Congressional Hearings on Crypto, Layer 1 vs Layer 2, DDoS Attacks, Lending Bitcoin…
Here we go again. Thursday’s hearings on crypto resulted in a renewed downward pressure on the major coins. However, it looks like MATIC got out of it’s funk while BTC wallows a little deeper in it’s own malaise. SOL and AVAX which I’ve been tracking recently have also dropped significantly off their highs. SOL also suffered from a DDoS attack but the network didn’t go down which is a positive sign. Still, expect a lot of SOL bashing for some time. ETH, while not down as much as BTC, saw some insane gas fees on Friday morning.
I’m presuming a lot of this was because of the PUNKS Comic #2 NFT minting that was going on. Here are the details on the contract. Looks like they sold out all of the comics and made ETH 960.
Layer 1 vs Layer 2
You may have heard the terms “Layer 1” and “Layer 2” in the blockchain world. Put simply, “Layer 1” protocols are main blockchains like bitcoin, ethereum, litecoin, solana, etc. They are solutions that employ a protocol and a consensus mechanism for data to be written to chain. Every transaction that happens on a layer 1 solution is recorded on chain.
Layer 2 solutions are built on top of the layer 1 solution but offer some advantages that lead to lower cost per transaction or faster transaction times. One layer 2 solution discussed very often is the “Bitcoin Lightning Network”. This network was built on top of the bitcoin network to allow faster and cheaper transactions like buying a cup of coffee. In this instance, not every transaction is written to the main bitcoin ledger. Instead only when a “channel” is opened or closed are all of the transactions written to the chain at that time.
There are a few different kinds of solutions that people are building but this is the basic gist of it. If you’ve got more to add or have questions about layer 1 vs layer 2, drop a comment! I’d love to hear from you.
News
Former U.S. official criticizes SEC crypto regulations
Brian Brooks during a U.S. hearing criticized SEC’s regulation of the crypto industry.
US Inflation Jumps to 39-Year High of 6.8% in November; Bitcoin Falls
Prices for bitcoin, seen by a growing number of investors as a hedge against inflation, jumped 2% after the CPI report from the U.S. Department of Labor’s Bureau of Labor Statistics.
Lending Your Crypto Could Generate Attractive Yields. But How Safe Is It?Lending Bitcoin can generate annualized yields from 3% to 8%. Yields on smaller “alt-coins’’ reach double-digit rates. And stablecoins like USD Coin — designed to maintain a fixed $1 value — may earn 10%.
Coinbase Launches High-Interest DeFi Yields to 70 Countries
Crypto exchange Coinbase has announced that eligible customers in over 70 countries can now earn yield with DeFi.
India’s Modi Calls for Global Crypto Standard
Indian Prime Minister Narendra Modi called for the creation of a global standard for technologies, such as social media and crypto.
Meme of the Week
Because many of us are going to be spending time going to holiday parties and get togethers with “normies”…
Tweet of the Week
How Can I Help You?
If you’re still with me and you’re new to the cryptoverse, what’s one of the most challenging things you’ve come across and how can I help you?