Square’s (SQ) revenue from its bitcoin (BTC, -0.14%) (BTC) business increased 11-fold compared with this time last year.

“Cash App generated $3.51 billion of bitcoin revenue and $75 million of bitcoin gross profit during the first quarter of 2021, each up approximately 11x year over year,” according to a shareholder letter published Thursday.

That was double Square’s bitcoin revenue of $1.76 billion in the fourth quarter of 2020. Bitcoin revenue for the first quarter of 2020 was $306 million.

Total revenue in the first quarter of this year was $5.06 billion, meaning bitcoin revenue accounted for 70% of Square’s total consolidated revenue in the quarter.

In addition to Cash App’s involvement as a mainstream gateway to bitcoin, Square holds a portion of its treasury in the cryptocurrency.

“In the fourth quarter of 2020 and first quarter of 2021, we invested $50 million and $170 million, respectively, in bitcoin,” Square wrote, adding that it expects to “hold this investment for the long term.”

Due to fluctuations in market prices during the first quarter, the company reported a $20 million impairment loss on its bitcoin holdings. Nevertheless, by quarter’s end, the value had made a strong gain, as Square reported a $472 million fair value of its bitcoin on March 31, $272 million greater than its carrying cost.

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Cryptocurrency ATM provider Coin Cloud is about to install its 2,000th kiosk with the placement of machines in stores of the popular, Texas-based grocery chain H-E-B, Coin Cloud said in a press release.

The Las Vegas-based company has been on a spree in recent months, increasing its installations from 1,250 kiosks in December. The H-E-B pilot program calls for machines at 29 locations in the Houston area, according to a Houston Chronicle report.

But Coin Cloud has placed more than 200 machines at CAL’s Convenience stores and 300 kiosks at United Natural Foods (UNFI) customer locations. In a March conference call, UNFI President Chris Testa said that the kiosks could appear in as many as 4,000 locations that the retail service provider serves. At the time, UNFI and Coin Cloud had partnered on 80 contracts with retailers.

“Our growth is a tangible representation of interest in digital currencies and of Coin Cloud’s mission to provide communities with seamless options to buy and sell,” said Chris McAlary, Coin Cloud founder and CEO.

Separately, Coin Cloud has also struck a partnership with the National Alliance of Trade, which supports over 6,000 convenience retail stores.

Coin Cloud machines offer access to over 30 cryptocurrencies, including bitcoin (BTC, -0.14%), ethereum (ETH, +3.07%), dogecoin (DOGE, -2.99%) and a number of stablecoins and DeFi tokens. Customers are able to purchase or sell crypto with cash, debit or credit cards. The seven-year-old, Las Vegas-based company has kiosks in 47 states and Brazil. Its H-E-B kiosks will appear in the Houston area.

Privately held H-E-B ranked 13th among U.S. grocery chains with nearly $37 billion in revenue last year, according to the trade publication Progressive Grocer. The 116-year-old company has 340 stores throughout Texas and northern Mexico.

Correction: A picture that initially accompanied this story was of ATMs from a different company.

The Central Bank of Portugal (Banco de Portugal) has licensed two cryptocurrency exchanges for the first time. 

In an official statement, the entity announced that it recognized Criptoloja and Mind The Coin as “virtual asset service providers.” This is the first time exchanges have been licensed to operate since a new law around crypto trading platforms took effect earlier this year.

The approval came after nearly nine months. Criptoloja first filed for approval on Sept. 29, 2020, the company’s CEO Pedro Borges told CoinDesk. 

“It was a long way. Being the first regulated exchange in Portugal means a lot,” Borges said. 

In April, a bank executive confirmed that at the time, Banco de Portugal had received five formal registration requests and a total of 60 informal contacts, according to local media outlet Dinheiro Vivo. 

Mind the Coin and Banco de Portugal did not immediately respond to CoinDesk’s queries. 

Critpoloja plans to launch operations “in the next couple of weeks,” Borges said, adding that the company allows customers to open online accounts but has not yet enabled online trading. 

According to Borges, Criptoloja will seek to bring together Portuguese people who are looking to invest in cryptocurrencies and do not feel confident enough to open accounts in foreign exchanges. 

Borges added that the greatest adoption of crypto in Portugal is among the new generation of traders, although the company will seek to promote the crypto ecosystem among people of different profiles.

At block number 10,499,401, which is expected to be mined next Thursday, the Ethereum test network Ropsten will undergo a backward-incompatible upgrade dubbed “London.” 

This is the first of three test network releases for London in the lead-up to a main network activation tentatively scheduled by Ethereum developers for mid-July. Included in London are five code changes, also called “Ethereum Improvement Proposals” (EIPs). In a blog post released Friday, Ethereum Foundation’s Tim Beiko said:

“[EIP 1559] introduces changes to the block header, adds a new transaction type, comes with new JSON RPC endpoints, and changes the behavior clients in several areas (mining, transaction pool, etc.). It is highly recommended that projects familiarize themselves with the EIP.”

Out of the five EIPs in London, EIP 1559 is arguably the most anticipated and controversial code change of them all. EIP 1559 introduces a minimum payment, also called a “base fee,” for sending transactions on Ethereum that dynamically adjusts based on network activity and demand for block space. 

Since EIP 1559 was first proposed over two years ago in 2019, there have been several misconceptions about its use and impact on end users, miners and investors. The following are four common myths about EIP 1559 sourced from CoinDesk Research’s latest report, “The Investment Implications of EIP 1559.” 

Read the full report on the CoinDesk Research Hub. 

Myth 1: EIP 1559 is aimed at reducing high fees on Ethereum.

At its core, the aim of EIP 1559 is to make transaction fees less volatile and more predictable by creating an algorithmic model to automatically adjust costs by a factor of 1.125x at most per block. 

Under the current blind auction-like system for determining fees on Ethereum, the costs for sending a transaction can skyrocket at a moment’s notice depending on the ups and downs of the crypto markets. Under EIP 1559, fees are regulated to increase and decrease based on the use of block space. If blocks are filled above a set “gas target,” the base fee will increase by 12.5% and vice versa. 

See also: CoinDesk Research’s Metrics Report Explaining Ethereum Gas Costs

These changes to the inner workings of Ethereum’s fee model are not expected to reduce transaction fees on Ethereum, however. The issue of high fees is primarily caused by limited network capacity to process transactions. EIP 15559 on its own will not affect how many transactions the network is able to handle at once.

Myth 2: EIP 1559 will make Ethereum’s monetary policy more predictable.

EIP 1559 introduces a fee-burning mechanism that will permanently remove coins from the total circulating supply of ether (ETH, +3.07%) (ETH). The reason for burning the base fee rather than distributing them to Ethereum miners is to ensure there is no financial incentive for miners to artificially congest the network and keep the base fee high. 

Because of this burning mechanism, EIP 1559 may strengthen a bitcoin-like narrative of limited supply to the investment case for ether. It is difficult, however, to predict exactly how much ether will be burnt over time given that the base fee dynamically adjusts according to network activity and demand for block space. 

While EIP 1559 introduces a counterbalance against an ever-increasing ether supply, it doesn’t make Ethereum’s long-term monetary policy more stable. On the contrary, it introduces economic instability to the network by making it impossible to control what the total supply of ether will be over time.

Myth 3: It is likely that EIP 1559 will cause Ethereum miners to quit and attack the network.

It is estimated that miners will lose 20% to 35% of their income with the activation of EIP 1559, and so there have been petitions from mining entities on Ethereum to stop EIP 1559 in its current form from being accepted into the London upgrade. In addition, amendments to EIP 1559 have been proposed. Those include changing the proposal so that the base fee is not burned, increasing miner income from other sources such as block subsidies and making adjustments to Ethereum’s mining algorithm so that competition for network rewards among miners is more equitable.

Despite the opposition from members of the Ethereum mining community, EIP 1559 is expected to be released on Ethereum’s main network in July, which raises the question of whether miners could potentially resist the London upgrade by shutting down their machines and weakening the security of the network. 

While that is possible, there are a number of reasons why it is unlikely that the majority of miners will defect or try to sabotage Ethereum as a result of EIP 1559 activation. One of the primary reasons is that miners would have to forgo rewards they might have otherwise earned by upgrading their machines and continuing operations. There is also the reality that miners have a limited runway on Ethereum and will have to forgo 100% of rewards once the network switches to a proof-of-stake (PoS) consensus protocol early next year. 

See also: The New Plan to Merge Ethereum to PoS

Myth 4: EIP 1559 will solve the issue of miner extractable value (MEV) on Ethereum.

Miner revenue on Ethereum has historically consisted of a fixed block subsidy and transaction fees. However, as a result of the growing popularity for high-frequency trading on decentralized exchanges (DEXs), miner income from MEV has become increasingly lucrative. Research and development organization Flashbots estimates daily income from MEV has grown from half a million dollars at the start of this year to over $6 million in June.

As background, MEV is the income that miners can earn as a direct result of their ability to order transactions within a block. It is difficult to quantify because miner revenue made from reordering, including or censoring certain transactions within a block, can come anytime a user interacts with another user or application on Ethereum. 

See also: The Good, the Bad and the Ugly of MEV on Eth 2.0

EIP 1559 reduces the ability for miners to rely on transaction fees as a way to extract MEV from users, but the ability for miners to order transactions and thereby earn MEV through other means will remain unchanged under EIP 1559. Speaking to the continued need for research and development on MEV after EIP 1559 activation, Flashbots researcher Philip Daian said during a virtual Ethereum conference in May: 

“The transaction fees people are paying for inclusion [in a block] are actually a very small percentage of the eventual MEV market … The game is still fundamentally unchanged and the deeper protocol level mitigations are still things that we haven’t explored yet.”

For more information about EIP 1559 and its investment implications, download the full report by CoinDesk Research here.