, but you know, it's continuing to surface. All the details of what's happened Celsius has a $1.2 billion hole in their balance sheet that they essentially are their customers. So they've filed for bankruptcy Voyager as well. Turns out that they probably won't make it through and they have millions of users. Blockfi is going to be bailed out by, you know, Sam from FDX, which is a big exchange. But you know, there's many other companies like Genesis, which was. More of an institutional lender. They've lost two and a half billion dollars. Today or yesterday, we heard that zip max. Southeast Asian Exchange potentially had exposure to Babel, which was another platform that lost a heap of money. So they have paused withdrawals. So I think we're going to see more and more your filter out and come out of the woodwork over the next weeks and months. But, you know, this liquidity issue that we've seen all kind of stemmed from three AC, the hedge fund that was seemingly borrowing money from everybody and as a result, have lost, you know, billions and billions of dollars of customers assets and which ends up filtering through to everyday people who have been using these platforms. So, yeah, there's there's more. There'll be more to talk about here. But yeah, that's just a short update. 

Craig: [00:22:45] And just a friendly reminder that Luhnow essentially walked out three arrows. And that feels like so long ago. But, you know, Luna, everyone's forgotten about Luna, but that was really the first domino to fall. 

Tracey: [00:22:58] I think we'll leave it there on that note, but we'd love to keep hearing from you guys. And if there's something that you want to hear on the podcast, if you've got a question for us. Send us an email, a podcast at Get Bamboo IO, and we might even answer it in next week's podcast. 

Craig: [00:23:12] And guys, the Facebook group is going off at the moment, a lot of good chat, everyone sharing their thoughts in the market, everyone's supporting each other and yeah, jump in. The Facebook group is called Crypto Curious Podcast Community. Just ask us to join and we'll accept and you can come on board, ask any questions you want me, Blake and Tracey all hang out.

Tracey: [00:23:32] There they go. Jump in the Facebook community group. Excellent. So thanks for joining us, guys, and we'll see you next week. Bye for now.

Craig: [00:23:38] Bye bye.