Author: Werner

Freelance crypto content editor, strategist and writer since the very top of 2017's bull run.  Based in Cape Town, SA and previously lived in Asia for a decade. I'm a big believer in the good that decentralized network technology and ethical AI can bring to make the world a more fair and transparent place.

SingularityNET (AGIX): A Deep Dive on the Best AI Crypto Marketplace

Posted on by Werner

Introduction

2023 has been a breakout year for artificial intelligence, with the astonishing superpowers of OpenAI’s ChatGPT, Midjourney, and others turning AI into the trending technology of the year and taking most of the shine (and funding) off previous darling Web3. 

Soon enough, savvy technologists connected the dots between blockchain technology and AI. They understood that all roads lead to Rome – a decentralized Internet that requires vast resources will need incentives to scale, and a big chunk of it will come from distributed ledger networks. 

As a result, there has been a dramatic surge in the price of so-called AI cryptocurrencies such as SingularityNET, which we covered in our Top 20 List of AI Cryptos for 2024 Part 1 and Part 2. Its token, AGIX, shot up from $0.04 at the start of 2023 to a crazy $0.58 in the beginning of February, and currently sits around $0.31 (December 2023).

Mindplex Magazine is a part of the SingularityNET ecosystem, so it’s an honor to tell our readers a bit more about this incredible project. Here’s what you need to know about SingularityNET, Sophia the robot, and the AGIX token. 

What is SingularityNET?

SingularityNET is an AI-focused project that leverages blockchain technology to redefine how artificial intelligence is developed, shared, and commercialized. The project’s mission is to go beyond conventional AI by open-sourcing the concept of Artificial General Intelligence (AGI).

SingularityNET has built a decentralized AI marketplace that allows developers to share their AI innovations, collaborate, and directly monetize their AI solutions without using third-party intermediaries. 

SingularityNET wants AI, one of the most important technologies that humans have ever worked on, to thrive by creating an environment where innovators can directly sell their AI solutions to consumers. SingularityNET, one of the top AI cryptocurrencies, has a utility token known as AGIX.

At the height of the initial coin offering in December 2017, SingularityNET raised $36 million in one minute. It also received a $25 million investment from LDA Capital in May 2022. Some of SingularityNET’s notable investors include Kosmos Ventures, Fundamental Labs, Zeroth.AI, and Elizabeth Hunker.

Who Created SingularityNET?

SingularityNET was founded in 2017 by a team including current CEO Dr. Ben Goertzel and Dr. David Hanson, two visionaries working at the intersection of AI and blockchain technology. Their credentials and track record in their fields of expertise lend credence to SingularityNET and the wider crypto sphere. 

Born in Brazil, Dr. Goertzel is a cognitive scientist and AI researcher who played a crucial role in popularizing the term ‘Artificial General Intelligence’. Apart from serving as the CEO of SingularityNET, he is the chairman and chief scientist of AI software firm Novamente LLC, chairs the OpenCog Foundation, and is the host of the Mindplex Podcast.

David Hanson is a roboticist who founded and serves as the CEO of Hanson Robotics, a Hong Kong-based company known for creating human-like robots like…

Sophia the robot

Hanson Robotics’ best-known work is Sophia, a humanoid robot that has received media attention for reasons such as obtaining Saudi Arabian citizenship, selling an NFT artwork for nearly $700,000, and being appointed the first robot Ambassador for the United Nations Development Programme. She often accompanies Dr. Goertzel at various blockchain conferences across the world such as Token2049 in Singapore, where I had the pleasure of meeting her and conversing a little bit. 

The verdict is still out on whether androids dream of electric sheep, but what’s certain is that Sophia is living the life that many people only dream of.

SingularityNET (AGIX) Tokenomics

SingularityNET’s maximum supply is capped at 2 billion AGIX tokens. The utilities of the AGIX token include:

  • Governance – most tokens in the crypto sector are being used for governance purposes, and AGIX is no different. AGIX tokenholders can vote on issues affecting the platform’s governance.
  • Staking and Rewards – AGIX holders can stake their tokens to receive rewards every 30 days.
  • Payment – AGIX tokens are used to settle payments within the SingularityNET ecosystem.

How Does SingularityNET Work?

SingularityNET, which represents one of the many use cases of AI and blockchain, creates a network of AI services where developers showcase and monetize their AI solutions through a decentralized network. On the other end, users can buy AI solutions or test them before making a payment.

The platform wants to eventually build a scalable platform that is less reliant on Ethereum and more chain-agnostic. To make this happen smoothly, SingularityNET utilizes some tools and systems that include Daemon and its SDK.

What is Daemon?

Daemon is an under-the-radar but important component that acts as a sidecar proxy service within the SingularityNET ecosystem. It is more like an assistant that helps to manage tasks related to payments, Ethereum smart contracts, and other blockchain-related tasks.

There are lots of technicalities involved in the functioning of Daemon, but in simpler terms, it ensures smooth and secure interactions between developers and users especially when it comes to financial transactions.

Registry and Multi-Party Escrow Smart Contracts

SingularityNET utilizes two critical smart contracts – Registry and Multi-Party Escrow – for the network to operate fluidly.

Registry, as the name implies, is a database where developers and AI service providers list the important details of their products or services. The Multi-Party Escrow is a smart contract that provides escrow services for users and AI service providers. It also enables cheaper and faster transactions.

SDK

In general, an SDK (software development kit) is a collection of software development tools bundled together in an installable package.

SingularityNET’s SDK is a handy tool for consumers using AI services. It makes it easier for them to connect with SingularityNET services. The SDK also helps by automatically adding the required permissions to the tool used for connecting to these services, making the whole process smoother.

What are SingularityNET’s Main Products?

The core products of the SingularityNET ecosystem are:

SingularityNET AI Marketplace

This is the most important product of SingularityNET because it encapsulates the main ideas of the SingularityNET platform – democratizing and monetizing AI tools on decentralized blockchain architecture.

The SingularityNET AI Marketplace is a decentralized app that lets developers list their AI services and allows consumers to browse their desired AI services and products. The marketplace is simple to use, a major step in getting more people to interact with the platform. Users need to have a Metamask wallet, the gateway to Web3, or a traditional online wallet such as PayPal to make payments on the marketplace.

SingularityNET AI Publisher

The AI Publisher is the backend portal for developers and innovators on SingularityNET. It serves as a gateway for developers to effortlessly showcase and oversee their AI services. 

The process is straightforward – developers complete uncomplicated forms and share basic onboarding information about the intended service. It is as easy as filling out a Google form. Those using the portal can access advanced AI applications, beta testing tools, and analytics that track the usage of their AI services.

Credit: Tesfu Assefa

SingularityNET and Cardano’s Partnership

SingularityNET and Cardano (ADA) are long-time collaborators with the shared objective of democratizing and decentralizing access to emerging technologies through blockchain technology.

As a decentralized AI marketplace, SingularityNET has been focusing on improving the interoperability between the Cardano and Ethereum protocols, such as developing a token bridge to enable transactions between the two networks. 

In 2023, SingularityNET, in partnership with IOHK (the organization behind Cardano), announced they intend to move a substantial part of SingularityNET’s decentralized protocol from Ethereum to Cardano, by converting ERC-20 AGI tokens to a Cardano-compatible version, and recreating Solidity-based smart contracts in Cardano’s Plutus smart contract language.

Additionally, SingularityNET has introduced staking for its native token, AGIX, on the Cardano blockchain. This feature enables users to engage in and contribute to the expansion and wider adoption of the Cardano ecosystem.

AGIX Staking

SingularityNET has a staking platform where AGIX holders can lock up their AGIX holdings in exchange for incentives. Users can stake their AGIX tokens for 30 days. After that, they can redeem their rewards and staked AGIX tokens or roll them over for the next staking period.

In November 2023, SingularityNET rolled out staking on the Cardano blockchain, in addition to Ethereum.

Conclusion

SingularityNET is a blossoming AI-powered blockchain ecosystem that is wildly ambitious in its goals and enjoys the backing of a strong team and partners such as the Cardano and Ethereum communities. With artificial intelligence still in its infancy and the next crypto bull market potentially shaping up for 2024, the platform is only getting started, and you can stay up to date with all its latest developments here.

Let us know your thoughts! Sign up for a Mindplex account now, join our Telegram, or follow us on Twitter. 

The Top 20 AI Cryptocurrencies For 2024 (Part 2)

Posted on by Werner

Introduction

In Part 1 of our 2024 guide to the best AI-powered cryptocurrencies, I covered the first five top AI crypto projects. They were: the leading AI marketplace SingularityNET (AGIX), data merchant Ocean Protocol (OCEAN), AI librarian The Graph (GRT), AI agency Fetch.AI (FET), and AI garden Cortex (CTXC). 

In no particular order, here are five more Web3 projects that use artificial intelligence to create novel applications for blockchain technology. Numeraire, iExec, dKargo, Arkham and Injective Protocol. In this article we’ll break down their core purposes, use cases and how they utilize AI. 

6. Numeraire (NMR): Using AI to Play The Stock Market

Year Founded & Team

Numeraire was founded in 2015 by Richard Craib (CEO), Joe Lallouz (COO), and Will Knottenbelt (CTO). 

Institutional Investors

Andreessen Horowitz, Coinbase Ventures, and Paradigm

What is Numeraire (NMR)?

Imagine a hedge fund, but it’s not run by Wall Street experts—it’s driven by the brainpower of data scientists all over the world. That’s Numeraire. Using the Ethereum blockchain, this decentralized hedge fund uses artificial intelligence (AI) to make supremely educated guesses on stock market ups and downs.

What is Numeraire Used For?

The project’s appeal here is pretty straightforward. Numeraire wants to make investing in stocks less of a guessing game and more of a science, all while being open and efficient about it.

So what can you actually do with Numeraire? Well, two main things: 

  1. If you’re into investing, you get to use AI-driven insights – which hopefully translate into smarter choices in the stock market. 
  2. If you’re a data scientist or researcher, you get access to a gold mine of financial data from the project’s sources.

How Numeraire Leverages AI

A selection of machine learning models working together helps the Numeraire platform guess where the stock market will go next – not just one AI model. When financial data is shared, it’s as private as can be. 

Why Numeraire is Important

Numeraire is shaking up how we think about investing. It’s making the stock market a little less mysterious and a lot more scientific. Plus, it’s a playground for data scientists who want to do cool stuff with huge sets of financial data.

7. iExec (RLC): Democratizing Cloud Computing

Year Founded & Team

Founded in 2016 by Gilles Fedak (CEO), Haiwu He (CTO), and Jean-Philippe Pothier (COO).

Institutional Investors

Draper Dragon Fund, ConsenSys Capital, and Ledger Capital

What is iExec (RLC)?

iExec (RLC) is an open-source, decentralized cloud computing platform that runs on the Ethereum blockchain. It’s essentially a superstore for cloud computing power, with a Web3 twist: it’s decentralized and runs on Ethereum and blockchain technology. It allows decentralized applications to access on-demand cloud computing services that fit their needs with ease.

What’s iExec RCL used for?

The main purpose of iExec is to connect cloud computing service providers and users in a decentralized, open marketplace. It decentralizes the cloud computing market, allowing users to make money from their spare computing power by renting it out to others. This computing power can be used to power decentralized applications, run off-chain computations, or perform a range of other functions.

Whatever your computing needs, whether you’re in AI development, knee-deep in scientific research, or working on graphic designs, this platform has got you covered. It’s versatile and caters to a broad range of computing requirements.

How iExec Leverages AI

iExec helps match you with the computing resources that fit your project’s needs, and it also performs like a savvy broker that sets dynamic prices based on how many resources are available and how many people want them. Plus it ensures that whatever you’re buying or renting meets the right quality standards.

Why iExec Is Important

iExec RLC matters because it aims to revolutionize cloud computing by breaking down the existing barriers to entry. By leveraging blockchain and AI, it’s making the whole system more efficient, transparent, and, most importantly, accessible to everyone. 

What is the iExec token RLC used for?

The iExec token, RLC, is used as the platform’s primary medium of exchange. All transactions on iExec’s decentralized cloud marketplaces are settled in RLC tokens. Workers need to stake RLC tokens as security deposits to be eligible to execute computation tasks.

8. dKargo (DKA): The Logistics Translator

Definition: Dkargo uses blockchain technology to address trust issues in the fragmented logistics industry, and create a more cooperative and efficient logistics network​​.

What is dKargo Used For?

dKargo is designed to address the core structural issue in the logistics industry: there is no credible decentralized protocol that permits honest data exchange within services. dKargo is primarily used for optimizing logistics information, improving the connection between participants in the logistics chain, and offering Web3 logistics services from the first to the last mile​​.

How it Leverages AI

dKargo incorporates AI route optimization to create a fluid logistic platform. 

Why is dKargo Important? 

dKargo helps to build trust and cooperation in the logistics industry using blockchain technology. 

What is the DKA token used for? 

The DKA token is used within the dKargo ecosystem to facilitate transactions and governance decisions. 

Credit: Tesfu Assefa

9. Arkham (ARKM): The Dark Knight of Crypto

Year Founded & Team: 

Founded in 2020 by Miguel Morel, Arkham Intelligence leverages his extensive experience in cryptocurrency markets and intelligence​​.

What is Arkham? 

Arkham is a controversial blockchain analysis platform that uses AI and other methods such as bounties to deanonymize blockchain and on-chain data, and ‘doxx’ (make public) the real identities beyond high-profile wallet addresses. It’s attracted some industry antagonism for this, as privacy is a core tenet of cryptocurrency ownership.

Main Purpose:

Arkham’s main purpose is to enhance the transparency and security of blockchain transactions by targeting crypto crimes and scams. It does this by providing users with a powerful tool offering valuable insights and analytics to make it easier to find the ‘bad guys’ of the blockchain – or at least, that’s its official purpose. Arkham’s platform can be used to track stolen funds, audit transactions, and investigate hacks, among other applications.

Use Cases: 

Arkham’s analytical products have played a notable role in addressing past high-profile crypto incidents, such as recovering assets related to high-profile cases such as FTX and Alameda Research.

How Arkham Leverages AI 

Arkham uses a dedicated artificial intelligence engine, ULTRA, to systematically analyze and deanonymize blockchain transactions. This in-house AI engine leverages various data sources, including public records and social media, to label addresses and provide entity analytics.

Why it’s Important 

Arkham strives to deanonymize blockchain transactions and put a name and identity to every wallet in the crypto community. Billions are stolen each year in Web3 hacks, and much of it lands in the pockets of sanctioned organizations like North Korea’s Lazarus Group. 

By combating crypto crimes and incentivizing on-chain research, Arkham contributes to a secure,transparent and trustworthy blockchain ecosystem at the cost of privacy. Of course, the money is in the database as they say, and knowing which entities own certain whale accounts and observing or tracking their activities can be highly lucrative. 

What is the ARKM token used for?

Arkham’s native token, ARKM, is used to trade for information such as entity labels and curated data feeds. It is also used to post bounties, and reward hunters and blockchain detectives providing valuable intel.

10. Injective Protocol (INJ): DeFi Infrastructure

Founding Team

Injective Protocol, led by Eric Chen and Albert Chon, emerged from Injective Labs, a hub for innovative blockchain solutions​​.

Definition

Injective is a layer-one blockchain designed for finance, powering a range of DeFi applications like decentralized exchanges and lending protocols.

What is Injective’s Purpose? 

Injective Protocol provides a decentralized, interoperable infrastructure for next-generation financial applications. Its platform supports various financial markets, including spot, perpetual, futures, and options, all fully on-chain.

How Injective Protocol Leverages AI

While AI’s direct application in Injective is not detailed, the platform’s advanced financial infrastructure implies potential AI use in market analysis and decision-making.

Why It’s Important

Injective is at the forefront of decentralized finance, offering a fast, secure, and low-fee environment for a wide range of financial applications.

What is the INJ Token Used For?

INJ tokens are used for various DeFi purposes, including protocol governance, dApp value capture, and staking. 

Conclusion

Stay tuned for Part Three of our Top 20 AI cryptocurrencies for 2024, and please note that this article is for educational purposes only and should not be construed as financial advice of any kind. AI cryptos are still largely unproven and can be subject to serious price fluctuations during times of market volatility. Invest with care and always conduct proper research. 

Let us know your thoughts! Sign up for a Mindplex account now, join our Telegram, or follow us on Twitter. 

Cardano Summit 2023 Dubai: Adoption, Impact… And AGIX Staking

Posted on by Werner

Introduction

The growing global Web3 hub of Dubai hosted the a well-attended Cardano Summit 2023 Nov 2-4. With over 30,000 attendees representing a diverse range of industries and countries, the packed 3-day affair showed Cardano’s expanding influence in the Middle East and North Africa (MENA) region and the course it’s charting in 2024 and beyond.

The summit’s main themes were adoption and impact. This tells us something about where the Cardano network stands in its journey to innovate in blockchain technology.

As the world’s premier peer-reviewed blockchain, the layer-1 network’s flagship network edition was  fertile ground for a wide range of high-quality discussions on its future and demonstrations of its present capabilities, including SingularityNET’s long-anticipated launch of AGIX staking on Cardano. 

This overview delves into the summit’s day-by-day activities, big announcements, and the future trajectory of Cardano in 2024. You can view some of the keynotes, panels and highlights at the Cardano Summit 2023 playlist on YouTube here.

Day-by-Day Overview

November 2nd: Inaugural Networking and ‘Battle of the Builders’

The summit kicked off with a networking soirée, featuring the ‘Battle of the Builders’. Sponsored by notable entities like the Cardano Foundation, CV Labs, and EMURGO, this event spotlighted the Cardano Market, an exhibition space for Summit participants, and an NFT Gallery. The evening successfully showed Cardano’s commitment to fostering innovation and entrepreneurship within its ecosystem.

Summit Day One – Emphasis on Governance and Education

The first official day of the summit was marked by over 55 speakers engaging in keynote talks, panel discussions and masterclasses about operational resilience and the importance of education in blockchain. 

Panels explored the foundations of blockchain, and the importance of community engagement and transparency kept cropping up as a recurring theme. 

  • Frederik Gregaard, CEO of the Cardano Foundation, discussed the importance of consent and operational resilience in the digital age, and how Cardano is enhancing social systems. 
  • Panels such as ‘Essential Governance: Building Strong Blockchain Foundations’ delved into the intricacies of creating robust blockchain platforms, emphasizing governance models and processes. 
  • Additionally, the importance of transparency and community engagement in Cardano’s age of Voltaire was a key discussion point, highlighting its commitment to an open and participatory ecosystem.

In the evening, Cardano Summit attendees were treated to a traditional Middle Eastern feast in the world’s fifth-largest desert – an atmospheric setting to network and share ideas.

Summit Day 2 – Focus on Adoption, Impact, and Blockchain for Good

The final day of the summit featured a plethora of workshops and panel discussions, with more than 70 speakers. The sessions focused on a range of topics, from the adoption and impact of blockchain technology to its potential in various sectors like agriculture, law enforcement, and decentralized social media. 

One of the panels, ‘Dubai’s Web3 Evolution’, explored how Dubai is positioning itself as a global center for Web3, highlighting the region’s forward-thinking regulations and infrastructure. The importance of open-source contributions and community involvement in such projects was also a prominent theme. 

The day culminated in the Gala Awards Dinner, where the winners of the Cardano Summit Awards and the inaugural Summit Hackathon were announced, celebrating the creativity and dedication within the Cardano community.

Credit: Tesfu Assefa

SingularityNET Unveils AGIX Staking on Cardano

With AI being the talk of the town in 2023 and probably 2024, a highlight of the summit was the announcement of the upcoming launch of pioneering decentralized AI platform SingularityNET’s AGIX staking on the Cardano blockchain. 

The staking solution is designed to be convenient, secure, and rewarding, supporting the growth of the SingularityNET platform. In this way, users can generate a yield from holding the token and contribute to the adoption of Cardano and SingularityNET.

SingularityNET COO Janet Adams and Chief AI Alchemist Dr. Mihaela Ulieru both participated in insightful panels discussing the convergence of AI and blockchain technology. 

Adams was part of the panel on ‘Applying AI Research to Blockchain Business Models’, which delved into how blockchain could unlock access to extensive datasets for AI scalability and robust data management. 

Ulieru’s panel, ‘Recalibrating Value, Identity and Impact through the Blockchain: The Cardano Impact Report’, explored sustainable blockchain impacts.

In an interview, Adams talked about the close relationship between founder Ben Goertzel and Cardano founder Charles Hoskinson, and named three reasons for their alignment:

  1. common vision and goal for positive impact on humanity
  2. the mathematical foundation of the Cardano blockchain
  3. the strength of the community, which she called the most passionate in the world

Attendees had the opportunity to interact with the SingularityNET team, learn about their staking solution, and engage with other SingularityNET ecosystem projects like Rejuve.ai and NuNet.

Other Cardano Summit 2023 Highlights

Midnight Network Partnership

A major announcement was the IOG’s partnership with the Midnight Network, leveraging Polkadot’s Substrate framework. This collaboration highlights a significant stride in privacy-focused blockchain applications and incoming partner chains for Cardano. 

MinSwap Recognition

MinSwap highlighted its significant contributions to the Cardano ecosystem as well as its thriving developer community and portfolio of innovative projects.

Tadamon Partnership with UNDP

The Cardano Foundation’s partnership with Tadamon, a UNDP-led initiative, underscores Cardano’s commitment to leveraging blockchain for societal empowerment across Africa, the Middle East, and Asia.

Battle of the Builders

In the Battle of the Builders competition, the final ten contestants demonstrated the vibrancy and versatility of the Cardano blockchain. 

  • NMKR – NFT creation and secondary marketplace
  • NEWM – music streaming governed by musicians
  • Xerberus – digital asset portfolio risk management
  • FiDa – insurance contract tokenization
  • Mehen USDM – bridging traditional finance and blockchain
  • Iagon – AI-driven shared storage platform
  • Maestro – Web3 stack for DApps and smart contracts
  • zkFold – scaling solution for Cardano
  • Finest – platform for trading tokenized real-world assets
  • TVVIN – improving accessibility to traditional assets

Winning Projects

  • First Place: Maestro won first place. Its platform allows users to build Web3 applications such as DeFi protocols, NFT marketplaces, blockchain analytics platforms, and wallets.
  • Second Place went to Newm, a music streaming marketplace governed by musicians and their fans.
  • Third Place: ZK Fold, a zero-knowledge rollups scaling solution for the Cardano blockchain.

What’s Next For Cardano in 2024? 

Cardano’s milestone Dubai event had a few initial technical hiccups but ultimately showcased the current capabilities of the Cardano ecosystem and set the stage for its future evolution which could one day see it rival Ethereum. 

As the blockchain ventures into new regions and integrates cutting-edge technologies like AI through projects like SingularityNET, it is poised to attract more developers and projects, which are the lifeblood for any Web3 network. 

The momentum generated at the summit and the strategic partnerships formed are indicative of Cardano’s promising trajectory in the blockchain space, and the commitment of its community – which was one of the strongest during 2021’s bull run – remains strong.

With its focus on innovation, community engagement, and global impact, Cardano is well-positioned to continue its growth trajectory and play a significant role in the blockchain industry in 2024 and beyond. 

Regulatory issues in certain jurisdictions still linger, but it’s clear that progressive new destinations such as the UAE are ready to take up the baton of innovation and partner with Cardano and its blossoming ecosystem.

Let us know your thoughts! Sign up for a Mindplex account now, join our Telegram, or follow us on Twitter. 

Why Did Binance and CZ Settle With US Authorities for $4.3 Billion?

Posted on by Werner

Introduction

A feared potential black swan event has come and gone in crypto with little fanfare. Binance, the world’s largest cryptocurrency exchange, and its popular founder/CEO Changpeng Zhao, better known as CZ, have reached a massive settlement with U.S. authorities, marking a significant turning point in the crypto industry’s relationship with regulators as the next bull run looms large thanks to incoming catalysts like the BlackRock Bitcoin spot ETF and Bitcoin Halving. This comes on the back of the SEC also again going “back for seconds” against Kraken and publishing a list of what it considers crypto securities. 

The U.S. Securities and Exchange Commission (SEC) had previously filed 13 charges against Binance and its CEO for: operating unregistered exchanges, broker-dealers, and clearing agencies, and misrepresenting trading controls and oversight. The CFTC, on the other hand, charged Binance and CZ with willful evasion of federal law and operating an illegal digital asset derivatives exchange.

The settlement, announced on Nov 21 and 22, 2023, sees Binance paying a whopping $4.3 billion. This settlement is the largest in Treasury history according to Janet Yellen, with CZ personally paying $50 million to the CFTC and posting bail for $175 million in order to return to his home in the UAE on bail. 

The charges against CZ are very serious and included failure to maintain an effective anti-money laundering program at the crypto exchange in violation of the Bank Secrecy Act which birthed regulations such as the so-called Travel Rule requirement.

As part of the settlement, CZ pleaded guilty to breaking U.S. anti-money laundering laws and agreed to step down from his role as CEO of Binance. It was announced on Nov 22 2022 that he has been replaced by the experienced ex-Abu Dhabi regulator Richard Teng in order to provide some much-needed stability at the world’s biggest crypto exchange. Zhao could see jail time if convicted. 

What’s next for Binance?

CZ will retain his stake in Binance, which could allow him to continue exerting some influence on the company. This is highly unlikely in the short term, as the criminal cases against him are ongoing and his behavior will be heavily scrutinized. Zhao’s demise at Binance draws comparisons with other axed exchange heads like FTX founder Sam Bankman-Fried (due for sentencing in 2024) and Arthur Hayes, previously the head of controversial exchange BitMEX, who faced similar charges in 2020. 

Both FTX and BitMEX embraced full compliance with anti-money laundering legislation after the departure of their founders; and the same is likely in store for Binance under the guidance of Teng. He stated that his focus would be on “reassuring users that they can remain confident in the financial strength, security, and safety of the company” and is a strong advocate for regulatory compliance.

The settlement also includes the appointment of independent compliance monitors for three- and five-year terms. These monitors will have sweeping powers to oversee Binance’s business practices, including how it adds new customers and how it interacts with jurisdictions subject to U.S. sanctions or surveillance. 

The Binance result is a highly significant development in the ongoing scrutiny of cryptocurrency exchanges by U.S. authorities. It sends a clear message to the industry about the importance of compliance with U.S. laws and regulations. Despite the hefty penalties, the settlement allows Binance to continue operating and potentially marks the start of a new chapter for the world’s largest exchange as well as the crypto industry. 

Credit: Tesfu Assefa

Why did the SEC charge Binance and CZ? 

The SEC previously filed 13 charges against Binance entities and CZ, alleging that since at least July 2017, Binance.com and Binance.US, while controlled by Zhao, operated as exchanges, brokers, dealers, and clearing agencies, earning at least $11.6 billion in revenue from transaction fees from U.S. customers. 

The SEC charged Binance for the unregistered offers and sales of BNB, BUSD, and crypto-lending products known as ‘Simple Earn’ and ‘BNB Vault’.

In addition to the SEC’s charges, Binance and CZ faced accusations from the U.S. Department of Justice and the U.S. Commodity Futures Trading Commission (CFTC). The CFTC sued Binance for offering unregistered crypto derivatives in the U.S., alleging that Binance had a “maze of corporate entities” demonstrating the exchange’s “willful evasion of U.S. law”.

Binance settles, CZ pleads guilty to AML violations

In response to these charges, Binance and CZ have agreed to a series of settlements. CZ pleaded guilty to failing to maintain an effective anti-money laundering (AML) program, in violation of the Bank Secrecy Act (BSA), and has resigned as CEO of Binance.

As part of the plea agreement, Binance has agreed to forfeit over $2.5 billion and to pay a criminal fine of over $1.8 billion, for a total financial penalty of over $4.3 billion. CZ will also pay a $50 million fine to the CFTC and may face potential prison time when he gets sentenced in 2024, ironically before Sam Bankman-Fried. 

In addition, Binance will make a “complete exit” from the U.S. (Binance.US, a different entity, will remain) and agree to strict oversight from monitors over the next several years.

These legal actions and settlements mark a significant moment in the regulation of the cryptocurrency industry. The SEC and other federal agencies have been increasing their scrutiny of cryptocurrency exchanges and other entities in what is known as Operation Chokepoint 2.0, seeking to enforce compliance with securities laws and other regulations. 

The actions against Binance and CZ are part of this broader trend, and the dominant exchange’s meek surrender could have significant implications for the future of the cryptocurrency industry which is gradually being reined in by regulators around the world. 

The settlements and CZ’s resignation may serve as a fresh start for Binance, which had been hamstrung by widespread market fears that U.S. authorities will shut it down globally. The settlement was seen as the only way for Binance to continue its business, giving them a fresh start in 2024 if all goes to plan.

With powerful new TradFi entrants like BlackRock and Fidelity knocking on its door, Binance’s actions are also bullish for the entire crypto industry, helping it to clear its collective closet of skeletons that regulators like Gary Gensler can point to when they argue that the whole market is manipulated.

Let us know your thoughts! Sign up for a Mindplex account now, join our Telegram, or follow us on Twitter. 

SocialFi: Trade Friends and Influence People With These Five Projects

Posted on by Werner

In a recent article we discussed the rising popularity of social finance, also known as SocialFi or SoFi) in 2023. This fun and experimental new way of monetizing social networking has helped crypto degens entertain themselves during a bearish last 12 months, while providing a compelling new use case for Web3. 

Much of this year’s hype has circled around Friend.tech, which tokenizes social media accounts kind of like a stock (don’t tell the SEC) and allows account holders to create monetized membership groups in the process. There has been a bit of controversy around its founders’ background and their role in a failed previous project named Kosetto (giving off some Do Kwon and Basis Cash vibes), however, it has certainly picked up organic traction despite this. 

Project 1: Friend.tech (Base)

What is it? 

Friend.tech is a decentralized platform for monetizing your social influence through tokenization. Built on the Base Network (a layer 2 network developed by Coinbase), Friend.tech allows users to own, tokenize, and trade Twitter profiles. 

How it works

Friend.tech allows users to tokenize their online influence and attention and trade it as a token. The token was renamed from ‘Shares’ to ‘Keys’ in August. These Keys grant holders exclusive access to the app’s built-in chat rooms and content from creators. Fans can support content creators by buying shares in their profiles in the form of ‘Keys’.

Friend.tech users have chat groups that are similar to other apps such as Telegram. However, the difference is that group members must purchase Keys in order to access the group. A holder can sell the Keys if they want to leave the group, or earn a profit by trading the ‘Keys’.

Team

Friend.tech was created by pseudonymous founder 0xRacer and his anon team. 

They’d pulled in over $40 million in revenue by October 2023 and the app was at the time considered the biggest revenue-generating dApp on the Base network, and astonishingly, the 2nd biggest in all of crypto. It’s no surprise then that a plethora of copycat projects soon tried to emulate their success.

Project 2: Stars Arena (Avalanche)

Stars Arena is a fork of Friend.tech, built on the Avalanche network instead of Base. It is a decentralized social finance platform that allows creators to monetize their work and enables followers to connect with their creators.

Main Purpose

The purpose of Stars Arena is to give creators a platform where they can monetize their content. Creators sell Tickets (similar to Friend.tech’s Keys), which equate to shares of their platform, to their followers. Followers can buy and sell the creators’ tickets using the AVAX cryptocurrency.

How Stars Arena Works

Stars Arena allows users to have fractional ownership of Twitter profiles of content creators, influencers, or celebrities. By purchasing Tickets, users have the right to engage with content creators in a more personalized way. 

Ticket holders can communicate with content creators via direct messages. Content creators can upsell the price of their Tickets by using various methods such as offering valuable info with restricted access. The platform has a tipping feature that enables users to reward creators.

Stars Arena has a referral program where users can refer their peers to the platform and earn a 1% commission on every trade made by their referrals.

Stars Arena Team

Stars Arena was launched by an anonymous developer with the Twitter handle @hannesxda.

Project 3: Open Campus (BNB Chain)

Open Campus is a decentralized education-focused social platform that brings educators, content creators, parents, and students under one roof. The Open Campus protocol is powered by the $EDU token. Built on the BNB network, the EDU token can be used for:

  • Paying content creators for their revenue share
  • Minting NFTs from educational content
  • Voting rights within the Open Campus ecosystem

Main Purpose

Open Campus is a platform that uses blockchain technology to build an education ecosystem. The platform decentralizes the creation of educational content so that students can access a wide range of learning material.

How Open Campus Works

Open Campus uses social incentives to promote the creation of valuable educational content. The platform works on the following premise:

  • Digital rights – educational content is minted as non-fungible tokens (NFT) to enable the wider community to participate in alternative, decentralized learning.
  • Decentralization – users can create and consume content whenever it suits them.
  • Immutable records – the platform uses blockchain technology to ensure that certificates and qualifications are permanently recorded on the blockchain, and can be easily verified.

By launching educational content as NFTs, content creators and their partners can earn revenue based on their contributions.

Open Campus Team

TinyTap, an Israeli company founded in 2012 by Yogev Shelly and Oren Elbaz, acquired Open Campus. Open Campus counts Animoca Brands, Mocaverse, The Sandbox, Hooked Protocol, and GEMS Education as its partners.

Credit: Tesfu Assefa

Project 4: Hooked Protocol (BNB Chain)

Hooked Protocol is an edutainment network that utilizes gamified and immersive learning experiences to accelerate Web3 mass adoption. 

How Hooked Protocol Works

Built on the BNB Chain, Hooked Protocol has bespoke Learn & Earn products that act as an on-ramp for attracting Web2 users to Web3.

The platform has built the following products to educate users about Web3:

  • Quiz-to-Earn
  • PoWT (Proof of Work and Time) Mining Game – a game that rewards users for contributing their effort and time to the Hooked Protocol ecosystem.
  • Social referrals – users are incentivized to invite other users to the platform
  • Stake and Swap – users can use the ecosystem’s wallets to stake and swap their crypto.

$HOOK, a BEP-20 token, is the platform’s governance and utility token. It has a market cap of nearly $50 million as of November 2023. 

Hooked Protocol Team

Hooked Protocol founding and leadership team consists of three known people:

  • Founder – according to LinkedIn, founder Jason Y has over ten years of experience in internet and growth strategy.
  • CTO – Mike Y has strong engineering skills that encompass financial services and consumer product development.
  • CMO – Jess L, who previously worked for leading tech firms in Silicon Valley, is proficient in marketing, strategy, and business development.

Hooked Protocol enjoys financial backing from Binance Labs and Sequoia. 

Project 5: Twetch (Bitcoin SV)

Twetch is a pay-to-earn Web3 social media platform where creators earn money for their content, and every bit of information is stored on the blockchain.

How Twetch Works

Built on the Bitcoin SV network, Twetch rewards creators using BSV. Creators need to have a wallet to receive micropayments for follows, likes, replies, and reposts.

Users earn payments from connecting their Twitter accounts to Twetch and posting from there. Users have to pay to post on Twetch, something that may discourage Web2 social media users who are used to posting for free. Every action on the Twetch platform needs to be paid for, since it is on-chain and incurs mining fees.

The native currency of Twetch is called Twetch Coin. Twetch also has an NFT marketplace and other features that include a BSV wallet, chat functions, and a jobs board.

Twetch Team

Twetch was co-founded by Billy Rose and Joshua Petty, who also serves as the CEO. Petty, who attended Purdue University, is the CEO of Ordinals Wallet. Petty and Rose have previously joined hands to co-found several firms such as Coindex and Area21.

Conclusion

While the recent slew of half-baked SocialFi applications might seem an opportunistic shout into the Crypto Twitter echo chamber, there’s no doubt that entertainment-focused use-cases such as social media and gaming are potential keys to mainstream adoption for Web3. 

By merging elements of the two and gamifying your social network interactions, SocialFi offers something unique and could be a precursor for the future of social networking.

Let us know your thoughts! Sign up for a Mindplex account now, join our Telegram, or follow us on Twitter. 

Ten AI × Web3 Challenges That Blockchain Must Solve

Posted on by Werner

In previous articles, we discussed the growing convergence of artificial intelligence (AI) and blockchain technology, as implemented in Web3, and the use cases of cryptocurrencies like SingularityNET’s AGIX token. 

The integration of these new digital tech fields would seem to be rather straightforward, but it’s quite the opposite. It can be a complex or near-impossible endeavor which some experts like DeFi lord Andre Cronje deem to be a waste of time. 

This is because blockchain serves to record historical financial data in a transparent and deterministic manner, while AI is a “black box” (in the words of Cronje) that delivers unpredictable results by design based on the input it receives.

As a result, there are several serious challenges that must be addressed to fully realize the underlying potential of AI and blockchain technology. Let’s take a quick look at ten of the most pressing issues.

Complexity

AI models traditionally have had a data collection problem; they have to connect to datasets from different parties. This can lead to interoperability issues, technical complexity, and a lack of unified standards. The same issues are also pop up in the blockchain and cryptocurrency sectors, which have created workaround solutions like cross-chain bridging. These are distinct but important technologies, still in an early stage of maturation, and they require specialized, costly expertise.

Scalability

AI applications often need high-speed processing and low-latency communication. This can be difficult to achieve on a blockchain network that has limited throughput and slow consensus mechanisms. 

Blockchain networks also face the problem of scaling: storage and energy demands grow as the networks grow in size and complexity. Viable scalability solutions include the use of layer-2 and layer-3 networks, as well as sharding, something that Vitalik Buterin has touted as one of the three transitions Ethereum requires for global adoption. Ethereum itself will soon implement its EIP-4884 Proto-danksharding upgrade to make it easier for L2 chains to scale without compromising on transaction cost and data privacy. 

Data Privacy and Security

One of the most important currencies of the modern era is data. It has been said that future wars will be fought over data, not oil, water, or gold.

Blockchain technology, known for its decentralized and immutable nature, presents challenges in handling sensitive data in AI applications. When AI algorithms are integrated with distributed ledger systems, sensitive data used for training models or executing smart contracts may be exposed to all participants in the network or to malicious third parties.

This raises questions about how data security and privacy are maintained. Data can be safeguarded through encryption and zero-knowledge proofs and ensuring strict access control. 

Without addressing data privacy and security, generative AI models may struggle to be adopted by major businesses.

Credit: Tesfu Assefa

Skills Shortage

The rapid evolution of AI and Web3/blockchain often outpaces the availability of professionals with skills on the cutting edge. Artificial intelligence is rewriting the workbook as Goldman Sachs claims that the emerging tech will impact 300 million full-time jobs globally, yet this revolutionary industry suffers from a skills shortage.

As such, technical requirements have become the key challenge in scaling high-performance AI projects. The skills gap can only be bridged by educational programs and a lively community of learners. Upskilling in these areas is essential for addressing this shortage. AI companies need to appeal to white-collar employees by reiterating that AI is not just taking over jobs but creating new employment opportunities.

Regulatory Challenges

AI and blockchain/Web3 are disruptive technologies; they could change the world as we know it. Therefore, they face regulatory hurdles from genuinely concerned lawmakers, including some who just oppose the existence of these technologies. Elon Musk has voiced his concern, saying that AI must be regulated as it poses risks to civilization. Over 1100 tech leaders earlier this year signed a letter of concern over the rampant growth of artificial intelligence and called for responsible development. 

The crypto industry has endured enough regulatory gaslighting from different authorities, and sometimes, the industry has frequently shot itself in the foot through shady individuals and corrupt companies. The industry needs to rebuild after flagship crypto entities such as FTX, 3AC Capital, Terra, etc. went belly-up in 2022.

Integrating AI in a blockchain company often involves dealing with regulatory challenges related to data privacy, security, and transparency. For AI and Web3 to thrive, it’s crucial for companies to find common ground with governments and regulatory bodies. AI and blockchain-specific regulations must provide clarity and encourage innovation within the confines of the law.

Lack of Standards

There is no set standard for integrating AI and blockchain, which can lead to problems with interoperability. This lack of uniformity may result in market fragmentation, which could stifle innovation and adoption.

Email became successful because it follows a common standard (called SMTP). A Gmail user can easily send and receive emails from Yahoo or similar services. The absence of clear standards in AI and Web3/blockchain can hinder development. Establishing universal standards for blockchain and AI protocols can facilitate smoother integration and collaboration across platforms.

After all, standardization leads to easier use, and by extension, wider adoption of AI and blockchain/Web3 technologies.

Decentralized AI Models

What if AI could leverage one of the major selling points of blockchains – decentralization? Decentralized autonomous organizations (DAOs), tokenization, and market analysis and trading are all areas where decentralized AI models can be used to reduce the risk of single points of failure and enhance trust. Using blockchains to store and distribute certain kinds of data is one way to achieve this. Several AI-focused cryptocurrencies could provide viable solutions for building decentralized AI models.

User Adoption and Education

Mass adoption might prove the major roadblock for AI and blockchain. The period of preaching to the choir is over; AI and blockchain developers must build so-called killer apps that naturally attract the masses to these technologies.

For AI and Web3/blockchain to gain wider acceptance, user education is key. The public must be informed about the benefits and potential applications of these technologies. 

This could come in the form of events, articles, and video content. The use of AI in the newsroom can also go a long way in writing factual, unbiased news articles that bring more people to AI and blockchain tech.

Demonstrating real-world use cases is the foundation for mass user adoption. They can’t meet the lofty goal of onboarding the next one billion users if they don’t offer practical apps that act as a bridge between Web2 and Web3. 

On a positive note, companies are more interested in blockchain technology. A survey carried out in early 2023 revealed that nine out of ten businesses in the US, UK, and China are adopting blockchain technology. 

Tokenomics and Governance

Tokenomics and governance are central to Web3/blockchain ecosystems. Many people and investors study the tokenomics of a project before they decide on whether they should invest in it or not. On the other hand, governance builds crypto communities by allowing individuals to vote on decisions that affect the community collectively.

Implementing effective governance models and clear tokenomics can enhance transparency, fairness, and the overall success of blockchain projects. This goes a long way in promoting blockchain projects.

Conclusion

AI, applied correctly, can greatly enhance the impact of Web3 in the coming years. Or the opposite could happen! While the challenges covered in this article would appear daunting, it’s normal for any new technology to have some teething problems in early years. 

For example, think back at the early issues with mobile phones and 3G networks. And before that, remember getting online through dial-up? Getting it right early on with the right frameworks and ethical decisions may prove to be the biggest challenge of all.

Let us know your thoughts! Sign up for a Mindplex account now, join our Telegram, or follow us on Twitter. 

Top 10 Use Cases of AI in Blockchain and Web3

Posted on by Werner

There has been lots of noise about artificial intelligence this year. We have heard that it will forever change every aspect of our lives. The same things were previously said about blockchain technology, which uses decentralized networks to offer cryptocurrency incentives to participants. 

The most prominent AI companies are still centralized Web2 behemoths like OpenAI, Microsoft, and Google, but there is increasing confluence between machine learning and blockchain as the world of business becomes more and more automated. 

Here are a few of the best use cases for a marriage between artificial intelligence and blockchain in 2024 and beyond.

10. Supply Chain Optimization

A 2023 study revealed that 29% of small and mid-sized businesses lost over 15% in revenue due to supply chain disruptions, with an additional 31% reporting losses of 7-15%. An integrated system of AI and blockchain could transform supply chain and logistics operations by making it more efficient and transparent, and helping better decision-making. 

Cutting-edge AI algorithms can predict demand, manage inventory, and automate specific logistics processes. This reduces costs and the risk of fraud and counterfeiting within the supply chain. For context, global companies lose $500 billion per year due to counterfeit products. 

AI and blockchain in supply chain processes can reduce errors and optimize resource allocation. This helps companies do what they love most: save time and money.

9. Market Analysis and Automated Trading

The crypto market is notorious for volatility and can move faster than traders can react. In August 2023, cryptocurrency traders lost $1 billion in liquidations due to a sudden sell-off.

Can traders or artificial intelligence counter these liquidations? Absolutely. By analyzing market data, social sentiment, and news in real time, AI can make predictions about future market trends and help traders with more efficient trading, improved risk management, and potentially higher profits. AI can detect pump-and-dump schemes (which are prevalent in the crypto space) to protect traders and investors.

AI can help traders identify crypto narratives in the early stages. For example, AI could have helped traders foresee the rise of AI cryptocurrencies or SocialFi and its importance to the creator economy. By picking the top 20 AI cryptocurrencies in early 2023, traders would have made sizable profits.

The rise of crypto trading bots on Telegram and Discord is a true reflection of AI’s growing influence in crypto trading. We hear that crypto builders are in it for the tech. But the traders are in it for the money, and bot trading when done right could be a viable way of getting that lambo one day, if you know what you’re doing and get lucky. 

8. Fraud Detection and Prevention

Blockchain is known for its robust security and transparency, but is not immune to acts of fraudulence such as market manipulation, fake trading volumes, and phishing scams. AI can help by detecting unusual patterns and behaviors within the blockchain to identify potential threats. By recognizing anomalies, AI can minimize fraud, whether it’s in unauthorized access to the blockchain network, identity theft, or financial transactions.

Of course, it’s not only crypto. The U.S. Federal Trade Commission (FTC) claims that consumers lost $8.8 billion to fraud in 2022, a worrying 44% increase from 2021. If AI and blockchain can reduce this figure, hopefully, some U.S. regulators hellbent on destroying crypto may start to see the potential it carries.

7. Personalized Recommendations

We have been using personalized recommendations for longer than we think. But through the power of Web3, AI, and blockchain, personalized recommendations can be taken to a whole new level. AI can be used on blockchain data to understand user preferences, and to provide users with tailored recommendations for new crypto, Web3, and NFT projects.

As the Web3 revolution accelerates, a decentralized web could help users own their data and achieve one of the leading promises of Web3: full privacy. 

Blockchain, a digital record, can be mined for insight into the provenance of the data that builds AI, addressing the challenge of ‘explainable AI’. This helps improve trust in data integrity and, by extension, in the recommendations that AI provides.

6. Data Analytics

Blockchains are immutable ledgers that provide rich data to analyze. AI can rapidly read, understand, and correlate data at incredible speed. This big-data processing brings a new level of intelligence to blockchain-based business networks, and centralized service providers will struggle to keep up.

By providing large volumes of data, blockchain helps AI provide more actionable insights, manage data usage and model-sharing. All these combine to make for a better and more trustworthy data economy. 

Credit: Tesfu Assefa

5. Smart Contract Auditing

It is estimated that the past decade has seen more than $4.75 billion in financial losses in Web3, caused by smart contract security flaws, with some estimates going as high as $12.3 billion.

AI can audit smart contracts, ensuring they function as intended, and are free from vulnerabilities and errors. This level of automation and assurance is crucial for the reliability and trustworthiness of smart contracts within the blockchain.

4. RWA Tokenization

Tokenization is a key concept in blockchain and Web3. A report by digital asset management firm 21.co claims that tokenized real world assets (RWAs) – crypto’s buzzword for bringing traditional financial products to various blockchain networks – could grow to $10 trillion by 2030.

AI can be used to create and manage tokens, ensuring that they are secure and compliant with regulations. This use case opens up new opportunities for businesses and individuals to tokenize assets, including real estate, art, fiat currency, and more. Stablecoins are so far the most successful application of tokenization of RWAs.

3. Healthcare Data Management

Healthcare providers must collect, transfer, and store sensitive data. This poses a big risk to the security and privacy of their users. In 2023, U.S. medical giant HCA Healthcare suffered a breach in which hackers stole data belonging to 11 million patients. How can healthcare facilities ensure data protection and privacy?

AI-driven blockchain systems can create and maintain secure, immutable patient records. This streamlines data access for healthcare providers, and also ensures the integrity and privacy of sensitive medical information.

The use of AI in healthcare can extend to clinical trials and research. Blockchain’s transparency and security, combined with AI, can optimize the management of clinical trial data. This can enable researchers to accelerate medical discoveries.

To go back to the realm of supply chain optimization, AI can aid in tracing the origins and journey of pharmaceuticals using blockchain technology to prevent counterfeit drugs from entering the market. It is estimated that nearly $83 billion of fake drugs are sold globally per year.

2. Energy Management

Arranging the clean energy transition is a key issue of our time. AI can optimize energy consumption, production, and distribution by studying usage patterns and predicting demand, while P2P blockchain trading can enable businesses and individuals to buy and sell excess energy directly from one another.

The two technologies of AI and blockchain can also speed up the development of smart grids that can efficiently distribute and manage energy resources. 

1. Gaming and Virtual Reality

As the gaming sector intertwines with blockchain, it is estimated that the market size of blockchain gaming will grow from $7.1 billion in 2022 to a projected value of $772.7 billion by 2032. 

Just like anything else in life, you can predict the future of blockchain gaming by following smart money, aka venture capital. Venture capital firms invested more than $2.3 billion in Web3 gaming in the first three quarters of 2023, showing the sector’s strength and resilience amid a brutal crypto winter.

What role does AI play in Web3 gaming and virtual reality? Generative AI can create immersive and responsive virtual worlds, enhance blockchain in-game experiences, and even optimize game development processes. 

From generating realistic non-player characters (NPCs) to predicting player actions, AI is revolutionizing the gaming and virtual reality industry within Web3.

Conclusion

It’s still early days for both blockchain and artificial intelligence, and both are rather unfairly misunderstood and maligned by the general public and media. Despite this, the evolving new economies around data, digital creators, and tokenized assets should solidify this alliance in the coming years, hopefully for the greater good. Blockchain establishes digital trust and proof, and AI can both benefit from it and boost its reach. 

Let us know your thoughts! Sign up for a Mindplex account now, join our Telegram, or follow us on Twitter. 

Crypto Bull Run 2024/2025: What Will Drive It?

Posted on by Werner

Some content on Mindplex may include forward-looking statements pertaining to future anticipated plans, performance and development of companies and industries. Any statements on this website that are not statements of fact should be considered forward-looking statements. Statements in this website that describe a company’s business strategy, outlook, objectives, plans, intentions or goals, or the future performance of an economic sector, are forward-looking statements, and all such forward–looking statements are subject to certain risks and uncertainties that could cause actual outcomes to differ materially from those in such forward-looking statements. Nothing in this article, or any other on Mindplex, should be considered financial advice. Cryptocurrency investing is a high-risk endeavor, and Mindplex accepts no responsibility for any risks taken by the reader.

Introduction

The 2021 Bull Run was incredible. Many first-time millionaires were created from the mix of innovation, economic stimulus, and – yes – a touch of speculation from investors stuck at home. The pandemic, which induced quantitative easing from the USA (aka money printing), and increased access to global trading platforms such as Coinbase and Binance, created a perfect storm for explosive crypto valuations.

Examining future crypto-narratives and pondering how they will influence the next cycle will best position you for the upcoming bull run. According to many experts, it is just beginning to form. Bitcoin has been off to a blistering start from the 1st of January 2023, then had a bit of a lull mid-year, before it breached $35,000 during October (‘Uptober’ in crypto parlance). This is consistent with the potential for a massive 2024. 

Bear market fatigue can make the days of up-only growth seem like a distant dream, and make you feel that crypto will never enter a bull market again. However, the global financial system is constantly shifting capital, attention, and manpower, and many factors are aligning that mark crypto as the center of the bullseye.

Let’s examine these fast-approaching events and understand how they are indicating now is the time to prepare for the next virtual asset bull cycle.

Bitcoin halving (April 2024)

You’ve undoubtedly heard of Bitcoin halving and how it reduces the Bitcoin mined from each block by half. This causes miners to receive half of the previous reward, simultaneously reducing the inflow and incentivizing them to HODL until Bitcoin prices increase. This event is programmed to occur every four years until 2140, when the final Bitcoin is mined.

Regardless of what any Ethereum expert or memecoin trader may tell you, the Bitcoin price is the leading indicator of any market shift. If your favorite Telegram group refuses to believe this, take a look at the graphs below tracking crypto’s total market cap and Bitcoin dominance.

Credit: CoinMarketCap

While the crypto market saw an increase of 25% in total market cap, Bitcoin dominance has increased by 5%, meaning Bitcoin has done some extremely heavy lifting. In an altcoin market, this trend would be reversed. Bitcoin trending up is a prerequisite for any bull market to begin, and observing price action as the halving next year gets closer will clue you into what we and the market are in store for.

Keep an eye out on Bitcoin’s price as we approach the next halving on 13 April 2024. 

AI’s role in the next cryptocurrency narratives 

The insane growth and interest in AI took a lot of shine and funding off crypto and poor old Web3. The blockchain industry responded, and has begun integrating the core features of artificial intelligence to enhance crypto-based platforms. Protocols already in the AI domain such as SingularityNET (AGIX), Render (RNDR) or Fetch AI (FET) are booming, with the correct assumption that crypto and AI are extremely complementary. 

The metaverse narrative in particular stands to greatly benefit from features such as generative AI, cloud AI solutions, and other tailor-made to take advantage of the blockchain industry. 

BlackRock Bitcoin Spot ETF

It’s easy to forget that just a few years ago, when everyone was in profit, mainstream adoption was considered inevitable. For this though, normies like grandma and grandpa would have to be able to own Bitcoin and crypto like a commodity stock without having to remember and safekeep their silly private key or recovery seed. This was thwarted by a variety of bad headlines coming from the crypto space, including the collapse of FTX, rampant scams, and yes, NFT ‘investing’.

BlackRock, one of the world’s largest asset managers with custody of over $9 trillion in assets, has been actively working to create a Bitcoin Spot ETF. Unlike many synthetic assets that simply mirror the price of Bitcoin, the BlackRock ETF would purchase and actively hold Bitcoin. This would offer direct exposure to BlackRock’s customers and likely mean millions of new digital asset investors.

The ETF, unfortunately, relies on approval from the Securities and Exchange Commission (SEC), which has an extensive record of being anti-crypto, but the BlackRock iShares Bitcoin Spot ETF’s chances of approval appears to be a shoo-in, according to most analysts, as are other ETFS from Fidelity, Ark and Grayscale. Its creation would act as a stamp of approval by the US government, and bring TradFi adoption to Bitcoin. 

Ethereum rolls out ProtoDanksharding with EIP-4844

Ethereum has been the clear winner for decentralized platforms to conduct fast and secure data transactions. Its massive user base and influence make it the platform for Web3 and decentralized transactions, but there’s still one issue: it’s expensive. 

Ethereum has been aware of this issue. In ProtoDanksharding (EIP-4844), on-chain data will be temporarily saved in so-called ‘data blobs’. 

Since these data blobs expire in 1-3 months, rather than remaining permanently saved on Ethereum, they cost a fraction as much. Instead of the user paying to maintain the cost of storing this data, that responsibility falls on those using it, such as protocols, exchanges, or indexing services. 

These data blobs are expected to be implemented in Q4 2023, followed by Danksharding to dramatically increase the transactions per second (TPS) of the network. 

Increased TPS and layer-2 throughput would cement Ethereum as the ideal platform to conduct DeFi transactions, host dApps, and trade ERC-20 tokens without taking out a second mortgage on the family farm. 

Improved macro conditions

Central bank interest rates have been steadily increasing since the end of the pandemic, causing investors rush to pile into safer investments, such as US Treasury Bonds, and driving down the value of risk-on assets, including cryptocurrencies. 

The poor macro-economic environment is a global consequence of the quantitative easing, or stimulus spending, that occurred during the pandemic, and was quickly followed by inflation. The reverse of easing, quantitative tightening, is currently being wielded to increase interest rates and ring out the excess capital still in the economy to bring inflation back down.

However, governments will eventually have to decide when enough anti-inflation measures have been deployed, or else a recession will begin and further damage the economy. Preston Caldwell, senior economist of the MorningStar Research Services LLC, estimates that rates will begin to be cut in early 2024, claiming that this will be when inflation appears to be returning to the target of 2%.

Honorable Mention: U.S. Elections

There’s been some speculation that Satoshi Nakamoto timed his Halving cycle to coincide with the U.S. election cycle. Politicians are notoriously apprehensive to try anything economically risky that might hurt their voters’ pockets during an election year. With a growing percentage of the population now owning crypto, especially the younger demographic, cryptocurrency regulation will become a very hot issue next year. With candidates such as Robert F. Kennedy, Tulsi Gabbard and Vivek Rawasamy all throwing their weight behind Bitcoin at May’s flagship Bitcoin 2023 Miami conference, expect a muted response from regulators in 2024. 

Conclusion

The previous cycle’s objectives were laser-focused on attaining mainstream adoption, onboarding newcomers to crypto and Web3, and demonstrating that digital assets offer substantial advantages to the global economy and traditional banking system. 

This time round, a more sophisticated crypto sector, buoyed by the growth of Web3, will show that it’s expanding its reach to TradFi, as well as integrating new technology like AI to offer users leveled-up DeFi and NFT applications for use across the growing digital economy. 

Let us know your thoughts! Sign up for a Mindplex account now, join our Telegram, or follow us on Twitter. 

Bitcoin Whitepaper: Satoshi’s Halloween Monster Turns 15

Posted on by Werner

Introduction

A not-so-long time ago, a scary monster was delivered into the world on Halloween by a mysterious inventor, then quickly cast out and pursued by a pitchfork-wielding mob of regular folk that accused it of facilitating the most heinous crimes in a place where regular folk didn’t go: The Dark Web. 

I’m of course talking about Bitcoin, not Frankenstein’s deadhead. In both instances, these creatures have proven to be all but unkillable in the best of Halloween traditions. In Bitcoin’s case, the original cryptocurrency has been giving the traditional finance sector, governments, and regulators the heebie-jeebies ever since. 

Let’s journey back to explore the genius behind it, and the key concepts that have reshaped the world of finance and technology.

What is the Bitcoin Whitepaper?

The Bitcoin Whitepaper is a concise, nine-page masterpiece written by an enigmatic figure known as Satoshi Nakamoto. Its title, “Bitcoin: A Peer-to-Peer Electronic Cash System,” immediately hints at its revolutionary nature. Essentially, it proposes a system for conducting electronic transactions without the need for intermediaries like banks, using a digital currency named Bitcoin (BTC). 

Satoshi Nakamoto distributed the Bitcoin Whitepaper on October 31, 2008, to the metzdowd.com mailing list of pioneering cryptography and digital privacy enthusiasts known as cypherpunks. Remarkably, this was a mere 46 days after the collapse of Lehman Brothers, a major event in the global financial crisis. The timing was impeccable, sparking the beginning of a new financial era. 

Its ideas laid the foundation for cryptocurrency and blockchain technology and were transformed only 2 months later (3 January 2009’s Bitcoin Genesis Block) into arguably the greatest financial technology innovation that the world has seen. It provided its adopters with the ability to create a decentralized network with a digital currency that was open to all and devoid of intermediaries or geographical borders.

The whitepaper emerged during the global financial crisis of 2008, a time when the public’s trust in traditional financial institutions had been severely eroded, and was inspired by the failure of banks to protect normal investors. Nakamoto’s solution was a system that could operate without reliance on such institutions, providing a secure, trustless, and efficient way to exchange value. It contained revolutionary new concepts and solutions to a problem that has plagued humankind for millennia.

And interestingly enough, it almost sunk without a trace, receiving a very lukewarm response that forced Nakamoto to reprint it again on 3 November 2008. This time, their community noticed, and the rest is history. 

When Was the Bitcoin Whitepaper Published?

Who is Satoshi Nakamoto?

The identity of Satoshi Nakamoto remains one of the greatest mysteries in the crypto world. Whether it’s a single individual or a group working under this pseudonym, Nakamoto’s true identity remains unknown. 

Despite various claims and speculations, the creator of Bitcoin has chosen to remain in the shadows or is not alive anymore, allowing the cryptocurrency to thrive without a central figure and become a clear commodity instead of a hated security. 

The leading candidates range from (deceased/cryogenically frozen) engineer Hal Finney to British programmer Adam Back (according to this documentary) to controversial names like “Fake Satoshi” Craig Wright and incarcerated felon Paul LeRoux. And who can forget poor Dorian Nakamoto?

Significantly, Satoshi used the words “we” and “our” way before they became gender-bending personal pronouns, and this indicates that more than one member of the Cypherpunks was involved. In any case, the Bitcoin Whitepaper is built on ideas that were developed over decades. 

Here are a few of the biggest pre-Bitcoin block builders:

•  Adam Back’s Hashcash, developed in 1997, influenced Bitcoin’s proof-of-work system by introducing the idea of using computing power as a security measure.
•  Nick Szabo’s Bit Gold proposal in 1998, although never implemented, shared similarities with Bitcoin, including the use of proof-of-work and decentralized timestamped transactions.
•  Wei Dai’s b-money, also from 1998, contributed ideas like community verification and recording of transactions, a cornerstone of Bitcoin’s decentralized network.
•  Hal Finney’s Reusable Proof of Work (RPOW) in 2004 demonstrated the secure transfer and exchange of digital tokens without a central authority, aligning with Bitcoin’s core principles.

These pioneers contributed a Lego set of ideas and intellectual property that Satoshi deconstructed and remolded to create Bitcoin. Which was a perfect expression of the cypherpunk movement that uses open-source collaboration to continue to shape cryptocurrency innovation today in arenas as diverse as Web3, DeFi, Crypto AI, and Ethereum’s evolution.

Credit: Tesfu Assefa

Bitcoin Whitepaper: Core Concepts To Know

What is the double-spending problem?

At the heart of the Bitcoin Whitepaper lies the “double-spending problem.” This challenge arises in digital currency systems when someone attempts to spend the same digital token more than once. How could participants trust without a central intermediary who’s keeping tabs that counterparties did not act maliciously? We need to know that the previous owners did not sign any earlier transactions.

Nakamoto proposed a brilliantly simple but effective mechanism: the network had to be able to announce all transactions publicly and establish a consensus mechanism among network participants. In simple terms, only the first transaction with a specific digital coin is considered valid. This consensus is achieved by publicly broadcasting all transactions on the Bitcoin network, preventing double-spending. 

Satoshi’s P2P system for electronic payments requires a distributed network of honest nodes. As long as the honest nodes have more CPU power than bad actors, the system will stay secure and be able to reject fraud. The nodes “vote” with their computer power. A voting system can also be used to govern changes, rule changes and incentives. 

Solving the Byzantine Generals’ Dilemma

Though not explicitly mentioned in the whitepaper, the concept of the Byzantine Generals’ Dilemma is crucial to understanding Nakamoto’s blockchain design. It addresses the challenge of achieving consensus among distributed nodes that may be untrustworthy or malicious. Consensus mechanisms like proof-of-work (PoW) are employed to overcome this dilemma.

The Timestamp Server: Creating an Immutable Transaction History

The timestamp server is pivotal in maintaining the integrity of the Bitcoin network. It orders transactions and prevents double-spending by using cryptographic hashes. The use of SHA-256 hashing ensures security and authenticity.

SHA-256: Secure Hash Algorithm 256-bit

SHA-256 is a widely used hashing algorithm in Bitcoin. It transforms transaction data into a unique, fixed-length string of 256 bits, providing a digital fingerprint for verification and security.

How do miners timestamp transactions?

Miners play a vital role in the Bitcoin network by competing to solve cryptographic puzzles that are adjusted by an algorithm to become more difficult or easier every 2,016 blocks (about 2 weeks), depending on the number of mining participants. They timestamp blocks and strengthen the validity of previous timestamps, creating a blockchain of transaction data that can be viewed on a public ledger online. This ensures trust and agreement across the network.

Reclaiming Disk Space with Merkle Trees

As a blockchain grows, storage eventually becomes a concern. Nakamoto’s solution involves using Merkle trees to optimize data storage. These trees reduce the space required for historical transactions while maintaining security.

Single Payment Verification (SPV) Wallets

Nakamoto envisioned a decentralized payment network where everyone could store and transfer digital assets securely. Single Payment Verification (SPV) wallets offer a lightweight and efficient way to verify transactions without downloading the entire blockchain. They prioritize convenience and mobility while maintaining trustworthiness.

Conclusion

Whether you consider the crypto sector to be a Ponzi trick or a lucrative treat that will one day pay for your retirement if you can HODL onto it long enough, there’s no denying after reading Satoshi Nakamoto’s whitepaper that it is a work of genius that has irrevocably changed the world of finance and technology through the power of decentralization.

Bitcoin has provided the world population with the ability to create money for the people, by the people, that is immune to centralized intermediary ills like inflation and corruption. What we do with this gift, and who we choose to trust as leaders, is of course up to us. If you look at the plundering and damage done by the likes of North Korea’s Lazarus Group and false prophets like Sam Bankman-Fried and Do Kwon in recent years, there’s still a long way to go. 

The beauty of Bitcoin is that it doesn’t require you to trust people, only its code. In just nine pages, it offers elegant solutions to age-old monetary challenges, providing a decentralized, trustless, and secure system for exchanging value. 

With Bitcoin, the power shifts from centralized institutions to the people, marking a significant step toward a more equitable financial future. 

With 2024 ushering in another Bitcoin Halving and in all likelihood a Bitcoin Spot ETF, the holy grail of crypto milestones,Satoshi’s benevolent monster is only getting started. 

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Stablecoins Deliver Us From Fiat and CBDCs

Posted on by Werner

Introduction

Stablecoins are a core but often misunderstood component of the Web3 sector. They provide price stability and easy on-ramps and off-ramps for users who want to protect themselves against market price fluctuations. At the time of writing, the total stablecoin market cap sits at $125 billion. Tether USD (USDT) has ⅔ of this market, with $85 billion, and USDC contributes ⅕ at just over $25 billion. 

When the first generation of stablecoins came to market in 2014, they revolutionized the crypto industry, offering a stable value asset to help hedge market volatility. In the decade since, stablecoins like Tether (USDT), Circle USD (USDC), and Binance USD (BUSD) have forged ahead despite regulatory scrutiny and the occasional depegging, while early experiments like BitUSD and Nubits have failed and disappeared into obscurity. 

A new generation of stable cryptocurrencies is coming to market, such as Cardano’s Djed. With artificial intelligence the flavor of the year, SingularityNET’s Cogito Protocol and its AI-powered synthetic assets GCoin and XCoin are also drawing widespread interest. We’ll cover them briefly in this article and more in-depth in a follow-up piece.

Last year’s cataclysmic collapse of UST, the Terra Luna algorithmic stablecoin, saw confidence in crypto completely evaporate in days along with billions of dollars of retail investor funds. Regulators paid attention and sharpened their pitchforks for the crypto space – they basically want stablecoins to comply or die, and we really only have ourselves (and Do Kwon) to blame for it. 

There has since been a shift in public sentiment, with regulators beginning to understand that stablecoins don’t aim to replace fiat currency, but rather complement it with their unique advantages, which we’ll be discussing in this article. 

In the last couple of months, major positive developments have helped to further adoption on blockchains such as Ethereum, despite resistance from lawmakers and the rise of central bank digital currencies (CBDCs).

These include the US Fed clarifying rules for how banks should deal with stablecoins, PayPal’s launch of its own PYUSD stablecoin, and Circle’s partnership with Grab, making USDC available as a Web3 payment tool to the Southeast Asian super-app’s nearly 200 million users. 

So what makes stablecoins so much better than fiat currencies and those scary CBDCs? 

Credit: Tesfu Assefa

Fiat Currency vs Stablecoins

Fiat currency is a legal tender whose value is backed by the government that issued it. It’s not backed by a physical asset like gold or silver, but rather leverages society’s belief and trust in its government. The word ‘fiat’ is Latin and translates as ‘let it be done’. Basically, fiat currency is a binding IOU from your central bank that you can use to acquire and transfer value. 

Stablecoins are a type of digital asset inspired by fiat currency, but they aim to remove fiat currency’s cost, centralized control, and distribution. They are pegged in value to a real-world asset such as the US Dollar or Euro or even a commodity like gold. 

The stablecoin issuer usually has to maintain a reserve of collateralized assets which must be audited in order to comply with financial legislation. Failure to do so can result in huge fines, and for good reason, as we saw in the past. 

Here’s a table of comparison:

DifferenceStablecoinsFiat CurrencyAdvantage/Disadvantage
NetworkOperate on decentralized blockchain networks.Centralized, issued, and regulated by governments.Stablecoins cannot be controlled or manipulated by one entity.
BackingValue is pegged to a reference asset like fiat currency or commodities.Value is derived from public trust and the stability of the issuing country.Stablecoins are usually fully collateralized by real assets. 
Intrinsic ValueDerive value from the assets they are pegged to.Lack of intrinsic value as they are not backed by tangible assets.Stablecoins are usually fully collateralized by real assets.
VolatilityDesigned to be less volatile by being pegged to stable assets.Generally less volatile due to the stability of the issuing government.Stablecoins can de-peg when they’re targeted by regulators or rumors of mismanagement circulate. 
Digital NaturePurely digital and programmable, capable of interacting with smart contracts.Exist in both physical and digital forms.Stablecoins can be used by DeFi applications to borrow, lend, stake and transfer assets seamlessly.
RegulationSubject to some regulations but not directly controlled by central banks.Regulated by central banks and governments.The lack of global regulations undermines institutional trust in stablecoins and can lead to exploitation, as we saw with Luna Terra.
CostTransactions are faster, cheaper, and more transparent.Transactions can be slower and more expensive, especially for cross-border transfers.Stablecoins are simply superior in terms of effective transacting. 

The New Breed of Stablecoins

Despite the well-documented failure of Terra Luna and its UST stablecoin, new algorithmic coins like Djed and Cogito are continuing to innovate in their efforts to establish a truly decentralized stablecoin that’s impervious to regulatory intervention and uses the best of new technology such as AI cryptocurrency technology in its quest. 

Cardano’s Djed

Launched in January 2023 on the Cardano blockchain, Djed is an algorithmic stablecoin and joint venture between Input Output Global (IOG) and COTI. The project maintains its peg by over-collateralization, filling its reserves with a big chunk of ADA cryptocurrency, between 400-800% of Djed’s value. 

They also use a second token called SHEN. This helps keep the system stable and easy to trade. Djed has had some ups and downs in value, mainly because there hasn’t been enough trading activity or demand. Djed represents an ambitious attempt at a transparent, decentralized stablecoin after previous failures like UST, but still needs to prove it can reliably maintain its peg over the long term.

AI ‘tracer coins’: Cogito’s XCoin and GCoin

Cogito Protocol, part of the SingularityNET ecosystem, is creating a new type of digital money called ‘tracercoins’. Unlike regular stablecoins, which are tied to real-world currencies like the dollar, tracercoins ‘trace’ non-financial indices like sustainability and technological progress and use AI and algorithms to create stable pricing. Cogito is still in beta and plans to launch two types of coins: GCoin, which will track progress towards climate sustainability goals. and the even more experimental XCoin. These coins will be available for anyone to buy and sell on decentralized finance (DeFi) platforms, starting with networks like SingularityNET and Cardano.

Conclusion

Fiat currency issued by governments remains the dominant form of money today, but stablecoins offer a compelling alternative, thanks to their advantages of decentralization, transparency, speed, low cost, and global reach.

Despite regulatory headwinds, algorithmic stablecoin innovation isn’t stopping. The dream is still alive: create a stable dollar-pegged digital asset that cannot be shut down by governments or tanked through fraud or manipulation. 

While CBDCs will challenge their global growth, stablecoins like USDC, USDT, and BUSD and a new generation of algo-backed stablecoins like Cardano’s Djed will continue providing benefits that CBDCs simply cannot replicate, thanks to their decentralization and 24/7 availability that can be tapped into by anyone anywhere in the world. 

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