Why Most Blockchain Projects Are Bullshit – magic. – Medium

https://medium.com/helloitsmagic/why-most-blockchain-projects-are-bullshit-2e3918439270

And How to Spot the Ones That Aren’t

This is a good overview to blockchains and mountains of bullshit talk circulating around it:

The key to separating uses with promise from bullshit projects is asking what can onlybe done with the specific features blockchains provide, and whether those things are worth doing or having. In almost all useful cases, blockchains don’t solve technological problems, they solve people problems.

138 Comments

  1. Tomi Engdahl says:

    Adi Robertson / The Verge:
    The DOJ arrests and charges two men with wire fraud and money laundering over an alleged $1.1M NFT rug pull scheme for their collection of 8,888 “Frosties” — They’d already announced a follow-up series — US government prosecutors have charged two men with fraud and money laundering …

    Two men arrested for $1.1 million NFT ‘rug pull’ scam
    They’d already announced a follow-up series
    https://www.theverge.com/2022/3/24/22995107/us-arrest-charges-crypto-nft-rug-pull-frosties-ethan-nguyen-andre-llacuna?scrolla=5eb6d68b7fedc32c19ef33b4

    US government prosecutors have charged two men with fraud and money laundering over a cryptocurrency “rug pull” scheme. Ethan Nguyen and Andre Llacuna allegedly earned around $1.1 million by selling non-fungible tokens (or NFTs) based on cartoon-like characters called “Frosties.” After selling the NFTs, they shut down the project and transferred its funds to a series of separate crypto wallets, leaving Frosties owners bereft of promised rewards.

    According to the criminal complaint, the Internal Revenue Service, Criminal Investigation (IRS-CI), and Homeland Security Investigations (HSI) began investigating Frosties in January, shortly after receiving complaints about the scam. Frosties was a buzzy project whose 8,888 NFTs — priced at the Ethereum equivalent of roughly $130 — sold out within an hour of the public launch.

    But as chronicled by Protocol, the creators abandoned it almost immediately. Buyers earned only a few dollars when they tried to resell their NFTs, and they gave up any hope of seeing future promised rewards, including 3D versions of their avatars and a Frosties video game.

    Crypto “rug pull” schemes are extremely common, but criminal cases remain far less numerous. For one thing, the teams behind NFT series often don’t reveal their legal identities — until recently, even the founders of the super-high-priced Bored Ape Yacht Club series remained pseudonymous. For another, lucrative NFT series launches are a relatively recent phenomenon. And the legal status of NFTs in general can be murky.

    But the Justice Department release is unambiguous about calling Frosties a scam. “NFTs represent a new era for financial investments, but the same rules apply to an investment in an NFT or a real estate development,”

    Reply
  2. Tomi Engdahl says:

    Two men face 20 years in prison over $1.1 million NFT rug pull scam
    Another warning to be wary of NFT schemes
    https://www.techspot.com/news/93924-two-men-face-20-years-prison-over-11.html

    What just happened? Another day, another NFT scam; this time it’s of the rug pull variety. Two men have been charged with conspiracy to commit wire fraud and money laundering after they made $1.1 million from a non-fungible token project before abandoning it without fulfilling any of the promises they made and leaving buyers with nothing to show for their investments.

    Department of Justice is charging 20-year-olds Ethan Nguyen and Andre Llacuna for allegedly running the Frosties NFT project, which saw its 8,888 NFTs, each priced at around $180, sell out within an hour of their public launch.

    Like similar NFT collections, buyers were promised rewards such as a “metaverse” game, giveaways, 3D versions of their avatars, etc. There was also the potential to make a lot of money by reselling their NFTs at a higher price.

    Reply
  3. Tomi Engdahl says:

    Hackers have allegedly breached a gaming-focused blockchain platform last week and extracted cryptocurrencies now valued at more than $600 million.

    Second Biggest Crypto Hack Ever: $600 Million In Ether Stolen From NFT Gaming Blockchain
    https://lm.facebook.com/l.php?u=https%3A%2F%2Ftrib.al%2FHuIT7kK&h=AT3D-E5XatXRkpIyd-zFpGTX3YrR6-qmvOZw0YKUo53e73XuTeveK4of-vFkLj2g5m9Be9hX0Gz35Hnaf7zQC68jGdy96IP30gSTRaKOjryfkzfOnNccjfjup0kWGC9D2Q

    Hackers allegedly breached gaming-focused blockchain platform Ronin Network last week and extracted cryptocurrencies now valued at more than $600 million, the company announced on Tuesday, marking the second-biggest hack ever in the burgeoning cryptocurrency space.

    “There has been a security breach,” Ronin, an Ethereum-linked blockchain platform for non-fungible token-based video game Axie Infinity, the company wrote in a blog post on Tuesday, adding that the hack was discovered today but occurred on Wednesday.

    According to Ronin, 173,600 ether tokens and 25.5 million USD coins—worth nearly $620 on Tuesday—were drained from its platform after an attacker used hacked private keys to forge two fake withdrawals last week.

    Reply
  4. Tomi Engdahl says:

    I would never condone this sort of behavior, but on the other hand, the premise of a cryptocurrency-based NFT game strikes me as shady in the first place

    https://thehill.com/policy/cybersecurity/600337-more-than-600m-in-cryptocurrency-stolen-in-video-game-hack/

    Reply
  5. Tomi Engdahl says:

    It’s almost like all these crazy expensive NTF’s are junk. Might as well put that money into tulips are this point…

    In March 2021, an NFT created by Jack Dorsey sold for $2.9 million. Yet in an auction this past week, no one bid more than $280 for it. What happened?

    https://www.forbes.com/sites/jeffkauflin/2022/04/14/why-jack-dorseys-first-tweet-nft-plummeted-99-in-value-in-a-year/?sh=218f822965cb&utm_source=ForbesMainFacebook&utm_medium=social&utm_campaign=socialflowForbesMainFB

    Reply
  6. Tomi Engdahl says:

    Ok so in order for a crypto to work it has to support speculation where you do something for nothing but get a voucher in the hopes that there will be enough of you that people will be interested in your vouchers.

    As long as everyone agrees that you vouchers are worth something then they magically are. Tell me again, why?

    Reply
  7. Tomi Engdahl says:

    Warren Buffett says crypto “doesn’t produce anything.” https://trib.al/Vxpk64K

    Reply
  8. Tomi Engdahl says:

    Thomas Stackpole / HBR.org:
    A Q&A with crypto skeptic Molly White, who runs Web3 Is Going Just Great, on Web3′s problems, cultural draw, privacy and potential harassment issues, and more

    Cautionary Tales from Cryptoland
    https://hbr.org/2022/05/cautionary-tales-from-cryptoland

    All of a sudden, it feels like Web3 is everywhere. The money, the buzz, the name all make it seem like Web3 will inevitably be the next big thing. But is it? And do we even want it to be?

    As the hype has reached a fever pitch, critics have started to warn of unintended and overlooked consequences of a web with a blockchain backbone. And while Web3 advocates focus on what the future of the internet could be, skeptics such as Molly White, a software developer and Wikipedia editor, are focused on the very real problems of the here and now.

    White created the website Web3 Is Going Just Great, a time line that tracks scams, hacks, rug pulls, collapses, shady dealings, and other examples of problems with Web3. HBR.org spoke to White over email about what people aren’t hearing about Web3, how blockchain could make internet harassment much worse, and why the whole project might be “an enormous grift that’s pouring lighter fluid on our already-smoldering planet.” This interview has been lightly edited.

    You make it very clear that you don’t have a financial stake in Web3 one way or another. So what led you to start your project and write about Web3’s problems?

    Late 2021 was when I really began to notice a huge shift in how people talk about crypto. Instead of being primarily used for speculative investments by people who were willing to take on a lot of risk in exchange for hopes of huge returns, people began to talk about how the whole web was going to shift toward services that were built using blockchains. Everyone would have a crypto wallet, and everyone would adopt these new blockchain-based projects for social networks, video games, online communities, and so on.

    This shift got my attention, because until then crypto had always felt fairly “opt-in” to me. It was previously a somewhat niche technology, even to software engineers, and it seemed like the majority of people who engaged with it financially were fairly aware of the volatility risks. Those of us who didn’t want anything to do with crypto could just not put any money into it.

    Once crypto began to be marketed as something that everyone would need to engage with, and once projects began trying to bring in broader, more mainstream audiences — often people who didn’t seem to understand the technology or the financial risks — I got very concerned. Blockchains are not well suited to many, if not most, of the use cases that are being described as “Web3,” and I have a lot of concerns about the implications of them being used in that way. I also saw just an enormous number of crypto and Web3 projects going terribly: people coming up with incredibly poorly thought-out project ideas and people and companies alike losing tons of money to scams, hacks, and user error.

    In the examples you’ve collected, what are some of the common mistakes or misapprehensions you see in companies’ efforts to launch Web3 projects, whether they’re NFTs (non-fungible tokens) or something else?

    My overwhelming feeling is that Web3 projects seem to be a solution in search of a problem. It often seems like project creators knew they wanted to incorporate blockchains somehow and then went casting around for some problem they could try to solve with a blockchain without much thought as to whether it was the right technology to address it, or even if the problem was something that could or should be solved with technology at all.

    Kickstarter might have been the most egregious example of this: Late last year they announced, much to the chagrin of many in their user base, that they would be completely rebuilding their platform on a blockchain.

    Companies also seem to announce NFT projects without doing much research into how these have gone for other companies in their sector. We’ve seen enough NFT announcements by video game studios that have gone so badly that they’ve chosen to reverse the decision within days or even hours.

    I firmly believe that companies first need to identify and research the problem they are trying to solve, and then select the right technology to do it. Those technologies may not be the latest buzzword, and they may not cause venture capitalists to come crawling out of the woodwork, but choosing technologies with that approach tends to be a lot more successful in the long run — at least, assuming the primary goal is to actually solve a problem rather than attract VC [venture capital] money.

    One of the most surprising (to me, anyway) arguments you make is that Web3 could be a disaster for privacy and create major issues around harassment. Why? And does it feel like the companies “buying into” Web3 are aware of this?

    Blockchains are immutable, which means once data is recorded, it can’t be removed. The idea that blockchains will be used to store user-generated data for services like social networks has enormous implications for user safety. If someone uses these platforms to harass and abuse others, such as by doxing, posting revenge pornography, uploading child sexual abuse material, or doing any number of other very serious things that platforms normally try to thwart with content-moderation teams, the protections that can be offered to users are extremely limited. The same goes for users who plagiarize artwork, spam, or share sensitive material like trade secrets. Even a user who themself posts something and then later decides they’d rather not have it online is stuck with it remaining on-chain indefinitely.

    Many blockchains also have a very public record of transactions: Anyone can see that a person made a transaction and the details of that transaction. Privacy is theoretically provided through pseudonymity — wallets are identified by a string of characters that aren’t inherently tied to a person. But because you’ll likely use one wallet for most of your transactions, keeping one’s wallet address private can be both challenging and a lot of work and is likely to only become more challenging if this future vision of crypto ubiquity is realized. If a person’s wallet address is known and they are using a popular chain like Ethereum to transact, anyone [else] can see all transactions they’ve made.

    This point of view seems almost totally absent from the conversation. Why do you think that is?

    I think a lot of companies haven’t put much thought into the technology’s abuse potential. I’m surprised at how often I bring it up and the person I’m talking to admits that it’s never crossed their mind.

    When the abuse potential is acknowledged, there’s a very common sentiment in the Web3 space that these fundamental problems are just minor issues that can be fixed later, without any acknowledgment that they are intrinsic characteristics of the technology that can’t easily be changed after the fact. I believe it’s completely unacceptable to release products without any apparent thought to this vector of user risk, and so I am shocked when companies take that view.

    One of the mainstays of the pitch made by Web3 proponents is that blockchain can democratize (or re-democratize) the web and provide new sources of wealth and opportunity — even banking the unbanked. What’s your take on that?

    It’s a compelling pitch; I’ll give them that. But crypto has so far been enormously successful at taking wealth from the average person or the financially disadvantaged and “redistributing” it to the already wealthy. The arguments I’ve seen for how this same technology is suddenly going to result in the democratization of wealth have been enormously uncompelling. The emerging crypto space is very poorly regulated, especially the newer parts of it pertaining to decentralized finance. It’s difficult for me to see a future where poorly regulated technology with built-in perverse financial incentives will magically result in fairer, more accessible systems.

    As for “banking the unbanked” and the democratization of the web, people are falling into a trap that technologists have fallen into over and over again: trying to solve social problems purely with technology. People are not unbanked because of some technological failure. People lack access to banking services for all sorts of reasons: They don’t have money to open a bank account to begin with, they’re undocumented, they don’t have access to a physical bank or an internet or mobile connection, or they don’t trust banks due to high levels of corruption in their financial or judicial systems.

    These are not problems that can be solved solely through the addition of a blockchain. Indeed, crypto solutions introduce even more barriers: the technological know-how and the level of security practices required to safeguard a crypto wallet; the knowledge and time to try to distinguish “scammy” projects from those that are trying to be legitimate; the lack of consumer protections if something happens to an exchange where you are keeping your funds; and the added difficulty of reversing fraud when it does occur.

    In my view, the places where crypto has done some good — and I do openly acknowledge that it has done some good — have primarily been in situations where there are enormous societal and political failings and any replacement is better than what exists. For example, some people have successfully used crypto to send remittances to people under oppressive regimes. These examples are fairly limited

    Given all of this, what do you think is the cultural draw of Web3?

    The ideological argument for Web3 is very compelling, and I personally hold many of the same ideals. I strongly believe in working toward a more equitable and accessible financial system, creating a fairer distribution of wealth in society, supporting artists and creators, ensuring privacy and control over one’s data, and democratizing access to the web. These are all things you will hear Web3 projects claiming to try to solve.

    I just don’t think that creating technologies based around cryptocurrencies and blockchains is the solution to these problems. These technologies build up financial barriers; they don’t knock them down. They seek to introduce a layer of financialization to everything we do that I feel is, in many ways, worse than the existing systems they seek to replace. These are social and societal issues, not technological ones, and the solutions will be found in societal and political change.

    Should HBR.org even be doing this package on Web3? Are we buying into — or amplifying — the hype cycle?

    I think we are comfortably beyond the “ignore it and hope it goes away” phase of crypto. I know I decided I was beyond that phase late last year. I think the best thing that journalists who report on crypto can do at this stage is ask the tough questions, seek out experts wherever they can, and try not to fall for the boosterism.

    Crypto and Web3 are complex on so many levels — technologically, economically, sociologically, legally — that it is difficult for any single person to report on all issues, but there are extremely competent people who have examined crypto through each of these lenses and who are asking those tough questions.

    One of the biggest failures of the media in reporting on crypto has been uncritically reprinting statements from crypto boosters with little reflection on the legitimacy or feasibility of those statements. It doesn’t have to be that way.

    Reply
  9. Tomi Engdahl says:

    Breaking: Regulators uncover evidence of the largest crypto Ponzi scheme

    $1B Crypto Ponzi Scheme Alleged by Regulators
    https://www.thestreet.com/investing/crypto-ponzi-scheme-irs-regulators?utm_campaign=tstmaycryptoponzischeme&utm_medium=paid_social&utm_source=facebook&utm_term=awareness_tof&utm_content=boost&product=tst&placement=tstmaycryptoponzischeme

    Whipsawing markets and faltering assets have shocked the nascent crypto market. Now, regulators say they’ve uncovered a Ponzi scheme.

    It’s been a tough six months to be a crypto investor. Whipsawing markets, faltering assets and economic pressures have all combined to shock the nascent market.

    The price of crypto’s best-known coin, bitcoin, has slumped since November and currencies that were touted as safe and secure because they were pegged to the dollar and monitored via exchanges have seen their valuations crumble.

    $1B Ponzi Scheme Hits Crypto
    Tax investigators said on May 13 that they have evidence of a $1 billion Ponzi scheme centered on the crypto market.

    American tax officials said that they were following 50 separate leads into scams focused on things like nonfungible tokens and other decentralized parts of the sector.

    “NFTs are one of the new modern digital ways of trade-based money laundering,” Niels Obbink of the Dutch Fiscal Information and Investigation Service said at a news conference involving the Internal Revenue Service’s announcement.

    It also has led to a large number of criminal actions, which regulators are attempting to attack and control as crypto grifters aim for bigger and richer targets.

    “Some of these leads I’m talking about, they involve individuals with significant NFT transactions revolving around potential tax or other financial crimes throughout our jurisdictions,” Jim Lee, the IRS’s chief of criminal investigations, said at a news conference attended by Bloomberg.

    “[One] appears to be a $1 billion Ponzi scheme. That’s billion with a ‘B’ and this lead also touches every single J5 country,” Lee said.

    The J5, or the Joint Chiefs of Global Tax Enforcement, is a tax-crime-fighting initiative including authorities in the five countries.

    Can Regulators Keep Up With Scammers?
    One of the most common complaints about the crypto sector is that it lacks transparency, ducks under regulation and is so opaque that if an investor loses money they have little recourse.

    Lee said May 13 that while that has traditionally been the case, the IRS is making the tracking of crypto movements one of its primary priorities.

    Reply
  10. Tomi Engdahl says:

    Kryptomarkkinat ajautuivat paniikkiin – vakaaksi väitetty valuutta romahti täysin: ”Sydämeni on särkynyt tuskasta” https://www.is.fi/taloussanomat/art-2000008818206.html

    Reply
  11. Tomi Engdahl says:

    Crypto traders are facing steep losses as Terra and Luna collapse, part of a broader selloff that has rattled the digital currency market.

    How a Cryptocurrency Trader Turned $10,000 Into $200 in Just Days
    https://www.bloomberg.com/news/articles/2022-05-12/crypto-traders-see-steep-losses-with-terra-and-lunge-plunge-rattling-market?utm_campaign=socialflow-organic&utm_medium=social&utm_content=business&cmpid=socialflow-facebook-business&utm_source=facebook

    The collapse of Terra and Luna are part of broader market turbulence that has rattled the crypto world, even as some holders of the coins shrug at steep losses.

    Reply
  12. Tomi Engdahl says:

    Hannah Miller / Bloomberg:
    Knock-on effects of the TerraUSD/Luna collapse will be felt across the crypto industry and may chill VCs’ enthusiasm for investing in crypto startups

    Terra $45 Billion Face Plant Creates Crowd of Crypto Losers
    https://www.bloomberg.com/news/articles/2022-05-14/terra-s-45-billion-face-plant-creates-a-crowd-of-crypto-losers

    VC firms, investors and startups are among the casualties
    The market downturn could chill white-hot valuations in crypto

    Reply
  13. Tomi Engdahl says:

    New York Times:
    A profile of Do Kwon, the trash-talking founder of Terraform Labs, which raised $200M+ to build LUNA and UST; many investors avoided losses by cashing out early — Do Kwon, a South Korean entrepreneur, hyped the Luna and TerraUSD cryptocurrencies. Their failures have devastated some traders …

    https://www.nytimes.com/2022/05/18/technology/terra-luna-cryptocurrency-do-kwon.html

    Reply
  14. Tomi Engdahl says:

    The Information:
    Sources: Coinbase is pausing new projects, freezing hiring, cutting costs, and giving staff more stock grants after its stock fell 75%+ in the past six months — Cryptocurrency trading firm Coinbase, whose revenue has shrunk amid a downturn in the sector, is pausing new business projects …

    Coinbase Slashes Costs, Freezes Hiring Amid Crypto Crash
    https://www.theinformation.com/articles/coinbase-memos-detail-cost-cuts-employee-stock-grant-boost

    Cryptocurrency trading firm Coinbase, whose revenue has shrunk amid a downturn in the sector, is pausing new business projects, freezing hiring for two weeks and aiming to slash its cloud spending on Amazon Web Services, among other cost-cutting measures, according to a pair of internal emails sent to employees this week and viewed by The Information.

    At the same time, the company, whose stock has fallen by more than 75% in the past six months, also told its 5,000 or so employees it is giving them more stock grants to offset half of the difference between the grants it made earlier this year and the stock’s closing price on Friday last

    Reply
  15. Tomi Engdahl says:

    But What Are NFTs Actually
    https://www.youtube.com/watch?v=IZaTd0hDtkI

    When you know the technical details of what NFTs are you realise that the way most people talk about them is completely wrong!

    00:00 Intro – NFTs aren’t want people say they are
    01:05 Cryptocurrency explained
    02:55 What non-fungible means
    05:41 The Ethereum blockchain makes NFTs possible
    06:55 NFTs are made on the Ethereum blockchain
    07:11 NFTs as tickets for an event – a hypothetical real world use case
    09:31 Buying NFTs without trust
    11:17 What NFT art actually is
    19:16 Maybe NFTs aren’t stupid
    20:50 LegalEagle tells me not to do something stupid
    24:15 NFT collectables – CryptoPunks
    25:05 Support digital artists by buying their NFTs
    27:26 Sponsor message

    Reply
  16. Tomi Engdahl says:

    But how does bitcoin actually work?
    https://www.youtube.com/watch?v=bBC-nXj3Ng4

    How does a blockchain work – Simply Explained
    https://www.youtube.com/watch?v=SSo_EIwHSd4

    Reply
  17. Tomi Engdahl says:

    Smart contracts – Simply Explained
    https://www.youtube.com/watch?v=ZE2HxTmxfrI

    What are smart contracts and what do they have to do with blockchains and cryptocurrencies? Well, let’s find in plain English!

    What are Smart Contracts in Crypto? (4 Examples + Animated)
    https://www.youtube.com/watch?v=pyaIppMhuic

    Reply
  18. Tomi Engdahl says:

    What is an NFT? (Non-Fungible Tokens Explained)
    https://www.youtube.com/watch?v=4dkl5O9LOKg

    What is an NFT? A Non-Fungible Token, also known as a NFT, is a type of digital token or asset. A common analogy is to think of these as digital trading cards or digital paintings. When you buy an NFT, you are buying the rights to that specific asset. In this video you’ll learn exactly what a non-fungible token is, and why they are valuable.

    0:00 – 0:15 Intro
    0:16 – 1:00 What is an NFT?
    1:01 – 2:24 The Details of all Non Fungible Tokens
    2:25 – 5:13 Why buy an NFT?
    5:14 – 6:12 Buying Jack Dorsey’s First Tweet
    6:13 – 6:48 How popular are they?
    6:49 – 7:52 Top 11 Most Expensive NFTs
    7:53 – 8:44 Can someone copy your NFT?
    8:45 – 10:13 How do you buy an NFT?
    10:14 – 11:05 Where do you store your NFTs?

    Reply
  19. Tomi Engdahl says:

    Inside The Cryptocurrency Revolution
    https://www.youtube.com/watch?v=u-vrdPtZVXc

    Bitcoin’s emergence as a global digital currency has been as revolutionary as it has been erratic. But while fledgling investors obsess over every fluctuation in the cryptocurrency market, nation-states are more interested in the underlying blockchain technology and its ability to revolutionize how business is done on the internet and beyond. VICE’s Michael Moynihan travels to Russia with Vitalik Buterin, inventor of the ethereum blockchain, to get a front-row seat to the geopolitical tug of war over Internet 3.0.

    Reply
  20. Tomi Engdahl says:

    NFTs are polarizing: Some think they’re the future of digital ownership, others predict the crypto bubble will pop and NFTs will vanish with it. What’s uncontestable, though, is that there are scams everywhere. One of the latest to fall for one such scam is actor and comedian Seth Green.

    https://www.cnet.com/personal-finance/seth-green-loses-200k-bored-ape-yacht-club-nft-in-phishing-scam/

    Reply
  21. Tomi Engdahl says:

    Cagan Koc / Bloomberg:
    European Central Bank President Christine Lagarde says crypto “should be regulated” to deter people from speculating on assets that are “based on nothing” — European Central Bank President Christine Lagarde said crypto-currencies are “based on nothing” …

    Lagarde Says Crypto Is ‘Worth Nothing’ and Should Be Regulated
    https://www.bloomberg.com/news/articles/2022-05-21/lagarde-says-crypto-is-worth-nothing-and-should-be-regulated

    Digital euro will be safer store of value, ECB president says
    Comments come amid turbulent times for crypto markets

    Reply
  22. Tomi Engdahl says:

    Rita Liao / TechCrunch:
    StepN, a Solana-based app that rewards users with tokens for walking and running, says it has 2M-3M MAUs and makes $3M-5M/day in net profit from trading fees

    ‘Move-to-earn’ Solana app StepN is latest crypto gaming craze
    But skeptics question its sustainability and whether it can be called a ‘game’
    https://techcrunch.com/2022/05/22/play-move-to-earn-solana-stepn-gamefi/

    Since its launch in December, StepN, an app that lets users walk and run to earn tokens, has quickly become a household name in the play-to-earn blockchain gaming, or GameFi, world. Two to three million users worldwide are now active on the app every month, StepN’s co-founder Jerry Huang recently told TechCrunch.

    That number is nowhere close to the hundred-million player size enjoyed by popular web2 titles, but in the world of crypto, it’s a meaningful breakthrough for a five-month-old app. As of May 22, the market cap of StepN’s native token GMT stood at around $860 million.

    Founded by Huang and his co-founder Yawn Rong in Adelaide, Australia, StepN debuted at a Solana hackathon in October.

    In weeks, StepN was growing so fast that the team needed to cap the number of daily registrations. Now, tens of thousands of new users are joining the app per day, according to Huang.

    Huang, a serial entrepreneur, and Rong, a blockchain venture capitalist, were self-funding the project at first for the pair were “financially stable.”

    Reply
  23. Tomi Engdahl says:

    Crypto Mining using NodeMCU
    https://hackaday.io/project/185449-crypto-mining-using-nodemcu

    Crypto Mining using microcontrollers, wait what!!! Are you serious? How?
    Believe it or not, that is possible…

    Crypto Mining using microcontrollers, wait what!!! Are you serious? How?
    Believe it or not, the rig you see onscreen actually mines a crypto currency called DUINO-Coin (ᕲ) or DUCO.
    The total cost of this rig is only $35.
    Now, if you believe me! then, grab yourself a cup of coffee, sit back and watch this video and start your journey into cryptocurrency with DUINO-Coin!

    DUINO-Coin (ᕲ) was founded in 2019 and is a for-fun project. This project was developed by a team of young developers that focuses on energy efficient mining. It’s mostly, but not only, dedicated to people who are just starting out in the crypto world and it doesn’t require any expensive hardware.
    DUCO is a transparent, open-source, centralized, eco-friendly coin that focuses on mining with low-powered devices like Arduino. DUCO tries to achieve a reward system using “Kolka” a name derived from Coca Cola making the low-powered devices like Arduino earn almost the same or even “more” than a powerful device like CPUs or GPUs. It also prevents people from building huge mining farms. It causes each additional miner to earn a bit less from the previous one.
    DUCO is “centralized” and has an “infinite supply” and hence you can mine this coin forever.

    You can Mine DUCO using:
    Android smartphone
    Computer’s CPU
    Arduino (or compatible AVR)
    Raspberry Pi, Orange Pi or Banana Pi
    ESP8266/ESP32 (or compatible boards)
    Internet browser on PC or smart-TVs
    Arduinos using ESP8266 as a host
    Arduinos using Raspberry Pi as a host

    Centralization: Making Arduino and other low powered devices not only profitable, but just possible would be impossible to maintain if the coin was decentralized. Hence, DuCo is a centralized coin with it’s own chain. It is however possible to wrap (convert) DUCOs to wDUCO, bscDUCO, celoDUCO or maticDUCO to store them in decentralized form on another coin’s chain.

    Reply
  24. Tomi Engdahl says:

    The Crypto Crash Continues, Spotlight Focus on Ethereum and Altcoins
    https://mishtalk.com/economics/the-crypto-crash-continues-spotlight-focus-on-ethereum-and-altcoins

    Ethereum is right on technical support and there is no fundamental or technical reason for that support to hold.

    Technically Speaking

    Ethereum is testing support at the 1700 level for the fifth time.
    In bear markets, repeated tests of support are overwhelmingly likely to break
    The next support level is 1250, then 600, then the 300 area
    Fundamentally, the major driver of cryptos is not energy, not the hash rate, not payments, not currency.

    The fundamental driver for the price of Bitcoin and all of the Altcoins is speculative sentiment.

    Major debates along those lines took place on Twitter yesterday.

    Hashing is irrelevant over the long haul. Sentiment will determine the price of Bitcoin. If the overall desirability and willingness to hold Bitcoin drops, so will the price. That is a statement of fact.

    The hash rate has been meaningless for six months. The desire to hold Bitcoin has gone the other way.

    Sentiment Crashing Across the Board

    That could be just day to day randomness. But it isn’t.

    I excluded stable coins because they are supposed to be stable, but TerraUSD associated with LUNA is now trading around 2 cents, down 98%.

    If diversification was supposed to help, it didn’t.

    Please note Dogecoin was started as a joke and pumped up spectacularly by Elon Musk.

    How Many Cryptocurrencies Are There?

    There are over 18,000 cryptocurrencies in existence as of March 2022.

    The vast majority of them are headed to zero if indeed they are not already at zero.

    Looking Back

    Looking back, the early Bitcoin and Ethereum investors are still laughing about this decline as if it is nothing.

    One could have bought Bitcoin under $1. Even if one bought at $1,000 they are up about 28 times on their money.

    For those who got in this year, the declines are very real.

    I have certainly been wrong about how much these have risen. Then again, I underestimate nearly every bubble.

    Hellen’s advice is still pertinent. Do Kwon just launched LUNA2!

    Seven Percent Free Money on LUNA2!

    Staking trapped people in LUNA unable to get there money out for 21 days. LUNA went to zero in a week. They were paid 20% for putting up LUNA. They got back their LUNA plus 20% more LUNA. But 0 + 0 = 0.

    What a Hoot!

    Where to Now for Cryptos?

    The question, as always, is not where we’ve been but where we are headed.

    Every time I look at lists like the one I posted, I ask myself the same question: Why are they worth anything at all?

    But they will always be worth what someone is willing to pay for them.

    Bitcoin advocates believe there is only one true coin, Bitcoin. They label the rest “sh*tcoins”.

    But ultimately, the price of all the coins will not be determined by hashrate, alleged scarcity, or the latest favorite hype (alleged ease at moving alleged money).

    In El Salvador, Bitcoin is officially legal tender. Hooray! But who uses it for that? Almost no one and I am confident almost no one ever will, globally, as any meaningful percentage of transactions.

    Even if 100% of the transactions in El Salvador were in Bitcoin, the price of Bitcoin will not be set in El Salvador.

    Rather, the price of Bitcoin will be the price people are willing to pay globally, in the midst of a global liquidity crunch.

    Reply
  25. Tomi Engdahl says:

    Molly White:
    A skeptical look at crypto as a foundation for self-sovereign identity and some likely dystopian outcomes, as Buterin, Dorsey, and others explore the idea

    Is “acceptably non-dystopian” self-sovereign identity even possible?
    https://blog.mollywhite.net/is-acceptably-non-dystopian-self-sovereign-identity-even-possible/

    Anonymity and trustlessness are central to the crypto world. People don’t have to attach real-world identities to crypto wallets, and communities at least nominally try to avoid placing trust into institutions like governments or big tech companies. But with the crypto world increasingly trying to move beyond simple payments and NFT trades, they are running up against these limitations.

    Decentralized autonomous organizations, or DAOs, are often governed with a “one token, one vote” model that gives power to the wealthy. Though some DAOs may believe this is the ideal governance model, many others have adopted it because there aren’t a ton of promising alternatives. Unlike in offline organizations and societies where centrally-controlled identifiers or even just in-person attendance are fairly successfully used to ensure one individual gets one vote, this has been a very difficult nut to crack in the crypto world, where one individual can trivially create endless new wallet addresses—known as a Sybil attack.1

    Loans in the crypto world tend to be overcollateralized, requiring users to put up more value in crypto than what they receive in a loan. Although this works reasonably well for users who have already accumulated capital and want to use that capital in a different format (i.e. borrowing fiat currency against their crypto holdings), it doesn’t work well for the more standard reason people take out loans: because they don’t already have the money they need. Needless to say in an ecosystem whose advocates like to promise will “bank the unbanked” and help the marginalized, this is a bit of a setback.

    So, increasingly, we’re seeing conversations around topics like: how can we verify a statement about a person (or crypto wallet) is true without relying on the state or another centralized entity? How can we ensure that a wallet represents a unique individual?

    Ethereum co-founder Vitalik Buterin has been talking about “soulbound tokens”.2 Jack Dorsey just launched “Web5”, a buzzwordy project focused on decentralized identity.3 Projects like Proof of Humanity,4 BrightID,5 and WorldCoin6 are all tackling Sybil prevention in their own ways. Web3 companies like Spruce7 and Disco8 have emerged to try to tackle self-sovereign identity (that is, identifiers that are controlled by users rather than by central entities) in the blockchain world and elsewhere.

    Reply
  26. Tomi Engdahl says:

    A Billion-Dollar Crypto Gaming Startup Promised Riches and Delivered Disaster
    https://www.bloomberg.com/news/features/2022-06-10/axie-infinity-axs-crypto-game-promised-nft-riches-gave-ruin?utm_medium=social&utm_campaign=socialflow-organic&utm_source=facebook&utm_content=businessweek

    Axie Infinity’s vision of a “play-to-earn” video game has crumbled, and the company behind it now tells the players who bought into the hype it was never about the money, anyway

    Axie Infinity was remarkably simple. Players control three-member teams of digital creatures that fight one another. The characters are cartoonish blobs distinguished by their unique mixture of interchangeable body parts, not unlike a Mr. Potato Head. During “combat” they cheerily bob in place, waiting to take turns casting spells against their opponents. When a character is defeated, it becomes a ghost; when all three squad members are gone, the team loses. A match takes less than five minutes

    Even many Axie regulars say it’s not much fun, but that hasn’t stopped people from dedicating hours to researching strategies, haunting Axie-themed Discord channels and Reddit forums, and paying for specialized software that helps them build stronger teams. Armentia, who’s poured about $40,000 into his habit since last August, professes to like the game, but he also makes it clear that recreation was never his goal. “I was actually hoping that it could become my full-time job,” he says.

    The reason this is possible—or at least it seemed possible for a few weird months last year—is that Axie is tied to crypto markets. Players get a few Smooth Love Potion (SLP) tokens for each game they win and can earn another cryptocurrency, Axie Infinity Shards (AXS), in larger tournaments. The characters, themselves known as Axies, are nonfungible tokens, or NFTs, whose ownership is tracked on a blockchain, allowing them to be traded like a cryptocurrency as well.

    Every new Axie player needs Axies to play, pushing up their price. Armentia started breeding last August, at a time when normal economics seemed not to apply. “You would be making 300%, 400% on your money in five days, guaranteed,” he says. “It was stupid.”

    Axie’s creator, a startup called Sky Mavis Inc., heralded all this as a new kind of economic phenomenon: the “play-to-earn” video game. “We believe in a world future where work and play become one,” it said in a mission statement on its website. “We believe in empowering our players and giving them economic opportunities. Welcome to our revolution.”

    By last October the company, founded in Ho Chi Minh City, Vietnam, four years ago by a group of Asian, European, and American entrepreneurs, had raised more than $160 million from investors including the venture capital firm Andreessen Horowitz and the crypto-focused firm Paradigm, at a peak valuation of about $3 billion. That same month, Axie Infinity crossed 2 million daily users, according to Sky Mavis.

    If you think the entire internet should be rebuilt around the blockchain—the vision now referred to as web3—Axie provided a useful example of what this looked like in practice. Alexis Ohanian, co-founder of Reddit and an Axie investor, predicted that 90% of the gaming market would be play-to-earn within five years. Gabby Dizon, head of crypto gaming startup Yield Guild Games, describes Axie as a way to create an “investor mindset” among new populations, who would go on to participate in the crypto economy in other ways. In a livestreamed discussion about play-to-earn gaming and crypto on March 2, former Democratic presidential contender Andrew Yang called web3 “an extraordinary opportunity to improve the human condition” and “the biggest weapon against poverty that we have.”

    By the time Yang made his proclamations the Axie economy was deep in crisis. It had lost about 40% of its daily users, and SLP, which had traded as high as 40¢, was at 1.8¢, while AXS, which had once been worth $165, was at $56. To make matters worse, on March 23 hackers robbed Sky Mavis of what at the time was roughly $620 million in cryptocurrencies. Then in May the bottom fell out of the entire crypto market. AXS dropped below $20, and SLP settled in at just over half a penny. Instead of illustrating web3’s utopian potential, Axie looked like validation for crypto skeptics who believe web3 is a vision that investors and early adopters sell people to get them to pour money into sketchy financial instruments while hackers prey on everyone involved.

    As Sky Mavis’s revolutionary rhetoric began to look increasingly hollow, the company shifted its story. In December it quietly altered its mission statement, deleting the phrase “play-to-earn” and replacing it with the mushier “play-and-earn.” Days after the hack it launched Axie: Origin, a long-awaited new version with upgraded graphics and tweaks to the gameplay. Crucially, this iteration doesn’t involve cryptocurrencies at all, because Sky Mavis has acknowledged that many players are willing to engage with a new game only if the complications of crypto are removed.

    Zirlin said he empathized with people who’d lost money—life-changing sums, in some instances. But he added that a crash that got rid of Axie profiteers could have its upside, too. “Sometimes having to flush out the people who are just in it for the money,” he said, “that’s just the system self-correcting.”

    The history of video games has seen plenty of in-game economies with real-life stakes for its players. Axie’s entry to the marketplace can be traced most directly to a fad known as Cryptokitties.

    As with many things in crypto, the simple fact that they could be bought and sold was enough to spark speculative fervor. Within a few months, Cryptokitties peaked, some selling for six-figure sums.

    The other key to Axie’s popularity was an economy based on a form of paid labor that has long existed in gaming: the for-profit player. People who owned Axies could rent them out to players, usually in lower-wage regions in Southeast Asia or Latin America, who treated the game as if it were a job. Players who don’t own their Axies are akin to digital sharecroppers, but they’re widely referred to as “scholars,”

    The rise of the scholar class made Axie look like a hit. Player-speculators wanting to get in early flooded the game, sending the prices of its digital assets skyrocketing. Many were open about their mercenary intentions. “I started playing because earning money playing video games seemed pretty unbelievable and amazing,”

    That Axie was widely viewed primarily as a way to make money has proven a major problem for its virtual economy. The game is designed to offer ways to both earn and spend SLP within the game. Any tokens spent within the game just disappear. But play-to-earners instead cash out all SLP by selling them on crypto markets, meaning the total number of tokens increases over time. The additional supply depresses prices, in a crypto version of hyperinflation.

    SLP prices peaked last July, but as they dropped, players began hoarding tokens in hopes of a market recovery. This strategy is self-defeating

    Doucet says Axie is stuck with the “sleeping dragon” problem: Every time SLP value begins to rise, the dragons—the people who have been waiting to cash in their SLP—wake up and liquidate their stashes, pushing the price back down.

    Even before the broader collapse of crypto, Sky Mavis struggled to address the issues with Axie’s internal economy. A financial system consisting of people all hoping to put in $1 and take out $2 can last only as long as someone else shows up believing others will come in after them with more fistfuls of cash. Once Axie began looking less profitable, its ability to draw new players decreased, making it even less profitable and setting off a vicious cycle. “Axie has just been this fascinating tale of people learning hard lessons of economics and monetary policy in microcosm,” says Doucet.

    When I asked if this was a strange way to make a living, he told me it wasn’t any less meaningful than his previous lines of work. “What’s the purpose of that bracelet?” he asked of the jewelry he’d been selling to cruise ship passengers. “It’s that someone can wear it and feel pretty, or whatever. Let’s say I create an Axie, and it costs me $30, and I sell it for $60 because I created something that someone else wants. That’s going to provide that same feeling as the people who buy those bracelets.”

    Sky Mavis had reason to be concerned about players losing hope. By late May even top-ranked players were making the equivalent of 68¢ a day, according to Naavik—a total that doesn’t account for the cut any scholars have to give to their managers. The company and other big players in the Axie economy were working to persuade everyone to hold on. Yield Guild Games head Dizon, whose company owns more than 150,000 Axies that it rents to scholars, says games like Axie were always intended to be a steppingstone to something else. “We’ve been trying to warn people, even when prices were high, don’t expect this to be a stable source of income,” he says. Dizon’s pitch now focuses on the value of owning NFT gaming assets over time, with the potential for some supplemental money along the way. “It’s a digital version of a gig economy job,” he says.

    So La is going back to basics, hoping to make Axie more like Pokémon Go—a place where players can spend money within the game on things like decorations for their avatars. He says it’s still important that people own their Axies, even if it’s not just about the financial upside. “With that comes the ability to sell those things if you stop playing or whatnot,” says La.

    Reply
  27. Tomi Engdahl says:

    DARPA study challenges assumptions about distributed ledger (and Bitcoin) security
    Blockchain not as decentralised as many assume, finds Pentagon sponsored research
    https://www.theregister.com/2022/06/22/research_challenges_assumptions_about_distributed/

    Reply
  28. Tomi Engdahl says:

    Cryptocurrency tech is vulnerable to tampering, a DARPA analysis finds
    https://www.npr.org/2022/06/21/1105815143/cryptocurrency-bitcoin-blockchain-security-tampering-darpa?utm_campaign=storyshare&utm_source=facebook.com&utm_medium=social

    Whether prices are up or down, for many investors in cryptocurrency, the real appeal is that there’s nobody in charge.

    As the crowd chanted at the recent Bitcoin 2022 conference in Miami, it’s all about “Freedom!” By design, the system is meant to be from interference by banks, companies and governments.

    But a new report finds that the decentralized system might not be working as well as many crypto enthusiasts assume.

    Reply
  29. Tomi Engdahl says:

    Billionaire investor Seth Klarman says he cannot see the point of crypto. “I don’t think anybody needs to own it. It just seems to me that it could end up very much in tears,” he added. Seth Klarman on Crypto Investing, Gold, and U.S. Dollar American billionaire investor and hedge fund manager Seth Klarman shared […]

    Billionaire Seth Klarman: I Can’t See the Point of Crypto — Nobody Needs to Own It
    https://news.bitcoin.com/billionaire-seth-klarman-i-cant-see-the-point-of-crypto-nobody-needs-to-own-it/

    Seth Klarman on Crypto Investing, Gold, and U.S. Dollar
    American billionaire investor and hedge fund manager Seth Klarman shared his views on a variety of topics, including cryptocurrency, gold, and the U.S. dollar, in an interview with Harvard Business School, released this week.

    Klarman is the chief executive and portfolio manager of the Baupost Group, a Boston-based hedge fund he co-founded in 1982. The investment firm currently has about $30 billion under management. According to Forbes, his estimated net worth is $1.5 billion.

    On the topic of cryptocurrency, Klarman said:

    I can’t see the point of crypto. It has this feel to me of being like catnip for techies.

    “The idea that we’re using more energy than the country of Iceland, to mine extra crypto, to solve math problems that don’t need to be solved, seems crazy to me,” he added.

    Reply
  30. Tomi Engdahl says:

    OneCoin-huijauksen pää­tekijä FBI:n etsityimpien listalle – ”Krypto­kuningatar” Rujasta, 42, luvattu 100 000 dollarin löytöpalkkio https://www.is.fi/digitoday/art-2000008921618.html

    Bulgarialaistaustaisen Ruja Ignatovan epäillään huijanneen sijoittajilta miljardeja euroja kryptovaluutta- ja pyramidihuijauksella.

    Reply
  31. Tomi Engdahl says:

    Let’s All Point And Laugh At The Rubbish NFT Console
    BY
    STACEY HENLEY
    PUBLISHED 5 DAYS AGO
    The Polium One is a console with no games that will somehow be more powerful than a PS5 and will have a button to let you instantly buy NFTs
    https://www.thegamer.com/polium-one-nft-crypto-blockchain-console-bad-idea-scam/?utm_source=TG-FB-P&utm_medium=Social-Distribution&utm_campaign=TG-FB-P

    I see exactly why NFT people want to get into gaming. But gaming is such an incredibly difficult thing to get right that I’m struggling to understand crypto’s obsession with the medium. Now there’s a crypto console, the Polium One, and I’m not sure how all of these people who are smart enough to make millions of pictures of ugly monkeys can be stupid enough to get everything so wrong.

    Breaking into gaming via the console racket is extremely difficult. Microsoft muscled in only through operating at a loss for years. Google and Amazon, the two kings of capitalism, both failed. An NFT console is just about the stupidest pitch I can imagine. A console made of cheese that runs games made of strawberries sounds like a better idea.

    Of course, that’s no surprise. There is zero creativity in the NFT game, and that’s because they’re all out to make a quick buck. Grit, the terrible NFT game supposed to blow our minds (but is really the thinnest Red Dead knock off with a Fortnite palette oh and also it looks garbage) gave away a talented, brilliant, incredible, amazing, show stopping, spectacular, never the same, totally unique, completely not ever been done before horse which was actually just a Unity asset. This new NFT console’s logo is just the GameCube logo with a tiny tweak. All of the apes look the same.

    There is a version of the future where the NFT people get things right. Digital ownership, in some form, will likely be a bigger part of our lives as the years go on. We already use digital money for most major purchases and a lot of minor ones, so some form of crypto currency might well become the norm.

    This console claims it will be ready in 2024, when presumably we’ll all be driving through Elon Musk’s underground tunnels in order to go pick them up. There is almost no chance this console even launches, and less that it will by 2024 with its current promises. The Polium One will be more powerful than the PS5 and the Xbox Series X, except it definitely won’t, will have a controller more advanced than the DualSense, except it definitely won’t, and will have a special wallet button so you can keep pouring your money into crypto pyramid schemes, which yes, it definitely definitely will. Taking money from crypto bros is so easy that building a whole console for it is absurd.

    There are no specs for the console beyond vaguely promising 8K, no games (Axie Infinity and Grit feature in online mock-ups of the console’s interface, but neither are confirmed yet), and maybe not even a company.

    Reply
  32. Tomi Engdahl says:

    Crypto like USD are supported by air and now Celsius have gone with the wind ..

    Reply
  33. Tomi Engdahl says:

    Cryptocurrencies
    ‘They couldn’t even scream any more. They were just sobbing’: the amateur investors ruined by the crypto crash
    The black hole of bitcoin investing
    https://www.theguardian.com/technology/2022/jul/12/they-couldnt-even-scream-any-more-they-were-just-sobbing-the-amateur-investors-ruined-by-the-crypto-crash?utm_source=facebook&utm_medium=news_tab

    Fuelled by hype and hysteria, the market in bitcoin and other cryptocurrencies went from an obscure niche to a $3tn industry. Then the house of cards collapsed

    “I thought I was on top of the world,” Roy says. “Nobody could tell me anything. Money would fix every single problem I faced from now on.”

    Reply

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