The Last Play

Byron Gilliam

This is a segment from the Blockworks Daily newsletter. To read full editions, <a href="https://blockworks.co/newsletter/daily">subscribe</a>.



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Consciousness may end up being found in very strange places.” — Christof Koch
</blockquote>



The canonical question in the philosophy of consciousness was posed by Thomas Nagel in 1974: “What is it like to be a bat?”



Nagel’s idea was that consciousness is defined simply by what it feels like to be something — the inner, subjective experience of being alive and aware.



“An organism has conscious mental states if and only if there is something that it is like to be that organism,” he explained.



Many have found this subjective answer unsatisfyingly circular: What is this something???



David Chalmers later declared this question “the hard problem of consciousness” because it exposed a gap between subjective experience and objective science.



In 2004, however, Giulio Tononi confronted Chalmer’s hard problem with a paper proposing a mathematical model for consciousness: Integrated Information Theory (IIT).



Consciousness, he argued, is a mathematical property of physical systems — something that can be quantified and measured.



But can a system be conscious?



After interviewing the computational neuroscientist Christof Koch, the co-hosts of the <a href="https://youtu.be/qme8fOs7N8g?si=xZUjUtbDmmNVpKuI&amp;t=665">New Scientist podcast</a> concluded that computers, being systems, could theoretically achieve consciousness if they were able to “integrate” the information they process.



And nearly anything could be a system: Even a rock might register a trace of consciousness if its atoms form the right kind of structure (as proven in the science documentary <a href="https://youtu.be/2X1sOTg-ivg?si=iVUg_SNnwbLK3Yrq">Everything Everywhere All at Once</a>).



Which got me thinking: Ethereum is a world computer, right?



And critics accuse Bitcoin of being a pet rock.



So…if computers and rocks can be conscious, surely blockchains can be, too?



Blockchains do, in fact, tick a lot of IIT’s boxes.



IIT posits, for example, that a system can only be conscious if its current state reflects everything it’s been through — just as your memories shape who you are and each moment builds on the last.



Blockchains like Ethereum work in a similar way: A blockchain’s current “state” is a function of its history and each new block depends entirely on the ones before it.



That history-dependence gives it a kind of memory — and because thousands of nodes agree on a single shared version of reality, it also creates a unified “now” (or “state”) that IIT says is a characteristic of consciousness.



Unfortunately, IIT also says that for a system to be conscious, it has to have “causal autonomy” — which is to say, its parts have to influence each other internally and not just in response to inputs it passively receives from external actors.



Blockchains don’t work like that, of course.&nbsp;



Instead, they rely on external inputs (like users sending transactions and validators adding blocks) to act on and advance — and the nodes that run the network don’t influence each other internally, they just blindly follow the same set of rules.



There’s no spontaneous activity, no internal causation — not even the aimless vibration of molecules you’d get in an inanimate chunk of granite.



So I’m sorry to report that, on the IIT spectrum of consciousness, blockchains rank below even rocks — and that the “pet rock” jab might therefore be a compliment to Bitcoin (or an insult to rocks).



But maybe not for long!



In 2021, the computer scientists (and married couple) Lenore and Manuel Blum co-authored a <a href="https://www.scirp.org/reference/referencespapers?referenceid=3699575">paper</a> describing how to engineer consciousness into machines.



Their framework treats consciousness as a computable property — achievable with AI algorithms designed to produce systems with the “causal autonomy” required for conscious experience.



The AI wouldn’t be conscious itself, in this case, but a system that deploys it could be.



Now imagine an AI-enabled blockchain that doesn’t just run code, but thinks about running code.&nbsp;



Instead of inert ledgers passively waiting for inputs, blockchains could be self-contained, “causally integrated” machines — more like synthetic brains than distributed databases, with the kind of internal autonomy that IIT researchers consider essential for consciousness.



This could be useful!



A system like that might be able to reason about its own security, detect anomalies in real time, and decide when to fork itself (perhaps after a period of soul-searching introspection).



In short, it would do things not because it was told to, but because it understood what was happening — both inside itself and in the outside world.



It’s not impossible.&nbsp;



Today’s blockchains are more like nervous systems without a brain — wiring without will.&nbsp;



But tomorrow? Who knows.&nbsp;



If IIT is right, philosophers might soon be asking, “What’s it like to be a blockchain?” (And also, is it better than being a rock?)



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The Breakdown Newsletter

Will AI make blockchains conscious?

Jack Kubinec

This is a segment from the Lightspeed newsletter. To read full editions, <a href="https://blockworks.co/newsletter/lightspeed" target="_blank" rel="noreferrer noopener">subscribe</a>.



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As Solana continues to cement itself as the most performant layer-1 blockchain by speed and cost, some crypto developers have gained an interest in using the technology underpinning Solana to launch new blockchains of their own.



To wit, there are around two dozen of these Solana Virtual Machine chains — counting layer-1s, layer-2s built on various other blockchains, and application-specific chains. But for simplicity’s sake, here are the layer-1s trying to out-Solana Solana:



<h2 class="wp-block-heading">Fogo</h2>



Fogo is a <a href="https://blockworks.co/news/solana-chain-running-pure-firedancer">forthcoming layer-1</a> that says it wants to push the SVM’s performance to its limits by only running the Firedancer validator client on a permissioned validator set with multi-local consensus.



If that sounds like word salad, just know that Fogo’s bet is that with a fork of Jump’s open-source Firedancer code and a couple tradeoffs around decentralization, Solana’s software can be even more performant.



The layer-1 raised $8 million at a $100 million valuation via the crypto crowdfunding platform Echo.



<h2 class="wp-block-heading">Pythnet</h2>



The popular Solana oracle Pyth runs an SVM app chain where Pyth operators who provide price data run validators, and the protocol aggregates prices.&nbsp;



Pythnet is the oldest on the list: Remarkably, Pyth shipped its SVM chain in August of 2022.



Since it’s a blockchain for data, this chain is less consumer-facing than others, but it’s an interesting decentralized way to stream price data — and the product has been live for nearly three years.&nbsp;



<h2 class="wp-block-heading">Solayer</h2>



Solayer initially fundraised and launched as a Solana restaking protocol, but after Jito entered the <a href="https://blockworks.co/news/jito-releases-code-for-solana-restaking-network">restaking race</a> — and as restaking became less buzzy, to put it bluntly — Solayer pivoted to launching its own layer-1 powered by its InfiniSVM.



Solayer’s documentation and leadership have claimed that it can achieve one million transactions per second at points, although some Solana developers <a href="https://x.com/trentdotsol/status/1917328407878328470">dispute</a> Solayer’s performance figures.



<h2 class="wp-block-heading">JupNet</h2>



The Solana DeFi giant Jupiter began teasing JupNet in January as an “omnichain network that aims to aggregate all of crypto in one single decentralized ledger.”



Little is yet known about JupNet, but Jupiter co-founder meow said in a blog <a href="https://meow.bio/jupnet.html">post</a> that its so-called Jupiter SVM has validators come to agreement on both internal Solana transactions and external transactions from other blockchains.



Jupiter has greatly expanded its business via acquisitions in recent months, but JupNet may be its most ambitious venture yet.



<h2 class="wp-block-heading">Cube</h2>



Cube Exchange is building an SVM L1, co-founder Bartosz Lipinski confirmed to me in a Telegram message.



Lipinski and co. <a href="https://www.youtube.com/watch?v=vo3nhdIra6M">forked the SVM</a> as part of a product they’ve <a href="https://blockworks.co/news/cube-exchange-crypto-mpc">described as</a> a hybrid centralized-decentralized exchange.



<h2 class="wp-block-heading">Thru</h2>



This one barely counts since Thru will be built on a new virtual machine called the ThruVM, but a <a href="https://blockworks.co/news/unto-vc-raise-thru-blockchain-l1">lot of the intrigue</a> around this brand new project comes from the fact that its co-founder, Liam Heeger, was previously a core engineer working on Solana’s Firedancer client.



So with the Firedancer credentials, Thru ekes out a spot on the list.



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Solana’s software underpins these layer-1s

Ben Strack

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance" target="_blank" rel="noreferrer noopener">subscribe</a>.



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A US litecoin ETF — and other altcoin products — will have to wait at least a little longer.&nbsp;



But the chance such products see the light of day still appears quite good — and issuers continue plotting more crypto ETFs.



The SEC decided on Monday to <a href="https://www.sec.gov/files/rules/sro/nasdaq/2025/34-102988.pdf">delay</a> its ruling on Canary Capital’s proposed spot LTC offering. It requested the following:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf8gYwBqo8LMe2Sj8ys9eqWodvuqV0_-TCHXOZBaQhF8PwaMhMnhCWM7sVT_SqFMbXgsbHj67Y_clBzkIBW0H4Maa3g3FzbZru95Kn8gsDo1IrTALIi5gRPim4o0T-1fGdbvIOp?key=RFcg87cpckgMv3djFkBtin71" alt=""/></figure>



We might not get a ruling until the agency’s final deadline in October.&nbsp;



Prior to the Monday delay filing, Bloomberg Intelligence’s James Seyffart held out hope that we could see a different result, writing on <a href="https://x.com/JSeyff/status/1919159854691713334">X</a> that the “SEC went early &amp; delayed a bunch of filings but not this. If any asset has a chance of early approval it&#8217;s Litecoin IMO.”



You might recall that in February, he and colleague Eric Balchunas <a href="https://blockworks.co/news/litecoin-etf-approval-odds-2025">put the odds</a> of a US spot litecoin ETF launching by the end of 2025 at 90%.&nbsp;



The thinking went that LTC was one of the few assets the SEC had not previously labeled as a security. Also, like bitcoin, litecoin uses the proof-of-work consensus mechanism.&nbsp;



Those 90% odds remain intact, Balchunas noted last week.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Would love to hear directly from Atkins, but all good chance of happening. Here’s our latest odds of approval for all the dif spot ETFs via <a href="https://twitter.com/JSeyff?ref_src=twsrc%5Etfw">@JSeyff</a> <a href="https://t.co/nLhYJJmO9U">https://t.co/nLhYJJmO9U</a> <a href="https://t.co/4AcJVwhics">pic.twitter.com/4AcJVwhics</a>&mdash; Eric Balchunas (@EricBalchunas) <a href="https://twitter.com/EricBalchunas/status/1917444433282490606?ref_src=twsrc%5Etfw">April 30, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The Bloomberg pros also give spot solana products a 90% chance of approval by the year’s end. XRP products are next highest, at 85%.&nbsp;



CME Group introduced SOL futures contracts in March. The derivatives marketplace is set to unveil XRP futures on May 19.&nbsp;



There are also products currently holding both BTC and ETH that want to add more assets. Hashdex CIO Samir Kerbage called indexing “the next frontier” in the crypto investing space, <a href="https://blockworks.co/news/trump-media-etf-cryptodotcom">telling me in March</a> that his firm wants to ultimately create “the Nasdaq 100 for crypto.”&nbsp;&nbsp;



With optimism comes more filings.&nbsp;



Canary last week applied for a product that would hold SEI — a token with a market cap of roughly $1 billion (ranking 90th on CoinGecko). It would seek to earn more SEI “through the validation of transactions in the SEI Network’s proof-of-stake process,” the April 30 <a href="https://www.sec.gov/Archives/edgar/data/2066353/000199937125005157/sei-s1_042925.htm">filing</a> notes.&nbsp;



Then on May 2, VanEck <a href="https://www.sec.gov/Archives/edgar/data/2066824/000206682425000002/vaneckbnbetfs-1.htm">proposed</a> an ETF offering exposure to BNB — the native token of the Binance-created BNB Chain. BNB’s market cap of ~$87 billion is fifth-highest among crypto assets — sitting between XRP (~$123 billion) and SOL (~$74 billion).



Kyle DaCruz, VanEck’s director of digital assets product, previously told me the SEC could wait for legislation — noting that following a framework would be easier than evaluating each crypto asset one by one.



Just when you thought you got away from Washington politics.



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Bloomberg Intelligence

Optimism fuels more crypto ETF filings despite LTC fund delay

Casey Wagner

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance" target="_blank" rel="noreferrer noopener">subscribe</a>.



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Just months after taking a euphoric victory lap around Washington to celebrate the new administration, it would appear the crypto industry has a Trump problem.&nbsp;



2025 was supposed to be a <a href="https://blockworks.co/news/trump-das-crypto-address">historic year</a> for crypto legislation. With a favorable White House and established <a href="https://blockworks.co/news/crypto-bipartisan-usa-polarization">bipartisan</a> <a href="https://blockworks.co/news/senators-oppose-sec-accounting-standards">support</a> for policy, lawmakers and industry members expected to have new laws passed before midterm elections.&nbsp;



But, as Ben <a href="https://blockworks.co/news/legislative-speed-bumps-genius-act-sec">wrote about yesterday</a>, nine Democrats pulled support for the current version of the stablecoin-focused GENIUS Act. They cited wanting stronger provisions around anti-money laundering and national security, for example.&nbsp;



Then there are concerns over the president’s family’s crypto business endeavors. Thanks to Trump’s <a href="https://blockworks.co/news/trump-more-than-a-memecoin">memecoin launch</a> in mid-January, tensions have been building since before Inauguration Day. In the months since, World Liberty Financial (the <a href="https://blockworks.co/news/on-the-margin-newsletter-trump-family-defi-venture">Trump family’s</a> crypto venture) has floated stablecoin plans and recruited investors.



Many Democrats, like Financial Services Ranking Member Maxine Waters, insist this is a clear conflict of interest, and lawmakers should not be advancing policy that would directly benefit Trump’s <a href="https://blockworks.co/news/crypto-prices-dinner-donald-trump">business initiatives</a>.



“I am deeply concerned that Republicans aren’t just ignoring Trump’s corruption, they are legitimizing Trump and his family’s efforts to enrich themselves on the backs of average Americans,” Waters wrote in a Tuesday statement after she objected to a planned joint House hearing on crypto.&nbsp;



“Through his crypto businesses, Trump has turned the office of the presidency into a personal money-making machine,” she added.&nbsp;



The comments come after members of the House Financial Services and Agriculture committees gathered this morning for a joint hearing on the newly released crypto market structure bill <a href="https://financialservices.house.gov/news/documentsingle.aspx?DocumentID=409719">discussion draft</a>.&nbsp;



The hearing didn’t get very far, though, as Waters objected to the gathering. Because unanimous approval is needed for joint hearings, she was successful in stopping the official proceedings.&nbsp;



Digital Assets Subcommittee Chair Bryan Steil pivoted, and called for a roundtable discussion — a loophole allowing the witnesses to provide testimony and answer lawmakers’ questions. Waters then left the room, asking colleagues to join her for a separate meeting to discuss Trump’s crypto dealings.&nbsp;



Financial Services Committee Chairman French Hill countered Waters, noting the market structure draft and the stablecoin-focused STABLE Act are intended to bring crypto out of regulatory purgatory. The bills, he said, seek to fill <a href="https://blockworks.co/news/washington-dc-blockchain-summit-takeaways">gaps in oversight</a> that even President Biden admitted existed. Up until recently, they had significant bipartisan support.&nbsp;



Crypto lobbying groups and Hill insiders have known for weeks that these legislative efforts would face roadblocks from Democrats.&nbsp;



Groups have even proposed combining the market structure and stablecoin bills into a single piece of legislation. The theory was that it’s extremely unlikely lawmakers will pass two crypto bills, but the problem with one super bill is it gives everyone a lot more to fight over.&nbsp;



The new market structure discussion draft in the House is similar to bills from the last session of Congress: <a href="https://blockworks.co/news/house-passes-act-fit21-with-bipartisan-support">FIT21</a> in the House and <a href="https://blockworks.co/news/bitcoin-ether-to-be-regulated-as-commodities-by-cftc-per-new-senate-bill">DCCPA</a> in the Senate.&nbsp;



Generally speaking, the legislation seeks to clarify the roles of the SEC and CFTC. It also outlines the process for listing tokens, consumer protections and disclosure requirements. A big difference between this draft and FIT21 is that the new version does not include the term “decentralized system.” A <a href="https://blockworks.co/news/fit21-isnt-crypto-win">key criticism</a> of FIT21 was that the focus on “decentralization” was too great, potentially making it more challenging for certain token issuers to be compliant.&nbsp;



The key term here though is really “discussion draft.” The industry can now submit comments on the bill, so we’re still several steps away from a floor vote.



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congress

Rep. Waters blocks joint House crypto hearing, cites Trump conflict of interest

Kate Irwin

This is a segment from The Drop newsletter. To read full editions, <a href="https://blockworks.co/newsletter/thedrop" target="_blank" rel="noreferrer noopener">subscribe</a>.



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Coinbase is now sponsoring Riot Games for the studio’s League of Legends and Valorant Esports global gaming events.



The deal officially starts next month with two esports events in Canada. The first is the Valorant Masters event in Toronto June 7. Coinbase will also be part of the MSI 2025 esports tournament in Vancouver that runs June 27 until July 12.



David Mulhall, Riot Games’ global head of esports partnerships and business development, called Coinbase a “perfect addition” to its list of brand partners and said the crypto firm can bring “engagement touchpoints and features that our global esports community appreciates.”



Crypto, however, remains a polarizing and controversial topic among gamers, including <a href="https://www.reddit.com/r/leagueoflegends/comments/1h1u11u/lol_community_opinion_on_blockchain_in_esports/">League of Legends fans</a>. Some gamers like it and some are open to it, while others absolutely despise it, as we’ve seen time and time again when non-crypto video games toy with the idea of crypto integrations or add NFTs to their titles.



Coinbase is planning event activations, promotions, awards and other perks in the Riot deal, but the financial terms have not been disclosed.&nbsp;



We do know that both parties are heavy hitters in their respective industries: Coinbase made $6.6 billion in revenue last year, while Riot made over $376 million in 2024.



Coinbase has sponsored the NBA since 2021. The US exchange also <a href="https://teamliquid.com/race-to-world-first">sponsored</a> esports organization Team Liquid (which itself struck a deal with Sui).



Other crypto firms have sponsored sports or esports, like Kraken with Williams Racing. Bybit struck a deal with the Brazilian esports organization Made in Brazil (MIBR) in 2022, and Crypto.com signed a five-year partnership with Fnatic in a <a href="https://www.sportspro.com/news/crypto-fnatic-esports-gaming-cryptocurrency-nft-partnership/">$15 million deal</a> in 2021, to name a few. 



But some deals have seen much bigger numbers. FTX struck a $210 million deal with the esports org TSM, but that fell apart in 2022 when the exchange collapsed.



The esports industry more broadly has <a href="https://decrypt.co/205565/inside-esports-industry-war-survival-investigation">struggled</a> in recent years, spurring an increasing reliance on brand sponsorships and corporate investment to generate revenue.



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Coinbase

Coinbase sponsors Riot Games’ League of Legends, Valorant esports

Donovan Choy

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We call this industry the “blockchain” industry. But people are fed up with too many chains.



If you’re launching a new chain in 2025, expect plenty of skepticism on Twitter. It’s what all the L1 blockchain raises in the last week had to confront.



<ul class="wp-block-list">
<li><a href="https://x.com/campnetworkxyz/status/1917227468458443116">Camp Network</a>, an intellectual property-focused L1, raised $30 million at a valuation of $400 million.</li>



<li><a href="https://blockworks.co/news/unto-vc-raise-thru-blockchain-l1">Unto</a>, an SVM-based L1, raised $14.4 million at a valuation of $140 million.</li>



<li><a href="https://x.com/0xMiden/status/1917202501910098321">Miden</a>, a zk rollup, raised $25 million (undisclosed valuation).</li>
</ul>



“Another chain, why?”



The easiest explanation is “greed.” It&#8217;s the fabled L1 premium!



Look at SUI’s price performance lately — what explains a $6.8 billion-market-cap token almost doubling in half a month?



We can all agree that it’s not based on fundamentals. Fees generated on Sui are at paltry lows compared to its highs last December.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeSyUs7NQcpRz3N6u0THgnme2_QFYBGECH_RZmZrs1yvW8AV4QEQ6I8LEJqXqmakL2Xj_Jw6ZE2Y4VadW_rO1MCH8hqBNbL2iM9_WgUqsOtUspa_JPvT6bRaLAs8Vh4pH5hTmMV-w?key=t1odmGaVblT5NpC6JTUK0g" alt=""/></figure>



Maybe I’m cherry-picking, and SUI is an anomaly. Maybe the L1 premium is dying, but it’s not quite dead yet.



Until then, the incentives to launch new L1s still exist.



The second (and charitable) explanation is simply that founders launching chains have competing visions of how a chain should be optimized.



How should the execution environment be designed? How is MEV captured? What data availability layer to use? Should there be a standardized oracle or gas token?



These things aren’t trivial. They determine where application developers go to build, and make or break the long-term success of a chain.



Expecting protocol builders to agree is like getting a hundred people to agree on a buffet’s menu.



It’s not all technical, either — there are social layer considerations. Take for example <a href="https://x.com/fede_intern/status/1846035499799978475">Rogue</a>, @fede_intern’s upcoming zk rollup that wants to have zero VCs, insider allocation, and a completely fair launch like Bitcoin did.



Builders have different opinions. They launch their own chains. It’s as simple as that. That’s economic freedom. We should celebrate it.



<h2 class="wp-block-heading">A solution?</h2>



Yet, there may be some consolation in the fact that L1 valuations are already compressing.



One of the highest profile L1 raises last year <a href="https://blockworks.co/news/evm-compatible-layer-1-blockchain-vc-interest">was Monad</a>. Valuations were undisclosed, but it was rumored to be at unicorn status <a href="https://pitchbook.com/news/articles/monad-labs-225m-paradigm-series-a-unicorn">according to</a> Pitchbook, so that puts Monad in the range of a billion.



Or consider <a href="https://blockworks.co/news/initia-mainnet-launch-appchain-l1">the Initia L1</a>, which was <a href="https://x.com/Xangle_official/status/1839198484152635649">valued</a> at $350 million last year.



These raises are nothing like what was seen in the last cycle.&nbsp;



Contrast this to when Avalanche reportedly <a href="https://coincheckup.com/blog/avalanche-developer-ava-labs-to-raise-350m-at-5-25b-valuation/?utm_source=chatgpt.com">raised</a> at a valuation of $5.25 billion in 2022. Or Flow, which <a href="https://www.coindesk.com/business/2021/09/22/dapper-labs-said-to-reach-76b-valuation-in-250m-funding-round">raised</a> at a valuation of $7.6 billion.



These numbers are dramatically down for L1s.



Public markets have responded to the distaste for more chains, and private markets are correcting overtime. The free market is <a href="https://x.com/MikeIppolito_/status/1919053350990934323">working</a>.



The data checks out when we zoom out. The below chart shows a downward trajectory for total funding raised for blockchains.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeFnfCgcQw9HlPAeqXDU-PXFk44jC1ULXaEmdYe3ZDQPoRBM6GbJv0aI7WX4j0t6FwdY8tKv38SdMv-9wdwXKIY1lqcrvrq9ObWIQiZEQ3HX2A8wdSCLYcxWijGXSUpDC7lt0Zg?key=t1odmGaVblT5NpC6JTUK0g" alt=""/></figure>



For those frustrated with “too many chains” who would like to see none at all, it’s probably not a satisfying answer.



Tied to that frustration is also an underlying desire to see more applications.



Fun fact: Consumer apps ironically received the lion’s share of venture funding vs. infrastructure back in 2013-2017 (Joel Monegro’s <a href="https://www.usv.com/writing/2016/08/fat-protocols/">Fat Protocol thesis</a> was written in 2016).&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdE_6rt6n3rOD8TrPoX_FvhrPeX-ygfofNuFVExWc0VmU5W77YyAXvI5QzKHCJ9_onfFw47g2x7rxK3jitq7jObQFm4cOnX4cnX5HSAr4pIvmfz9umAYam81ZpLU5n9uC9TYrsTIQ?key=t1odmGaVblT5NpC6JTUK0g" alt=""/><figcaption class="wp-element-caption">Source: <a href="https://cheekyrolo.substack.com/p/web3-fundraising-in-focus-the-truth">Outlier Ventures</a></figcaption></figure>



That has, of course, flipped today. Is there some reason why application funding has fallen out of favor with VCs?



Take it from 1kx, which <a href="https://x.com/pet3rpan_/status/1917288546324697325">claims</a> to be one of the most active investors in consumer apps.



1kx partner Peter Pan told me: “Applications live and die by their traction and follow through — it’s an immediate feedback loop. Whereas with infrastructure, you can continue to find funding in a pre-launch state based off existing market comps, and push reality further and further out.”



Pudgy Penguins, Axie Infinity, Off The Grid, Rodeo and Layer3 are some examples of apps that have surmounted that feedback loop, Peter said.



Application revenues are also collectively outpacing the underlying protocol’s revenue (measured by REV) on most chains today.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc6FqIKnaLBnQV1HMDRg0dbAyerrBZ8vugrzGtTyJgQDFGU2xUoK1lX3zL5OAd8_KDCRzsr9mXkVrMJMqhVi9Quu-eEt6s2kY7cDD9j0UK5Pxq0GHemhb4SpsPj4Bp0ROzKKEC2?key=t1odmGaVblT5NpC6JTUK0g" alt=""/></figure>



If free markets worked to correct L1 overvaluations, maybe the reverse can happen for application funding, too.



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0xResearch Newsletter

Does the blockchain industry have too many blockchains?

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Adidas is dressing up in-game characters with a collection of NFT skins for Xociety, an upcoming third-person crypto shooter game with RPG elements.



2,600 <a href="https://adidas.xociety.io/">Adidas</a> mystery box NFTs can be opened to reveal in-game skins, including black hoodies, neon Adidas tracksuits, and other looks emblazoned with the Adidas logo.&nbsp;



Like Xociety itself, these NFTs will use the Sui L1 chain. Each box consists of a specific number of full clothing sets.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcfqjWsP6ca5Ld8FoDrVO5aXcSrQh-1UTz42KlZjeW_fckyWDnc1JwWFDIN5zc57RGTDQ7YGqRrxZOnsljfN2hewgYm_x12XppBua5ksVQ0spjNzzc6XhL9EFEzh2kriE8wZTYq?key=UWHqtG8Z0vxHNZSW5p9TP6_S" alt=""/></figure>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="720" height="405" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/image.png?w=1024&amp;h=1024" alt="" class="wp-image-101598" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/image.png?w=720 720w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/image.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/image.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/image.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/image.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/image.png?w=80 80w" sizes="auto, (max-width: 720px) 100vw, 720px" /></figure>



Each box will offer one of four rarity tiers: Uncommon, Rare, Epic and First. Uncommon will have three sets, Rare will have four, and Epic and First will come with eight sets of apparel. The boxes will mint on Tradeport on May 16 at 9 am ET.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="636" height="342" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/image-1.png?w=1024&amp;h=1024" alt="" class="wp-image-101599" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/image-1.png?w=636 636w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/image-1.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/image-1.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/image-1.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/image-1.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/image-1.png?w=80 80w" sizes="auto, (max-width: 636px) 100vw, 636px" /><figcaption class="wp-element-caption">To me, these avatars look a lot like Nike’s RTFKT CloneX NFTs.</figcaption></figure>



Xociety’s deal with Adidas is a revenue share deal through which players will receive rewards “for spend by other players,” the team said, calling it a powerful way to “access real rewards across the life of Xociety.”



Xociety’s audience is primarily in Asia, with South America and Europe also making up large contingents of its playerbase. So far, the game is playable via limited-time playtests. Xociety said more than 12,000 players competed in their most recent playtest across 64 different countries.



The team has plans to “deliver more into the North American market” soon. Xociety will be available to play on the SuiPlay 0x1 handheld, too. 



Adidas has launched <a href="https://nftpricefloor.com/brands/adidas-nft">over a dozen</a> different NFT collections since its first foray into the space in 2021. Its first collection, a metaverse drop with the Bored Ape Yacht Club and others, generated $23 million in revenue. But Adidas may have only kept about <a href="https://www.ledgerinsights.com/adidas-keeps-little-from-its-23m-nft-launch-faces-complications/">$6.2 million</a> because of the other partners in the deal, research firm Ledger Insights reported.



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Adidas

Exclusive: Apparel giant Adidas launches Sui NFTs

David Canellis

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Painters paint, sculptors sculpt and cryptographers code.



For millennia, creators have fought to express themselves through their chosen media.&nbsp;



Around the year 430 BC, Greek sculptor <a href="https://www.britannica.com/biography/Phidias">Phidias</a> is famously said to have died in prison after being charged with impiety due to his art (with a side of treacherous politics).



Phidias had sculpted himself and statesman Pericles onto the shield of Athena on the Athena Parthenos, an unforgivable act of hubris in front of the gods.



Nearly two and a half thousand years later, cryptographer Daniel Bernstein fought the US government over his constitutional right to express himself through code — and won.



<h2 class="wp-block-heading">On This Day: Code Is Speech</h2>



Twenty-six years ago today, Judge Marilyn Patel <a href="https://archive.epic.org/crypto/export_controls/bernstein_decision_9_cir.html">ruled</a> that computer code should be considered speech and thus protected under the First Amendment, even if that code represented powerful encryption technology.



Bernstein had sued the US State Department and subsequently the Department of Commerce in what Judge Patel later described as “part political expression.”



As we touched on in a <a href="https://blockworks.co/news/cypherpunk-movement-history-wired-1993">retrospective last week</a>, the US government at the time classed cryptographic tools with a key size larger than 40 bits as weapons.



This meant anyone seeking to publish or otherwise make cryptography software available outside the US had to register as an arms dealer — including doctoral candidates studying mathematics at UC Berkeley, like Bernstein.



So, when Bernstein approached the State Department about publishing the source code, instructions and academic paper describing a new encryption method called Snuffle, authorities labeled the work a “munition” under the International Traffic in Arms Regulations.&nbsp;



But the imposition of any licensing regime on code — the medium through which cryptographers express their ideas, thoughts and theories — was unconstitutional, in Bernstein’s view. The Electronic Frontier Foundation (EFF) then <a href="https://www.eff.org/deeplinks/2015/04/remembering-case-established-code-speech">sponsored</a> his lawsuit, in what was its second major case after the <a href="https://www.eff.org/effector/5/4">Steve Jackson Games</a> in the early ‘90s.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdEfRWs76iqy8ikvy0drJ2gaNsmJaKCwO15FQDC24JYlwm6MtKEdAREb3BiXzeBSEObADH4Mt3xloq2GxfURrkvHRzp11ZSdw4jBylwQfjWjWyDavRlCsWfTPhMxMtxAawm1-kd?key=c9U2HACTQaLeKA_MOWlaORni" alt=""/><figcaption class="wp-element-caption">Long before Bitcoin, Adam Back <a href="http://www.cypherspace.org/adam/rsa/uk-shirt.html">protested</a> the US government’s classification of RSA encryption as munition with this cool shirt.</figcaption></figure>



Courts sided with Bernstein and the EFF in a landmark decision about a year later, ruling that the government must protect cryptographers’ freedom to code. It’s their language. 



The case paved the way for strong encryption to be readily applied to e-commerce and all manner of private enterprise, thanks in no small part to the forward-thinking Judge Patel.&nbsp;



Patel wrote: “By utilizing source code, a cryptographer can express algorithmic ideas with precision and methodological rigor that is otherwise difficult to achieve… The need for precisely articulated hypotheses and formal empirical testing, of course, is not unique to the science of cryptography; it appears, however, that in this field, source code is the preferred means to these ends.”



It’s clear that without the Bernstein ruling, the development and release of Bitcoin might have been seriously slowed. After all, Satoshi (if they were in the US) would’ve needed to acquire a license to share Bitcoin source code, immediately doxxing them with the government. How convenient!



Luckily, Bernstein chose to fight.



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Cybersecurity

Code is speech: How computer source code secured First Amendment rights

Katherine Ross

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M&amp;A szn’s still going strong — and this morning’s announcement that Trident and IntoTheBlock are merging is yet another sign of the consolidation we’re seeing.



If you’re not familiar with the two, IntoTheBlock is a financial services platform designed for institutional DeFi investors, and Trident Digital offers services from lending to advisory.&nbsp;



The firms will now become Sentora, and the goal of the new joint entity is to cater to funds, treasuries, and other institutional investors in DeFi. Basically, they want to create an ecosystem focused on the needs of institutions to push into DeFi.&nbsp;



Trident’s Anthony DeMartino will take the helm of Sentora. (If he sounds familiar to you, he was also former head of risk strategies at Coinbase.)



“Through our strategic partnerships with industry leaders, we are developing a suite of products that address the key blockers preventing institutional adoption of DeFi,” DeMartino said.&nbsp;



“The future of finance is decentralized — but not disorganized,” he added. And, honestly, what a fun way to put it.



Meanwhile, IntoTheBlock’s CEO Jesús Rodríguez will take the helm as CTO.&nbsp;



But the merger isn’t the only news they announced. They also raised $25 million in a Series A funding round led by New Form Capital, with Joint Effects and Tribe Capital. Ripple was noted as a strategic ecosystem investor.&nbsp;



&#8220;Institutional capital won’t move into DeFi without strong risk management and compliance frameworks. Sentora provides both — without sacrificing performance,&#8221; New Form’s Alex Marinier noted.



So let’s zoom out.



We’re seeing a rise in these types of M&amp;A deals, in which crypto firms are looking to create a platform that can cater to multiple needs for clients, like institutional investors. We’re also just plain seeing an uptick in M&amp;A activity. That’s a trend I wouldn’t expect to go away anytime soon.



Let’s take a look at some (<a href="https://x.com/blockworksres/status/1919481758183260325">brand-spanking-new</a>) data from Blockworks Research, shall we?



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXfwy0RBOW-brdt4fgSNttwVC-m9rUnbQBJdxJVO6LRGBKoXIOtGQpywSmcg0DoI6XI8uOlC4X2HG11Z3Pq5MxFbdJWPa8WD1RPPQYImVh22yJ6jJ6A0HBJISxwdb6XwwFGl0pHG?key=7zUD8Y_viE1QdBy1hh8N1dFR" alt=""/><figcaption class="wp-element-caption">No, literally. This is fresh out the oven as of yesterday afternoon. Yay.</figcaption></figure>



You can see above that finance is one of the top sectors to consolidate. This makes sense because we’re going to see a lot more competition as this space heats up and institutional investors look to find a platform that can meet most of their needs.&nbsp;



Who wants to have multiple platforms when you can find one that fulfills your needs, right? It simplifies it, and projects will cater to what the market’s looking for (see the deal above).&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdMqwDaV-JckDFHj01fpyyQxWJXr41l7D6DVKukfdZJa7Dsb-Wuq0_GzUlIwwoT1cGKobjExxHXFzxLZIadja2rHngqq2iuuaXBCtXyiNwoRrxx70GsTM4GLmp86UHRi0wyVxN6Vw?key=7zUD8Y_viE1QdBy1hh8N1dFR" alt=""/></figure>



As you can see, crypto deal activity is starting to pick up. Just remember: we’re likely going to stay a ways off from those crazy 2021 levels for a while.&nbsp;



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Empire Newsletter

IntoTheBlock and Trident announce merger, raise $25M for new firm

This is a segment from the Blockworks Daily newsletter. To read full editions,&nbsp;<a href="https://blockworks.co/newsletter/daily">subscribe</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
&#8220;There are three creativities: creativity in technology, in product planning, and in marketing. To have any one of these without the others is self-defeating in business.&#8221;



— Akio Morita
</blockquote>
</blockquote>
</blockquote>



The TR-55 transistor radio, the first product sold under the Sony brand, was a technical success — released in 1955, it marked a leap in miniaturization, solid-state design and made-in-Japan innovation.



It wasn’t much of a seller, however, and Sony’s co-founder, Akio Morita, knew why. It needed a better marketing pitch.&nbsp;



So for its next product, Morita demanded that Sony’s engineers develop a gadget that he was sure would get people’s attention: a “pocketable” transistor radio.



By 1957, Sony had developed the world’s smallest radio, the TR-63 — a miracle of miniaturized components and clever engineering.



But it was a little too big to fit in a shirt pocket, which was Morita’s goal: “We liked the idea of a salesman being able to demonstrate how simple it would be to drop it into a shirt pocket,” he explained in his autobiography, <a href="https://www.amazon.com/Made-Japan-Akio-Morita/dp/0002177609/ref=sr_1_1?crid=4ZF0Q2S3B4TG&amp;dib=eyJ2IjoiMSJ9.0zcUUQcaQpbtKX_x1xOCuJKoRNc2MamfeyKAlF0zly4wWkHCkxmSqnMH50M34tzQ.bRsiaT1afnYAOO4qYvQLY3sWKopRwRbjGGTTosCLLJ8&amp;dib_tag=se&amp;keywords=made+in+japan+akia+morita&amp;qid=1746404065&amp;sprefix=made+in+japan+akia+morita%2Caps%2C122&amp;sr=8-1">Made in Japan</a>.&nbsp;



Instead of sending the engineers back to the drawing board, however, Morita solved his design problem with a marketing trick: “We had some shirts made for our salesmen with slightly larger than normal pockets, just big enough to slip the radio into.”



It worked better than even Morita could have imagined.&nbsp;



Not only did the TR-63 become an international hit that made Sony synonymous with innovation and high-quality products — it also kickstarted a revolution in global consumer electronics that would change the world’s perception of Japan.



Morita would go on to become — in the assessment of John Nathan, author of <a href="https://www.amazon.com/Sony-Private-Life-John-Nathan/dp/0618126945/ref=asc_df_0618126945?mcid=72054532ed0a3c389805f0c0816b3e3d&amp;tag=hyprod-20&amp;linkCode=df0&amp;hvadid=693310352361&amp;hvpos=&amp;hvnetw=g&amp;hvrand=17722954159000540309&amp;hvpone=&amp;hvptwo=&amp;hvqmt=&amp;hvdev=c&amp;hvdvcmdl=&amp;hvlocint=&amp;hvlocphy=9009671&amp;hvtargid=pla-568202304859&amp;psc=1">Sony: A Private Life</a> — “probably the greatest marketer of the 20th century, right up there with Steve Jobs.”



If that sounds like hyperbole, consider that Sony — a Japanese company — was rated <a href="https://www.yahoo.com/news/2006-07-13-sony-is-still-the-1-brand-seven-years-in-a-row.html">the number one brand</a> in America from 1999 to 2006.



It was such a significant accomplishment that when Morita died in 1999 at the age of 78, he was hailed as “the engine that pulled the Japanese economy.”



He wasn&#8217;t born a marketer, however — he started out as a kid who liked to tinker with electronics. He went on to become a physicist working for the Navy, and then co-founded Sony as an engineer.&nbsp;



Neither he nor his co-founder Masaru Ibuka had any notion of “merchandising or salesmanship” when they started Sony.&nbsp;



“It never occurred to Ibuka or me that there was any need for this,” Morita explained in his autobiography. “Ibuka believed strongly that all we had to do was make good products and the orders would come. So did I. We both had a lesson to learn.”



Both founders assumed that “in making a unique product, we would surely make a fortune.”



But when they made their first unique product — a ground-breaking, magnetic-tape recording device — they didn’t even make their investment back: “Everybody liked it, but nobody wanted to buy it.”



That’s when Morita learned the value of marketing: “Having unique technology and being able to make unique products are not enough to keep a business going,” he realized. “You have to sell the products” too.&nbsp;



He also realized he’d have to do the selling himself: “I was struck with the realization that I was going to have to be the merchandiser of our small company.”



This may be a universal truth of business: Every product, no matter how good, needs to be sold.



Blockchains, included.



<h2 class="wp-block-heading">Aim high</h2>



In his latest blog post, <a href="https://vitalik.eth.limo/general/2025/05/03/simplel1.html">Simplifying the L1</a>, Vitalik explains what Ethereum is aiming for — “to be the world ledger: the platform that stores civilization&#8217;s assets and records, the base layer for finance, governance, high-value data authentication, and more” — and how to achieve it: “This requires two things: scalability and resilience.”



Well, three things, probably: Morita would tell him that simplifying Ethereum requires marketing, too.



Ethereum’s decentralized and unofficial messaging has done a poor job of explaining what the world’s first smart-contract blockchain is, why it matters, or why anyone might want to use it.



Fortunately, Vitalik may have inadvertently fixed Ethereum’s messaging, too. “World ledger” is an excellent elevator pitch!



Using Bitcoin as a model, Vitalik’s new priority for Ethereum is technical simplicity: “One of the best things about Bitcoin is how beautifully simple the protocol is.”



He’s referring to Bitcoin’s code, which is simple enough that “even a smart high school student is capable of fully wrapping their head around and understanding” it.



(Note: I’ve looked at the code myself and, well…remind me never to match wits with a smart high school student.)



But Vitalik could equally have been referring to Bitcoin’s pitch to investors, which is beautifully simple, too: Everyone can immediately comprehend the appeal of “digital gold.”



“World ledger” may not be quite as intuitive as that, but it’s a major improvement on Ethereum’s previous attempts at branding: “World computer,” “ultra-sound money,” and “the app store of crypto” all required a good deal of explaining.&nbsp;&nbsp;



The explanation of “world ledger,” by contrast, seems far simpler: a decentralized platform “that stores civilization&#8217;s assets and records.”



Being simpler should give it a better chance to stick.



Simplifying any aspect of Ethereum will not be easy, however, as Vitalik warns: “Explicitly valuing simplicity requires some cultural change.”



But that change may already be underway — there’s a growing consensus that Ethereum’s development should be “<a href="https://x.com/sassal0x/status/1917764357641118184">reprioritized</a>” in favor of the base layer (rather than deliberately pushing transactions to layer-2 blockchains).



Just as importantly, there’s a growing recognition that Ethereum’s marketing needs to be reprioritized, too.



For example, Tomasz Stanczak, the newly appointed co-executive director of the Ethereum Foundation, has acknowledged that marketing is part of what’s needed to rebuild Ethereum’s “social layer.”



“On the marketing side, I think we don’t want to create a brand name or advertising style of marketing,” Stanczak told Bankless on a <a href="https://youtu.be/uEzt2ABF80g?si=MmSWYODCBAs5LXBh">podcast</a> this morning, “but better communication and clarity is also part of marketing.”&nbsp;



Better communication and clarity would fit Morita’s definition of marketing, too — marketing, he explained, is about showing people “the real value of what you are selling.”&nbsp;



The good news for Ethereum is that the value it’s selling can be a little aspirational — like Sony’s pocketable radio that didn’t quite fit into a pocket.



Similarly, Ethereum isn’t quite the world’s ledger just yet — but that sounds like a good thing to aspire to.



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Has Ethereum finally found its elevator pitch?

This is a segment from the Lightspeed newsletter. To read full editions, <a href="https://blockworks.co/newsletter/lightspeed" target="_blank" rel="noreferrer noopener">subscribe</a>.



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In mid-April, leaders in the Solana world took to X to post the same cryptic hash. Strings like this can conceal a message’s contents from the public, while still allowing anyone with the original data to verify its authenticity.



Some <a href="https://x.com/0x_Osprey/status/1912915445830848625">speculated</a> the hash was a method to coordinate Solana validators to patch a vulnerability in Solana’s code, and they turned out to be right: Shortcomings in the protocol’s confidential tokens product could have allowed a sophisticated attacker to mint unlimited new tokens, the Solana Foundation disclosed on Friday. The upgrade follows a similar vulnerability and patch situation that <a href="https://blockworks.co/news/lightspeed-newsletter-solana-outage-patch">went down in August</a>.



Solana’s token-2022 standard includes a feature named “confidential transfers” that allows addresses to transact on Solana without revealing the transfer amount. Confidential transfers are verified with a zero-knowledge proof. The bug was basically caused by some missing math that could have allowed someone who knew what they were doing to have invalid proofs be accepted by Solana’s zk program.



The bug being identified and then privately patched with the help of Solana validators provided some good engagement bait for Ethereum fans, but to be fair, I’m not sure what better option Solana had here. No user funds were lost, which is arguably the most crucial factor.



“Criticism of Solana&#8217;s zero-day bug fix makes me realize people have no idea how it would work on Ethereum,” Equilibrium investment partner Mika Honkasalo wrote on X. “TLDR; mostly the same process except feeling ‘holier’ to the ETH community.”



One person involved in Solana’s efforts to patch the bug said the process of privately patching a bug before publicly disclosing the vulnerability later on follows “established security protocols seen in other major blockchains and software projects.”



It’s also not like Solana validators are sharing war plans in a Signal chat. The Solana Foundation, Anza, and Jito contact validators through a patchwork of platforms and then share a hash as a kind of two-factor authentication to prove their outreach is legit, according to multiple people I spoke to involved with the response.&nbsp;



If you believe that Solana is the financial rails of the future, then that’s actually a pretty messy way to coordinate emergency software updates. Solana’s approach to this kind of thing is, arguably at least, a bit too decentralized.



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Solana says zero-knowledge proofs were root of mid-April bug

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance" target="_blank" rel="noreferrer noopener">subscribe</a>.



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Roads that people drive fast on sometimes get speed bumps. I live in Queens, so I’d know.&nbsp;



While pro-crypto developments have <a href="https://blockworks.co/news/trump-first-100-days-crypto-policy">quickly proliferated</a> this year, we’ve seen a couple legislative slowdowns in recent days.&nbsp;



Nine Democratic senators — Digital Assets Subcommittee ranking member Ruben Gallego among them — noted they would not vote for the current version of the Guiding and Establishing National Innovation for US Stablecoins <a href="https://blockworks.co/news/senate-advances-stablecoin-bill">(GENIUS) Act</a>.&nbsp;



If it gets to the floor, that is.



Desired additions include “stronger provisions on anti-money laundering, foreign issuers, national security, preserving the safety and soundness of our financial system and accountability for those who don’t meet the act’s requirements,” they wrote in a Saturday statement.



This development made waves in the crypto community, especially considering the Senate Banking Committee advanced the bipartisan bill out of committee in March with an 18-6 vote that included five Democrats.



Gallego addressed the decision in a weekend X post:



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">This isn’t some reversal out of nowhere by Dems. The fact of the matter is, Dems, including me and my team, were trying to negotiate with the Republicans for weeks. The bill that was introduced for floor consideration back-pedaled on a lot of the progress we made and did not… <a href="https://t.co/hq5HxtEmcx">https://t.co/hq5HxtEmcx</a>&mdash; Senator Ruben Gallego (@SenRubenGallego) <a href="https://twitter.com/SenRubenGallego/status/1919107948317454394?ref_src=twsrc%5Etfw">May 4, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Galaxy Digital research head Alex Thorn acknowledged that an updated draft of the bill was released on May 1. He argues in a <a href="https://x.com/intangiblecoins/status/1919387739444654508">note</a>, however, that nearly all the changes made in recent weeks “make the bill stricter on stablecoin issuers when compared to the version the Senate Banking Committee voted on.”



Essentially endorsing the GENIUS Act, Thorn’s note explains that the crypto industry “both gets a viable pathway while also being reigned in, it protects the financial system, and it helps America succeed geopolitically and in the shifting global economy.”



Amanda Fischer, Better Markets policy director and an ex-SEC chief of staff, sees the situation a bit differently:



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Since the Committee mark-up, the DOJ announced it’d no longer enforce anti-money laundering laws against crypto companies, POTUS launched a stablecoin &amp; did a $2B deal with a foreign government and Binance. If that’s not grounds for a “retrade” what is? <a href="https://t.co/H9cThLLhEY">https://t.co/H9cThLLhEY</a>&mdash; Amanda Fischer (@amandalfischer) <a href="https://twitter.com/amandalfischer/status/1919066651644858404?ref_src=twsrc%5Etfw">May 4, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



In the case there was trepidation given <a href="https://blockworks.co/news/bitgo-to-custody-wlfi-usd1">World Liberty Financial’s USD1</a>, CoinFund president Christopher Perkins <a href="https://x.com/perkinscr97/status/1919206924379177399">said</a>: “Enough of the politics, let&#8217;s focus on doing what&#8217;s right for a change.”&nbsp;



With everyone and their crypto moms sharing their thoughts on X, the CEOs of Blockchain Association, Crypto Council for Innovation and the Digital Chamber also put in their two cents.&nbsp;



They noted being “grateful” for the “significant strides” the GENIUS Act has already made and urged the Senate to bring the bill to the floor for debate this week.&nbsp;



“We hope to see meaningful refinements to further ensure US leadership in digital finance,” Kristin Smith, Ji Kim and Cody Carbone wrote.



So we’ll see how this snag impacts the timeline for when this legislation could see the light of day. Here at Forward Guidance, Casey recently <a href="https://blockworks.co/news/congress-crypto-market-structure-bill-regulation-cftc">shared an update</a> on the crypto market structure bill, too. We had previously heard a perhaps ambitious goal of having these passed by the end of the summer.



The Democratic senators did note in their GENIUS Act statement: “We recognize that the absence of regulation leaves consumers unprotected and vulnerable to predatory practices.”



So it would seem we’ll get there eventually.&nbsp;



Separately (but speaking of legislative speed bumps), Arizona governor Katie Hobbs vetoed a bill that would have allowed the state treasurer and retirement system to invest up to 10% of public funds in “virtual currency” like bitcoin.



Hobbs wrote in a <a href="https://www.azleg.gov/govlettr/57leg/1r/sb1025.pdf">letter</a> to Senate President Warren Petersen: “Arizonans’ retirement funds are not the place for the state to try untested investments like virtual currency.”



Interestingly, it appears the Arizona State Retirement System <a href="https://www.sec.gov/Archives/edgar/data/1558481/000089706925000898/xslForm13F_X02/informationtable.xml">owned</a> nearly 67,000 shares of Michael Saylor-led bitcoin treasury company Strategy at the end of Q1 (worth ~$19 million at the time).&nbsp;It would seem the “need for more education” trope continues to be a cliché with merit.



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Crypto industry sounds off on legislative speed bumps

This is a segment from The Drop newsletter. To read full editions, <a href="https://blockworks.co/newsletter/thedrop" target="_blank" rel="noreferrer noopener">subscribe</a>.



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Tech giants Epic Games and Apple have been duking it out in court for years now, and Apple was just handed a <a href="https://www.documentcloud.org/documents/25924283-epic-v-apple-contempt-order/">ruling</a> that’s changed the US App Store’s rules.



A California judge found Apple to be engaging in anticompetitive practices. The ruling takes steps to stop “Apple’s continued attempts to interfere with competition.”



US apps are <a href="https://x.com/superwoj/status/1918134583234535489">no longer barred</a> from adding external links, buttons, or other ways to get users to leave the app to “browse NFT collections owned by others.”



Apple won’t stop US App Store apps from adding pathways to external pages, and apps can now encourage users to go to those pages.



The main reason this was a point of contention is because apps downloaded from Apple’s App Store are subject to <a href="https://developer.apple.com/app-store/review/guidelines/">Apple’s rules</a>, which prioritized in-app purchases and restricted or made it difficult for developers to link to external marketplaces.&nbsp;



In-app purchases got hit with a fee from Apple (up to 30%) on every purchase, which resulted in slimmer margins for developers and/or higher prices for consumers. Now, Apple’s not allowed to slap that “Apple tax” on app purchases made externally (but can still collect up to 30% on in-app purchases).



I previously saw some crypto games getting around Apple’s old rules with strategies like vaguely hinting to users via in-game messages that the “PC version” offers some items not available on the iOS version’s shop. Apps also didn’t link to said versions or tell players directly how to get NFTs to use in their games.&nbsp;



But that’s not a great gaming experience, and it probably confused some players.



Because of the ruling, Apple approved a Spotify update that will let the streaming giant offer more pay transparency and external links for users. Epic <a href="https://x.com/TimSweeneyEpic/status/1917716512347152499">said</a> it’s finally bringing Fortnite back to the US iOS App Store this week as well. EU gamers have been able to get it through Epic’s own games store since August, <a href="https://www.pcmag.com/news/fortnite-returns-to-android-globally-ios-in-eu-as-epics-fight-with-apple">thanks to the EU’s Digital Markets Act</a>.&nbsp;



So, what does this latest ruling mean for crypto?&nbsp;



Apps of all kinds — from games to trading apps, NFT marketplaces and wallets — can now openly link to external pages where users can make purchases without incurring Apple’s fees. It means indie crypto games can be more sustainable and more transparent to users without gray-area phrasing. It also means marketplaces like OpenSea can directly link to the web versions so users can buy NFTs.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf3CvWGsoNbEDi3SbCkPN1X4MsWked9UGJk9JiHRWcWyiYNuI2V-ZZmc6yy9tLJ_ntNY_nL8jkSsW6uLNVcGALGxIajiC2T6rLiu9lK6sea91J5088vVLsEiJ8gCR1dsTufti4LFw?key=7M5mjXCmi_7PCPWjVvVfQ1Ce" alt=""/><figcaption class="wp-element-caption">Apple’s new language around NFTs</figcaption></figure>



Apps using iOS have always been able to offer in-app purchases, and some chose not to in large part because of the profit margins with those fees.



It’ll help smaller developers trying to break even, as well as more established firms looking to boost revenue and see long-term growth.&nbsp;



This ruling could make mobile games an even bigger portion of the blockchain gaming sector. Last year, Game7 Research found mobile games were the most popular platform for crypto game developers, making up roughly 30% of that market.



Making users leave the app still isn’t ideal, but it’s better than what it was before.



The decision’s receiving positive feedback from executives in the crypto gaming space. Mythical Games COO Arron Goolsbey <a href="https://www.linkedin.com/posts/arron_games-creators-opengardenday-activity-7323970603315593216-Esul?utm_source=share&amp;utm_medium=member_desktop&amp;rcm=ACoAABKdI6YBVCnELgEXIz0Jo0Q13EHkptJChqw">applauded</a> Apple’s changes, “even if they were reluctant to open the door to a wider, more connected future.”&nbsp;



Sam Barberie, Sequence’s head of strategy and partnerships, <a href="https://www.linkedin.com/posts/sambarberie_epic-vs-apple-opens-doors-for-developers-activity-7325157244331864067-gv4h?utm_source=share&amp;utm_medium=member_desktop&amp;rcm=ACoAABKdI6YBVCnELgEXIz0Jo0Q13EHkptJChqw">said</a> it’s “massive” for NFTs and blockchain games.



“Such high fees made it unviable for most Web3 games to target mainstream audiences on the US appstore [sic] but now the friction is gone,” Immutable cofounder Robbie Ferguson <a href="https://x.com/0xferg/status/1918126839928897645">wrote</a> on X. “We’ve still got a long way to go before Web3 gaming is truly mass-market but a huge source of friction just got removed.”



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Apple

What Epic Games’ App Store ruling means for crypto

Pete Rizzo

This is a segment from the Supply Shock newsletter. To read full editions, <a href="https://blockworks.co/newsletter/supplyshock" target="_blank" rel="noreferrer noopener">subscribe</a>.



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Yes, Warren Buffett is one of the greatest to ever do it. But he clearly has a blind spot for Bitcoin.



It’s seven years ago today that Buffett famously called Bitcoin “rat poison squared” in front of CNBC reporter Becky Quick.



Buffett, who at 94 has just <a href="https://www.nytimes.com/2025/05/03/business/berkshire-earnings-warren-buffett.html">confirmed</a> that he’s stepping aside as Berkshire Hathaway CEO at the end of the year, has actually been negging Bitcoin since May 2013. At Berkshire’s annual shareholder meeting, an audience member <a href="https://buffett.cnbc.com/2018/06/26/buffett-a-z-bitcoinand-cryptocurrencies.html">asked</a> Buffett and Munger how they viewed the rising significance of Bitcoin.



“Charlie, I hope you know something about this subject, because I don’t know a thing,” Buffett said. By that point in 2013, the price of bitcoin had jumped from $11 to almost $150 in the past six months.



<h1 class="wp-block-heading">On This Day: Rat Poison Squared</h1>



Munger was blunt. “I have no confidence whatsoever in bitcoin being any kind of a big universal currency.”



“That would certainly be my gut reaction,” Buffett replied. “But I haven’t really looked into it. I’ll put it this way, of our $49 billion, we haven’t moved any to bitcoin.” Cue audience laughter.



“Well, the truth is that I don’t really know anything about it. That doesn’t always stop me from talking about things, but it will in this case.”



The takes never improved from there. “It’s not a currency, it does not meet the test of a currency, I wouldn’t be surprised if it’s not around in 10 or 20 years,” Buffett said a year later.



“Stay away from it. It’s a mirage, basically…the idea that it has some huge intrinsic value is just a joke in my view,” he added a few days on from that.



There are already <a href="https://blogs.cfainstitute.org/investor/2015/01/14/warren-buffett-wrong-on-bitcoin-the-bitcoin-proof/">many</a> <a href="https://bitcoinmagazine.com/business/what-warren-buffett-gets-right-about-bitcoin">thoughtful</a> <a href="https://www.forbes.com/sites/kashmirhill/2014/03/26/warren-buffett-says-bitcoin-is-a-mirage-why-marc-andreessen-thinks-hes-wrong/">critiques</a> of Buffett and Munger’s opinions on Bitcoin out there. And his investment philosophy — of not investing in anything he doesn&#8217;t understand — has obviously worked.



“We just have to focus on eight or 10 stocks, business basically, that we think are decent businesses,” Buffett said in 2018. Berkshire Hathaway’s stock price has tripled since then. Bitcoin’s price, meanwhile, has multiplied almost 13 times in the same period, although directly comparing the two makes little sense.



Does that make Buffett wrong? Sure, in the way that someone who bought Amazon instead of Google 10 years ago is wrong. Both Berkshire and Bitcoin have clearly won: 5.5 million percent returns since 1964 for the former, nearly 137 million percent since 2010 for the latter.



Regardless of how cashed-up Berkshire may be — even without buying bitcoin — it has still missed out big time.



Had Buffett allocated only 2% of Berkshire’s $57.9 billion to bitcoin in May 2018, instead of calling it rat poison squared, the firm might’ve bought up to about 137,000 BTC, potentially for under $8,500 per coin on average.&nbsp;



The same haul today would be valued at more than $13.1 billion, boosting Berkshire’s current cash holdings by almost 30%. 



What doesn’t kill you is meant to make you stronger. And what you don’t know can’t hurt you. But as it turns out, it can make you poorer, relatively. Even if you’re very, very rich.



— <a href="https://x.com/dcanellis">David</a>



<h1 class="wp-block-heading">The Historian’s View</h1>



You know the saying: One man’s rat poison is another man’s treasure…



If you need more proof of the errors of Buffett’s worldview, there’s the tale of HyphyMikey, a BitcoinTalk user who for all we know is still holding on to this 100 BTC gold bar he posted for sale, exactly 12 years ago. Today, the artifact lives on on social media as a talisman from an earlier Bitcoin time, one when you might be someone like HyphyMikey, an early forum user who bought this heirloom (alongside two 25 BTC gold coins) and <a href="https://bitcointalk.org/index.php?topic=196320.0">then tried to sell it to purchase a new car</a>.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcjNpTc5NO56iDGgDM4Om0seJj6vdbUdRtNjfWijKFy8Sadrt-9RgmJMuLbAprmsdwyGDGyL0_m6Z_1xIxDBbvFy5Y-d0ppQgiUhgAzkzNf_kXM7_XB_REPLvOFSspCGyQRaShpSg?key=c_hyr5oLrM_EKwJKfnsOEck_" alt=""/></figure>



Did Hyphy sell? We don’t really know. All told, there’s about 214 of these $10 million Bitcoin bars <a href="https://casascius.uberbills.com/">floating around</a>, though only 37 are “active” and yet to be redeemed for their BTC. (This is where you run into the whole difficult-to-trace part of Bitcoin.)



Though we might never know, it’s another reminder to HODL your BTC. In another 10 years, who knows how expensive this bar will get (and how much more wrong Buffett will be).



— <a href="https://x.com/pete_rizzo_">Rizzo</a>



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Bitcoin

‘Rat poison squared’: 7 years since Buffett’s Bitcoin barb

This is a segment from the Empire newsletter. To read full editions, <a href="https://blockworks.co/newsletter/empire" target="_blank" rel="noreferrer noopener">subscribe</a>.



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In the past few months, we’ve talked about the <a href="https://blockworks.co/news/crypto-fundamentals-metrics-to-watch">rise of fundamentals in crypto</a>.&nbsp;



I take a similar stance to Arca CIO Jeff Dorman when looking at projects: I’m not expecting them to start producing revenue tomorrow, but I’m very aware that projects will need some sort of vision about how they plan to make money. VC raises can truly only get them so far.&nbsp;



But Dorman, in this <a href="https://blockworks.co/podcast/empire/0b22230a-2840-11f0-bf59-bb1feb638e99">week’s episode of the Empire podcast,</a> made an interesting point. Some projects can win in the social value category without necessarily relying on other fundamentals.&nbsp;



“You&#8217;ve got financial value, which is cash flows. You&#8217;ve got utility value, which is some form of usefulness. And then you have social value. And social value is real. It&#8217;s much harder to define. But you can&#8217;t dismiss it,” Dorman explained. He clarified that he’s not just thinking about memecoins or memestocks, but projects that have really catered to and built up social value.



<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" title="The Ultimate Coinbase Debate: Can It Survive? | Jeff Dorman" width="1024" height="576" src="https://www.youtube.com/embed/1dWhiGn4HkQ?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>
</div></figure>



If you’re searching for a winner in this category, it may be Ripple. XRP, at a market cap of $126 billion, is arguably overvalued.&nbsp;



“ But that doesn’t [mean that] because there is no financial value, there is no utility value. It&#8217;s a hundred percent just social value,” Dorman explained. The “ social value of being one of the oldest cryptocurrencies and having this massive following could one day lead to something that does have financial value.”



Dorman compared it to a call option, referring to the contract between a buyer and seller to purchase a stock at a certain price within a set period.&nbsp;



To its credit, Ripple is eyeing ways to boost its own financial profile. Ripple <a href="https://blockworks.co/news/crypto-tradfi-intersections-ripple-blackrock">acquired Hidden Road,</a> giving it access to a new business with the added bonus of a US broker-dealer license.&nbsp;



And, if we’re to believe a <a href="https://www.bloomberg.com/news/articles/2025-04-30/ripple-is-said-to-have-offered-to-buy-stablecoin-rival-circle">report from Bloomberg</a> last week, Ripple also attempted to approach Circle with a hefty bid between $4 and $5 billion. The bid, at this point, is pretty on par with what Circle itself is eyeing upon public debut, but it’s too early to say whether or not it <a href="https://blockworks.co/news/circles-valuation-could-top-5b-post-roadshow">can debut at that valuation.&nbsp;</a>



All of this is to say that Ripple is clearly trying to take advantage of its dominance and expand its reach, which has the added potential of boosting its fundamental value.&nbsp;



So fundamentals aren’t key to success yet, but I also wonder if any other project could copy what Ripple’s done at this stage. It seems to be in a league of its own.



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How Ripple built up ‘social value’: Arca CIO

This is a segment from the Supply Shock newsletter. To read full editions, <a href="https://blockworks.co/newsletter/supplyshock" target="_blank" rel="noreferrer noopener">subscribe</a>.



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Worshipping at the Church of Satoshi has never been a bulletproof vocation. The sect of Hal Finney is a different story.



Yes, even this Supply Shock has spent sizable energy on what Satoshi said over the four-ish short years that the pseudonym was active… and subjected you to all sorts of <a href="https://blockworks.co/news/satoshi-nakamoto-age-birthday-50-clues">hypotheticals</a> and <a href="https://blockworks.co/news/satoshi-disappear-day-cia-bitcoin">assumptions</a> about their motivations for leaving.



Satoshi is/was clearly a brilliant individual. But if their decision to “<a href="https://blockworks.co/news/bitcoin-satoshi-patrick-bateman-commonalities">move onto other things</a>” means anything at all, we must treat whatever Satoshi said or signaled publicly as starting points on a larger journey.&nbsp;



All of Satoshi&#8217;s emails and forum posts have only ever set Bitcoin in a certain direction. They rarely cut the actual path.&nbsp;



Hal Finney is someone who did cut the path. 



The legendary Cypherpunk would’ve turned 69 years old today, May 4, a day celebrated across the world even beyond Bitcoin circles.



<h1 class="wp-block-heading">Bitcoin Legend — Hal Finney</h1>



Hal was the second person after Satoshi to ever run the Bitcoin software, only seven days into its lifespan, making him Bitcoin’s first real user.



“When Satoshi announced the first release of the software, I grabbed it right away,” Hal said on <a href="https://archive.fo/JJP9q#selection-1125.0-1076.38">BitcoinTalk</a> in March 2013. “I mined block 70-something, and I was the recipient of the first bitcoin transaction, when Satoshi sent ten coins to me as a test. I carried on an email conversation with Satoshi over the next few days, mostly me reporting bugs and him fixing them.”



We can only ever infer the pre-Bitcoin history of Satoshi. There’s no record of the pseudonym before the white paper. He appeared out of the ether, a manifestation of the radical corpus that contained the Cypherpunk <a href="https://mailing-list-archive.cryptoanarchy.wiki/">mailing list</a>, Tim May’s <a href="https://groups.csail.mit.edu/mac/classes/6.805/articles/crypto/cypherpunks/may-crypto-manifesto.html">Crypto Anarchist Manifesto</a> and David Chaum’s <a href="https://chaum.com/publications/">voluminous</a> academic papers.



Hal’s own history is meanwhile woven into the very texts from which Satoshi sprung. Living in Temple City, California, he spent years closely developing Pretty Good Privacy (PGP) with Phil Zimmermann — <a href="https://blockworks.co/news/cypherpunk-movement-history-wired-1993">another Cypherpunk legend</a> — when it was still unclear whether contributing to the software was an illegal act. Hal worked there until he retired in 2011.



Hal also built and operated two of the first-ever cryptographically-based anonymous remailers in the early ‘90s, which novelly allowed users to send emails without revealing any information about their identities.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Running bitcoin&mdash; halfin (@halfin) <a href="https://twitter.com/halfin/status/1110302988?ref_src=twsrc%5Etfw">January 11, 2009</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div><figcaption class="wp-element-caption">The greatest Bitcoin tweet of all time</figcaption></figure>



These are acts of activism. Hal had pushed persistently, for decades, in defense of our right to privacy in a digital world increasingly surveilled by governments and corporations. He was also a key force in the protracted Cypherpunk war for anonymous digital cash that gave us Bitcoin.



“When Satoshi announced Bitcoin on the cryptography mailing list, he got a skeptical reception at best. Cryptographers have seen too many grand schemes by clueless noobs. They tend to have a knee jerk reaction,” Hal <a href="https://archive.fo/JJP9q">recounted</a>.



“I was more positive. I had long been interested in cryptographic payment schemes. Plus I was lucky enough to meet and extensively correspond with both Wei Dai and Nick Szabo, generally acknowledged to have created ideas that would be realized with Bitcoin. I had made an attempt to create my own proof of work based currency, called RPOW. So I found Bitcoin fascinating.”



Fitting Hal’s legacy into this humble article will never be feasible. Still, I can say this: In 2025, it’s very easy to take our right to encryption — the shared core ingredient for online freedom and Bitcoin — for granted.&nbsp;



End-to-end and other manners of encryption may now be commonplace, but there are still grave concerns over the power that tech companies, financial intermediaries and state forces have over our lives. We are surveilled by default and complacency is too convenient. Normalized.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">I am proud to recognize the <a href="https://twitter.com/HRF?ref_src=twsrc%5Etfw">@HRF</a>’s incredible freedom and privacy focused initiative honoring Hal’s legacy through the Finney Freedom Prize. 🙌 Congratulations to the 2nd halving era’s winners—your work truly embodies the spirit Hal believed in. 🌟 <a href="https://t.co/PxvN0T6csr">https://t.co/PxvN0T6csr</a>&mdash; halfin (@halfin) <a href="https://twitter.com/halfin/status/1877759826983522443?ref_src=twsrc%5Etfw">January 10, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div><figcaption class="wp-element-caption">Fran Finney, Hal’s wife, celebrates Hal’s legacy with an annual <a href="https://secure.alsnetwork.org/site/TR?fr_id=1510&amp;pg=entry">Running Bitcoin Challenge</a> to raise money for ALS Research.</figcaption></figure>



Hal built and sharpened tools for mitigating those threats, even right up until the end of his life. We must use those tools and all others like them. Promote them.



“Currently I&#8217;m working on something Mike Hearn suggested, using the security features of modern processors, designed to support ‘Trusted Computing,’ to harden Bitcoin wallets,” Hal posted on BitcoinTalk around 18 months before his passing, even as he was “essentially paralysed” due to ALS.&nbsp;



“It&#8217;s almost ready to release. I just have to do the documentation.” Hal was referring to bcflick, for which he’d earlier released a <a href="https://bitcointalk.org/index.php?topic=154290.0">prototype</a>.



Cypherpunks write code.&nbsp;



Hal Finney wrote code.



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