Connect with us

Cryptocurrency

What is web3? It’s Silicon Valley’s latest identity crisis

Published

on

For something that doesn’t yet exist, web3 is sure to upset a lot of people.

It’s on the tip of your tongue in Silicon Valley these days. Tech offspring argue about web3 on social media. Investors poured $ 30 billion into startups that build on it last year. And smart engineers leave comfortable jobs at companies like Facebook to get on board early.

The mere idea that there is a new frontier on the internet makes people even pay millions of dollars for digital tokens that revolve around cartoon monkeys.

But so far, web3 has been more of a confusing rather than illuminating buzzword, and it’s causing something like an identity crisis for the tech industry – with ramifications for the rest of us.

What is web3?

It is short for Web 3.0. It is sometimes spelled with a capital “W”, but usually not.

It is believed that Web 1.0 was the first World Wide Web to gain popularity through web browsers in the 1990s, and Web 2.0 followed a decade later with the advent of mega-platforms like Google and Facebook.

Most of the mentions of web3 treat it as an umbrella term, a vision of the future of the internet in which property and power are more dispersed. This vision is based on transparent digital ledgers known as blockchains (the technology that underlies cryptocurrencies), and it assumes that big tech is competing by more democratic forms of internet governance that you, the user, enter Have a say – maybe even a voice – in making important decisions about how platforms work.

But that definition seems rather vague to many people.

Tech magnate Elon Musk, the richest person in the world, was recently at a loss when trying to find out what web3 is. “That seems like more of a marketing buzzword than reality right now,” he wrote on Twitter last month.

What’s wrong with the current web?

In short, many technologists (not to mention many users) fear that a handful of technology CEOs have a lot of power. YouTube, Instagram, and Twitter host much of the online content, including political speeches, and these companies can decide who gets banned. They are also hoarding huge amounts of data and taking an ever larger share of Silicon Valley’s revenue.

It is a situation that no one – except maybe shareholders – is really happy about, and it shouldn’t be.

“We are creating a world in which everyone, no matter how unique, can express their beliefs without fear of being silenced or forced to conform,” wrote activist John Perry Barlow in his 1996 Declaration on the Independence of Cyberspace “.

Software engineers have been playing with alternatives for years. Think of the standardized, open nature of email, but for social media. However, services like Mastodon, which is similar to Twitter but does not have a central server, have not yet caught fire. Twitter is working on its own distributed social media project called Bluesky.

If web3 is unproven, why the optimism?

The reason for the optimism is the development of blockchain technology and cryptocurrencies. Bitcoin, Ethereum and other digital forms of money are the most concrete examples that exist for a purely online system without a blockchain-based controller.

And since the perceived value of these coins increased last year and the total value of the market exceeded $ 3 trillion in November, the expectation is that the decentralized model can be applied to other areas of online life. If Bitcoin can work, why not other blockchain-based financial products like insurance or credit?

“Crypto is not only the future of finance, but, like the Internet in the beginning, will change all aspects of our lives,” said Andreessen Horowitz, a venture capital company that relies heavily on web3, last year.

The company defines web3 as “the Internet owned by builders and users, orchestrated with tokens”. And a token in that sense is like a title deed to a small piece of the internet, be it an object in a video game or something someone else might value, like art.

Perhaps we will all soon have lots of tokens, each for something different, and all will increase in value over time, according to the opinion.

So do we all get rich with tokens?

This is what web3 evangelists say. But a high-profile tech founder recently put all sermons aside.

“You don’t own Web3,” tweeted Jack Dorsey, co-founder of Twitter and Block, last month. Instead, he said, it will, as usual, belong to the investor class. “It will never escape their incentives. It is ultimately a centralized unit with a different label. ”

Dorsey, who had appeared as Appendix A in a Wall Street Journal column about web3 “revolutionaries” days earlier, said in a series of tweets that he was never part of web3 and called for massive investments in free open source software . (Dorsey is still a bitcoin booster who said it could help create “world peace.”)

His posts upset some people. Marc Andreessen from Andreessen Horowitz blocked Dorsey on Twitter and triggered a mini soap opera in the tech world.

But the first web3 winners can actually be big companies. Non-fungible tokens that people buy and sell as art – including those cartoon monkey tokens – have to be traded in a marketplace somewhere, and OpenSea, one such marketplace, was recently valued at $ 13.3 billion. (Andreessen Horowitz is an OpenSea investor.)

A number of venture capital firms now specialize in crypto investments and poured more money into cryptocurrency and blockchain startups over the past year than ever, according to estimates by Crunchbase and Pitchbook, two research firms.

According to Crunchbase, a venture capital company, Coinbase Ventures, affiliated with the Coinbase cryptocurrency exchange, made 100 different investments over the past year. Startups include an Indonesian website for buying cryptocurrency and an online marketplace for buying video clips from gaming streamers. Like startups in general, most are just beginning to explore business models.

Where does “web democracy” come into play?

Do you remember the tokens that supposedly we will all have with web3? Each of them could have voting rights.

The best example so far is a group that formed in November with the idea of ​​crowdsourcing a pot of money to buy a rare copy of the US Constitution at auction. The term for this type of group is the Decentralized Autonomous Organization (DAO), and the group has been called the Constitution DAO. That weird prank failed, but if the group succeeded, they would vote on a plan to present the document to the public.

Another recently formed DAO is planning to buy a golf course, giving the participants voting rights like in a country club.

Do people leave big tech for this?

The attraction of web3 – the money or the idealistic talk or both – is big enough that top engineers jump out of so-called Web2 companies.

Two of Facebook’s top engineers for its blockchain and digital currency project left the company in October to join Andreessen Horowitz’s crypto team, CNBC reported. They cited the investment firm’s track record of “advancing the entire crypto ecosystem” – a broader mission than Facebook. And last month, a vice president of Facebook parent company Meta went to OpenSea.

It’s not exactly a brain drain, but the pace seems to be picking up.

Is this really the future?

The future is always uncertain, but the tech industry is generally at the forefront and the craze for crypto is unmistakable whether it is a bubble or not.

Benedict Evans, a London-based tech investor, wrote this month that the crypto world has been marked by both “irrational religious hype” and “straw man attacks”. And he said it helped shift the focus of technology away from, say, smartphones or social media.

“Crypto is so big and potentially important, and yet so vague and so early that we can’t even agree on what to call it,” he said without using the term web3.

There are other hot tech sectors – including games, autonomous cars, and virtual reality, Evans said – but there’s likely little that could cool the Web3 hype in the near future without regulatory intervention from Washington or elsewhere. Other countries, including China, have cracked down on bitcoin mining, for example.

Still, a few more recent products would help the web3 advocate cause.

What will Washington do?

So far: mostly debate. The Biden administration is weighing the cryptocurrency regulations, and in December Congress held hearings on a possible regulation of cryptocurrencies – and with it all of web3’s potential tokens.

“What do you say to the people who say this is not a new financial system per se, but an extension of the old one?” Asked Rep. Alexandria Ocasio-Cortez, DN.Y.

One of last week’s witnesses, Brian Brooks, was a former Trump administration official who is now the CEO of blockchain technology company Bitfury. And other former government officials are caught by none other than Andreessen Horowitz as part of a lobby lightning bolt to rewrite cryptocurrency regulations.

Andreessen Horowitz also predicts that voters might favor pro-crypto candidates. “Web3 has become a major political force,” it said last month based on a paid survey.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Cryptocurrency

Walmart is quietly preparing to enter the metaverse

Published

on

A shopper carries a bag in front of a Walmart store in San Leandro, California on Thursday, May 13, 2021.

David Paul Morris | Bloomberg | Getty Images

Walmart appears to be venturing into the Metaverse with plans to create its own cryptocurrency and collection of non-fungible tokens, or NFTs.

The major retailer filed several new brands late last month, announcing its intention to manufacture and sell virtual goods including electronics, home decor, toys, sporting goods and personal care products. In a separate filing, the company said it will offer users virtual currency as well as NFTs.

According to the US Patent and Trademark Office, Walmart filed the applications on Dec. 30.

A total of seven individual applications were submitted.

A spokesman for Walmart did not immediately respond to CNBC’s request for comment.

Source: Tanning Intellectual Property

“They’re super intense,” said Josh Gerben, a trademark attorney. “There’s a lot of language in there, which shows there’s a lot of planning going on behind the scenes about how they’re going to approach cryptocurrency, how they’re going to address the metaverse and the virtual world that seems to be coming or that’s already there.”

Gerben said since Facebook announced it would change its company name to Meta, signaling its ambitions beyond social media, companies have rushed to figure out how they would fit into a virtual world.

Source: Tanning Intellectual Property

Nike filed a series of trademark filings in early November that previewed its plans to sell virtual branded sneakers and apparel. Later that month, it announced that it was teaming up with Roblox to create an online world called Nikeland. In December, virtual sneaker company RTFKT (pronounced “artifact”) bought it for an undisclosed amount.

“Suddenly everyone is saying, ‘This is getting real and we need to make sure our intellectual property is protected in space,'” Gerben said.

Gap has also started selling NFTs of its iconic logo sweatshirts. The apparel maker said its NFTs range in increments from about $8.30 to $415 and come with a physical hoodie.

Meanwhile, both Under Armor and Adidas NFT debuts sold out last month. They are now fetching sky-high prices on the OpenSea NFT marketplace.

Gerben said clothing retailers Urban Outfitters, Ralph Lauren and Abercrombie & Fitch have also filed trademarks in recent weeks detailing their intention to open some sort of virtual store.

A report by CB Insights outlined some of the reasons why retailers and brands are keen to enter into ventures that can potentially provide new revenue streams.

The launch of NFTs allows companies to tokenize physical products and services to reduce online transaction costs, it said. And for luxury brands like Gucci and Louis Vuitton, NFTs can serve as a form of authentication for tangible and more expensive goods, CB Insights noted.

Gerben said that as more consumers become familiar with the Metaverse and the items stored on the blockchain, more retailers want to create their own ecosystem around it.

According to Frank Chaparro, director of crypto information services company The Block, many retailers are still reeling from being late to e-commerce, so they don’t want to miss opportunities in the metaverse.

“I think it’s a win-win for any company in retail,” Chaparro said. “And even if it turns out to be just a fad, just trying something weird like giving some customers an NFT in a sweepstakes doesn’t do much reputation damage.”

— CNBC’s Melissa Repko contributed to this coverage.

Continue Reading

Cryptocurrency

Bitcoin crashes the midterms – POLITICO

Published

on

Aarika Rhodes, an elementary school teacher who poses a major left-leaning challenge against California Democrat Brad Sherman, the most prominent cryptocurrency critic in the house, is promoting the technology in its run. She said she has so far received thousands of dollars in cryptocurrency donations after speaking to constituents and hearing from crypto advocates urging her to make a difference to Sherman on the matter.

“More and more people of color, women and single mothers are interested in bitcoin,” said Rhodes, the largest cryptocurrency. “I’ve never met anyone who was against it.”

According to the Pew Research Center, about one in six Americans has personally traded, used, or invested in cryptocurrencies, including 13 percent of whites, 18 percent of blacks, 21 percent of Hispanics, and 23 percent of Asian Americans.

So far, the political incentives surrounding cryptocurrency are proving to be one-sided. More candidates have found reason to embrace a technology supported by legions of devoted users, a new generation of new wealthy donors, and a growing number of lobbyists than vocally oppose it.

“Look, it just looks cool. Everyone has a friend who made some money from it. There’s a lobbyist who wants to take me out to lunch,” said Sherman, who has called for an outright ban on cryptocurrency, of the hype that has popularized it among his peers on the Hill. On the other hand, shunning technology has brought few immediate rewards to the congressman. Not only has he taken on a crypto-powered main challenge, but he has also inspired the creation of a new super PAC, Shut Down Sherman, “dedicated to the task of defeating enemy number 1 against crypto”.

Sherman lamented a lack of political interest in what he saw as emerging crypto threats, such as the potential to undermine US-imposed financial sanctions and the US dollar’s status as a global reserve currency.

“It’s worth hundreds of billions of dollars to American families, and there’s no lobbyist in this city to protect it,” he said. “No lobbyist is fighting to be able to take sanctions against criminals.”

Ron Hammond, director of government relations at the Blockchain Association and advisor to the pro-crypto HODL PAC, said he’s more likely to receive requests for advice than raise concerns about crypto. Congressional staffers from both parties need help, he said, penning pro-crypto tweets for their bosses who see the issue can generate insane engagement on social media.

The website of the Congressional Blockchain Caucus, established to promote the accounting technology underlying cryptocurrency, lists 18 Republican and 17 Democratic lawmakers. However, Sherman isn’t the only one taking a hard line on the crypto boom.

Brock Pierce, a former child actor-turned-crypto entrepreneur, is reviewing a run for the Vermont Senate seat being vacated by Democrat Patrick Leahy. | (Photo: Business Wire)

Massachusetts Senator Elizabeth Warren has urged Congress to do more to regulate the industry. She is also among Democrats calling for a crackdown on the carbon emissions associated with some cryptocurrencies, like bitcoin, which relies on large numbers of specialized computers running as part of an energy-intensive process that secures its network Compete solving math puzzles.

Hillary Clinton and Donald Trump have both spoken out against cryptocurrency due to its potential to undermine the dollar’s global dominance.

In June, Trump likened bitcoin to a “scam,” telling Fox Business Network, “The currency of this world should be the dollar. And I don’t think we should have all the bitcoins in the world out there. I think they should regulate very, very highly.”

Younger politicians give such concerns less priority. “I don’t know of a single Republican under 50 who is cryptosceptic,” said Hammond, who previously worked for Ohio Republican Rep. Warren Davidson. Hammond said some senior members of the party have been quietly opposed to cryptocurrency adoption but have been reluctant to publicly resist.

Technology has even split the Trump family down the generations. Former First Lady Melania Trump, 51, tweeted this month in honor of Bitcoin’s 13th birthday as she launches her own line of non-fungible tokens, digital collectibles based on the same blockchain technology that powers cryptocurrencies allows.

While those acting on the world stage tend to see crypto as a threat to the US-led global financial order, many mayors — such as New York’s Eric Adams and Miami’s Francis Suarez — have embraced crypto as a means of attracting attention and possibly jobs in their cities.

The technology is also inspiring candidates who have made money hosting crypto-themed runs for office. In Oregon’s newly created 6th District, Matt West, a developer of DeFi — or decentralized finance, a new form of lending made possible by blockchain technology — is emerging as a pro-crypto Democrat. After an adventurous independent presidential bid, Brock Pierce, a former child actor turned crypto entrepreneur, is exploring a run for the Vermont Senate seat vacated by Democrat Patrick Leahy.

As the total value of cryptocurrencies has exploded to more than $2 trillion in the past few years, those made rich by the boom have begun to make their mark as spender as well. Last year, Sam Bankman-Fried, the 29-year-old founder of cryptocurrency exchange FTX, was the second-largest single contributor to Joe Biden’s presidential effort. Bankman-Fried gave more than $5 million but showed little interest in arranging a meeting with the beneficiary of his generosity.

As Congress and the Biden administration begin to seriously consider cryptocurrency’s impact on a number of policy fronts, crypto donors are becoming more strategic. On New Year’s Eve, Jesse Powell, the CEO of Kraken, another exchange, issued a public call for lists of cryptocurrency-supporting candidates and “crypto-enemies.” The next day, he announced that he had made maximum allowable donations to 15 politicians, including Rhodes, Mandel and West.

Sam Cooper, a former deputy chief of staff to pro-crypto Senator Ted Cruz who now advises crypto clients in the private sector, said donors are still figuring out this cycle before expecting a more organized effort for the next presidential election.

By then, Cooper said he expects crypto to have gone from being a niche topic to being a staple of campaigning. “Will Bitcoin become a core issue in 2022? No. It’s going to be inflation and immigration and the things we see every day,” he said. “But I expect that to be an issue in 2024, especially on the Republican side.”

Ben Schreckinger reports on technology, finance and politics for POLITICO; he is a cryptocurrency investor.

Continue Reading

Cryptocurrency

How the great migration of cryptocurrency mining is playing a rising role in the global energy crisis

Published

on

As the country’s central bank and state authorities lived up to their pledges to effectively wipe out crypto mining operations in China, the Cambridge Center for Alternative Finance (CCAF) estimated that the country’s average monthly share of the Bitcoin network’s hashrate of almost 70 percent was down in September 2020 to 0 percent by August 2021.

Meanwhile, the neighboring Republic of Kazakhstan had become an obvious target for many cryptocurrency miners, forced to flee China, with an abundance of cheap electricity awaiting miners and foreign mining farm owners looking for new pastures to turn to build their wealth.

Register to our daily newsletter

The i-Newsletter cut through the noise

According to estimates behind the Cambridge Bitcoin Electricity Consumption Index, based on geolocation data collected from a number of cryptocurrency mining pools, Kazakhstan’s average monthly share of the bitcoin network’s hashrate increased as China’s disappeared — rising by nearly 10 percent in two months, when it jumped from 8.8 percent in June to 18.1 percent in August 2021.

Workers transfer cryptocurrency mining rigs to a cryptocurrency farm that includes more than 3,000 mining rigs in Dujiangyan, southwest China’s Sichuan province. (Credit: STR/AFP via Getty Images)

“The Bitcoin protocol – per se – has no geographic preference,” says Professor Aggelos Kiayias FRSE, Chair of Cybersecurity and Privacy at the University of Edinburgh.

“However, it rewards miners with a digital asset that is traded globally, thereby giving them an incentive to find the cheapest electricity to maximize their profit.”

Professor Kiayias adds: “For this reason, countries that offer subsidies for electricity, have lax regulation and/or have cheap electricity due to natural resources can be very attractive places to set up mining operations.

“This may lead to over-reliance of Bitcoin on such countries and over-exploitation of preferential electricity tariffs and resources, which in turn may lead to withdrawal of subsidies and unavailability of resources.”

Professor Aggelos Kiayias, Chair of Cybersecurity and Privacy and Director of the Blockchain Technology Laboratory at the University of Edinburgh and Principal Scientist at IOHK, creator of the Cardano blockchain platform

Indeed, as quickly as Kazakhstan became the world’s second largest crypto mining homeland after the US, the proliferation of mining “hotels” that allowed people to rent data center space for their mining rigs and “grey ‘, unregistered miners gobbling up gigawatts of electricity a year illegally across the country have been blamed for a buckling national power grid.

“The thing is, China was the world’s largest producer of cryptocurrencies,” says Alex de Vries, a data scientist and cryptocurrency researcher who created his own landmark consumption indices for Bitcoin and Ethereum on his website Digiconomist.

“So if all the miners have to migrate, you’re effectively shifting a country’s energy consumption somewhere else like Argentina — onto a grid that’s much smaller than what China can offer.”

Kazakhstan Electricity Grid Operating Company (KEGOC) said in late October that electricity consumption was exceeding generation “due to the sharp increase in consumer consumption of digital mining (above 1,000 MW) and the higher number of emergencies at power plants.”

dr Luca Anceschi, Professor of Eurasian Studies at the University of Glasgow

“I suspect the government wanted to make a quick buck [off cryptocurrency mining]” says Dr. Luca Anceschi, Professor of Eurasian Studies at the University of Glasgow, “then they realized they couldn’t do it because their infrastructure wasn’t big enough”.

for dr Anceshi, Kazakhstan, as an energy-rich country, is facing a situation in which it should never have been.

“A country like Kazakhstan doesn’t have to be seen as energetic as it is,” he says.

“It’s like Scotland is running out of water with all the rain we’re getting.”

Riot police prepare to block protesters in central Almaty, Kazakhstan, January 5, 2022. During demonstrations in the largest city of Almaty, protesters say groups of armed men have reportedly joined the peaceful rallies, urging them to evacuate police stations and to storm government buildings. (Photo credit: Vladimir Tretyakov/NUR.KZ via AP file)

When Kazakhstan’s bitcoin mining operations ramped up in late 2021, even some of the country’s largest and oldest data centers found themselves in a different landscape than before.

Electricity supply became more patchy by the day as electricity rationing for crypto mining farms was rationed, with these problems getting worse when the Kazakh government shut down the internet to try to disperse riots and unrest.

On Wednesday, January 5, anger erupted on the streets of Almaty at government corruption, inequality between social classes, the doubling of LPG costs and the complex historical issues in Kazakhstan in a call for change that erupted nationwide 164 people were killed in protests.

And when the Kazakh government shut down the internet, restricting online freedom of expression, access to social media and web services in Kazakhstan, Bitcoin’s hashrate appeared to take a hit at several major mining pools as well, as the country’s miners lacked access to the network — sparked a flash cryptocurrency crash that saw the already subdued prices of Bitcoin, Ethereum, and more sink even lower.

With many other miners now looking to the US for greater geopolitical, economic and energetic stability for large mining farms, the great migration to cryptocurrency mining appears to be progressing only in states like Kentucky and Texas, thanks to their cheap energy and minimal regulation.

The Electric Reliability Council of Texas (ERCOT) projects that energy loads will increase fivefold by 2023, with the demands of crypto mining and its data centers requiring up to 5,000 megawatts of additional electricity.

Alex de Vries is the cryptocurrency researcher and data scientist behind the blog Digiconomist, which studies the impact of cryptocurrencies on energy and the environment

“Once Kazakhstan is done with this industry and their government tries to kick out bitcoin miners, they will probably go elsewhere,” says Mr. de Vries.

“But then the next country will have the same problem.”

Mr de Vries and Dr. Pete Howson, Lecturer in International Development at Northumbria University, recently examined the impact of moving cryptocurrency miners from country to country and that of mining itself on vulnerable communities in countries with poor energy infrastructure and cheap fossil fuel-powered electricity in a joint paper .

It brought Dr. Howson concludes that the energy-intensive process of mining proof-of-work cryptocurrencies like Bitcoin and Ethereum “can be viewed as parasitic in the sense that it sort of plugs into local resources.”

“It takes time and time again for the host to attempt to eliminate it through regulation, prohibition, violent insurgency, or kill the host by depriving it of too many resources it needs,” continues Dr. Howson away.

“I think there’s this idea among some crypto advocates that mining, especially Bitcoin, comes to the rescue by providing a revenue stream for so-called stranded energy resources that states can’t find a buyer for.

“But the reason crypto and bitcoin miners are moving to these places is because they have vulnerable, poor populations, rusty infrastructure and weak regulatory regimes.

“That’s why they go there — to exploit them, not help them.”

Kosovo began the new year by banning cryptocurrency mining, with police seizing hundreds of expensive graphics processing units (GPUs) and application-specific integrated circuits (ASICs) in nationwide raids, while the country’s economy minister, Artane Rizvanolli, cited the potential for power outages , while Iran introduced a second four-month suspension of crypto mining operations in the country in late 2021.

Such moves are being repeated across Central Asia and Europe — where countries like Abkhazia, Georgia and Uzbekistan have turned to crypto mining bans and suspensions to cope with increased demand for cheap electricity, while popular Scandinavian mining countries Norway and Iceland are trying to back Sweden’s push for an EU-wide ban on cryptocurrency mining.

“What is inevitable is not that mining will be banned,” says Professor Kiayias, “but the fact that bitcoin miners will look for the cheapest electricity and, unless hindered by regulations, will not stop there, any source to use every country, regardless of the environmental impact.”

A message from the editor:

Thank you for reading this article. We need your support more than ever as the change in consumer habits caused by the coronavirus impacts our advertisers.

If you haven’t already, you can support our trusted, fact-checked journalism by subscribing to a digital subscription.

A worker installs a new set of bitcoin mining machines at the Whinstone US bitcoin mining facility in Rockdale, Texas on October 9, 2021. (Credit: Mark Felix/AFP via Getty Images)dr Pete Howson, Senior Lecturer in International Development at Northumbria University, believes there is a greater need to view Bitcoin and proof-of-work cryptocurrency mining as “parasitic” given the ease of regulation in countries with vulnerable populations and ailing energy infrastructure is growing.

Continue Reading
Advertisement

Trending