Tag: blockchain

How to Bridge, Swap and Wrap Crypto on Ethereum and Polygon Networks

Overview of Bridging, Swapping, and Wrapping tokens on Ethereum Mainnet and Polygon Mainnet

After familiarizing myself with transacting in ETH using the Metamask wallet, I wanted to try a few things on Polygon.

Unfortunately, I made few mistakes and almost lost $375 worth of Ethereum.

Not a life-changing amount of money, but still would have been a bummer to lose funds.

Thankfully, I was able to locate all of the funds after doing my due diligence to understand how the Ethereum-to-Polygon network transactions work.

I’ll share what I learned – but first, the TLDR:

TLDR: Wrapping and Swapping happen between tokens on the same blockchain network. Bridging means you are switching your funds from one blockchain to another.

etherescan transactions
my transactions in question, via etherscan

Swapping ETH to MATIC

When you want to transfer ETH into other tokens, you use a process called “swapping”. During Swapping, your funds stay on Ethereum Mainnet but they are transferred to a different token.

Uniswap is a popular tool that allows you to transfer ETH to another token on the Ethereum Mainnet Network.

When you want to swap a token from ETH to something like Polygon / Matic, you’re going to end up with the MATIC token on the Ethereum Mainnet network after paying your gas fees.

Initially, however, the token might not show up in your wallet (this is what happened to me). I thought I lost my tokens because I simply didn’t see them there, and mistakenly thought my funds were lost completely.

In order to fix this, you have to click “Import Tokens” in your wallet. Search for MATIC, and select the one that says “Matic Network Token (MATIC)”.

import tokens on matic

You should then see the value of the Matic that you swapped displaying in your wallet.

Wrapping ETH to WETH:

OpenSea gives users the two options:

  1. Bridge Ethereum to Polygon
  2. Wrap Ethereum to WETH
ethereum and polygon options to bridge or wrap on opensea

Bridging processes are fundamentally different – more on that in the next section.

Wrapping means you are converting ETH to WETH on the Ethereum Mainnet network. You are not switching blockchains.

When you select “Wrap” and input the amounts, you will end up with WETH on Ethereum Mainnet. It should auto-display in your wallet without you having to do anything. Pretty easy.

Bridging ETH to Polygon

Bridging ETH to Polygon means you are moving funds from one blockchain network to another (off of Ethereum Mainnet and onto Polygon Mainnet).

This is fundamentally different than Wrapping and Swapping because you are literally changing blockchains.

When you bridge, you also end up swapping or wrapping tokens on the back end. ETH does not exist on the Polygon Mainnet blockchain – only WETH (wrapped Ethereum).

What does exist on Polygon Mainnet is WETH. When you select “Bridge to Polygon”, you end up with WETH bridged to Polygon Mainnet.

When you Bridge, because your funds are moved off of the Ethereum Mainnet blockchain, they might not show up in your wallet.

This is where I mistakenly thought I lost my funds the second time!

To fix this, you need to add the Polygon Mainnet network to your wallet.

Using a tool like Chainlist makes it easier. Go to the website, connect wallet, search for Polygon Mainnet, and click “Add To Metamask”.

Once its added, switching between Ethereum Mainnet and Polygon Mainnet is possible.

ethereum mainnet and polygon mainnet

When you click Polygon Mainnet, you should see your bridged funds displaying in WETH – in my case 0.055 worth, below.

Once you bridge to another blockchain, you can swap and wrap different tokens on Polygon Mainnet just like you can on Ethereum Mainnet. Uniswap enables this on the Polygon blockchain too.

On OpenSea, you can transact with WETH on Polygon, but not with MATIC.

Just don’t forget to check your wallet and make sure you’re on the right network!

matic and weth balance on polygon mainnet
Notice that the balance of MATIC on Polygon is 0 – its all in WETH.

What do to if WETH is not showing up on your wallet:

If you switch the the Polygon Network after depositing WETH into your Polygon wallet, sometimes the tokens are hidden, and won’t initially show up.

This can also happen if you disconnect your Metamask wallet from your browser and then re-connect.

But Don’t worry! Your funds are still there, they’re just hidden.

To fix this, simply click Assets, then click “Import Token”, and paste the WETH token address into the “Token Contract Address”.

import WETH token on Polygon Mainnet

Don’t forget to double check and verify that you are using the correct token contract address. Refer to Polygonscan if in doubt, or the official Polygon Docs. We’re going to be using WETH-POS.

When you paste the Token Contract Address in, it should auto-populate the Token Symbol (WETH) as well as Token Decimal, 18.

Click Add Custom Token, and it should work!

Moment of Zen:

Crypto is risky. Blockchain is the wild wild west of the internet – there’s not really anywhere to go for help if you make a mistake.

The beauty of owning your private keys means that you have control over your funds.

The downside is that if you end up losing those funds, there’s really no one to blame but yourself. If I lost my funds, it would have been my own fault, and there’s not a bank to help recover anything.

In hind-sight, the funds were never really at risk of being gone forever, I simply didn’t know how bridging and swapping worked.

I should have educated myself because a lot of blockchain processes are counter-intuitive.

Crypto finance is different than the traditional banking that we’re all used to.

There are prerequisites and important steps to be taken to ensure the protocols line up and that the transactions go through smoothly.

Lesson learned: next time I try something new or experimental in crypto, I’m going to watch a few videos, read the documentation, and educate myself BEFOREHAND.

Making mistakes is part of the crypto learning experience. Fuidance of friends from time to time has certainly helped, but there will always be some trial and error while experimenting in the world of crypto.

Should You Hold More NFTs or Crypto Long Term? Which is more likely to go up?

not investment advice, do your own research, etc.

While it’s difficult not to roll your eyes the idea of a million $$$ dollar jpeg, there is a special shift happening that will fundamentally change the way that humans behave on the internet.

Crypto vs. NFTs as investments – some context:

At their best, cryptocurrencies like Ethereum have gained notoriety and traction as development platforms for blockchain applications (aka dapps).

At their worst, the ICO mania has seen many cryptos pump to extremely high valuations, to later crash back to pennies after early investors dump their holdings (aka pump and dump schemes).

NFTs, on the other hand, haven’t been around as long as Bitcoin or Ethereum. Even an NFT from as recent as 2018 is considered historical and hence more OG by groups of self-proclaimed “NFT Archaeologists”. Still, we haven’t yet seen a true bear market in the space just yet, and only time will tell if these hypothesis will remain plausible.

Regardless, the steady value accretion among communities like CryptoPunks and the Bored Ape Yacht Club provides evidence that NFTs are in fact more than just overpriced .pngs.

Wherever a person chooses to invest, one thing is for sure: NFTs and crypto are risky, and you can lose the money you put in.

Whether you should allocate more of your investments towards crypto or NFTs is dependent upon your own situation and investment goals.

That being said: NFTs and crypto have both had huge price swings in recent months. So, which might be a better investment – crypto or NFTs?

Why might a cryptocurrency like Ethereum be a better long term investment than an NFT?

As cool as NFTs are, there is a high chance they will not outperform a cryptocurrency such as ETH.

Most NFTs are built and hosted on top of the cryptocurrency protocols within the Ethereum ecosystem. Although there are NFTs built on other chains like Solana or Tezos, the largest market share by far sits on Ethereum.

Because that Ethereum powers the majority of the NFT market as a development platform and smart contract programming language (Solidity), owning ETH could feel safer than owning any one individual NFT.

After all, platforms tend to be accrue more value than the sum of all the individual items they support.

Developers are actually building new products and applications on top of the Ethereum Virtual Machine, which inherit the security and decentralization protocols of Ethereum itself.

Another property that makes Ethereum unique is that the asset is burned during each transaction, via gas fees. This reduces supply making ETH progressively more scarce as a result. This decrease in supply is one of the key tenets surrounding the ultrasound money movement.

Ethereum also has a strong development community.

The most significant upcoming item on the dev roadmap is the Merge, in which the Ethereum consensus mechanism will transition from proof-of-work to proof-of-stake. This means that new blocks are validated by nodes that have staked their ETH, instead of by doing energy-intensive computations.

Once Ethereum transitions to proof of stake, owners will be able to earn interest on their staked ETH, which could further drive the charts up and to the right.

The downside of purchasing NFTs

Given the large amount of questionable NFT projects he risk / reward ratio may not be there for NFTs. Extremely high fees mean your ETH stack is dwindling every time you make a purchase.

NFT markets are unpredictable, yet there are few sound and known fundamentals that back them up as an investment. They’re largely focused around hype, which whales are involved etc.

There is a lot that goes into deciding how to invest and which project to put your eggs into, finding high-ROI investments is an art as well as a science.

An investment portfolio is like a bar of soap. The more you handle it, the smaller it gets.

Does it make sense to own NFTs as a part of your crypto portfolio?

In my view, NFTs should not be held as investments, but for FUN and for the community.

Although NFT value increases can be quite unpredictable, a strong community is a good sign.

If you choose to hold an NFT, take your time, do your research, and find an NFT project with real world utility.

NFTs give you the opportunity to become part of a group that is focused around any specific thing.

One sign of legitimate community within an NFT project is the willingness for the founder as well as active holders to be doxxed and in the public eye, as well as seeking to build community for the long haul.

One thing that I always look for is whether or not there are in-person events or meetups happening within the community and among members from different regions around the globe.

Do the NFT holders know each other in real life?

That being said, being a member of an NFT community can be valuable because it is just fun.

Its like joining a fraternity or sorority in college, playing competitive club soccer, or joining the varsity wrestling team.

NFTs create groups of like minded individuals with stake in the focus area.

Diminishing returns: Once you purchase a few NFTs and join a few different communities, any future NFT purchases may only slightly (if at all) increase the amount of value you get from being part of the community.

Because of this, owning more than 1 NFT isn’t necessarily valuable unless you plan to flip it for profit.

Spreading yourself too thin: Being in a community means investing time and energy hanging out in discords, going on trips / attending events, and building relationships in that community.

A single person can only spend so much time. I feel that it is more impactful to be a dedicated member of a small number of communities rather than loosely tied to many different ones.

Sure, the NFT markets are fun to watch. Perhaps they’re worth keeping an eye on in case something truly special comes around that you’re dying to be a part of.

When I get the drive and conviction to own a specific NFT, I do so while making sure to maintain as much ETH ownership as possible.

Number going up is simply a by-product of being part of the group.

Looking ahead

Most of us aren’t building the future of the internet – that’s the job of software engineers and designers. But we are the ones that will be more affected by crypto and NFTs potential use cases – we are the ones who will actually use it.

From the content we consume, to how we communicate… from how we spend money, to the career paths we choose… if blockchain technology and its applications continue to advance, the world and our relationship with the internet will be extremely different in the years to come.

Regardless if you’re allocating more capital towards NFTs, crypto, or neither, when we take a step back and look at the larger impact of this technology on our society, we should feel lucky to be around during such an exciting time.

8 Reasons Your NFT Project Should Host Meetups In Real Life — this is how the Bored Apes did it.

NFT communities benefit from in person events

November, 2021- in the center of Manhattan, NYC – a huge NFT conference changed the crypto and NFT industry forever.

NFT.NYC is a yearly an in-person NFT conference.

It’s a big deal for a number of reasons, but in many ways, NFT.NYC 2021 was a catalyst that brought blockchain, crypto, and NFTs to a much larger percentage of the population.

The Crypto Punks, Bored Ape Yacht Club, and other NFT projects were brought into the spotlight and became known to the mainstream individuals.

Many people were motivated to invest in crypto, setup their first non-custodial crypto wallet, and mint or purchase NFTs because of all the action and excitement surrounding the conference.

bored ape party during NFT.NYC
BAYC party at NFT NYC source: twitter

The BAYC community stood out during NFT.NYC and has since grown exponentially.

We believe that the key reason for BAYC’s exponential growth and success was that the team hosted multiple parties, meetups, and events throughout the week of November 2-4, 2021.

In the months that have passed since the conference, the Bored Ape Yacht Club has gone nowhere but up and to the right, creating immense value for its NFT owners and community overall.

Since the conference, Bored Ape Yacht Club community and organization Yuga Labs have been hard at work.

A few of the big news headlines recently includes the recent launch of the $APE token airdrop, as well as Yuga Labs acquiring the Crypto Punks and Meebits from Larva Labs.

Did in-person meetups influence the Bored Ape Yacht Club’s immense success?

As of today, the Bored Ape Yacht Club is the number 1 NFT project.

While there were likely a few contributing factors, we cannot overstate the significance of in person meetups which catalyzed this growth.

We believe that in-person connections and networking among the BAYC community during and after the conference was a key reason that the sales prices have more than doubled recently.

In addition, there have been standout sales of millions of dollars for specific BAYC numbers.

bored ape NFT sales data april 2021 to january 2022
Figure 2: NFT.NYC was the catalyst in early November that resulted in a gradual increase in the value of Bored Ape Yacht Club NFTs. Source: OpenSea sales data.

The Bored Ape Yacht Club community is now a global network.

With 10,000 NFTs in the collection, the members of Bored Ape Yacht Club have the opportunity to meet up with local owners in their geographic location.

There have been in-person Meetups in Los Angeles, Atlanta, Amsterdam, and elsewhere.

Why do people join NFT communities?

Owning an NFT is not only a financial investment. Yes, you typically mint or purchase an NFT, and spend money in order to own it, yet owning an NFT is so much more.

Purchasing an NFT means you are joining a community of real people, a group of people larger than yourself.

When humans form groups, they create something that is greater than the sum of its parts. Group, tribe, club, and team formation is a key fundamental behind all human behavior.

BAYC party at NFT.NYC
Figure 3: Notice the Bored Ape posters displayed on the wall. source: https://www.inputmag.com/culture/bored-ape-yacht-club-nft-nyc-ape-fest

Being a member of a community is an investment of our time, effort, and energy.

Buying into a credible NFT project means you are deciding to become an active contributor to the community in some way.

When an NFT community has members / owners that are dedicated and genuinely want to build the community and contribute positive things, the community becomes more fun, better networked, and more inviting to new members.

Why should NFT communities connect in real life?

People crave genuine connection and interaction.

Having a big event on the a community schedule, even if it is just a few times a year, brings people together, gives them a reason to stay in touch, and creates purposeful interaction and networks.

We believe that the NFT communities which host in-person events create exponential increases in community value.

It helps on-ramp new users into the blockchain technology space, providing newbies a safe place to learn about crypto, NFTs, DeFi, wallets, and more.

Experienced members of the community can share wisdom and insights with those that are new to the arena.

And having that in-person connection helps people feel closer to those in the NFT community. Once you meet up with someone from your network in real life, that person becomes a friend, a part of your social circle, and you think about the entire project in a new, more realistic energetic light.

In-person NFT events help eliminate flippers and short-term holders from the community.

Internet hype from influencers with large following will pump up NFTs and get more people to buy them, but this type of increase only has short-term impacts.

Instead of making the community stronger, this type of hype only invites flippers and profit seekers into the Discords and Twitter spaces.

These short-term thinkers might even negatively impact the experiences of long-term dedicated community members.

I am all about long-term thinking.

Network value cannot simply be one-to-many, where a single influencer with millions of followers encourages many people to buy into a project.

Hype pumping does not benefit the community long-term, it benefits flippers.

What will sustain long term is when all members of the community can seamlessly access, and easily connect with all of the other members. Whether this is thru communication channels, Twitter DMs, Discord servers, or meeting up locally for coffee, beer, dinner parties, or business opportunities.

Which type of NFT community do you want to be a part of? What type of network sounds like the most fun and intriguing?

17 Free Tools to Analyze NFTs and Crypto Before Ape-ing in

This is never investment advice. Let me know what I missed, and what tools you enjoy using.

Etherscan https://etherscan.io/

Gas Tracker https://etherscan.io/gastracker

Gas Cost Estimator https://etherchain.org/tools/gasnow

Etherchain https://etherchain.org/

Icy tools https://icy.tools/

OpenSea https://opensea.io/

LooksRare https://looksrare.org/ – for when OpenSea servers are overwhelmed.

Token Trove: https://tokentrove.com/ another NFT marketplace

Rarible https://rarible.com/

NFT Stats https://www.nft-stats.com/

NFT Scoring https://nftscoring.com/trending Y-Combinator startup

Rarity Tools https://rarity.tools/

Proof of Attendance Protocol (POAP) https://poap.xyz/

Super Rare https://superrare.com/ – NFT marketplace focused on authentic art

Nifty Hype https://www.niftyhype.com/ – news and insights for NFT industry

Dapp Radar: https://dappradar.com/ – dapp rankings among various ecosystems on different chains.

Getting Started

Coinbase https://www.coinbase.com/

Metamask https://metamask.io/

General stuff

Coinmarketcap https://coinmarketcap.com/

Twitter / Spaces https://twitter.com/home

Discord https://discord.com/

PSA – grading services for trading cards IRL https://www.psacard.com/

Go bankless and get a self-custodial crypto wallet:

Why Ethereum matters

Most people don’t understand blockchain, let alone Ethereum.

What is Blockchain?

Blockchain is basically a database that everyone shares.

Anyone can write to the database.

Blockchain enables users to attain self sovereignty over their money and wealth. To do so, all you need is a non-custodial crypto wallet.

What is Ethereum?

Ethereum is a decentralized world computer.

Ethereum possesses all the key tenets of decentralization, security, and cryptography, which are fundamental to blockchain.

Beyond that, Ethereum is fully programmable, where any application can be built.

The investment case for Ethereum (and hence ETH) is that it will become the most liquid token in a digital economy built atop of a Turing-complete decentralized computer that can execute smart contracts.

How do most people view Ethereum, and what are they missing?

Ethereum means many things to different people.

To some, it is a cryptocurrency… a token and you can buy and sell and speculate on, just like any stock or asset.

To other people, Ethereum is the entry point into the world of DeFi, and the slightly shady world of lending, borrowing and yield farming.

Some people use Ethereum buy into web3 projects like NFT’s or other crypto tokens.

To others, Ethereum is like a cousin of Bitcoin with high-transaction fees.

All of these various “identities” that Ethereum might take on express the magic of the Ethereum Virtual Machine.

When you combine all these applications of Ethereum, you start to see the big picture:

Ethereum is more than a cryptocurrency – it is programmable money.

Of course, the first use case of blockchain was the Bitcoin cryptocurrency, and it is extremely valuable because it solves the double spend problem.

But the principles of blockchain that enable currency can be applied in many other unique and creative ways. This is what Ethereum focuses on.

Solving the double spend problem is just the first of many.

However, in order to apply blockchain tech to problems in the world and on the internet, we needed a way to build apps and systems that has blockchain technology built in.

We needed a blockchain software development platform.

This is why Ethereum was invented.

Ethereum is a Platform Where Any Application Can Be Built

Ethereum is first and foremost a computer built on the technical fundamentals of blockchain.

Remember computers in the 90s and 2000s and even the ones we have now aka smartphones?

Well, the Ethereum computer is like that but its built on a new architecture using blockchain.

The technical fundamentals of Ethereum are sound. Its a distributed computer, meaning it runs on a network of linked nodes instead of a single motherboard and processor.

And blockchains fundamentals of decentralization, cryptography, and security have been built in… so its different from other computers because of this.

Given that Ethereum is a computer, this means that Ethereum can serve as a platform that allows applications to flourish. Ethereum it provides the tools for this.

Solidity is the Programming Language for Ethereum

By tools, I’m talking programming languages, developer documentation, Github repositories, communities, etc.

Ethereum actually has a programming language called “Solidity” that allows any developers to write code and build an application using the Ethereum blockchain as a platform.

Doing so allows developers to build the front-end that users interact with, while maintaining the solid technical fundamentals like decentralization that Ethereum promises.

Since 2017 when I first learned about Ethereum, this is by and large the biggest reason that I believe in its future.

I wanted to invest in a technically sound project that was seeking to re-engineer the internet and the way computing can be architected.

A technically sound blockchain platform would ensure that software engineers and developers would be driven to use it.

And in technology, if developers use it, then the business people will follow.

The platforms that allow applications to be built will be the biggest winners.

This is true for any industry. For this reason, I am bullish on Ethereum.

Ethereum scalability vs. decentralization and the future of ETH.

Its difficult to have both scalability and decentralization on a blockchain.

If the blockchain community cares about maintaining decentralization, we must prioritize decentralization over scalability.

Ethereum and Decentralization

Yes, decentralization matters. What makes ethereum decentralized?

As Polynya describes on the linked Medium article, in order to ensure decentralization, it is important for a significant number of average users to be able to run a validator node.

A validator node is a someone with a computer within a peer-to-peer network that ensures consensus and validates transactions on the blockchain network. This prevents falsification and fraudulent activity, ensuring the blockchain remains trustworthy and tamper-proof.

To increase decentralization, blockchains must not create barriers or restrict / limit anyone’s ability to serve the community as a validator node.

Blockchains also need a way to incentivize users to become validator nodes. Today, ethereum does this by something called “proof of stake”, where validator nodes earn interest for their work.

Today, ethereum does a pretty good job of this by keeping block size low, meaning less computing power is needed to validate each block.

And while validator nodes on ethereum technically require 32 ETH, users can join a staking pool to participate with a small group.

How is a decentralized community of validator nodes structured?

To ensure that ethereum continues to have as many validator nodes as possible, it needs to be easy for people to serve as nodes.

Users with consumer laptops/hardware and novice technical acumen should be able to participate in the community as a validator.

Compare the two possible blockchain architectures below and how they might affect the average person’s ability to serve as a node:

  • Scenario A: Low computing power is required for validation. Someone with a regular laptop (the kind you can buy from best buy or costco or apple) is able to run a node on the network and act as a validator.
  • Scenario B: High computing power is required for validation. A network full of a high-performance servers, or million-dollar supercomputers acting as nodes.

The model described above in Scenario A is decentralized because there can be a LOT of validators and nodes ensuring that no bad actors try to take over.

In Scenario A, while maintaining decentralization, the tradeoff with having a culture of small validator nodes means the blockchain is unfortunately inefficient and less scalable than a centralized system can be.

Scenario B is way more centralized because there are fewer people that will be able to serve as a node on the network.

The small number of nodes in Scenario B could in theory work together to take advantage of some portion of users at any given time.

Although Scenario B will be highly scalable, lower cost, and will enable the network to run faster, having such a structure defeats the purpose because the whole reason blockchains are valuable in the first place is to enable decentralization.

Scenario B could be less-favorable for end users because you cannot trust the few large-scale validator nodes from acting out of self interest.

Maximizing Decentralization

To maximize decentralization, as many people as possible should be able to serve as a validator node on the network.

With present technology, true decentralized systems are great for establishing trust and avoiding but not so great for scalability.

The good news is that Ethereum will release data sharding which will increase scalability, but the risk is that, by Polynya’s estimates, it may take until 2023.

This is the world we’re living in today with Ethereum.

As Polynya describes below, based on the current state of the internet, I’m not so sure whether or not users truly do care about decentralization.

“there’s plenty of evidence from the web2 world, where the most adopted services are the ones that are most convenient, despite their overwhelming problems with privacy.” Polynya on Medium

Polynya on Medium

Perhaps some people simply want to use the most convenient blockchain with the lowest fees.

However, this partially misses the point.

In traditional models, as in Apple’s app-store, users experience fees on the backend, where the centralized entity takes a percentage cut of all app-generated revenue.

This idea came from BelugaWilliams’ tweet below.

The advantage of decentralized cryptocurrencies, albeit stressed with high-gas fees, is that creators and developers can maintain ownership of whatever they create.

What does this mean for ethereum?

Given that some users inarguably do prefer networks with lower fees, one possible outcome is that ethereum is overtaken by another, more centralized blockchain.

Although this may feel unlikely, it would be naive to ignore it as a hypothetical future scenario.

Today, ethereum does feels like the dominant chain.

More projects are built on top of ethereum than anything else.

Ethereum has created a rapidly growing application ecosystem.

From NFTs to layer 2 blockchains to lending and borrowing apps, as of right now Ethereum has more developer usage and user adoption than any other blockchain.

  • NFT’s, for example, while largely containing hype infused projects, also contain projects building a genuine community for their members. Surf Punks NFT, for example, is a community centered around surfing, and is even throwing a few wave pool surfing events.
  • Decentralized apps like Sorare enable enable fantasy futbol, powered by ethereum. What’s amazing is that all fees, transactions, and blockchain jargon is abstracted behind the scenes, so that all people experience is a user friendly fantasy sports game with their friends.

Conclusion

Ethereum’s current state is not without risks. The fact that sharding will take until 2023 to implement means that scalability will continue to be a challenge, although layer 2 chains may help segway some of the demand off-chain.

Given Ethereum’s strength, an unknown and unforeseen up-and-coming chain is unlikely to takeover without anyone realizing.

Sure, it is technically possible, but probably unlikely as the network effects of ethereum are growing rapidly.

However, while the new dapp ecosystem is focused on Ethereum, perhaps someone in the world is working to build a true Ethereum killer that will arise from out of nowhere and take us all by surprise.

No one knows for sure.

Sources:

https://polynya.medium.com/is-ethereum-too-decentralized-68a929f255c1

Kickstarter’s move into crypto

Crowdfunding platform Kickstarter announced their plans to build a new decentralized crowdfunding platform that utilizes cryptocurrency and blockchain.

As the cryptocurrency market cap has been trending upwards for months, blockchain’s current popularity means that Kickstarter will undoubtedly benefit from the hype associated with riding the crypto wave.

Kickstarter has been around since 2009. As a company looking to innovate, its not surprising that they’ve chosen to build upon blockchain and crypto.

It is surprising to hear that the new platform will enable Kickstarter to function as an independent organization.

Significance of building a protocol

Kickstarter is not simple re-building their company on top of blockchain technology. The company is building a protocol, on which many future projects and companies may be hosted. This company is 100% distinct and separate from Kickstarter; however, given the affiliation between Kickstarter and their new protocol, Kickstarter will be the FIRST project built on top of the new protocol.

The exciting thing is that once completed, other companies may leverage the same protocol to enable crowdfunding.

Over the history of the internet, many researchers that have innovated and created some of the net’s most impactful protocols have received little if any financial gain from their work (HTTP or TCP/IP, for example).

The problem with this lack of incentive is that it discourages researchers from innovating on existing web protocols and making the internet better. With blockchain, this incentive structure changes.

Tokenization of protocols enables these researchers and creators to maintain direct financial ownership, incentivizing them to continue building and improving upon them.

Kickstarter selects Celo Blockchain

Kickstarter reportedly selected Celo blockchain because it is “carbon neutral”, and more environmentally friendly.

Celo enables the creation of decentralized applications, or dapps.

Celo blockchain is built on top of the ERC-20 technical standard, and leverages the Solidity programming language. This means that Celo runs on Ethereum.

Our take on Celo: With Ethereum’s strength in security and decentralization, Celo effectively borrows these components from Ethereum, while building on top of it and optimizing for scalability and carbon neutrality.

How is Celo a carbon neutral blockchain?

The criticism of some blockchains like bitcoin and ethereum include the fact that the servers that verify the transactions use a lot of energy, which is supplied by coal-burning power plants via the traditional power grid.

This is no different than the electricity used in homes across the United States, or the servers at an Oracle data center. As a society, we still largely use non-green sources of energy.

Its always exciting to see companies that dedicate themselves to building while ensuring environmental sustainability.

I’m not 100% sure how Celo ensures their energy is green, but a few possible ways might be to ensure the energy is produced by solar, wind, hydro, or nuclear. Other possible ways include purchasing carbon credits, or planting trees.

Backlash from users

Somewhat surprisingly, the responses on Twitter from users and self-reported “backers” have not been positive.

With over 1000 replies on Twitter, many user comments on their post are concerned that the majority of value associated with a crypto-based crowdfunding platform will go to investors, rather than creators.

It will be important for Kickstarter to demonstrate their commitment to ensuring the actual creators are able to capture significant value, not just crypto investors.

What’s next for Celo and Kickstarter?

Kickstarter plans to launch a whitepaper in the coming weeks to describe the technology and plans for the decentralized protocol that they will build.

In the meantime, we’re keeping up with the latest on Celo as a member of the Celo community Discord.

Thanks for reading. Reach out to us on twitter and let us know your thoughts.

How Crypto Follows the Hype Cycle

Between 2013 and 2021, Cryptocurrency has followed the Hype Cycle exactly as expected. Let me explain.

What is the Hype Cycle?

The Hype Cycle, coined by Gartner, is a law that describes how humans accept new and emerging technologies and adopt them into our everyday lives

Its a generalized way of estimating and predicting the rise and fall of a new technology and the way people react to it.

Figure 1: Phases of the Hype Cycle Curve. Source: Wikipedia; Olga Tarkovskiy – Own work

The curve above is a graph of TIME on the x-axis, and EXPECTATIONS on the y-axis.

In cryptocurrency, expectations is quantified by looking at the price or market cap of cryptocurrencies. For years, the price of cryptocurrency was not interesting. Price was flat.

Hype Cycle Phase: Technology Trigger Pre-R&D

Crypto wasn’t being discussed all over Twitter. It was a nerdy, boring conversation.

Cryptocurrencies like bitcoin were only being used by a few small groups of people, and was nowhere near mainstream discussion or adoption.

Just look at the market cap of Bitcoin between 2013 and 2017 below. Relative to where it is now, this is extremely insignificant

Figure 2: The market cap of bitcoin between 2013 and 2017. Source: CoinMarketCap

Bitcoin’s price and adoption wasn’t even relevant at this point. Compared to the Hype Cycle phases in Figure 1, cryptocurrency wouldn’t have even been on the charts.

But while the public vernacular and mainstream media ignored cryptocurrency, engineers and enthusiasts were quietly building. On the Figure 1 Hype Curve, at this point crypto is leading up to the R&D phase; it still early.

This is why venture capitalists like Marc Andreessen are famously interested in “what the nerds do at night“. By recognizing emerging tech trends before everyone else, you have the opportunity to invest in them at a favorable discount… when the technology principles have been proven, but the applications have not quite been built, they are not user friendly yet, and the mass majority of people aren’t even aware of the technology.

Vitalik Buterin was funded by Peter Thiel in 2015 to found Ethereum. As the potential applications of Ethereum started coming into light, a buzz started happening within tech circles.

Hype Cycle Phase: Early Adopters Investigate

People started to understand the power of this thing called blockchain, and could envision the possible smart contracts and more.

While Bitcoin was built to serve as digital gold, Ethereum was built as a platform from which blockchain applications would grow.

Coinbase.com became the de-facto place to purchase Bitcoin and Ethereum. It was easy to use and wasn’t that different from purchasing stocks at a place like Fidelity or Charles Schwab.

Working a desk job at a cubicle during this time, it felt like colleagues in the office were all starting to think about crypto and were considering buying it on Coinbase.

A few viral memes and Twitter conversations happened and before you know it, the prices of Bitcoin and Ethereum, the two big flagship cryptocurrencies, were pushing all time highs almost every day.

I hate to include a disclaimer here, but as you can tell, I’m going to be generalizing a lot in this post about the crypto community. I mean no disrespect. I love blockchain technology and the projects it has enabled… I want nothing more than what’s best for crypto as a whole. As an owner of bitcoin, ethereum, and other coins, I’ve seen the emotions of early adopters around me have experienced when the prices rise extremely fast (and inevitably fall just as quickly).

Hype Cycle Phase: Inflated Expectations

Towards the end of 2016 and into 2017, everyone started buying crypto. If you took a 10 minute uber ride across town, you would almost undoubtedly hear your driver mention something about the price of bitcoin.

Crypto millionaires were created. A friend of mine even managed to pay off his student loans from selling his stake in Ethereum, which he had acquired just months earlier.

At some point, it felt like people didn’t necessarily care about the applications of blockchain technology. Your average person was interested in trading, buying and selling, getting rich quick and only focused on the price rather than the underlying technology.

At the peak of inflated expectations, a few things can happen:

Engineering and developer teams tend to over-build. More crypto’s launched between the end of 2016 and early 2017 than anyone could keep track of. But the projects being built were not being used by anyone. The projects had no customers…

What the projects DID have, however, were investors. There was an abundance of over-eager individuals looking to throw $100 bucks into any coin with a slim chance of making it in hopes of returning 1000X on their investment.

The problem with this is that there are more people in the crypto community who are focused on making money from the technology than there are users and customers who are actually using the technology for the value it brings into their lives.

This fixation on price is a problem with the crypto community and it still exists to a large extent today.

Hype Cycle Phase: Trough of Disillusionment

As more cryptos were launched than there were users or customers, the over-inflated expectations started to become apparent.

The thing is, no one knows just how HIGH the peak of inflated expectations might go.

Peak of Inflated Expectations leads into the Trough of Disillusionment. Source: CoinMarketCap

In order to capitalize on investments in crypto, the smart ones on Twitter and Reddit communities preached the importance of holding onto the investments, not selling, and riding out the wave.

The thing is, this is a tricky thing to do. It is easy to decide to sell at the top, and even easier to decide to call it quits as an investment tanks and you lost 80-90% of your the value of your portfolio.

In some cases, those that sell at the top end up exiting while they’re ahead. In other cases, people with intentions to sell at the top end up waiting too long, and end up making an emotionally drastic decision to exit their crypto position at the worst possible time, during the trough of disillusionment.

Because the trough can last for years. In the case of Bitcoin and Ethereum, it lasted from the beginning of 2018 through late 2020.

The thing about cryptocurrency and blockchain technology (at least so far) is that the rise and fall of price of different cryptocurrencies are heavily correlated with each other.

As bitcoin rises, ethereum usually is rising also. As bitcoin enters the trough of disillusionment, ethereum was too. The same can be said for the other crypto’s that made it through the trough.

Bitcoin didn’t really start to enter the next phase until the coronavirus pandemic was in full swing mid to late 2020.

Hype Cycle Phase: Enlightenment to Productivity

Between late 2020 and today, the market cap of all cryptocurrencies has continued to push all time highs.

As of 2021, bitcoin has pushed all time highs. Source: CoinMarketCap

The reason for this may partly have been accelerated by the pandemic, but there’s more to it than that.

Within the crypto community, there is a large amount of funds going into projects that are receiving mainstream adoption.

NFTs (non-fungible tokens) are one example of an application that is seeing close to mass adoption.

Although it is still a fringe hobby, NFT collectibles have some resemblance to the enthusiasm around collectible sports cards and even Pokemon cards.

People are creating NFT masterpieces using artificial intelligence and listing them for sale as unique, one-of-a-kind tokens on websites like OpenSea.

For a fraction of an Ethereum, anyone can go on OpenSea and start collecting their own NFTs.

This is just one example. There are a number of other projects being built on top of Ethereum and discussed but we for many of these applications, it seems we still have a long way to go before mainstream adoption.

So as we’re pushing all time highs in almost every cryptocurrency, my question for the world is: are we entering another peak of inflated expectations? Or is this time for real? Are we truly in the Plateau of Productivity?

And this brings up a few follow up ideas and questions about the future… because at the end of the day, we can’t truly predict the future, we can only form hypothesis based on historic trends, proven laws, and observable principles.

Final Thoughts and Additional Questions

Could a technology go through the various phases of the Hype Cycle more than once?

Will cryptocurrency enter another trough of disillusionment?

How might other technologies follow the hype cycle?

Are there examples of technologies that do NOT follow the hype cycle?

As a technology follows the hype cycle, will the peak of inflated expectations ever over-extend the value of the technology as it reached the Plateau of Productivity?

Get the Future of Technology letter each month. Sign up below.

Processing…
Success! You're on the list.

Buying and Selling NFT Artwork made by Artificial Intelligence

One of the most popular NFT categories in 2022 is artificial intelligence generated artwork.

For a small amount of of an Ethereum, you can purchase artwork that was created by combining two of the most exciting emerging technologies, both blockchain and artificial intelligence.

In order to buy and sell these unique AI-generated NFT pieces, you’ll first need to setup a crypto wallet and link it to the OpenSea website.

Among the NFT projects I’ve browsed through, AI-generated Project Argo is one collection that stood out.

ai generated nft artwork
by Project Argo – titled Fading

What’s interesting about Project Argo is that the artist has been able to use AI to develop artwork that seems to embody characters or entities within each piece.

As seen in Fading above, the NFT appears (to me at least) to feature a face.

Artworks become much more interesting when they appear to feature individual characters and facial expressions.

All types of art – whether painting or literature or music – seems to have a positive or negative connotation.

Some artists create more uplifting artwork (Norman Rockwell or Michelangelo’s Sistine Chapel) while others create artwork that is mischievous or scandalous work, and other artists create powerfully dark and emotional works.

What emotional sentiment do AI-generated NFTs evoke?

Looking through the list of images made by AI, I can’t help but wonder about the baseline emotion evoked by artificial intelligence.

What connotation and sentiment does the neural network create when generating these graphics?

As the lay observer, every photo seems to evoke the same balance of emotion, somewhere between darkness and excitement.

If we had a way to measure emotional sentiment, where might each image fit on a scale that measure how optimistic or pessimistic each image looks?

To me, it feels as though each image is quite close to neutral.

Can art created by artificial intelligence create emotions?

The surprising thing is that, looking through all of these photos on Project Argo, I get the sense that each piece of artwork is depicting entities that are saying and feeling very similar representative emotions.

And yet its difficult to put it into words.

Its like trying to explain what is experienced under the influence of psychedelics – often impossible to do so in worldly terms.

The resemblance to faces in the photos are approximately accurate. Although there is no true face, the outline of eyes, nose, mouth, etc. evoke a baseline facial expression that a person might have when their face is at rest.

ai generated nft artwork via opensea
Zen by Project Argo

The entities depicted in these photos all have the same, neutral facial expression. Not a single smile, eyebrow raise, or wink. They all have the same, neutral look – one that you cannot quite figure out.

Yet the images don’t feel expressionless or emotionless.

They feel as if they are showing life at work. Life doing what life does – here to experience our world for the sake of its own existence.

Except that these entities are in a different place. They don’t exist in our world, but in an unknown realm – completely generated by AI.

What can humans learn from artificial intelligence by viewing its NFT artwork?

Each piece has a that resembles some sort of techno-futuristic Armageddon. “The last island party” and “robot revolution” for example.

Of the list, Dreamy City and Penguin one stood out. They’re all worth a look.

  • When artificial intelligence designs an image for humans to look at, what is it trying to say to us?
  • As artificial intelligence looks back at us in society, could the message be “you can do better”?

Perhaps we can gather a sense for what AI feels, by looking at the artwork it creates, and by interpreting the types of creations that arise.

How to buy AI-Generated NFT Artwork:

In order to get involved and actually own a few NFTs, you’re going to need a crypto wallet.

In the mean-time, get your crypto wallet setup and learn as much about blockchain as possible. Check out this Blockchain Simplified Explainer.

SHIB Crypto Community Supports Dog Rescue and Artwork

There are enough projects out there that are actually doing nothing. Admittedly a meme coin, SHIB is building a strong community:

It goes without saying, THIS IS NOT INVESTING ADVICE. Do your own research. We all know that crypto tends to follow the Hype Cycle pretty accurately, so ups and downs are to be expected.

SHIB token mascot
source: happy doggo

Since the SHIB token community is actually helping raise money for Shiba Inu dogs to get rescued and adopted, it separates itself from 99% of the other coins out there.

The SHIB token and community actively promotes the Shiba Inu Rescue Association.

The Shiba Inu Rescue Association is a 501(c)3 non-profit organization. The SHIB crypto community does the service of encouraging members to leverage Amazon Smile, which can donate a portion of your Amazon purchases to the nonprofit.

As fellow dog lovers, when we heard that SHIB crypto community is helping Shiba Inu’s get rescued and adopted, we wanted to be involved. So, yes – we purchased some SHIB token with no intentions of selling for the foreseeable future 🙂

Is the coin garbage? Quite possibly. If by owning SHIB coin, more cute little Shiba Inu puppies are able to find homes, will you regret your ownership regardless of how the price turns out in the long run? Doubt it.

Why The SHIB Token Crypto Community Matters

shib token mascot 2
yep, that’s a bucket of shiba puppies. source: pinterest

SHIB is one of the few communities doing something in the real world.

For that, the community deserves some respect.

The thing about the world of crypto today is that there are a never ending number of new projects and tokens available for purchase.

New crypto projects are launched every. damn. day.

Building a cryptocurrency token on the blockchain has become commoditized.

Although Blockchain can be difficult to wrap your head around, the technology itself is surprisingly simple and elegant compared to the complexities of other types of software.

Development is relatively simple…. the average college student majoring in computer science can write a few lines of code and create a blockchain.

In a market of commoditized goods and services, the one thing that will never be a commodity is the human. People will always determine the value of any cryptocurrency token. The people are the ones that build the community which can create something meaningful.

If you’re looking for a strong cryptocurrency to get on board with, find a token that has a dedicated community.

That being said…..

When two of the biggest names in technology are involved with a project, its a good sign. I’m talking about both Elon Musk (CEO Tesla, SpaceX) and Vitalik Buterin (founder of Ethereum).

Their online publicity for SHIB is another signal for the dedicated and committed community that the SHIB token is building:

Elon Musk Subtweets SHIB Token

Say what you will about shitcoins being overhyped and “pump and dump” schemes. SHIB might even be a scam, who knows… and there has certainly been some big action on the “pump” side.

elon musk tweets about getting a shiba inu

Tweets from Elon Musk about getting a Shiba Inu was likely a subtweet referencing the meme that SHIB as well as DOGE have become.

Vitalik Buterin Gifts $1 Billion in SHIB to India Relief Fund

SHIB token mascot resting his weary head
source: lifehacker australia

Vitalik Buterin was gifted billions of dollars worth of SHIB token, $1 Billion of which he first donated.

But Vitalik had even more SHIB – he only donated 10% of his holdings – and his next move was unexpected.

As seen on Etherscan, Vitalik actually burned the equivalent of more than $12 BILLION in today’s value, since SHIB has appreciated since then.

Vitalik explained his rationale for the whole endeavor in a note.

In the note, Vitalik mentioned that he was “impressed with how the dog communities have treated the recent donations” and focus on “making the world better as a whole“.

For a crypto community, this is quite inspiring to see, and might just restore our faith in humanity.

SHIB Token Artwork

Aside from donating, the SHIB community encourages its members to create artwork.

Its unclear from the website how the artwork is related to the SHIB token, but it can be expected that at some point, NFT artwork may be involved.

There are all sorts of different artwork creations being made featuring the cute little Shiba Inu puppy mascot, just look at a few of them below.

SHIB token community artwork collage

As far as a Shiba Inu coin art incubator, it looks like they’ve started taking applications and we’ll look forward to seeing more exciting creations that the community comes up with.

So, its a fact that SHIB token has had more than a few positive impacts on the world: donating money to India Relief fund, as well as helping raise money for Shiba Inu dog adoption.

And if we’re going to risk betting on a cryptocurrency, we want to bet on one where we know there is at least some good in the world coming of it, because there’s always the chance that we lose our money.

Regardless of whether or not we go to the moon, funds are being raised, and dogs are being helped.

Because dogs are our best friend.

Which cryptocurrencies do you like? Which tokens do you think are actually doing something in the real world?

Get the Future of Technology letter each month. Sign up below.

Processing…
Success! You're on the list.