How Square’s Purchase of Jay Z’s Tidal Could Popularize Blockchain

Square Inc’s (NYSE: SQ) purchase of Jay-Z’s Tidal could lead to a boost of the cryptocurrency ecosystem. What Happened: Square CEO Jack Dorsey said Thursday on Twitter that just as the company created ecosystems of tools for sellers and individuals it would do the same for artists. “We’ll work on entirely new listening experiences to bring fans closer together, simple integrations for merch sales, modern collaboration tools, and new complementary revenue streams.” New offerings by Square could capitalize on emerging technologies such as blockchain and cryptocurrencies, which are viewed favorably by Dorsey, Reuters reported. “You need the applications to drive the new economy,” said Gartner technology analyst Avivah Litan. “No one’s going to just go get a cryptocurrency wallet if there’s nothing to buy,” said Litan, as per Reuters. Why It Matters: Square purchased a majority stake in Tidal for 7 million in a cash-and-stock deal and cited “economic empowerment to a new vertical: musicians” as a motive. Dorsey and Square are upbeat on cryptocurrency and blockchain, with the company buying 0 million worth of Bitcoin (CRYPTO: BTC) last month. Dorsey supports decentralization technologies like blockchain because of their potential to circumvent reliance on big tech companies which profit as gatekeepers, noted Reuters. Non-fungible tokens could reportedly be used to establish ownership of digital media by Square and Tidal. Litan pointed that NFT could be used to verify the authenticity of autographs and memorabilia. On Wednesday, a group of cryptocurrency enthusiasts burned a 2006 Banksy artwork titled “Morons” in order to auction it as an NFT. Not everyone is enthusiastic about NFT, with Litecoin (CRYPTO: LTC) creator Charlie Lee dismissing the hype surrounding the technology. Price Action: BTC traded 8.37% lower at $46,589.44 at press time. Square shares closed nearly 6.7% lower at $218.41 on Thursday and fell almost 3.4% to $211 in after-hours trading. See more from BenzingaClick here for options trades from Benzinga'Morons:' Crypto Enthusiasts Burn Banksy's Real Artwork To Turn It Into Digital TokenSuch Speed, Much Wow! Dogecoin To Make A Reappearance At NASCAR© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved. Read More...


Texas Watchdog Says Grid Operator Made $16 Billion Error

(Bloomberg) — A firm hired to monitor Texas’ power markets says the region’s grid manager overpriced electricity over two days during last month’s energy crisis, resulting in $16 billion in overcharges.Amid the deep winter freeze that knocked nearly half of power generation offline, the Electric Reliability Council of Texas, known as Ercot, set the price of electricity at the $9,000-a-megawatt-hour maximum — standard practice during a grid emergency. But Ercot left that price in place days longer than necessary, resulting in massive overcharges, according to Potomac Economics, an independent market monitor hired by the state of Texas to assess Ercot’s performance. In an unusual move, the firm recommended in a letter to regulators that the pricing be corrected and that $16 billion in charges be reversed as a result.Potomac isn’t the first to say that leaving electricity prices at the $9,000 cap for so long was a mistake. Plenty of power companies at risk of defaulting on their payments have said the same. But the market monitor is giving that opinion considerable weight and could sway regulators to let companies off the hook for some of the massive electricity charges they incurred during the crisis.The Arctic blast that crippled Texas’s grid and plunged more than 4 million homes and businesses into darkness for days has pushed many companies to the brink of insolvency and stressed the power market, which is facing a more-than $2.5 billion payment shortfall. One utility, Brazos Electric Power Cooperative, has already filed for bankruptcy, while retailers Griddy Energy LLC and Entrust Energy Inc. defaulted and have been banned from participating in the market.“The market is under quite a bit of duress,” Kenan Ogelman, Ercot’s vice president of commercial operations told Texas lawmakers Thursday. Moody’s Investors Service downgraded Ercot one notch from A1 to Aa3 and revised the grid operator’s credit outlook to “negative.”Retroactively adjusting the power price would ease the financial squeeze on some of the companies facing astronomical power bills in the wake of the energy crisis. EDF Renewable Energy and Just Energy are among those asking the Public Utility Commission to reset the power price for the days after the immediate emergency while others have also asked regulators to waive their obligation to pay until price disputes are resolved.“If we don’t act to stabilize things, a worst-case scenario is that people will go under,” said Carrie Bivens, the Ercot independent market monitor director at Potomac Economics. “It creates a cascading effect.”The erroneous charges exceed the total cost of power traded in real-time in all of 2020, said Bivens, who spent 14 years at Ercot, where she most recently was director of market operations before becoming its watchdog. “It’s a mind-blowing amount of money.”While prices neared the $9,000 cap on the first day of the blackouts, they soon dipped to $1,200 — a fluctuation that the utility commission later attributed to a computer glitch. The panel, which oversees the state’s power system, ordered Ercot to manually set the price at the maximum to incentivize generators to feed more electricity into the grid during the period of supply scarcity. The market monitor argues that Ercot should have reset prices once rotating blackouts ended because, at the point, the emergency was over.It’s asking the commission to direct Ercot to correct the real-time price of electricity from 12 a.m. Feb. 18 to 9 a.m. Feb. 19. Doing so could save end-customers around $1.5 billion that otherwise would be passed through to them from electricity providers, Bevins said.But power generators that reaped substantial profits from the high prices during the crisis week are likely to push back. Vistra Corp. on Thursday submitted comments to the utility commission arguing against repricing. During a Texas senate hearing the same day, utilities South Texas Electric Cooperative and the Lower Colorado River Authority also voiced opposition.Texas Competitive Power Advocates, a trade association representing generators, said retroactively changing prices could discourage future investments in Texas’s electricity market. “Changing prices after the fact creates additional instability and uncertainty,” Michele Richmond, the group’s executive director, said in an email.Bivens acknowledged the market monitor isn’t typically in favor of repricing, but noted in her letter to the commission that the move wouldn’t result in any revenue shortfalls for generators. Instead, the new price would reflect the actual supply, demand and reserves during the period.“This isn’t some Monday morning quarterbacking,” she said in an interview. “Ercot made an error and we don’t let errors slide.”The utility commission on Wednesday adopted a prior recommendation made by the market monitor, voting to to claw back some payments to power generators for services they never actually provided during energy crisis. The commissioners also expressed support for capping the price of certain grid services — a request made by several retailers — but didn’t take action on it. Another commission meeting is scheduled for Friday.(Adds Ogelman quote, Moody’s downgrade in fifth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

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