#294—Microstrategy is building decentralized identity

Also, an endless game of cat and mouse

May 06, 2024

Welcome to Yaka Stuff, our weekly newsletter that covers news, industry perspectives, and updates from the Hard Yaka ecosystem. Check out our last report here.

This week:

MicroStrategy is building decentralized identity
Tether has another record-breaking quarter
What we’re reading: The endless game of cat and mouse
Stuff happens

1. MicroStrategy is building decentralized identity

MicroStrategy co-founder and Bitcoin evangelist Michael Saylor “unveiled the open-source MicroStrategy Orange Decentralized Identity protocol,” in Las Vegas last week, according to Decrypt:

According to the MicroStrategy Orange documentation, the decentralized identity protocol uses a modified approach to inscriptions as Ordinals, but stores only data related to decentralized identity (DID), meaning documents can be created and updated with few restrictions on size and content while taking advantage of the segregated witness (SegWit) feature of Bitcoin.
“Once you've established that that email is genuine, you accept the invitation, and at that point, we're going to generate your unique decentralized identifier, and the public and private key pair,” Raczko explained. “We're going to send a decentralized identifier and the public key to the Orange server to be inscribed on the Bitcoin Blockchain, [and] from that point onward, you are ready to start sending Orange-signed or emails.”
“[The] opportunity we see and want to pursue is integrating the digital identity based on Bitcoin with this bigger, verifiable credential ecosystem which opens up another large number of very interesting use cases where I can now credential my identity anchored to Bitcoin,” Raczko said.

2. Tether has another record-breaking quarter

According to Tether:

Building on the momentum from Q4 2023, the first quarter of 2024 marked a significant milestone for the group with a record profit of $4.52 billion.
The main contributing entities are those in charge of issuing Stablecoins and managing the respective reserves where approximately $1 billion of this profit stemmed from net operating profits, primarily derived from US Treasury holdings. The remainder of reported profits were comprised of mark-to-market gains in Bitcoin and Gold positions. Additionally, Q1 2024 showcased the Group’s unprecedented achievement in increasing both direct and indirect ownership of U.S. Treasuries, now in excess of $90 billion. Indirect exposure was calculated to include overnight reverse-repurchase agreements collateralized by US Treasuries, as well as investments in US Treasuries through money market funds.
Furthermore, as part of its steadfast dedication to transparency, the Group unveiled its net equity for the first time, revealing an impressive $11.37 billion as of March 31, 2024. This reflects a notable uptick from the recorded equity of $7.01 billion on December 31, 2023. The report highlights a $1 billion increase in excess reserves maintained as a buffer to support the Company’s stablecoin offerings, pushing the total to nearly $6.3 billion.
In regard to the Reserves backing fiat-denominated stablecoins, BDO further confirmed that Tether-issued tokens are backed by Cash and Cash Equivalents at an impressive 90%, underscoring its commitment to upholding liquidity within the stablecoin ecosystem. Additionally, in the first quarter alone, over $12.5 billion in USDt was issued.

3. What we’re reading: The endless game of cat and mouse

Billions of dollars worth of dirty cash is being funneled between Heathrow and Dubai. Why? “One airport doesn’t scan outbound luggage for cash and the other welcomes sacks of it.”

Here’s the WSJ (via Greg Kidd):

Jo-Emma Larvin wheeled a baggage cart piled with suitcases through London’s Heathrow Airport in August 2020 and handed her passport to an Emirates Airline agent for a flight to Dubai.
Larvin was traveling business class with another woman and together they heaved seven heavy suitcases onto the conveyor belt. She exchanged texts with her boyfriend en route to the security line.
“Do you feel ok?” he asked.
“Yes phew,” Larvin wrote. The suitcases carried millions of dollars worth of British pounds wrapped with rubber bands and bundled in plastic.
The money was headed to an international money launderer who charged a hefty fee to clients to exchange cash for gold or other currencies. His preferred route was to Dubai from Heathrow, Nos. 1 and 2 of the world’s busiest airports for international passengers.
The U.K. requires passengers to tell customs authorities if they are leaving the country with more than the equivalent of around $10,000, but Larvin didn’t, risking arrest. The seven suitcases entered Heathrow’s baggage handling system and slid through a 3-D scanner that checked only for explosives and other potentially dangerous items.
The next morning, the women collected their luggage in Dubai without having too much to worry about: Any amount of cash is allowed to enter the United Arab Emirates, as long as it is declared. The women followed signs to customs and told authorities they had brought the equivalent of $2.8 million.
Most airports worldwide, including in the U.S., don’t scan passenger luggage for cash, a costly undertaking in equipment and personnel. Countries where all money is welcome have no obligation to report about suitcases full of cash arriving from abroad. The loopholes allow billions of dollars worth of cash to fly out of the U.K. and elsewhere to countries with fewer rules, law-enforcement officials said.

Yaka Stuff

#294—Microstrategy is building decentralized identity

Also, an endless game of cat and mouse

1. MicroStrategy is building decentralized identity

2. Tether has another record-breaking quarter

3. What we’re reading: The endless game of cat and mouse

4. Stuff happens