Bitcoin’s next gen tokens are here. Inside the Silicon Valley hacker house where 17 coders helped build the new memecoin market
Magic Eden coders gathered in an Airbnb in San Jose, California, to hack in preparation for the so-called bitcoin halving.
Amil Husain
In the East Foothills of San Jose, California, 17 coders working for the popular ordinals marketplace maker, Magic Eden, piled into a 4-bedroom, 3,875 square-foot house rented on Airbnb. Their goal was to spend a week hacking to prepare for the so-called bitcoin halving — an event that is baked into the chain’s code and helps to stave off inflation through programmatic monetary policy.
A lot of the talk surrounding the halving, which happens roughly every four years, has been pegged to the fact that new issuance of the world’s largest virtual coin would be cut in half. But the block that locked in the halving also coincided with a couple other major launches on the blockchain, including cutting-edge programming innovations that are expected to draw both a lot more coders and a lot more venture capital dollars into the bitcoin ecosystem.
Also unlike past halving events, the world’s largest cryptocurrency touched a new all-time high above $73,000 in March as record flows entered the bitcoin ecosystem via the newly-launched spot bitcoin exchange-traded funds in the U.S.
“Bitcoin has never been healthier – what was missing previously was a vibrant developer ecosystem on top,” said Magic Eden’s co-founder and chief operating officer, Zedd Yin.
Some of Magic Eden’s coders took breaks from hacking to play arcade games.
Amil Husain
Arcade games and hard liquor
Magic Eden’s pop-up hacker house was modest but had a few bells and whistles that carried the skeleton crew through the week.
Those perks included Teenage Mutant Ninja Turtles and Street Fighter themed arcade-style machine games in the living room — plus a DIY open bar on a collapsible, plastic table in the dining room.
Engineers also went into the hackathon with the distinct advantage of knowing what they wanted to build. In the days leading up to the halving, Yin, 33, convened his team under the same roof in Northern California with one clear goal in mind: To code and launch the definitive marketplace for a new wave of digital products coming to bitcoin’s blockchain. On Monday morning, Magic Eden’s Runes Platform went live, helping to cement its place as the go-to forum to deal in these novel bitcoin offerings.
For years, rival chains like ethereum and solana have competed with bitcoin on functionality, because both have smart contracts — that is, programmable pieces of code — natively built into the base chain. That has been one of the chief reasons why developers around the world have flocked to these blockchains to build applications.
Magic Eden’s pop-up hacker house included arcade games and a ping pong table with a full bar.
Amil Husain
Enter Casey Rodarmor.
The popular bitcoin coder totally disrupted this dynamic last year when he introduced bitcoin’s version of non-fungible tokens known as ordinals, which developers ended up using as a base for bitcoin-issued coins called BRC-20 tokens. The launch was quiet, at first, but ultimately landed him tremendous acclaim.
Late Friday night, at the exact moment that the bitcoin halving initialized, Rodarmor unveiled his latest creation, runes, which is basically just a better and more efficient version of BRC-20 tokens.
“People really respect Casey and think that he sort of captured lightning in a bottle,” said Nic Carter of Castle Island Ventures. “And so there’s very high expectations for runes as well.”
Technically speaking, runes just enables asset issuance of fungible tokens on bitcoin’s base chain. That could be stablecoins, memecoins, or any variety of fungible token.
The reason this is significant to developers is because of its efficiency relative to existing BRC-20 tokens, bitcoin’s widely-used fungible token standard that has already received a ton of traction. Having a universally accepted token standard like this is seen as key to helping unlock scale of decentralized finance on bitcoin. Decentralized finance, or DeFi, is a parallel banking system that cuts out middlemen like lawyers and banks and relies upon code for enforcement.
“Fungible tokens are a significant part of every meaningful ecosystem like solana and ethereum, so runes is an important step in the evolution of bitcoin,” said Yin, who previously helped lead product for all institutional trading products at Coinbase.
Bill Barhydt, who runs Abra, a company that supports miners with a mix of services, including auto liquidations, and has access to macro data across the sector, said bitcoin simply cannot scale 100% on-chain via its own layer one. The problem has to do with the fact that bitcoin’s blockchain lacks the built-in smart contract capabilities necessary to reproduce the banking stack of a chain like ethereum or solana.
“BRC-20 tokens and ordinals, its successor runes, sidechains such as stacks, and DeFi on bitcoin are all showing strong promise in user adoption which stands to dramatically increase the demand for bitcoin block space and adoption, which I believe will create a positive feedback loop further driving bitcoin price gains in the coming years,” Barhydt said. “It’s truly remarkable the level of new development work happening around bitcoin,” he added.
Venture investors agree.
“I’ve never seen deal pacing move this aggressively in the bitcoin space in my entire career,” Carter tells CNBC.
For a week, the Magic Eden team gathered in an Airbnb in San Jose to work on the code for a new digital asset marketplace that would go live at the bitcoin halving block.
Amil Husain
Bitcoin ‘layer two’ interest spikes
Indeed, the VC appetite for these layer two bitcoin projects has been picking up in the last few months.
PitchBook says that the fourth quarter of 2023 was the first time in almost two years that deal value in the crypto sector had increased, reaching $1.9 billion — up 2.5% from the previous quarter. While still well off the 2021 high of $31 billion, funds are building back interest, and trust, in the space.
“There’s definitely been an awakening of capital interest in the bitcoin layer two space,” said Muneeb Ali, who co-founded Stacks — an open-source blockchain network that brings smart contracts to bitcoin.
Stacks is a separate chain to bitcoin but the two are able to work together. The project launched its own upgrade at the time of the halving block, as well, which reduced transaction time to five seconds, compared to the 10 to 30 minute block times tied to bitcoin’s base chain.
“Having so much VC interest just cements that the bitcoin ecosystem is primed to grow,” Ali said, who noted that the pace of projects launching on bitcoin has also picked up momentum in the last six months, from a half dozen projects going live to more than 50.
A new report released by Austin-based venture fund Trammell Venture Partners found that the bitcoin startup sector had a breakout year at the pre-seed stage, noting a 360% year-over-year increase in transaction count.
“Founders really want to be building on bitcoin specifically,” Christopher Calicott, the fund’s managing director and founding partner, said of the study’s findings.
The report also noted that early-stage, bitcoin-native startups raised just under $1 billion from 2021 through 2023.
Take Alpen Labs. The layer two project, which is bringing cutting-edge scaling technology known as zero-knowledge proofs to bitcoin, just emerged from stealth mode with Ribbit Capital leading a $10.6 million round. Another popular layer two solution dubbed “Build on Bitcoin,” or BOB, has raised $10 million in seed funding.
“Ordinals, BRC-20s and other innovations that came about in 2023 really helped build momentum ahead of the halving,” Ali said. “They made bitcoin fun again for developers and showed that users will favor NFTs, assets, and apps on bitcoin if given the opportunity.”
In the East Foothills of San Jose, California, 17 coders working for the popular Ordinals marketplace maker, Magic Eden, piled into a 4-bedroom, 3,875 square-foot house rented on Airbnb.
Amil Husain
DeFi on bitcoin rails
For years, developers have been trying to bake additional functionality into bitcoin’s base chain. Barhydt tells CNBC that demand for DeFi — specifically yield and lending — is a key driver of crypto adoption.
Sidechains like stacks, for example, have been working to bring the speed and competitive transaction costs of solana-type rails to the bitcoin ecosystem, in order to decongest the main chain and allow the overall bitcoin economy to scale.
With runes, these existing projects have a new tool they can use to grow, since it enables them to potentially plug into a native, lightweight token system on the main bitcoin chain rather than having to generate their own independent token environment.
“Runes presents an efficient system for creating and managing fungible tokens directly on bitcoin in a way that reduces blockchain bloat and improves scalability compared to other token standards,” said Hong Fang, president of crypto exchange OKX. “This has major implications for layer two solutions and sidechains that are working to scale bitcoin,” added Fang, who previously spent nearly a decade working at Goldman Sachs.
Stacks’s Ali has dubbed the post-halving environment “bitcoin season two.”
“Season two is all about the return of builders to bitcoin. Users are finally separating bitcoin the asset from Bitcoin, as the rails,” he said.
As for Yin and his team — one other big takeaway of the runes hackathon was the need for a bit more due diligence on Airbnb properties.
The team had an outdoor gas fireplace that wasn’t working so there was a constant smell of a gas leak the entire week, the rental’s WiFi was down for the entire first day — and a handful of folks got Covid.
According to a Tesla Semi customer, the electric truck program is suffering more delays and a price increase that is described as “dramatic.”
Tesla Semi has seen many delays, more than any other vehicle program at Tesla.
It was initially unveiled in 2017, and CEO Elon Musk claimed that it would go into production in 2019.
In late 2022, Tesla held an event where it unveiled the “production version” of the Tesla Semi and delivered the first few units to a “customer-partner”: PepsiCo.
More than 3 years later, the vehicle never went into volume production. Instead, Tesla only ran a very low volume pilot production at a factory in Nevada and only delivered a few dozen trucks to customers as part of test programs.
But Tesla promised that things would finally happen for the Tesla Semi this year.
Tesla has been building a new high-volume production factory specifically for the Tesla Semi program in a new building next to Gigafactory Nevada.
The goal was to start production in 2025, start customer deliveries, and ramp up to 50,000 trucks yearly.
Now, Ryder, a large transportation company and early customer-partner in Tesla’s semi truck program, is talking about further delays. The company also refers to a significant price increase.
California’s Mobile Source Air Pollution Reduction Review Committee (MSRC) awarded Ryder funding for a project to deploy Tesla Semi trucks and Megachargers at two of its facilities in the state.
Ryder had previously asked for extensions amid the delays in the Tesla Semi program.
In a new letter sent to MSRC last week and obtained by Electrek, Ryder asked the agency for another 28-month delay. The letter references delays in “Tesla product design, vehicle production” and it mentions “dramatic changes to the Tesla product economics”:
This extension is needed due to delays in Tesla product design, vehicle production and dramatic changes to the Tesla product economics. These delays have caused us to reevaluate the current Ryder fleet in the area.
The logistics company now says it plans to “deploy 18 Tesla Semi vehicles by June 2026.”
The reference to “dramatic changes to the Tesla product economics” points to a significant price increase for the Tesla Semi, which further communication with MSRC confirms.
In the agenda of a meeting to discuss the extension and changes to the project yesterday, MSRC confirms that the project went from 42 to 18 Tesla Semi trucks while the project commitment is not changing:
Ryder has indicated that their electric tractor manufacturer partner, Tesla, has experienced continued delays in product design and production. There have also been dramatic changes to the product economics. Ryder requests to reduce the number of vehicles from 42 to 18, stating that this would maintain their $7.5 million private match commitment.
In addition to the electric trucks, the project originally involved installing two integrated power centers and four Tesla Megachargers, split between two locations. Ryder is also looking to now install 3 Megachargers per location for a total of 6 instead of 4.
The project changes also mention that “Ryder states that Tesla now requires 600kW chargers rather than the 750kW units originally engineered.”
Tesla Semi Price
When originally unveiling the Tesla Semi in 2017, the automaker mentioned prices of $150,000 for a 300-mile range truck and $180,000 for the 500-mile version. Tesla also took orders for a “Founder’s Series Semi” at $200,000.
However, Tesla didn’t update the prices when launching the “production version” of the truck in late 2023. Price increases have been speculated, but the company has never confirmed them.
New diesel-powered Class 8 semi trucks in the US today often range between $150,000 and $220,000.
The combination of a reasonable purchase price and low operation costs, thanks to cheaper electric rates than diesel, made the Tesla Semi a potentially revolutionary product to reduce the overall costs of operation in trucking while reducing emissions.
However, Ryder now points to a “dramatic” price increase for the Tesla Semi.
What is the cost of a Tesla Semi electric truck now?
Electrek’s Take
As I have often stated, Tesla Semi is the vehicle program I am most excited about at Tesla right now.
If Tesla can produce class 8 trucks capable of moving cargo of similar weight as diesel trucks over 500 miles on a single charge in high volume at a reasonable price point, they have a revolutionary product on their hands.
But the reasonable price part is now being questioned.
After reading the communications between Ryder and MSRC, while not clear, it looks like the program could be interpreted as MSRC covering the costs of installing the charging stations while Ryder committed $7.5 million to buying the trucks.
The math makes sense for the original funding request since $7.5 million divided by 42 trucks results in around $180,000 per truck — what Tesla first quoted for the 500-mile Tesla Semi truck.
Now, with just 18 trucks, it would point to a price of $415,000 per Tesla Semi truck. It’s possible that some of Ryder’s commitment could also go to an increase in Megacharger prices – either per charger or due to the two additional chargers. MSRC said that they don’t give more money when prices go up after an extension.
I wouldn’t be surprised if the 500-mile Tesla Semi ends up costing $350,000 to $400,000.
If that’s the case, Tesla Semi is impressive, but it won’t be the revolutionary product that will change the trucking industry.
It will need to be closer to $250,000-$300,000 to have a significant impact, which is not impossible with higher-volume production but would be difficult.
FTC: We use income earning auto affiliate links. More.
-
Sports2 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports12 months agoStory injured on diving stop, exits Red Sox game
-
Sports1 year agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Business3 years agoBank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway