#73. NFTs & Physical Goods: Has Amazon Entered the Room? Bitcoin NFTs Are for Real - Twelvefold by Yuga Labs.
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Bitcoin NFTs Are for Real - Twelvefold by Yuga Labs
You might have heard about Ordinals by now, a new, clever way of having NFTs on Bitcoin. Decrypt has a pretty nice article explaining the mechanics behind it, although it might be a bit too technical for some. But you don’t need the details to get the idea. All the great stuff you know & love about NFTs, put together with all the great stuff you know & love about Bitcoin - pretty cool, right? Indeed. Ordinals took off lately and people figured out ways of even burning Ethereum NFTs and minting them on the other side as Bitcoin NFts. Pretty wild.
To really drive home the point, Yuga Labs - creators of the Bored Ape Yacht Club, owners of CryptoPunks and pretty much GOATs of the NFT space - launched a 288 item collection called TwelveFold using this new technology. It sold out, of course, and generated around 735 BTC (more than 16 million USD at the time) via an auction. As CoinDesk points out, this is the first time Yuga Labs builds on another chain than Ethereum, signaling their plans for expansion, as well as the fact that Bitcoin is evolving to be much more.
And this is, I think, key here. Not long ago, Bitcoin critics would point out that it is simply a cryptocurrency that “doesn’t do anything”. The flipside of it was - so is gold, but this is more secure, transparent, fractionable etc etc. But thanks to the open source community of builders around it, Bitcoin is seeing real progress in terms of what it can do. We have already seen NFTs, a social network built on top of the Lightning network and even ZK-rollups. Some might say this is just getting started. It’s crazy to think how fast Crypto moves and how much innovation we get to witness.
The great (possible) miner exodus
Yesterday, the Treasury released a paper explaining the 30% tax on miner energy usage. In Biden’s latest budget plan, there is a plan to impose an excise tax on the electricity used for “digital asset mining” - and it’s up to 30%.
I can’t think of something more shocking right now (besides Gensler’s stance on cryptocurrency) for the crypto community. This means that the US is planning to tax the security of PoW blockchains. Think about that for a second. Certainly, miners receive a share of the coins native to the blockchain they secure - but it’s not for nothing! First of all, they require lots of electricity (for both running the machines and cooling them) AND the machines themselves. Sure, you can try mining Bitcoin using your old computer but you won’t yield palpable results.
And, as always, the government wants a piece of your pie. This time they’re taxing the energy (which we know has been getting more expensive in the last year). Starting January 2024, the tax will be phased in over three years: 10% in the first year, 20% in the second and 30% thereafter.
If this proposal will pass, I doubt there will be many crypto miners left in the US. Good for the environment? Sure, there will be fewer emissions overall and the national energy grid won’t be as overloaded.
But does this gain offset the massive losses this would cause to the community? Centralization of miners abroad, an exodus of businesses and investors to the East and more. I’m not sure that in the long run this is the sustainable (or dare I say “right”) decision for the US.
NFTs & Physical Goods: Has Amazon Entered the Room?
Rumor has it Amazon is laying the groundwork to give its customers the ability to purchase NFTs tied to real-world assets delivered to their doorstep and planning to launch an NFT marketplace in April.
According to an article published by The Big Whale, the launch should take place around the 24th of April and will include the launch of 15 NFT collections according to anonymous sources. The report went on to say the marketplace will be available as a tab on Amazon’s main website titled Amazon Digital Marketplace. The platform should initially only be available to U.S.-based customers before being rolled out internationally. The report also says that the launch of the marketplace was delayed twice in the aftermath of FTX’s high-profile collapse last November.
The back-end blockchain technology that will be used isn’t yet clear, and the company appears to have considered a number of different options for integration since it began working on the ambitious initiative. So far, representatives for Amazon working on the project have contacted multiple Layer-1 blockchains, blockchain gaming companies, and other types of both emerging and established digital asset projects.
If these rumors will be coming to fruition this could be a significant vehicle for onboarding new Web3 users given that Amazon has over 310 million active users. However, until these rumors are confirmed by Amazon representatives this remains at the speculative stage.
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