Connect with us

Published

on

This is an opinion editorial by Max Keidun, the CEO of peer-to-peer bitcoin exchange Hodl Hodl.

The bitcoin lending space has suffered from several major issues in recent months and years, from the fallout of the Terra/Luna crash, impacting Celsius and BlockFi, and now FTX as well, to liquidity crunches given the sustained price drawdown, varying accusations of market manipulation and more.

All of these have led to significant losses, bankruptcies and a complete reshaping of the lending market. Many users have lost faith in bitcoin-based lending products and the market appears to be at its historical bottom, both in terms of volumes and public confidence.

As usual, the mainstream media blamed these crises on Bitcoin itself. But is any of this Bitcoin’s fault? Does it make Bitcoin any less attractive? Does it even mean that we shouldn’t consider bitcoin as lending collateral? No!Bitcoin Is Super Collateral, It’s The Lenders Who Have Failed

While Bitcoin's code is law, custodial lending platforms are trusted third parties, owned and managed by private entities. Trusted third parties are security holes. This was true before Bitcoin, and it is still true today.

Furthermore, most bitcoin lending platforms are poorly conceived, poorly developed and poorly managed. This doesn’t necessarily imply bad code. The code can be well written, properly audited and verifiably secure, but there may still be poor incentives that emerge from the design of the lending platforms. If the focus is to treat bitcoin as if it were a yielding asset, we are likely in for trouble.

The longer the “bitcoin lending” industry goes on, the clearer it becomes that most involved do not really understand how yield is generated. And as the saying goes, if you don’t know where the yield comes from, then you are the yield. What it really means is that your bitcoin is being used as the principal for risky investments, and it is likely only a matter of time before the house of cards starts to collapse.

I believe that the proper focus for integrating bitcoin into intermediated lending is to appreciate how valuable and unique bitcoin is, and to treat it as something to be borrowed against: to understand that bitcoin is super collateral. But what makes it so unique?

We can identify twelve characteristics that make it so:Bitcoin Is Liquid

Bitcoin is an extremely liquid asset. It is traded 24/7, with no weekend breaks and no banking holidays. Massive liquidity pools across a variety of fiat currencies are available globally. For lenders, this means that if you want to convert your collateral into fiat, you can do it instantly — either because the borrower has been liquidated or because the loan was repaid from the collateral.

This also allows for the hedging of risks. Bitcoin may be the only kind of loan collateral which can be instantly and dynamically hedged: a serious competitive advantage.Bitcoin Is Programmable

Bitcoin enables the creation of programmable lending products and ownership mechanisms. Among other benefits, this feature allows us to solve the problem of trusted third parties by building non-custodial lending mechanisms and storage systems. For example, we can distribute collateral claims or create conditional logic for redemption that will be automatically executed by the Bitcoin network, not the whims of a centralized financial institution.Bitcoin Is Scarce

There will only be 21 million bitcoin.Your collateral is getting more valuable over time, which means there is less incentive for you to sell, and likely more lenders who are willing to accept it. Bitcoin Is Flexibly Transparent

Bitcoin allows us to enable selective transparency of your assets when useful, but also allows complete anonymity when desired. In a lending scenario, for example, you can easily prove to a lender that you own and control the collateral under consideration.Bitcoin Is Sovereign

Bitcoin is yours. You have keys to your bitcoin just like you have keys to your house and your car. Bitcoin is your personal property. If you use a house or a car as collateral, you won't own it — your lender would. With bitcoin, you can still conditionally own it during your lending agreement. In fact, with the right tools, you can not only use but continue to use this collateral during the period of the lending agreement.Bitcoin Is Secure

Bitcoin is protected cryptographically, economically and socially. It is sensible to think of Bitcoin's lowest-level network security expanding to the set of tools built on top of it. For example, you can distribute ownership of your collateral between multiple independent parties, use offline wallets and utilize many more security methods.Bitcoin Is Market Driven

Bitcoin is the essence of a market-driven asset. The price of bitcoin reflects the market almost instantly, and it's not determined by one or several individuals. It is extremely difficult to manipulate the price of bitcoin. Bitcoin costs almost the same in fiat in any part of the world and is determined by a global market. Bitcoin Is A Real-Time Asset

Not only can we track the price of bitcoin collateral in real time, but Bitcoin's blockchain allows you to track your collateral address in real time also. Any price fluctuation can be reacted to appropriately. As mentioned, there are no weekends or holidays, and the market is always open to everyone, so nobody will close the market on a Friday and open on a Monday with different prices.Bitcoin Is Objective

Bitcoin is honest. Bitcoin in Miami costs the same amount of fiat as it does in Lugano or Riga. Bitcoin doesn't care whether you like it or not. The price of bitcoin cannot be determined by your personal views or your forecasting capabilities. To borrow against bitcoin, you only need to have bitcoin. Your credit history, social score or anything else is irrelevant to the lender as long as you have the collateral to borrow against.

Take real estate, for example. The same amount of money can buy you different properties in different countries with the same levels of economic and social development. What makes the difference then? Why can you buy a mansion on the coast of the Mediterranean in Spain or Italy and, for the same amount of money, you won’t be able to afford a proper house in the Bay Area in the U.S.?

It’s due to humans' irrational valuation capabilities. Because real estate valuation is primarily based on human factors, banks evaluate your property as either too expensive or too cheap, depending on market conditions and their plans.

Or take stocks, for example. Your stocks in a certain company can have good underlying conditions and great potential growth opportunities, but suddenly the CEO of this company can tweet some stupid thing, and you are losing money or getting liquidated. Meanwhile, Bitcoin is fair.Bitcoin Is Global

Bitcoin is globally accessible and globally distributed. For lending, this means that you can borrow remotely from anyone in the world, and you can lend money using bitcoin as collateral to anyone in the world. Bitcoin is neither limited to, nor exclusively exposed to, specific local markets.Bitcoin Is Digital

In a digital age, with digital commerce, we need digital collateral. Bitcoin is already online. It's here, on your machine, your phone, your cold wallet. Bitcoin allows you to borrow remotely and instantly. There is no need to digitize bitcoin as you need to do with real estate, land, cars or any other assets. It's already digital. Bitcoin Is Decentralized

There is no single point of failure in Bitcoin. Bitcoin has been attacked multiple times, and yet it is growing and expanding globally. No committee or person is responsible for Bitcoin. Having decentralized collateral significantly decreases your dependence on single events and failures of companies or people. You are protected by a distributed network. Will Lending Ever Match Bitcoin’s Potential?

Powerful collateral requires powerful tools. Is it possible to build lending tools that will match bitcoins' value? In order to do so, we all need to take a step back and check Bitcoin's white paper.

After reading Bitcoin’s white paper, you will understand that in order to build a successful lending product (in fact, any type of Bitcoin product!), you need to meet three main criteria. If your product has all three, congrats you have passed the test. Let's call it “The Satoshi Test.”Your service should be non-custodial. Remember: not your keys, not your coins. When using custodial lending platforms, you are exposed to the risk of losing your collateral completely. Because, as soon as bitcoin hit platform wallets, they are no longer yours. This is exactly what happened to customers of the many lending and trading platforms that have failed in 2022.Bitcoin is a peer-to-peer, electronic cash system. Once again: peer to peer. Instead of acting like a middleman, you need to provide technical tools for individuals or businesses to operate with each other. Or you can be a business that will allow customers to directly interact with your platform. A good example is a platform that allows customers to buy bitcoin directly into their own cold storage. Your platform should be Bitcoin only, meaning that the only collateral you should work with should be bitcoin. Shitcoins are risky, and shitcoins' code is a ticking time bomb. By integrating many blockchains into your product, you are exposing the most valuable to the most vulnerable.

There is an extra criteria that could be met: anonymity. If you are building non-custodial, Bitcoin-only, peer-to-peer products, this can and will allow you to offer anonymity and better privacy for your customers because security is not full without anonymity and the data of your customers should be protected, as well as their funds.

A good way to pass The Satoshi Test is to utilize multisig. Multisig is a simple and secure yet powerful tool. It allows you to offer peer-to-peer interactions to users, leverage non-custodial escrows and use only Bitcoin. It also allows you to offer better privacy for your users.

Take, for example, a multisig setup with three keys where the consensus mechanism is reached by entering at least two keys. This is called “two-out-of-three Bitcoin multisig.” In that type of setup, you — as a technical tool provider — can become one of the key holders, but you won’t have full control over customer funds (because you only have one key!), thus ensuring that these funds won’t be moved and rehypothecated. For example, the lender will have one key, the borrower will have another one, and the provider will have the third key. This kind of setup will allow users to verify that funds are only used by them, and that all parties must act according to rules in order to reach consensus, and that no single party can act in a dubious and shady way.

In fact, there are already powerful platforms that use Bitcoin multisig and offer peer-to-peer interactions. These platforms can provide lenders and borrowers from all over the world with easy two-out-of-three multisig setups, where each side (including the platform itself) has one key. The multisig is created on Bitcoin’s public blockchain, meaning that you can check your collateral at any time through any block explorer. And the best part is that no funds can be rehypothecated because the platform itself only has one key that ensures that every involved counterparty is acting in a good and professional way. Proper Lending Platforms Might Be Useful For HODLers

Although the lending market at the moment is experiencing turbulence and contagion effects, it is a good time to educate yourself about proper lending platforms that might be useful for any true HODLer in the future. As soon as we enter the next bull cycle, there will be less incentive to sell bitcoin and more interest in holding it for the long term and borrowing against it. Be prepared, because bear markets don’t last forever. HODL and learn!

This is a guest post by Max Keidun. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

Continue Reading

Sports

Ovechkin passes Howe in goals at single venue

Published

on

By

Ovechkin passes Howe in goals at single venue

WASHINGTON — Alex Ovechkin scored his 903rd career NHL goal as the Washington Capitals beat the Los Angeles Kings 2-1 on Monday night.

Ovechkin also passed Gordie Howe for the most regular-season goals scored at a single venue in NHL history with his 442nd goal at Capital One Arena.

Matt Roy also scored for the Capitals, who ended a two-game losing skid to gain some traction in the standings.

Anze Kopitar scored for lone goal for the Kings, who had won four straight. It was just their second regulation road loss of the season.

Washington, which has been struggling to finish at 5-on-5, opened the scoring early, as Roy got to the front of the net and tipped Aliaksei Protas‘ point shot past Darcy Kuemper. It was Roy’s first goal in 25 games, dating to last season.

In the second period, Ovechkin crashed the crease and got to the front of the net before burying a behind-the-net feed from Connor McMichael. Ovechkin now has goals in back-to-back games and three of his past four.

Kopitar pulled Los Angeles to within one with his third goal of the season with 6:33 left in the second. He tapped in a backdoor feed from Corey Perry on a power play. Washington has now given up a power-play goal in three straight games and five of the past six.

Despite a rally, the Kings couldn’t beat Charlie Lindgren, who stopped 30 of 31 shots for his second win of the season after losing his previous four starts.

Kuemper stopped 23 of 25 in the defeat.

The Associated Press contributed to this report.

Continue Reading

Sports

Kempe signs 8-year, $85M contract with Kings

Published

on

By

Kempe signs 8-year, M contract with Kings

The Los Angeles Kings have signed winger Adrian Kempe to a new eight-year contract worth $10.625 million annually, the team announced Monday.

The Kings viewed it as a priority to re-sign Kempe, especially as they prepare for captain Anze Kopitar to retire at the end of the season. The sides had been negotiating over the past few months, and Kempe, sources said, took a little less money, indicating his desire to stay in Los Angeles, where he believes he can win a Stanley Cup.

The contract runs through the 2033-34 season. The 29-year-old Kempe, a native of Sweden, has played his entire 10-year career with the Kings after being drafted in the first round in 2014.

Kempe, the Kings’ leading scorer in each of the past two seasons, has six goals and 19 points through 19 games this season.

He was arguably the biggest free agent remaining for the summer of 2026. Connor McDavid, Jack Eichel, Kirill Kaprizov and Martin Necas all re-signed with their respective teams over the past two months.

Continue Reading

Sports

‘Cool and new thing for me’: Zdeno Chara on entrepreneurship, his new job with the Bruins and more

Published

on

By

'Cool and new thing for me': Zdeno Chara on entrepreneurship, his new job with the Bruins and more

Zdeno Chara is often remembered for how he stood out on the ice.

Over a 24-year career, the Slovak-born defenseman was the tallest player in NHL history at 6-foot-9 and 250 pounds. He boasted the hardest shot the league had ever seen (108.8 miles per hour, recorded at the 2012 NHL All-Star Game) and his longevity is hard to comprehend. When Chara retired at age 45, he had played in 1,680 regular-season games, the most ever for an NHL defenseman.

In his 14 seasons with the Boston Bruins (all as a captain) Chara became the second European captain to win the Stanley Cup, while ushering in a new era of excellence in Boston. The polyglot who speaks seven languages set the standard with his relentless work ethic and mentality of doing whatever it takes for the team — all while instilling the values of respect.

Earlier this month, Chara was inducted into the Hockey Hall of Fame — the culmination of an unlikely yet impressive journey.

“Growing up in a small town in Slovakia, Trencin, you don’t dream about nights like this,” Chara said in his induction speech. “You dream about a patch of ice that doesn’t melt before we finish practice. You dream about finding a stick that’s not broken or skates that can still fit for a couple of years.”

Three years removed from the game, Chara’s pursuit of excellence hasn’t stopped. He crushed his first Ironman triathlon in August in less than five hours — upping the ante from his nine completed marathons in a 15-month span. After taking business courses at Harvard University, Chara is entering the world of entrepreneurship, and soon will launch his first app called Castable. And he has remained close to the game, taking an advisory role with the Bruins beginning last season.

ESPN recently caught up with Chara, who opened up about his life and goals outside of the rink.

Post retirement, you took an advisory role with the Bruins. You’re also exploring entrepreneurship, and you’ve competed in several marathons and Ironmans. Why do you continue to push yourself?

Chara: I think it’s a really cool thing. As much as you can think, “I don’t need to do this, I’m all set. I had a good successful career,” you know what? I’m more the guy that says, “Hey, why not? I’m going to try this. I’m going to learn a ton.” And the learning that’s priceless. So I’m investing the time and energy and obviously some money into it. But in return I’m gaining something amazing, an unbelievable experience by learning about myself, about others, about business, about the world.

As for hockey, the game is constantly evolving. It’s always going to keep going forward and there’s going to be some adjustment. The main thing is: I love watching the game and I love being part of it. I’m so happy I’m being included in the Boston Bruins organization in a mentorship, advisory role with hockey operations. And that’s also a cool and new thing for me where I offer my experience in my mentorship, my smarts that I gained over a 25 year career.

When people consider the career of Zdeno Chara, what do you want to be remembered for most?

Chara: Well, I always say the stats, the records, the games played, the hardest shot, all that stuff: I’m super grateful and I’m humble about it. But the biggest thing is what kind of impact you have on others. I took a huge amount of pride to build something and create something in the organization, and leave something behind. I’m most proud that we were able to build that culture between 2008 and 2014-15 where we were very, very strong. We were contenders and that culture, that legacy was one of the best, if not the best in the league.

You were known for setting a great culture as a captain, and that was passed down to Patrice Bergeron and then Brad Marchand. The Bruins don’t currently have a captain; do you see your guys’ legacy still living within the team?

Chara: I mean that’s the ultimate goal, to be passing on that leadership and the legacy to younger generations. And I think looking back, I think we created something very special in those years where we were winning, ultimately the Stanley Cup, and then we carried it out for a long period of time. Everything has its own runway, and when I left and then Patrice left, Brad Marchand left, yeah, there’s a little bit of gap. But it takes time, it takes learning. And that’s why one of my roles is to come in and try to help these players to become better leaders and better mentors for their younger teammates. So it just takes patience and takes time.

What do you tell those young players about leadership?

Chara: Well, it starts with themselves first, foremost. You can’t be expecting to lead or follow if you don’t commit to certain things. And it starts with self discipline and commitment. You’ve got to be willing to put the work and time into it. You have to find the purpose behind everything you do and everything has to be within team goals, and you have to be willing to accept those responsibilities and accountabilities.

Watching this Bruins season so far, what has surprised you the most?

Chara: I wouldn’t say anything really surprised me. I mean, we had a pretty good start and there was a little bit of a setback if you want to call that, but we bounced back and now we are playing very strong, good hockey, and so we just got to continue to keep going forward and keep improving. Every game is a hard game. There are no easy games in the National Hockey League. Consistency is the biggest thing.

There have been very few European-born coaches in NHL history. Marco Sturm of Germany is now one of them. What is different about what he brings to the Bruins?

Chara: Well, I think he brings positive energy, and he brings the right mindset with his structure and system. He is a great human being. He cares about his players. He wants to win. He has great attention to details. He’s a hardworking coach. He’s their first guy in the office, last guy to leave. So he’s very, very disciplined and driven. You have a coach who is very motivated and inspired to bring the winning culture and championship back.

You were always really close with Patrice Bergeron. What is your relationship like today?

Chara: We are best friends. That’s something that carried over our careers into our personal lives. I can always rely on Patrice to be in touch weekly. He’s an amazing human being and couldn’t ask for a better friend to have. He is very caring, such a great family man. Anytime we have time to get together, we get lunch or dinner. Then we enjoy our re-groups after a few days, and we always touch on our lives and it’s great. I love the guy.

You’re now launching an app called Castable. How would you describe it?

Chara: This idea was created about three years ago. I met my co-founder, Peter Gladstone, at the Harvard Innovation Labs (i-Labs), and I was seeking some sort of hands-on experience to learn more about entrepreneurship, the business side of things. And he said, “Hey, look, I have an idea I’m brainstorming around. I want to create a platform that would be focusing on people connecting with celebrities or talented people. And they wouldn’t have to chase them, literally it will be easy to get together through a sporting or live event.”

So it’s an audio-first platform for broadcasting and commentary, but much more accessible — where celebrities or talented people will provide real time commentary during events or sports events and bring fans closer to those moments that they care about most.

We found that the majority of people, maybe over 80% of people watch sporting events alone. So we want to create something where these people are not alone, but connected not just with their friends and the other group of listeners, but also their favorite people. So imagine: the ManningCast, in real time, and it will be accessible to many, many people.

How do you envision it applying to hockey?

Chara: Imagine you have a hockey game going on, and I could be one of the casters. It’s not required for me to do the play-by-play commentary, but more focused on storytelling or anything that comes up. I could be giving fans some inside information or insight from me growing up. The fans have the privilege of sending me text messages through this application and asking me questions. I can be scrolling down while I’m talking and looking at some comments and choosing which ones I want to answer, which ones I want to let go. It will be entertaining for fans, and I think this is a great chance to also show your persona, show your authenticity and have fun. But it doesn’t have to be that I have to do a hockey game. I can do any type of event, like TV, movies or concerts, or any type of sport. I can watch basketball, golf, tennis, and I can bring guests, I can bring people that are my friends and we can cast.

What have you learned in the business world?

Chara: I think the biggest thing is to listen. I think that you’ve got to be open to always have your eyes ears open and try to learn how things are being developed takes a lot of patience. There’s a lot of smart people. The biggest thing is a willingness to learn, willingness to surround yourself with smarter people than you are and create a team that is diversified. I think it helps when you take some courses. I took a whole bunch of courses at the Harvard Business School, some MIT courses.

And then I think you also have to understand that most of the startups fail; obviously things that can come up. In general, you just got to be willing to grind and keep working at it and never give up and just go after your dream

Your athletic achievements following retirement include several marathons and Ironmans. Are there any other athletic goals you have?

Chara: People ask me all the time, what’s next? What’s your next race? I don’t know at this point. I’m entering the winter season and my focus is on just sustaining the fitness, get a little stronger. If I feel ready for another marathon, I can always find another marathon. I had a pretty good season in the summer. I’ve done three or four half Ironmans. I did one full Ironman and then I did the Chicago Marathon. So it was kind of a busy summer season, and right now I’m just in the process of getting stronger and we’ll see maybe January, December, February, something comes up and I’ll be like, let’s do it.

You’ve played more regular-season games than any other defenseman in NHL history. How were you able to do that?

Chara: Took care of my body. I worked so hard and trained so hard, I think that’s what probably made me last so long. Maybe some people would think differently. Maybe some people think that when you work so hard and you train so many times a day and that you’re going to have way more wear and tear on your body. But it worked for me. I took so much pride in my fitness and being always in top of my shape and good conditioning and strengthening. Obviously I didn’t have any huge major injuries. I had my share of injuries, but I was pretty lucky that I didn’t get really bad ones.

What’s the one element of your fitness routine that you felt helped you the most in your career?

Chara: I grew up as a Greco-Roman wrestler, so I did a lot of Greco-Roman wrestling and I think that was hugely important for me. It was not just to be weight strong, but to be body strong, stand up strong, you control your body, way differently and way better when you are wrestling man against man rather than just lifting weights. I mean, you can be as strong as you can be lifting weights, but then you go on a mat and you are wrestling other men that are at least 240, 250 pounds. It’s a completely different exercise, completely different strengthening. So I think for me, doing Greco-Roman wrestling was the difference maker.

How did you incorporate it into your training? You weren’t doing it during the season, were you?

Chara: Only the offseason. During the season you don’t have time to wrestle and also you don’t want to risk injuries. But my dad was a wrestler and I was able to grow up with wrestling and continue to do that in the summers for my entire career.

The one injury everyone always remembers was the 2019 Stanley Cup Final when you broke your jaw in multiple places. You got surgery with two plates, wires and screws and played in Game 5. What do you remember most about playing that next game?

Chara: The fans were so supportive and amazing to show their gratitude and appreciation of me being on the edge and playing. I will never forget that ovation. I felt it in my heart and that will always stick with me forever. I’m just, I’m forever grateful for that.

What did it take to suit up and get through that game?

Chara: I was pretty tired, pretty exhausted from traveling back, going through the surgery the next day, waking up, just having a little bit to eat. But everybody at that point of the playoffs is exhausted. So I just had to stay calm and really focus on spending every ounce of energy I had left in my body to leave it on the ice.

Continue Reading

Trending