Twitter to support long-form articles with mixed media, Elon Musk confirms

Twitter Notes, the feature that would allow Twitter users to publish long-form content on the platform, appears to be back on track, according to a post from Twitter owner Elon Musk on Tuesday. The Twitter owner confirmed the company’s plans in response to a user’s tweet which claimed the Twitter Notes project had recently been rebranded as “Articles.”

The company first launched Twitter Notes in June 2022, ahead of Musk’s Twitter acquisition, as an experiment with a small group of writers in the United States, Canada, Ghana, and the United Kingdom. The writers gained access to a new “Write” tab on Twitter where they could write and access all their Notes. Their Twitter profiles would also have a Notes tab where their followers and other Twitter users could view all their long-form content in one place.

Twitter Notes supported rich formatting and uploaded media, the company explained at the time, including the option to embed photos, videos, GIFs, and even tweets. When published, writers could tweet out their Notes to share them with followers, who could then retweet them, share them in DMs, bookmark or like them, as they could with other tweets.

But the status of Twitter Notes was unknown as not much had been heard about the project in the months since Musk bought the social network for $44 billion. Platformer reported in November 2022 that Notes had been put on indefinite “pause,” for instance. Plus, Musk had killed off other reading-and-writing related Twitter projects, including ad-free articles for subscribers in November 2022 and its newsletter platform Revue in December.

Now it appears Notes will return. On Tuesday, Twitter user @FaustoChou tweeted that Notes had been renamed to Articles, signaling perhaps renewed development efforts on Twitter’s part. His screenshot showed the Notes interface, looking much like it did before, as well as other unlaunched features, like Twitter Coins.

Musk then replied to the tweet, confirming Twitter’s plans.

“This will allow users to post very long, complex articles with mixed media. You could publish a book if you want,” Musk wrote.

The Twitter owner didn’t share any other details about the company’s plans for Notes, or Articles as it may now be known, including when people would gain access or when the feature would launch publicly. The timing of the announcement comes as the company has been working to retain creators in the face of increased competition from Instagram Threads and others, even paying creators a share of ad revenue, which has netted some creators payouts in the four or five figures.

Long-form content could help retain other creators — writers — who want more distribution for articles that would otherwise be posted on their blogs or perhaps newsletters, like Substack, another Twitter rival.

Substack this year and the last directly targeted Twitter with launches of both a short-form Notes that looked a lot like Twitter as well as a chat feature that moved conversations off social media to its own platform. In response, Twitter stopped allowing users to retweet, like, or reply to tweets with Substack links. It makes sense that Twitter would now take on Substack with a long-form content distribution feature of its own as a means of fighting back and re-establishing itself as a home for conversations, including those that go beyond 240 characters.

Musk has also been open to the idea that character count should not be a limiting factor for using Twitter, having raised the limit to 4,000 and then 10,000 for Twitter Blue subscribers after taking ownership of the social network.

Read-it-later app Pocket now you lets you create article lists

Mozilla-owned read-it-later app Pocket unveiled several new features across platforms including rolling out the redesigned app to iOS and better article-jumping features for Android. However, the standout feature of this release is the ability to create lists of articles.

Pocket said it will now let users add articles to their own lists — think of them as playlists but for stories. At launch, the feature will be available only on the web for U.S.-based users. Global rollout should occur next month. The company also said that it is working on bringing the ability to create lists to mobile later this year.

While users will be able to create multiple lists and give them titles and descriptions, they won’t be able to share them as they are private lists. However, the developers said that it is working on a feature that will let you share lists.

Pocket has had tags for organizing content, the company believes lists are easier to manage.

“The new Pocket Lists feature will offer users a more intuitive way to organize their content, and unlike tags, which can sometimes be difficult to manage, Pocket Lists provide a more structured approach to categorizing content,”  Pocket’s head of product management Kait Gaiss, said in a statement.

Apart from rolling out the list feature, Pocklet has redesigned its iOS app. Most noticeably, the company has changed the home screen with sections like “Recent Saves,” “Editors’ picks,” “Ten minutes or less,” and “Long reads worth the time.” Until now, the Pocket iOS app had a separate tab for article discovery. With the new update, that’s being merged into the Home tab.

The iOS redesign also brings things like better search, a simplified settings screen, and a swipe-to-archive feature. The company also mentioned that going forward it is aiming for a two-week update cycle for the iOS app to release features like better recommendations, the ability to create highlights on saved articles, and improved listening experience.

Image Credits: Pocket

Additionally, Pocket is updating its Android app with a better reading experience on tablets and previous-next buttons in the Article View to easily navigate between stories. Plus, the app now saves your login info for websites — through the Android custom tabs feature — so you don’t need to log in every time you read a story on those sites.

Earlier this year, Pocket rolled out a new tab design on Android and renamed “My List” to “Saves. Last year, the app was a part of Google’s “Best Apps of 2022” list. The app also serves 8.8 billion reading recommendations per month through Firefox’s new tab feature.

Read-it-later app Pocket now you lets you create article lists by Ivan Mehta originally published on TechCrunch

Connect with Mayfield, JETRO, Toptal and more at TechCrunch Disrupt

Mark your calendars, startup fans, because TechCrunch is returning — live and in person — to the beautiful City by the Bay to host our flagship event, TechCrunch Disrupt, on October 18–20 at the Moscone West Convention Center followed by an online recap event on October 21.

TC Disrupt is the grande dame of tech conferences for many reasons, and today we’d like to highlight some of the companies that you’ll be able to engage with at the event. Every year we’re fortunate to join forces with great companies that are committed to supporting early-stage startups. You’ll be able to take advantage of their resources and connections and even take away a chunk of knowledge from real-life case studies and startup educational content. Their participation elevates, engages and supports early-stage founders.

These companies also come to Disrupt to connect and explore opportunities with other companies within the startup ecosystem. They form alliances, forge partnerships, and look for potential investments, and sometimes they become a startup’s new client.

I go to TechCrunch Disrupt to find new and interesting companies, make new business connections and look for startups with investment potential. It’s an opportunity to expand my knowledge and inform my work. — Rachael Wilcox, creative producer, Volvo Cars.

Breakout sessions are a great feature at Disrupt that allow attendees to meet in smaller settings. Xsolla will be presenting “Expand to New Platforms and Take Your Games Direct-to-Consumer,” while Mayfield‘s session “Getting to Yes and What Happens Next: An Unfiltered Chat with a Top VC” is one not to miss. Wells Fargo will also be hosting a breakout session on “How Banks and Fintech Startups Can Effectively Co-Thrive”.

And for attendees who want to get even more face-to-face time, roundtables provide a perfect setting for small-group discussions. Mayfield will be hosting a session on “Saving the World: The Playbook for Building Planetary Health Unicorns” and will also be exploring “Why nine out of ten startups fail.” Virtual Gurus will be leading a roundtable as well.

What would Disrupt be without a signature satellite party – be on the lookout for an invite from Singapore Global Network to join them for a fun party.

Exhibiting on the show floor are Dolby.io, Justworks, Toptal, JetBrains, JETRO, Kapstan, NeoSoft, Remote Tech Services, Nano Nuclear Energy, Inc, and Remotebase, Dryvebox all of whom you’ll be able to connect with.

And what would Disrupt be without a party? Terra.do will be hosting a signature reception at the show.

TechCrunch Disrupt takes place in San Francisco on October 18–20 with an online day on October 21.

Is your company interested joining us at TechCrunch Disrupt? Contact our sponsorship sales team by filling out this form.

Connect with Mayfield, JETRO, Toptal and more at TechCrunch Disrupt by Lauren Simonds originally published on TechCrunch

Sources say Web Summit Ventures will be a new $40M follow-on fund

Web Summit, one of the world’s largest events centered around technology startups, is to launch a brand new venture capital vehicle consisting of two new funds, TechCrunch understands. The move follows an acrimonious fall-out between Web Summit’s co-founders, who first started the now-defunct Amaranthine VC fund in 2018, in part to join the ballooning investment ecosystem which had grown up around the Web Summit events.

While it’s been previously reported that Web Summit cofounder, Paddy Cosgrave, will imminently launch his new vehicle, Web Summit Ventures (WSV), the nature and size of the fund has not, until now, been revealed.

TechCrunch understands that WSV will command $40 million in funding, split into two $20 million funds. They will be dubbed “Web Summit Ventures Seed” and “Web Summit Ventures Growth,” respectively . The Seed fund will invest at the early stage and Series A, while the Growth fund will invest at the ‘Series B and beyond’ stages. Both will be ‘follow-on’ funds and are not intended to lead funding rounds, say sources. This mirrors the previous Amaranthine strategy.

Further confirmation of the funds’ existence comes in the form of a new job posting advertising for a for an Associate for the fund.

It’s understood that WSV is intended to replace Cosgrave’s previous attempt to enter the investing game, after the Amaranthine Ventures vehicle ended up embroiled in a series of byzantine legal fights amongst its founders and partners.

As previously reported in the Irish media, documents filed in the Companies Registration Office in Dublin, Ireland, where Web Summit was originally launched, show that Cosgrave, Web Summit CEO, is listed as a director of the Web Summit Ventures Management Ltd.

It’s understood that only Cosgrave and Chris Murphy and will be partners in Web Summit Ventures. Murphy is a former Web Summit employee, who went on to work for the Amaranthine Fund for nearly three years as its Managing Director.

A well-placed source told TechCrunch that one of the main differences with the new WSV fund is that a number of tech founders will join as LPs, include some of the founders of Twitter, Tinder, N26, Checkout.com, Rappi, Algolia, Lightricks and Wise, along with a handful of GPs at some VC funds who said to be investing personally, although this has not been independently confirmed.

The story of Web Summit’s attempts to participate in the vast ecosystem of startups it was amassing begins in 2018.

The Amaranthine Fund was set up by Cosgrave, David Kelly, a Web Summit co-founder, and Patrick Murphy, a fund manager, in 2018. But while it managed to back, among others, Hopin (the online events startup, the valuation of which soared to $5.6 billion during the remote-working era of the pandemic) a series of bitter disagreements led to Cosgrave suing Kelly and Murphy in the US courts.

The $50 million Amaranthine fund has since rebranded at Tapestry after the lawsuits were filed.

But the acrimony is not just confined to the US.

Cosgrave is also suing Kelly in the Irish High Court. Kelly and Murphy deny the allegations, while Kelly is separately suing Cosgrave in the High Court over alleged minority shareholder oppression. Cosgrave denies the claims.

A spokeperson for Web Summit declined to comment on the launch of WSV, citing regulatory restrictions.

Sources say Web Summit Ventures will be a new $40M follow-on fund by Mike Butcher originally published on TechCrunch

Sources say Web Summit Ventures will be a new $40M follow-on fund

Web Summit, one of the world’s largest events centered around technology startups, is to launch a brand new venture capital vehicle consisting of two new funds, TechCrunch understands. The move follows an acrimonious fall-out between Web Summit’s co-founders, who first started the now-defunct Amaranthine VC fund in 2018, in part to join the ballooning investment ecosystem which had grown up around the Web Summit events.

While it’s been previously reported that Web Summit cofounder, Paddy Cosgrave, will imminently launch his new vehicle, Web Summit Ventures (WSV), the nature and size of the fund has not, until now, been revealed.

TechCrunch understands that WSV will command $40 million in funding, split into two $20 million funds. They will be dubbed “Web Summit Ventures Seed” and “Web Summit Ventures Growth,” respectively . The Seed fund will invest at the early stage and Series A, while the Growth fund will invest at the ‘Series B and beyond’ stages. Both will be ‘follow-on’ funds and are not intended to lead funding rounds, say sources. This mirrors the previous Amaranthine strategy.

Further confirmation of the funds’ existence comes in the form of a new job posting advertising for a for an Associate for the fund.

It’s understood that WSV is intended to replace Cosgrave’s previous attempt to enter the investing game, after the Amaranthine Ventures vehicle ended up embroiled in a series of byzantine legal fights amongst its founders and partners.

As previously reported in the Irish media, documents filed in the Companies Registration Office in Dublin, Ireland, where Web Summit was originally launched, show that Cosgrave, Web Summit CEO, is listed as a director of the Web Summit Ventures Management Ltd.

It’s understood that only Cosgrave and Chris Murphy and will be partners in Web Summit Ventures. Murphy is a former Web Summit employee, who went on to work for the Amaranthine Fund for nearly three years as its Managing Director.

A well-placed source told TechCrunch that one of the main differences with the new WSV fund is that a number of tech founders will join as LPs, include some of the founders of Twitter, Tinder, N26, Checkout.com, Rappi, Algolia, Lightricks and Wise, along with a handful of GPs at some VC funds who said to be investing personally, although this has not been independently confirmed.

The story of Web Summit’s attempts to participate in the vast ecosystem of startups it was amassing begins in 2018.

The Amaranthine Fund was set up by Cosgrave, David Kelly, a Web Summit co-founder, and Patrick Murphy, a fund manager, in 2018. But while it managed to back, among others, Hopin (the online events startup, the valuation of which soared to $5.6 billion during the remote-working era of the pandemic) a series of bitter disagreements led to Cosgrave suing Kelly and Murphy in the US courts.

The $50 million Amaranthine fund has since rebranded at Tapestry after the lawsuits were filed.

But the acrimony is not just confined to the US.

Cosgrave is also suing Kelly in the Irish High Court. Kelly and Murphy deny the allegations, while Kelly is separately suing Cosgrave in the High Court over alleged minority shareholder oppression. Cosgrave denies the claims.

A spokeperson for Web Summit declined to comment on the launch of WSV, citing regulatory restrictions.

Sources say Web Summit Ventures will be a new $40M follow-on fund by Mike Butcher originally published on TechCrunch

Last call to save $1100 on Disrupt passes

The clock is ticking and the countdown is on: There are now less than 24 hours left to save $1,100 on a regular ticket to TechCrunch Disrupt 2022. The dramatic discount to the biggest tech gathering of the year lasts until tonight at 11:59pm PT, so take advantage of the deal now and then mark your calendar to join the 11,000 insiders and aspirants. The event takes place from October 18–20 in San Francisco.

Every year, Disrupt captures the imagination of people around the world. There’s a massive global audience eager to hear the buzz about dynamic new startups, larger trends in the industry, and prognostications made by legendary tech visionaries. Whether you’re looking for an angel round, a new job, or a new co-founder, the opportunities at Disrupt 2022 are boundless.

For founders and startup execs, the TechCrunch+ stage is the place to be. There will be three days of programming dedicated to everyone trying to bootstrap, fundraise, rustle up another round, or scale up a budding business. Whether you’re in the idea stage or a central player in the middle of the ecosystem, the TechCrunch+ stage will have panels tailored to your interests and business needs.

As anyone in the tech space will tell you, there’s only one consistent truth about raising money: It’s not easy. That’s especially the case when you’re an up-and-comer in an industry that’s filled with superstars and littered with sure things that have gone down in flames. A fair number of the programming on the TechCrunch+ stage will feature veteran VCs and founders as they dish out insights and tips on the financing front. Nik Milanović, Gefen Skolnick, and Campfire co-founder Joshua Ogundu will hold court on growing your VC network by turning social capital into financial capital. A few hours after that, a trio of CEOs will share their best advice for finding funding when investors are keeping a tighter fist around their fund’s capital.

It’s not just about money; managers will also find a wealth of knowledge to keep them a step or three ahead of the game. Even more than funding, the success of a startup rides on the talent and intangibles of its people. Putting together a great team is imperative, which is why the TechCrunch+ stage will host conversations like “How to Secure Those Hard to Find Hires” with top talent executives from powerhouses like Gusto and Sequoia. The event will also feature panels on how to manage remote staff, which has become more essential than ever.

There will be business forecasts peppered in there, too, so you’ll have an edge on finding the next big thing in the crypto market and other burgeoning niches. And anyone in need of inspiration or wants to swap notes with other founders and startup pros will enjoy the networking lunch breaks, and will at some point probably find themselves wandering around Startup Alley, marveling at an exclusive glimpse at the future.

Opportunity is knocking, but the clock is ticking down. Just 16 hours to go to score $1,100 off a ticket to the entire three-day conference, taking place October 18–20 in San Francisco.

 

Last call to save $1100 on Disrupt passes by Lauren Simonds originally published on TechCrunch

General Atlantic buys out SoftBank’s 15% stake in edtech Kahoot, now valued at about $152M vs the $215M SoftBank ponied up 2 years ago

SoftBank’s retreat from its past investing exuberance continues apace. This morning, Kahoot, the Norwegian startup that provides a popular platform for people to build and use education-focused games, announced that General Atlantic is buying out SoftBank’s entire 15% stake in the company. SoftBank is exiting at a loss. The firm sunk at least $215 million into the company in the last several years. However, 15% of Kahoot’s current market cap (10.415 billion Norwegian Krone) works out to about $152 million (1,562,250,000 NOK).

This looks like an all-secondary round: no new investment coming in alongside the buyout. (We’re confirming this with Kahoot and will update as we learn more.) “Kahoot plans to partner with General Atlantic to accelerate further growth initiatives, drive innovation, and expand its global footprint in homes, schools, and corporations,” the company said in a statement.

Nevertheless, the deal comes as Kahoot, like many other tech companies, continues to feel the pinch of the general downturn in technology stocks and the wider technology market. A year ago, its shares were trading at 70.25 NOK on the Oslo Stock Exchange. They are now worth only 22.77 NOK. And that is with a bump of nearly 27% that Kahoot had this morning on the news of the investment/divestment.

SoftBank, meanwhile, has been in hot water itself, facing up to big losses in its splashy Vision Fund investment vehicles on the back of those wider tech industry doldrums. In August, Vision Fund I reported a loss of over $17 billion for just one quarter (Q1). Vision Fund 2 is reportedly down in value by some 19% on the funds that have been invested so far. Amid layoffs and big executive changes, no surprise, then, that it is now divesting stakes that are underperforming. (It’s still working on a Vision Fund 3 though, so never say die in the world of tech.)

“We are very grateful to SoftBank for their partnership over the past two years. As Kahoot! continues to pursue its mission to improve lifelong learning by building a leading global learning and engagement platform, we are thrilled to add a partner of General Atlantic’s caliber,” Eilert Hanoa, CEO of Kahoot, said in a statement. “The team at GA brings deep experience in scaling global education technology and software businesses and positioning market leaders for long-term success, and we look forward to our next phase of momentum in empowering the learning ecosystem around the world.”

“We believe Kahoot has significant potential for further growth as digital learning solutions continue to be adopted across its work, school, and home markets,” added Chris Caulkin, MD and head of technology for EMEA at General Atlantic. “With its much-loved brand, product-centric approach, and engaged global user base, Kahoot is well positioned to scale, and we look forward to supporting Eilert and the full Kahoot! team in the years to come as they reach and engage ever more users worldwide.” General Atlantic and SoftBank have partnered on many deals in the past, so there was clearly already a relationship between the two and that may have played a factor here as well.

To be fair, since SB Northstar (the SoftBank Group fund making the investment) made its first investment in Kahoot nearly two years ago, in October 2020, Kahoot has grown a lot. It had 1.3 billion users (“participating players”) at that time; now that number is 8 billion.

What started as a “YouTube for education”- style model (big emphasis on user-created content and a way of using what you have made for yourself or your own learning group, but also dipping in and using material made by others) has worked to diversify deeper into enterprise and more. It said today that Kahoot! at Work is used in 97% of Fortune 500 companies for corporate learning and engagement, and that Kahoot! at School is used by approximately 9 million teachers in the classroom. And Kahoot! at Home & Study has over 18 million users as an “at-home gamified learning solution.”

Indeed, the company went large during the Covid-19 pandemic, doubling down on being one of the platforms to help fill the gap of amusement and engagement for students who were no longer in classrooms; and ditto for remote workers as a way of team building and more.

But as with many companies that found business ballooning because of market conditions, now as more people return to the office, students are back in the classroom, and generally budgets are all being reined in in the current economic climate, it will be having an effect on Kahoot as well.

We’ll update this post as we learn more.

General Atlantic buys out SoftBank’s 15% stake in edtech Kahoot, now valued at about $152M vs the $215M SoftBank ponied up 2 years ago by Ingrid Lunden originally published on TechCrunch

Private equity’s gatekeepers get serious about tokens

Welcome to Chain Reaction, where we unpack and explain the latest in crypto news, drama and trends, breaking things down block by block for the crypto curious.

For our Thursday episode this week, we dug into the institutional embrace of blockchain by stodgy financial powerhouses including mega PE firm KKR which announced this week that they were tokenizing one of their latest funds to provide access to slightly less rich wealthy investors. While it’s far from pervasive financial democratization, the move attracted a lot of attention, which we dissected.

We also covered:

  • A Supergroup of financial institutions including Fidelity, Schwab and Citadel are teaming up to build a new digital asset exchange called the EDXM. Is this a signal of institutional fervor or just more groupthink?
  • The White House’s Office of Science and Tech Policy released a sweeping report on the energy usage of the cryptocurrency industry; The report signals future pressures on Bitcoin miners to reduce greenhouse gas emissions or else.

Chain Reaction comes out every Tuesday and Thursday at 12:00 p.m. PT, so be sure to subscribe to us on Apple Podcasts, Overcast and Spotify to keep up with the action.

Private equity’s gatekeepers get serious about tokens by Lucas Matney originally published on TechCrunch

Could the forests and land of Europe offset most of its CO2? This startup hopes to prove it

The voluntary carbon market remains a Wild West. There are few standards, a myriad of approaches, while buyers and sellers are crying out for clarity.

And there are lots of different approaches. In tokenization there are startups like Single.Earth and Flow Carbon. In marketplaces there is CarbonXchange, Aircarbon. In afforestation there is Land Life Company and Future Forest Company. The list goes on.

Arbonics‘ approach is to use a data- and science-driven tool to calculate the potential carbon income of land and forests for landowners in Europe. For obvious reasons, this creates a business for these owners as well as helping to fight climate change.

The company is now announcing that earlier this year it raised €1.8M in a pre-seed round from Taavet Hinrikus (co-founder of Wise) with his new fund Plural.

Founded by Kristjan Lepik and Lisett Luik in early 2022, Arbonics says it helps landowners to analyze and calculate the ability of their land to absorb carbon using many data sources and looks at unused land and existing forests which can generate carbon credits.

Carbon credits are a way for carbon emitters to offset emissions. It’s estimated that the European Union alone has the potential to capture and store up to two gigatonnes of additional carbon annually – equivalent to 73% of the EU’s total CO2 emissions in 2021. Assuming Arbonics is successful, that’s a big prize to shoot for.

Kristjan Lepik, co-founder of Arbonics, told me: “Right now the process of getting carbon credits is far too complex and too costly for an average landowner to go through. Data and tech make this quick and transparent. Secondly, we are taking the long-term view. Some players on the market are trying to create short-term credits that are harder to sell to B2B credit buyers. We need to make sure that long-term changes are made to the forests.”

He says the company is different from competitors because it looks across the whole forest lifecycle, is aimed at European landowners, and is faster that others.

In a statement Taavet Hinrikus, founding investor, added: “I am a big fan of technologies that can speed up carbon capture – direct air capture is one example. But those technologies are only a small part of the solution; we need to empower nature and combine it with data-based technologies to help nature-based solutions scale.” 

Could the forests and land of Europe offset most of its CO2? This startup hopes to prove it by Mike Butcher originally published on TechCrunch

‘The Merge’ could be good news for China’s Ethereum enthusiasts

When China banned cryptocurrency mining and trading, many saw it as putting an end to a burgeoning industry in the world’s second-largest economy. As it turned out, the country’s crypto investors, developers, and hobbyists continue to play a critical role in building the backbone and applications of web3.

The Merge, the much-anticipated network update on Ethereum that’s slated to unfold this week, could provide a new way for China’s crypto enthusiasts to participate in the blockchain economy two years after the country began phasing out the lucrative crypto mining industry.

While crypto mining, the process that verifies and adds new transactions to the blockchain using the proof-of-work method, is costly to join and prone to regulatory clampdown, crypto staking, enabled by the Merge, offers enhanced censorship resistance thanks to its low barriers to entry both in terms of cost and the computing power required.

More discreet

The Merge is expected to address one of the biggest criticisms against cryptocurrency — its environmental impact. For China specifically, the transition will also make it harder for regulators to trace participants in the Ethereum network, which has a market cap of over $200 billion as of writing.

Major blockchains like Bitcoin and Ethereum have been using what’s called the proof-of-work consensus method to validate transactions, where computer servers — or miners — race to solve cryptographic puzzles by consuming massive amounts of power.

Before China banned crypto mining, the country accounted for as much as two-thirds of Bitcoin’s worldwide hash power, the energy consumed to carry out proof-of-work.

But Beijing saw the novel sector as a drag on its economy. In 2019, China added crypto mining to a list of industries to be “eliminated” because they “lacked safe production conditions, seriously wasted resources, polluted the environment,” among other issues. Since then regulators have launched a number of crackdowns on mining, but the industry recently saw a rebound in hash rate after laying low for several months.

It won’t be surprising to see local governments loosening their grip a little as time passes. Crypto mines are often located in backward and landlocked areas of China where there isn’t much economic development for tax revenues otherwise.

But after the Merge, the amount of energy it takes to validate Ethereum transactions will be “indistinguishable”, said Daniel Dizon, co-founder and CEO of Swell Network, an Ethereum staking protocol.

Ethereum will switch to a so-called proof-of-stake mechanism. Servers compete by “staking” their tokens as collateral in the network in order to approve transactions, which is estimated to reduce the blockchain’s power consumption by 99%.

“All you need is basically fairly low computer power, like a computer at home, and the asset itself because it’s proof of the asset that you put at stake,” said Dizon.

The power needed to operate a “node” can be as lightweight as running a Raspberry Pi, the microcomputer originally designed to teach basic computer science in developing countries, Dizon added.

The switch means regulators can no longer detect Ethereum node operators by tracking abnormally high electricity consumption. Proof-of-work, on the other hand, normally takes place at mining farms full of rigs, the set of hardware and processors assembled for crypto mining.

“[A mining facility] is a big place that’s hot and noisy and uses up a lot of energy. It’s kind of hard to miss, right?” said a long-time crypto miner from Singapore who uses the nickname James.

More decentralized

Aside from its environmental impact, crypto mining also incurs exorbitant upfront investments in rigs that could easily cost hundreds of thousands of dollars. Proof-of-stake, in comparison, allows anyone with the tokens to start staking right away.

Running a node is one way to join the staking economy, but to be a node operator, one needs to not only have a good dose of technical competency but also own at least 32 ETH, which, as of writing, amounts to $55,648.

That’s why many ETH holders delegate third parties to stake their assets. Centralized crypto exchanges such as Binance and Coinbase allow users to put down any amount by pooling together others’ tokens. But such platforms have mostly left China and removed Chinese users following Beijing’s crackdown. That means if one holds a Chinese passport, they won’t pass the know-your-customer or KYC requirement on a centralized platform that fully abides by Chinese law.

Users who are more crypto-savvy could opt for decentralized protocols, which use algorithms to facilitate peer-to-peer transactions rather than relying on a centralized intermediary, allowing for a higher degree of anonymity. Decentralized options often enable liquid staking, meaning users can access their funds anytime and avoid the custodial risks associated with centralized platforms.

For the technically proficient, it’s possible to operate nodes from China, though the country’s intricate censorship machine could add uncertainties. Nodes need a “good internet connection” to talk to their nearby peers to carry out the validation process, explained Lecky, CTO of Swell. But nodes in China could be on a virtual private network or VPN, which is used to circumvent the Great Firewall by masking their true IP address, making it tricky for nodes to know where exactly their peers are.

Despite these obstacles, China’s crypto users are already jumping on the staking bandwagon. While it’s tricky to put a firm number down, Dizon reckoned a “meaningful” percentage of ETH is held and managed in China, with an upswing in capital inflows into the staking economy expected after the Merge.

“The issue of geography, especially in the context of a permissionless and decentralized network in cyberspace which is effectively what Ethereum is, slightly complicates things when discussing whether assets are truly held or staked ultimately within a specific ‘meatspace’ boundary, i.e. a certain jurisdiction, be it China or otherwise,” the founder added.

‘The Merge’ could be good news for China’s Ethereum enthusiasts by Rita Liao originally published on TechCrunch