Our Partnership with Morpheus Labs, Crypto Mining and Security

Newsletter #3: For Week Ending July 26th

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Welcome to the RedBlock newsletter, where we break down the week’s biggest news in the world of digital investment and fintech.

First Up, Our Partnership with Morpheus Labs has Officially Been Announced!

This week, we officially announced our extensive partnership with Morpheus Labs. This highly synergistic partnership leverages Morpheus Labs’ BPaaS (Blockchain Platform as a Service) and DeFi (Decentralized Finance) solutions and our global network of capital participants as well as our end-to-end digital asset management platform to drive the adoption of tokenized assets and digital securities and provide enterprises and projects alternative routes of capital fundraising.

Read our full write up on the partnership here: https://www.redblockcap.com/post/official-announcement-our-partnership-with-morpheus-labs

Before we move onto our subject this week, we have another announcement: we have begun to publish proprietary research reports, the first of which is live on our site here and covers this week’s newsletter topic.

Now, on to our focus this week, cryptocurrency mining and security!

Bitcoin’s Hash Rate and Transaction Fees

A report by Namrata Shukla of AmbCrypto.com details how Bitcoin’s network- although its hash rate is in recovery- still needs more security. This is owed in part to the dip in revenue received by crypto miners, who are responsible for Bitcoin’s security, as they make sure that 51-percent attacks can’t happen.

In order to make up for the lessened incentives for miners to, well, mine, Bitcoin’s network has to pay out transaction fees, which they have had to do increasingly in recent months. Increasing fees might undermine security, in that it “may incentivize selfish mining practices in a bid to extract greater profits, risking disruptions to how transactions are processed”, according to an article about Ethereum’s security published by cointelegraph.com earlier this week. The increasing trend of transaction fees plays an interesting role, at once being cited as a measure that makes up for a lack of security, but according to other sources, one that, if it gets to be too high, can compromise security as well.

Protocol Labs’ Filecoin Incentivization Program Is Receiving a Lot of Interest in China

The deep interest in crypto-mining in China reaches new heights as Filecoin, a cryptocurrency made by the US-based Protocol Labs, gets closer deployment in the mainnet. For four months now, Protocol Labs has been running a testnet version of their Filecoin mining incentive program that seeks to decentralize storage power, thus creating a “distributed storage network”. Although only in its testing phase, it has attracted the speculation of investors, and “Chinese crypto exchanges, such as BKEX and ZB, [who have] also partnered with Filecoin miner makers and claimed on their website that Filecoin cloud mining contracts worth over $1 million in USDT were sold out within minutes last month.” Why is this speculation important? Well, China is responsible for at least half of the computing power on Bitcoin, so it stands to reason that mining interest here will be a driving factor in the security of the network and its adoption.

Texas Throws Its Hat in the Ring

Texas is bringing its trillion-dollar economy, backing of state-representatives, and cheap mining power to the table in an effort to become the United States’s hub for blockchain investments and business operations. In fact, Texas has already attracted attention from the likes of China-based crypto hardware manufacturing company Bitmain, which has opened a Bitcoin mining facility, and Germany-based tech company Northern Data AG, which has plans to open one. According to the Texas Blockchain Council’s president, Lee Bratcher, “Texas will most likely see an increase in hash power and hash rates due to the state’s cheap” and deregulated “electricity, natural gas and boom in the development of wind power”. When it comes to mining, Texas is definitely a place that you should keep your eye on.

The Upshot:

  • We have officially announced our partnership with Morpheus Labs!
  • We are now publishing research reports that you can find on our website
  • Bitcoin’s hash rate is on the mend, but transaction fees are something to be wary of
  • Filecoin, although not yet rolled out on the mainnet, is showing a great deal of promise and attracting a great deal of attention in China
  • Texas is gearing up to leverage its economy and cheap power sources to become a crypto-mining powerhouse

Thanks for reading and, of course, be sure to share the knowledge to make sure your friends stay in the loop!

Visit us at: redblockcap.com

For questions and business inquiries, contact us at info@redblockcap.com

About RedBlock

RedBlock Inc is a digital investment and fintech firm leveraging blockchain technology for asset digitization and management, from issuance to secondary liquidity. Its global network of capital market participants, including issuers, broker-dealers, secondary exchanges, funds, liquidity providers and custodians, are supported by its end-to-end blockchain-powered asset management platform. RedBlock also manages an investment fund to support companies in its ecosystem that align with its investment thesis. With a growing track record and pipeline, the RedBlock team hails from top tier global investment banks, venture capital firms and blockchain technology companies.

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