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Top Headlines for 1 April, 2022

Visa Launches New NFT-Focused Program

Payments giant Visa has unveiled a new program to help non-fungible token (NFT) creators grow their business.

According to SignalFire, nearly 50 million creators worldwide earn their income by publishing content on the Internet. The content creator economy has grown into a $100 billion market.

Visa’s crypto head Cuy Sheffield said, “We’ve been studying the NFT ecosystem and its potential impact on commerce, retail and social media; the Visa Creator Program plans to help this new breed of small and micro businesses tap into new mediums of commerce.”

Visa claims its program aims to “deepen the fluency of its selected creators in crypto commerce and traditional payments”. The company will pay out undisclosed stipends to selected creators. A team of Visa’s product and strategy leaders will guide cohorts of creators through the distinctions and tradeoffs between different blockchains, NFT platforms and other critical parameters.

CleanSpark to Add 500MW to New Mining Facility

Bitcoin mining company CleanSpark is reportedly increasing the mining power of its facility by 500 megawatts.

The miner has tapped Texas-based energy firm Lancium to support the expansion. CleanSpark expects to add 50MW of power by the end of 2022 and an additional 150MW in 2023.

The deal also includes the option to add 300 MW to the firm’s operations, but it has not yet specified a timeline for that upgrade. For its Texas expansion, the firm plans to add 20000 Bitmain S19 rigs to its existing fleet of 22000. This will increase CleanSpark’s hash rate capacity to 20 exahash per second. Hash rate is a metric used to calculate the computational power plugged into a blockchain network. Currently, the global hash rate for Bitcoin sits at 203 exahash per second.

In addition to the new Texas operation, the company also runs two data centers in Georgia. CleanSpark’s expansion into Texas has added the firm to the growing list of Bitcoin miners moving to the state. Texas Governor has been very supportive of Bitcoin, making the location attractive for miners. Mining giants like Riot, Argo Blockchain and Bitdeer have already set up their facilities in the region.

Bitcoin Mining Difficulty Hits ATH

Bitcoin difficulty, the measure of how much computing power is required to mine a block has reached an all time high.

This metric has gradually increased with the network’s popularity even though China, one of the biggest markets in the world, banned all crypto mining within its borders in May 2021. Since then miners from that country have migrated to friendlier jurisdictions, and the number of mining operations continues growing.

As of 1 April 2022, the ever-growing number of miners on the network are producing 6.2 blocks per hour. The previous record block production rate was 6.0 blocks per hour. The increase has affected the network’s mining difficulty level, which has reached the highest point in the network’s history. Experts estimate an additional 4-5% upward adjustment in Bitcoin’s mining difficulty.

Bill Requires Stablecoins Backing with USD and Bonds

The Stablecoin Transparency Act introduced by Representative Trey Hollingsworth (R-IN) and Senator Bill Hagerty (R-TN) will require stablecoins to only use the U.S. dollar or government bonds for their reserve.

The proposed legislation would also require stablecoin issuers like USDC’s Circle and USDT’s Tether to routinely publish audited reports of their accounts.

Senator Hagerty said that many players in the crypto market operate with a lot of ambiguity about essential data, and the consumer should not be made to guess whether their funds will be safe. Stablecoins are cryptocurrencies that are pegged to a specified value of a fiat currency that would be expected to be less volatile than Bitcoin. A stablecoin is usually created by backing the asset 1:1 with a reserve of fiat or an adjusting amount of crypto reserve.

There has, however, been a lot of controversy around stablecoins issuers like Tether. The company has not been transparent about its U.S. dollar reserves and has been the subject of scrutiny by the regulators. The stablecoin issuer always claimed that its cryptocurrency is backed 1:1 by a reserve of U.S. dollars; however, an investigation by the New York Attorney General did not find that to be the case. The company then backtracked on its original claims and published a transparency report revealing that a significant quantity of the reserve was represented by “cash equivalents”, known as commercial paper, which is a kind of short-term debt issued by one or more company.

Circle, the second largest stablecoin issuer in the crypto market, also experienced criticisms for having only 61% of its reserves in cash. Circle then announced that the firm would only use cash reserves or short-term government bonds for its stablecoin and revealed that it had selected Bank New York Mellon as its primary custodian.