A quick update from the intersection of trust, content and blockchain
Estimated reading time: 6 minutes, 10 seconds. Contains 1280 words
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Blockchain Weather, Week 1 2022
This is a new element in our newsletter. In each edition, we summarise the current sentiment for crypto, blockchain and web3 similar to a weather report – from our point of view.
Current: Cloudy, with partial thunderstorms and heavy winds from ahead.
Outlook: Potential longer sunny period for blockchain and sunny spots for web3 ideas in 2022. But expect occasional disturbances with dark clouds coming through.
Please tell us what you think.
Updates this week:
Why bitcoin is worse than a Madoff-style Ponzi scheme
The linked article, a guest post in the Financial Times, says one can describe the current market with the mechanisms of a Ponzi scheme. In such a scheme, rising value is achieved by constantly finding new buyers. Such markets are at risk of suddenly losing value, resulting in late entrants’ total loss of investments.
More than $31 billion of venture capital for crypto companies in 2021
Last year, crypto companies raised more money than ever before: The investments amounted to more than $31 billion (€27.4) globally for the entire year, according to the linked report, which was cited in several articles. VCs from the US raised around 7.2 billion of this sum. This means the majority of the VC funds came from other investors worldwide. Some startups received more than 100 million. For example, DapperLabs, the platform behind CryptoKitties and NBA Top Shot, got $305 million of capital in March 2021.
Mirrortables: Better transparency for web3 angel investors
Quote, from Balaji Srinivasan, previously CTO at Coinbase:
“I want to talk about one very concrete problem: the tangle of angel investing. This is an area where off-chain web2 tools like DocuSign, Hellosign, Carta, and AngelList could be profitably augmented with on-chain web3 tools that have matured over the last several years — particularly the Ethereum blockchain, the USDC stablecoin, and the Ethereum Name System (ENS). To do this, we’ll introduce a concept called a mirrortable, an on-chain representation of a traditional capitalization table.”
Wired: The empty digital lands
The article looks at projects trying to sell virtual land. Sellers argue that early buyers will get the “best” land. But at this time, several assumptions must come true: That one platform manages to attract a sufficient number of users and that these users will be using the platform frequently, not just for a short period. The market is driven mainly by speculation about the future value of digital land—the article in Wired challenges many of the current assumptions.
Two key quotes:
“The ‘real estate of the future’ is plagued by buggy software, empty servers, and huge opportunities for abuse.”
“…buying “real estate” on these platforms is like buying property in Manhattan, but in a world where anyone could feasibly create an infinite amount of alternative Manhattans that are just as easy to get to.”
Decentraland plans to create virtual markets for (digital) luxury goods and fashion shows.
A fashion show is planned for March 24-27, 2022. The idea is to let users experience fashion in a virtual environment and to let them “purchase outfits for their online avatars”. Decentraland aims to attract designers, brands and fashion fans to create virtual collections and participate in the event. Decentraland partners with UNXD, a virtual marketplace that has recently worked with Dolce & Gabbana. UNXD uses the principle of “drops” to create artificial scarcity.
NFT numbers for 2021
Non-fungible tokens or NFTs, in short, were in high demand in 2021. Whether this is early market speculation or a sustainable trend remains to be seen.
As of Dec. 23, the total number of NFTs sold, year-to-date, reached nearly 14.5 million, and a total of about $13.8 billion was spent to buy them, according to NonFungible.com, a database of blockchain gaming and crypto collectible markets. Considering how much was spent, it’s important to note that the number of unique wallets (digital stores for cryptocurrencies and NFTs) that bought and sold NFTs also increased substantially in 2021, reaching nearly 1.4 million as of late December, up from about 87,000 on Jan. 1.
A theft of NFTs leads to a debate about the decentralisation of NFT platforms.
NFTs worth over two million US-Dollars recently got stolen from a “hot wallet” when the owner clicked on a phishing link. As a reaction Open Sea, the platform offering and hosting the NFTs, then froze the assets. The whole episode resulted in a discussion on Twitter about security and decentralisation on such platforms.
Samsung support for NFTs on new TVs for 2022
The TV maker wants to let owners of large TV screens buy and then show NFTs they own, similar to putting fine art on the wall.
According to Samsung, this platform will let creators “share their art with the world” and let potential buyers:
- Preview an NFT before purchasing it
- Learn about an NFT’s history and blockchain metadata
Blockchain gaming might become a significant trend in 2022
While most gamers look for entertainment, the future might see a new type of “contributing” player willing to work on specific virtual tasks to receive goods or even money.
But, as with coins, digital land, and other early crypto concepts: It is still difficult to predict how these markets will evolve. So far, successful gaming platforms such as Roblox can create marketplaces without a need for blockchain storage.
Blockdata: A review of 2021 with data
“Blockchain & Crypto in 2021 – A review in data” is free to use a summary of key trends, such as the number of investments, where the money was invested, etc.
The European Security Authority (ESMA) seeks feedback on tokenised securities regulation.
The EU regulator has initiated a process where stakeholders can submit their opinions. The initiative tries to determine whether market rules must be changed for tokenised securities.
Current situation and trends, according to Ethereum co-founder Vitalik Buterin.
Vitalik Buterin started the new year with a Tweetstorm, observing the current market situation and what 2022 might bring.
Among the talking points: The use of crypto in Argentina, the popularity of stable coins and the ongoing challenge to technically enable further scaling for Ethereum.
Presidential candidate in South Korea to raise funds using crypto
The candidate of the ruling Democratic Party wants to attract young, tech-savvy voters.
Lee Jae-myung, nominated by the ruling party in South Korea for the upcoming presidential elections this spring, is preparing to raise funds in cryptocurrencies and issue non-fungible tokens for supporters. His campaign hopes that the initiative will woo young and tech-savvy Korean voters whose interest in digital assets is growing.
- South Koreans have to report overseas crypto accounts LINK
- Allianz expects further growth for crypto in 2022 LINK
- Today technical support ends for Blackberry devices. Notable, as the company was a market leader once. LINK
- Ledger, the first peer-reviewed journal dedicated to the study of blockchains and cryptocurrencies LINK
- Some of the year’s most controversial NTFs, coins, and crypto scams. LINK
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Photo by Jose G. Ortega Castro on Unsplash