Tag Archives: nft

Deglobalization is happening

Deglobalization is happening. Whether or not you believe it.

Since the beginning of 2000, manufacturing power has awakened in Asia, and economists believed that globalization would benefit the whole world. 

I am not sure if that is totally accurate, but some countries did better than others. 

For example, China has been successfully becoming the world’s second most significant economic zone. 

Not until COVID-19 hit and the war between Russia and Ukraine, did the deglobalization accelerate. 

However, deglobalization will make currency fluctuate more than ever. 

Due to geopolitical concerns, some countries’ currencies would not be tradable globally, making cryptocurrencies more attractive than ever.

Blockchain and crypto may become an alternative to help citizens whose countries with weaker currency to preserve the value of their assets. 

Despite political differences, citizens are innocent of political conflicts, and they have options to use cryptocurrencies to buy necessities.

Of course, there will be political disputes such as financial sanction avoidance resulting from the banning of blockchain technology such as tornado cash, and the technology will improve through different ways to achieve the same alternative.

Deglobalization will also result in many countries becoming more isolated than ever. Cryptocurrencies can help citizens to avoid the drag of the nation.

Deglobalization may be a part of political conflict, but you can become apolitical and help yourself.

Support writer here or join Medium here

Photo by Andrew Shelley on Unsplash

Kim Kardashian’s $1.26 million crypto ticket

The Securities Exchange Commission (SEC) has charged $1.26M to Kim Kardashian for social media promotion of a cryptocurrency offered by EthereumMax (EMAX).

Kim Kardashian failed to disclose the payment she received for promoting EMAX.

Ryan Huegerich and many other claimants filed a class-action lawsuit against Kim Kardashian, Floyd Mayweather Jr, and Paul Pierce in a California district court, for promoting an Ethereum knockoff, Ethereum Max (EMAX), according to a lawsuit filed on January 7.

At least, “not financial advice” is not a disclaimer of promoting crypto of any kind.

Kim’s influence did make the unknown token become an investment asset as a result:

A striking 19% of respondents who said they heard about the post invested in EthereumMax as a result.

And she claimed to make more money than an entire season of her reality television show that further demonstrating her involvement in the promotion marking:

While it is unclear what the precise terms of the financial compensation that Defendant Kardashian was given by the Executive Defendants, Defendant Kardashian routinely gets paid between $300,000 and $1 million for most promotional posts.

What is EMAX?

According to the filed lawsuit,

EthereumMax has no connection to the second largest cryptocurrency, Ethereum. This name association appears to be an effort by the Company and the Executive Defendants to mislead investors into believing that the EMAX Tokens were a part of the Ethereum network (when they are not). It would be akin to marketing a restaurant as “McDonald’sMax” when it had no affiliation with McDonald’s other than the name similarity and the fact that both companies sell food products.

EthereumMax is to build a robust and scalable ecosystem that fully maximizes the power of DeFi, creating a wide range of products for our community that encompasses everything from a deflationary token and a core stablecoin for processing payments to curing edge NFTs and exclusive events for our community, according to its whitepaper.

Of course, it sounds just like BS. This type of token puts every buzz words together that means nothing.

The court document further approved this assumption:

In plain terms, EthereumMax’s entire business model relies on using constant marketing and promotional activities, often from “trusted” celebrities, to dupe potential investors into trusting the financial opportunities available with EMAX Tokens.

If you check their source code, no devs are working, and codes are forked from open-source codes as usual.

And after dumping and rug-pulling investors, the token majority still controlled by creator(s).

https://etherscan.io/token/tokenholderchart/0x15874d65e649880c2614e7a480cb7c9a55787ff6

Pump and Dump

Following the EMAX Token’s launch and Defendants’ promotional activities in May 2021, the trading volume and price of EthereumMax surged. By May 30, EMAX already had a transaction volume of over $100 million, up 632% in just two weeks. The day before, it reached its maximum price of $0.000000863, which represents a rise of 1,370% more than its initial price of $0.00000005875.

However, this meteoric rise did not last long, and EthereumMax began to deflate immediately after Defendant Kardashian’s post. On July 15, the price of the EMAX Token hit its all-time low: $0.000000017 per unit, a 98% drop from which it has not been able to recover. On August 1, its transaction volume plummeted to $157,423, which is less than a hundredth of its initial capital.

https://coinmarketcap.com/currencies/ethereummax/

The result is the price will never get recover.

Celebrities’ promotion of crypto in the future

This is to set a precedence for the SCE to prohibit celebrities and social influencers promote unsecured cryptocurrencies.

“This case is a reminder that, when celebrities or influencers endorse investment opportunities, including crypto asset securities, it doesn’t mean that those investment products are right for all investors,” said SEC Chair Gary Gensler. “We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.”

“Ms. Kardashian’s case also serves as a reminder to celebrities and others that the law requires them to disclose to the public when and how much they are paid to promote investing in securities,” Chair Gensler added.

“The federal securities laws are clear that any celebrity or other individual who promotes a crypto asset security must disclose the nature, source, and amount of compensation they received in exchange for the promotion,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “Investors are entitled to know whether the publicity of a security is unbiased, and Ms. Kardashian failed to disclose this information.”

Moral hazard or not, the SCE does make crypto space a better space.

Support writer here or join Medium here

Not an expert

Web3 is the weird place ever. A bunch of people got together to build something that may or may not work.

So why is Web3 the future?

Death of an expert

Who claimed to be an expert? Unfortunately, there are more and more experts on the internet. Watching YouTube for 10 minutes can boost your confident 100%, and watching a week of YouTube has prepared you to teach the rest of the internet how things work. 

What makes an expert, then? If you can tell everything that the internet is searchable may not make you the one. 

You probably will consider an expert is someone who can provide answers precisely and quickly. 

It is not. An expert is a person who can question precisely such field and research depths to provide plausible solutions and make solutions workable.

Precision Matters

The problem of the internet, particularly with YouTube guru channels, is that they present them as experts on some kind and get very general solutions to the problem that sound precise. However, because many of us do not have a background in such subject matters, it makes us fall within the expert trap and believe them to sound correct. 

Because we did not spend time around the subject, we had no specific expectations about what will happen rather than believing someone told us what would happen.

Scientific Inquiry vs. Guesstimate

There are usually 6 steps to discovering the truth through:

1. Observe and Ask Question: in this stage, we think about a question because of our observations  

2. Research: we research our question  

3. Formulate a Hypothesis: we come up with a theory  

4. Test your Hypothesis: we test our theory in a fair and unbiased way  

5. Conclude: we conclude a result of our research  

6. Share Results: we share our idea with other people

However, many of the internet shares guesstimate results and skip step 4.

They offer solutions without possible persistence and observe the conclusion they make. 

When the internet was doing guesstimate, we made fun of them.

When the government started doing guesstimate, we should be worried.

And that is precisely we are heading into serious trouble when the government is guesstimating our economy.

Why Web3 then? Maybe it is just a guesstimate?!

Support writer here or join Medium here

Photo by Hunters Race on Unsplash

A trust issue

Systematic risk is coming – a trust issue. 

The financial crisis in 1929 made the first central bank in the US collapse, and private bankers rescued the government. 

The global financial recession in 2008 almost collapsed the private banks until the government recused them.

The slowly deteriorated of the banking system and central banks showed the crack of how the current financial system may not be as sustained as we believed.

The fiat currency ran on the trust system.

The original idea is to link with the concept of the social contract.

The social contract is between citizens and the nation, and they exchange legislative powers for equal treatment and freedom.

Similarly, the fiat system was constructed to let everyone exchange the legislative power on the financial system for equal ability to spend the fair fiat currency.

Therefore, even the fiat currency runs on the trust system, which does not mean that the money is worth zero if everyone does not trust the system. It only means you should trust the government as much as possible so that the currency in your hand is worth what it states. Otherwise, you can’t do anything about it.

You only have two choices: belief or can’t do anything about it.

Until the cryptocurrency, you have another option, to use cryptocurrency if you do not believe in fiat currency anymore.

Why is this so significant?

Since the government has represented you, you had no influence and to express your objections instead of reaching out to your representatives to help you influence the government. But do they care about your opinions or just your voting right?

Similarly, whether you trust the financial system or not, the fiat currency is still working, and the government still is making mistakes. 

Cryptocurrency offers the hope that you can express your opinion and empower yourself without letting others represent you.

People will have no trust eventually if the government continues doing its own way and ignores the rest of the people. And they will continue making mistakes. 

At least we still have cryptocurrencies.

Support writer here or join Medium here

Photo by Joshua Hoehne on Unsplash

Decentralized Social Media is a BS

Elon Musk just trashed Twitter again. And he is reluctant to buy Twitter. He claimed Twitter has a more vast bots population than human beings active in space.

The recent court documents released many discussions and conversations between billionaires and what they thought before acquiring a company.

Elon planned to turn Twitter into blockchain social media because he thought the blockchain was a solution to prevent bots and spammers since the blockchain was created to fight email spammers in earlier days.

But his plan did not go well.

First, Elon got soured with Parag Agrawal, who later became CEO of Twitter.

Elon thinks Parag is just an a**-kissing CEO to please everyone.

Later, he refused to get a lecture from another Billionaire CEO of the crypto exchange FTX, Sam Bankman-Fried, about how to make Twitter a blockchain social media.

Elon Musk suddenly disliked the idea of Twitter, killing all bots and turning Twitter into blockchain social media. 

What just happened?

Here is what I think is why he just turned around suddenly.

Killing bots is unprofitable

Twitter without bots is unprofitable anymore. Those bots can easily influence the opinions of viewers in the Twitter space.

Twitter is fighting hard, but more bots will likely be created and push more spam.

Blockchain Social Media is unprofitable

Yes, blockchain kills bots, but it makes social media becomes useless. Social media is a propaganda tool that spreads misinformation and disinformation. If social media loses its power to spread “the good news”, why do people bother to use such a tool?

Cost of fighting bots over profits

Twitter will have an existential crisis when bots are more than they can control that outweigh the profits Twitter can bring. That is when the end of the social media era. Rather than using blockchain to make the purposely computation speed goes slow, AI is an excellent tool to categorize bots and eliminate them. However, there will have spammers AI to fight the good AI later.

Twitter is unprofitable business

The more bots on Twitter, the less profitable the Twitter business will be. Twitter has to find a way to eventually reduce the increase of the bots and consistency have enough users in the space. One solution is to use a real identification verification process, which is also a privacy concern for many Web3 community raise concerns. 

Another way is using the NFT identification process to prevent bots enrollment, but people can use multiple wallets to register the platform, which is another future problem.

In conclusion

Blockchain social media is a contradictory idea.

Support writer here or join Medium here

Photo by Alexander Shatov on Unsplash

What Did the Bank of England just Do?

When inflation is high, and US central bank has raised the interest rate to suppress the acceleration of the inflation, the Bank of England can not wait but do Quantitative Easing (QE) again?!

Unfortunately, the Bank of England has no choice but to QE during this challenging time.

Why did England shoot its own feet, then?

One of the oversized industries is pension fund which composed 120% of the GDP of England. It is too big to fail. 

The Bank of England is trying to avoid a systematic collapse of the economy rather than an unsystematic collapse as persistent inflation increases.

UK has no control over US central bank and how they fight inflation. However, they can control their domestic economy through their monetary policy to stabilize their domestic market, but their fiat currency is further devalued.

And US central bank no longer had the power to bring further inflation down without increasing interest rates to break the economy.

With the current loss of confidence in the dollar and everyone losing, nations carry many more debts, and the central bank will go low-interest rate environment by printing more money to support its financial market to stabilize the market until it can no longer do. 

Cryptocurrencies, particularly Bitcoin, will become more and more critical in the coming years to challenge the crown of dollar domination.

Support writer here or join Medium here

Photo by Benjamin Davies on Unsplash

What if you regret your crypto transaction

Defi hacking is a pandemic now. We lost $2.2B this year, which marked the worst year of the crypto losses despite the fact that we are at the bear market, in which the market capital has shrunk to $1 trillion.

There are a few solutions that can prevent hacking. One of them is creating reversible transactions on Ethereum.

Ah, it goes back to the debate on blockchain trilemma.

If you ever noticed the old debate on blockchain trilemma, you realize these three elements control how a perfect blockchain works: security, decentralization, and scalability.

https://www.ledger.com/academy/what-is-the-blockchain-trilemma

Lacking one of the three elements will make blockchain unusable.

The idea of decentralization is providing an option to give power to people by using computer governing and to reach a fair and square consensus.

The characteristics of decentralization include:

  • transparency
  • immutability
  • accessibility
  • trustless

The reversible transactions are challenging the decentralization assumption of the blockchain, which sparks debates on sacrificing decentralization to prevent hacking losses.

Is preventing theft more critical than permissionless immutability?

Of course, the proposal is just a suggestion of one possible solution, but I shared some of my ideas about such a proposal.

Utilitarianism

If we only focus on what will work for us, that reversible transactions feature is preferable and can prevent hacking from damaging the crypto project.

Defi hacking is a pandemic now. We lost $2.2B this year, which marked the worst year of the crypto losses despite the fact that we are at the bear market, in which the market capital has shrunk to $1 trillion.

There are a few solutions that can prevent hacking. One of them is creating reversible transactions on Ethereum.

Ah, it goes back to the debate on blockchain trilemma.

If you ever noticed the old debate on blockchain trilemma, you realize these three elements control how a perfect blockchain works: security, decentralization, and scalability.

https://www.ledger.com/academy/what-is-the-blockchain-trilemma

Lacking one of the three elements will make blockchain unusable.

The idea of decentralization is providing an option to give power to people by using computer governing and to reach a fair and square consensus.

The characteristics of decentralization include:

  • transparency
  • immutability
  • accessibility
  • trustless

The reversible transactions are challenging the decentralization assumption of the blockchain, which sparks debates on sacrificing decentralization to prevent hacking losses.

Is preventing theft more critical than permissionless immutability?

Of course, the proposal is just a suggestion of one possible solution, but I shared some of my ideas about such a proposal.

Utilitarianism

If we only focus on what will work for us, that reversible transactions feature is preferable and can prevent hacking from damaging the crypto project.

Liberalism

If we focus on individual freedom rather than preventing losses, we will not trade off from the immutability feature of blockchain to a centralized governing function to reverse transactions.

Virtue Ethics

Of course, stealing is universally wrong. But what if hackers stole funds to save local people from starvation? Then such stealing may not seem so wrong after all.

But if hackers stole funds to get themselves rich and purchased luxury goods, such action would be prevented.

Moral Absolutism

But if you believe stealing is universally wrong, no matter the circumstances, reversible transactions seem an excellent idea.

Moral Nihilism

We may go extreme that moral is no matter in crypto whatsoever, then implementing reversible transactions simply changes nothing.

Theory of Justice

If you think fairness is more important than utility, implementing reversible transactions is an excellent choice to ensure the ecosystem is fair.

Majority Rule

You may also not decide but ask consensus to vote on such changes and implement them upon the majority vote agree upon.

So which one would you like to choose from?

But no matter what you choose, I think crypto is more toward to Majority Rule that consensus will decide what moves forward with decisions everyone votes.

Of course, who controls the voting power is another debate in the crypto ecosystem—this question we will discuss the next time.

Support writer here or join Medium here

Photo by lucas clarysse on Unsplash

If we focus on individual freedom rather than preventing losses, we will not trade off from the immutability feature of blockchain to a centralized governing function to reverse transactions.

Virtue Ethics

Of course, stealing is universally wrong. But what if hackers stole funds to save local people from starvation? Then such stealing may not seem so wrong after all.

But if hackers stole funds to get themselves rich and purchased luxury goods, such action would be prevented.

Moral Absolutism

But if you believe stealing is universally wrong, no matter the circumstances, reversible transactions seem an excellent idea.

Moral Nihilism

We may go extreme that moral is no matter in crypto whatsoever, then implementing reversible transactions simply changes nothing.

Theory of Justice

If you think fairness is more important than utility, implementing reversible transactions is an excellent choice to ensure the ecosystem is fair.

Majority Rule

You may also not decide but ask consensus to vote on such changes and implement them upon the majority vote agree upon.

So which one would you like to choose from?

But no matter what you choose, I think crypto is more toward to Majority Rule that consensus will decide what moves forward with decisions everyone votes.

Of course, who controls the voting power is another debate in the crypto ecosystem—this question we will discuss the next time.

Support writer here or join Medium here

Photo by lucas clarysse on Unsplash

The core reason why Defi is not working

Defi or decentralized finance is an alternative way to traditional finance. It sounds fancy, but it does not work in reality. Here is why:

Securitization

You cannot ignore the innovation of securitization that gives banks a further push on their asset management and expand their operation into more risky asset management in modern finance.

In the past, banks heavily relied on deposits from users, but with securitization, banks can turn illiquid assets into liquidated assets while raising more cash to make more loans.

In theory, a bigger pool with more loans can reduce default rates and make such financial instruments more secure.

In reality, it will trigger a chain reaction and melt down the entire finance in a second.

What makes security secure?

It is a way to make the default rate as accurate as possible, giving a higher security grade than the lower ones.

A lower grade of loan means a higher potential of default because there are not as straightforward as of default rate whoever originated can be calculated. 

There are many ways to calculate loan grading however, there are some factors, include:

  • The borrower’s credit history.
  • Quality of the collateral.
  • The likelihood of repayment of the principal and interest.
  • Cash flow of borrower that can sustain

Defi’s assumption

The loan grade is automatically low when you allow everyone to get loans from the smart contract without sharing financial background because there is no information about how likely the loan will be the default.

Also, the pool is open to all who can get in and out quickly, which makes it even harder to provide sustainable management of such loans.

Defi is very similar to subprime Morgage-backed securities.

The digital finance product is like a shell company with fake value stocks that attract investors to buy in with the high return rates and risk of defaulting at any time.

There is no innovation in preventing default rates but in speeding up cash flow transactions.

Defi only conveniences the money pooling process but has not improved the prevention of possible default and provided sustainable solutions for long-term gains. Instead, it just repackaged the bad loans and sold them for liquidity.

And even worse, Defi will have no mechanism to force investors to repay loans.

Support writer here or join Medium here

Photo by Akinori UEMURA on Unsplash

When fiat currency is volatile

Cryptocurrency may not promise you to become rich immediately, but it did foresee the worst scenario of the fiat currency – uncontrollable inflation that makes fiat currency unstable. 

We knew it would happen, but it just did not happen as quickly as we imagined dating back to 2008.

Inflation is climbing into the most dangerous zone in decades:

These types of inflation usually will never occur unless we were:

✅ at war

✅ at the trade war

✅ at the political turmoil

✅ at the economic crisis

✅ at the energy crisis

✅ at the challenge of new power

✅ at the currency transition

In the meanwhile, governments are doing a business-usual.

While the currency crisis intends to repeat itself, it will get worse,

Or maybe not…

Or maybe yes…

Okay, the point is, why is the currency in crisis mode?

It is unresponsible for massive spending that gets out of control from central banks.

Who is paying the bill after the math?

Do you want to guess it?

What is the bright side of the development of the currency crisis?

I have seen no light in the tunnel in the coming years, but it does not mean we are out of any solutions. I just have not yet seen anything.

Support writer here or join Medium here

Photo by Breno Machado on Unsplash

AI vs Tornado Cash

There is more than just a ban on Tornado Cash.

Since the US Treasury Department announced sanctioning Tornado Cash, it is clear the government chooses AI to move forward with future technology selection rather than crypto.

Why is AI a bad choice for the future? Let’s explore.

A truly surveillance state

AI is all about data. But, unfortunately, it is an invasive technology that disregards your privacy. 

China has been utilized AI to control and monitor its citizens.

Such technology is so efficient and very easy to watch their citizens 24/7.

AI helps China to reach total control of its citizens easily.

A dystopian state is approaching complete with the help of AI.

Blocking Invasion

Tornado Cash is the opposite of AI, preventing revealing data in the public domain. It is a technology that can be against AI and prevent AI from invading your privacy.

If there is the correct use of such technology and development, AI may no longer be a threat, and the surveillance state may no longer be reached fully.

Some have realized how serious banning Tornado Cash will push Western to move toward the same surveillance state, which is why Tornado Cash may come back again.

If your privacy is a fundamental right, we should prevent the government from taking away our ownership of freedom.

Support writer here or join Medium here

Photo by Lianhao Qu on Unsplash

One of the biggest advantages and disadvantages in crypto

There are so many promises from cryptocurrency.

Dated back in 2014, one of the promises of Bitcoin is to become a future payment system.

You may question the advantage of using Bitcoin as the payment system rather than using said Paypal?

Bitcoin isn’t the fast transaction alternative, and transaction fees aren’t that cheap if you include all the mining energy of running the entire nodes. 

Bitcoin has not reached anonymous and is not truly a trustless blockchain network.

Bitcoin is not decentralized but a decentralized like centralized system.

In the early stage after Bitcoin was released in 2009, there were only 6 major miners to control the entire system. 

Bitcoin is not decentralized as many people believe.

And Bitcoin is traceable in many aspects and easily be determined through big data collections.

Making Bitcoin decentralized is pushing miners to become more decentralized, which is impossible.

But besides the all myth of Bitcoin that does not add up through the math, Bitcoin is a payment system that potentially anonymously when purchasing goods.

While credit cards have merchant category codes or MCC that can potentially prohibit users from purchasing certain goods or sellers to sell illegal goods online that the government determined, Bitcoin transactions have no codes to prevent transactions at all.

Such apolitical feature helps cryptocurrency to have some degree of privacy.

Of course, such privacy may not sustain as long as when the time comes to the end of the Bitcoin as there is always an expiration time of the encryption, and you should not assume the privacy has no expiration date when technology continues invading and challenging the social norms.

Further readings:

New Research Unearths Insights Into Satoshi and Bitcoin’s Early Days

How ‘Trustless’ Is Bitcoin, Really?

Cooperation among an anonymous group protected Bitcoin during failures of decentralization

Support writer here or join Medium here

Photo by Ben White on Unsplash