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    Anna Key

    SEC, DeFi, COVID & CBDC — An Ultimate 2020 Year Ender

    End of 2020

    2020 was one of the most unusual years of the 21st century. A pandemic covered the world. Bitcoin halving occurred, Ethereum 2.0 was released, Pavel Durov lost the war against the SEC, DeFi projects flourished. Let's remember these and some other highlights of the year.

    1. Bitcoin Halving

    On May 11, the Bitcoin halving took place. It concerns the halving of the compensation for miners for each mined block. It is not tied to a precise date and occurs every 210,000 blocks. This event influences the price of the crypto and the income of miners. After the Bitcoin halving in May 2020, the reward for miners decreased from 12.5 to 6.25 BTC.

    What did it lead to? The owners of old mining equipment left the market, the rest were modernized. Different forecasts were made for the Bitcoin price: from a dramatic fall to a radical increase. As you can see from the graph, there weren't any catastrophic price changes in 2020 after the halving. The overwhelming growth and breaking of the psychological ceiling of $20,000 happened in December, but that's another story.

    Bitcoin Halving

    2. Ethereum 2.0

    Ethereum was founded in November 2013 with the future plans of building decentralized applications on a blockchain basis. The initial release of ETH was conducted on July 30, 2015. So this year the second popular cryptocurrency turned 5 years old.

    The first version of Ethereum uses the Proof of Work (PoW) algorithm, which requires a huge amount of hardware devices to run continuously to mine cryptocurrencies. Due to the energy intensity of PoW, the Ethereum creator decided to switch to a more efficient Proof of Stake (PoS) mechanism.

    The top task for Ethereum 2.0 (which is called Serenity) as the final step in the development of the whole system is to eliminate the main blockchain system blockers and solve its problem of limited scalability.

    For a certain time after the start of ETH V.2, it will be mainly a testnet for examining the stable performance of the Proof-of-Stake mechanism. The smart contracts and main real processes proceed to work within ETH V.1. So, as you can see ETH V.1 and ETH V.2 are coextending nets.

    The shift to the second version is quite long and consists of 4 stages (see our article):

    • Beacon Chain. It started on December 1, 2020, only for PoS testing.
    • Sharding.
    • Merging both PoW and PoS branches.
    • Implementation of the new fully functioning full-scale ecosystem.

    It is noteworthy that transaction fees in the Ethereum system have risen significantly in 2020. According to bitinfocharts in July an average fee was around $0.4-0.7, then in September, it reached $14.5. In October it jumped again, but it was less terrifying.

    Ethereum 2.0

    It was due to the rapid progress of the DeFi sector. This includes applications that mostly run on the ETH blockchain. So it puts a too heavy burden on the ecosystem. Nevertheless, according to some experts, the start of Ethereum 2.0 won't be a panacea for solving the issue of high transaction costs for users.

    3. TON, GRAM, And Pavel Durov's War Against The SEC

    The SEC vs. TON war grabbed the attention of the entire community. Pavel Durov (the creator of the VK social media and the Telegram messenger) tried to conduct an ICO of the Telegram Open Network (TON) blockchain system. It was announced in early 2018. The White Paper for the future ICO was released, and the preliminary sale of Gram tokens took place. The number of Grams sold was $1.7 billion.

    But October 11, 2019, SEC prohibits TON and its Gram tokens. Under the pressure from the SEC, the future of the project was pessimistic. Therefore, after 2.5 years of development and a long fight against the SEC, Pavel Durov considered further struggle senseless. And in May 2020 he wrote about the end of TON in his official Telegram channel.

    4. The Flourishing Of DeFi Projects

    In 2020, the crypto community has also witnessed a DeFi boom. Increasingly, users began to consider DeFi as a promising investment tool. In addition, a lot of new DeFi projects are constantly appearing in the ecosystem.

    In the mass of DeFi startups and projects, there were several quite shiny ones. Thus, the Uniswap Decentralized Exchange released its UNI tokens on September 16, 2020, and distributed some of them to users. UNI released with the goal of finally transforming Uniswap into a self-contained infrastructure.

    The second interesting project is SushiSwap. And it's also closely related to UNI. Three days after the launch of SushiSwap, the volume of funds blocked in this protocol exceeded $800 million. The project is positioned as an "evolution of Uniswap", distributing the SUSHI token among the participants. The capitalization of the SushiSwap project began to grow rapidly thanks to the entry of large investors into the DeFi market. Recently, this token has had two large jumps in the price and in the number of blocked funds: in November and December.

    DeFi projects

    The concept of Yield Farming has become popular this year in the DeFi ecosystem. By the way, thanks to the hype around SushiSwap and yield farming in general, the Uniswap exchange has become the leader in the DeFi Pulse rating. So, yield farming is one of the most popular investment strategies in the DeFi sector. In simple terms, it means making money with help of any operations with DeFi assets. It can be giving or getting some sorts of loans, voting, depositing, and so on.

    5. COVID-19

    Everything is pretty clear and obvious here. Global lockdown, total uncertainty, many businesses have closed, currencies have faltered. Against this background, cryptocurrency has become more popular. After the first cases of China's outbreak, the crypto indexes soared to $10 thousand. The fall was just as rapid: in a week, the cryptocurrency almost halved. But in general, as you can see on the charts of Bitcoin 2020 price fluctuations, the coronavirus even strengthened the crypto industry to some extent.

    The unprecedentedly high growth rates of public debt in developed countries, caused by the need to provide huge amounts of financial assistance to economies affected by the coronavirus, were perceived by many investors as a signal of a high risk of global inflation. It caused the rise of popularity for "quasi-money", which would have retained purchasing power even if the fiat currencies fall. The positive news about coronavirus vaccines also pushed up the prices of leading crypto assets and strengthened their position.

    6. Recognition Of Cryptocurrencies By PayPal

    In the PayPal payment system on October 21, 2020, it became possible to buy, sell, and store cryptocurrencies. You even don't need to create a separate wallet for this, the money will be stored in one PayPal account. Buying cryptocurrency is also simple. The money will be debited from your account or bank card. For now, there were 4 crypto assets added to the list of supported currencies:

    • Bitcoin;
    • Ethereum;
    • Litecoin;
    • Bitcoin Cash.

    Cryptocurrencies at PayPal only work in the United States so far. The company plans to expand the list of available coins, add the basic payment options, and also to launch the service on the international level in the second half of 2021.

    This recognition from such a reputable organization has led to increased confidence of crypto users and investors. You see the result with your own eyes. At least the top cryptocurrencies are doing well enough. And Bitcoin has completely broken the historical record of value (see the price chart at the beginning of the review).

    7. Series Of Forks: Ripple, Bitcoin Cash, Cardano

    This year, several divisions of cryptocurrencies into different independent branches occurred or are expected at once (a division like that is called a fork).

    On November 15, 2020, a planned hard fork was held on the Bitcoin Cash system. The largest Bitcoin Cash client ABC hasn't got the support of the crypto users, so the Bitcoin Cash blockchain split into two backward-incompatible chains.

    In December 2020 there's a hard fork on the Ripple network (it's called Flare). The idea of a hard fork arose due to the dissatisfaction of the Ripple community with the hyper centralized policy of the project, as well as the desire to expand the functionality of the network.

    In December 2020, a hard fork in the Cardano project is also planned (so far there has been any news about the process). It is called Allegra and should make the network even more efficient, as well as add token blocking functionality. It will be a step towards the next major update named Goguen.

    8. 51% Attacks On ETC

    This year, many users and analytics started talking about this term (however, it appeared earlier).

    A 51% attack is a condition in which some network participants seize power that is more than the overall computing capabilities of other usual miners. A participant like that can conduct activities and then erase any traces of it from the blockchain.

    Small cryptosystems are usually vulnerable to 51% attacks. Because the price per token on them is relatively low. The cost of attacking large networks is extremely high. Only big players can do it. For example, Bitcoin activist Andreas Antonopoulos noticed that attackers would have to spend about $1 billion to attack the Bitcoin network.

    51% attacks now and then affect various cryptocurrencies, but at the moment you can be sure that Bitcoin won't be affected. There were several attacks in 2020 on the Ethereum Classic and the Grin Systems.

    In November, a group of anonymous malefactors conducted a 51% attack on Bitcoin Cash ABC.

    9. Central Bank Digital Currency (CBDC)

    Also, 2020 can be surely called the year of CBDC. Central banks of different countries are already studying official virtual money emission (no cash evolved). According to some specialists, the growth of CBDC is one of the top monetary priorities, which will dramatically transform the financial domain world next 5-10 years.


    Due to the ConsenSys blog, at the beginning of 2020, more than 80% of countries were researching the CBDC field. A BIS spring 2020 report shows the COVID-19 spreading has accelerated these researches in China, South Korea, Sweden, Ukraine, Canada, and many other countries.

    CBDC projects status

    10. Zcoin Rebranding

    On November 30, the rebranding of the Zcoin cryptocurrency took place. Now, the coin is called Firo, and the ticker has changed from XZC to XFR.

    Zcoin was built on the popular Zerocoin privacy-enhanced protocol in 2016. The development team is constantly working to improve the project: first, there was an update to the Sigma protocol, and the new update, along with the rebranding, has enhanced privacy through the Lelantus protocol.

    According to Firo's Project Steward, Reuben Yap, the rebranding should highlight the burn mechanism of their privacy, help the project sound like money, show that they no longer use Zerocoin protocol, and avoid Zcash confusion.

    The full transfer of the main network of this cryptocurrency will take place in January 2021.

    If you want to learn more about it, check out the intro video with Diego Salazar and Reuben Yap:


    This year was strange and ambiguous. 2021 will also definitely bring a lot of interesting events. May it bring more good news for all of us.

    The content of this article is for informational purposes only and should not be construed as investment advice. We ask you to do your research.