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

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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. 

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What is the price of human creativity?

In a world where LLMs are able to generate ideas for dime a dozen, can humans expect to retain their role in society?

Credit: Zoran Spirkovski

In an era of rapid technological advances, Large Language Models (LLMs), are seen as a frontier pushing the boundaries, especially in the realm of human creativity. LLMs like GPT-4, can generate text that is not only coherent but also creative. This has led some to speculate that such models could soon surpass human ingenuity in generating groundbreaking ideas. Research has found that the average person generates less creative ideas than LLMs, but the best ideas always come from the rare creative humans.

This leads us to one crucial question: “Can AI agents discern what makes an idea good?” Even though they are capable of generating ideas, they cannot (at this time) properly understand the quality of their ideas.

Before we get ahead of ourselves, let’s have a short dive into how AI agents work.

The Mechanics of AI and Language Models

Credit: Zoran Spirkovski

Nobody doubts that artificial intelligence is a game-changer. If you are reading this article, you are on the forefront of the explorers of the effects of this technology, and have probably played with it first-hand. 

AI has revolutionized many different industries since the 1950s, when machine learning was first conceptualized. But let’s narrow our focus a bit on the superstars of today, Large Language Models (LLMs) like GPT-4 and LLaMA. What is it about them that sets them apart?

Most people don’t have the time to learn how to properly work and prompt LLMs. ChatGPT, in particular, opened the floodgates by providing a pre-prompted model that is highly effective at understanding the context of requests and giving its best shot at producing the desired output. GPT was available before, through the OpenAI dashboard and API, but ChatGPT is what made it accessible and thus popular.

Certainly, it has its own issues and quirks, but fundamentally it does a good enough job that it can actually save you time in your work. Up to you if you consider it ethical or not.

So, how do they actually work?

Credit: Zoran Spirkovski (Enhanced by Tesfu Assefa)

Well, if you’ve been living under a rock, give it a spin at https://chat.openai.com. The free GPT 3.5 version is good enough to give you a demonstration of its capabilities. 

These models have been trained on vast sets of text data and they are able to combine, regurgitate, and generate outputs in response to instructions (prompts), sometimes in completely unique ways.

So they can churn out content that appears original, but the kicker is that they don’t understand the value or meaning of the longer forms they themselves generate. You need a human for that. They produce highly legible and contextual outputs, relying on their training analyzing large sets of text and identifying patterns among words. They then use this information to predict what comes next. Models use so-called ‘seeds’: random numbers that make each response unique and varied. This is why it sometimes feels like a hit or miss with prompts that worked one day, but not the next. 

The Bottom Line:

Are LLMs a valuable tool for the modern creative worker? 

Absolutely.

Are they a replacement for human creativity

Not by a long shot.

What Makes an Idea Good?

Credit: Zoran Spirkovski

AI models share some similarities with human brains. They both rely on prediction mechanisms to generate outputs. The difference is models predict the next word in a sentence, while humans are trying to predict future outcomes based on the entire flow of an idea. We don’t just blindly generate ideas for the sake of it, although that too happens when we are bored.

Most often, we already have some goal behind our ideas. Whether this is to make money, deal with a specific problem or situation, or decide what kind of outfit and perfume will present us in the best light. These are all goal-oriented endeavors.

Models, on the other hand, are prompt driven – prediction is their only goal. So they do their best to fulfill the criteria of the prompt as they understand it, and predict which words are most likely to be the correct answer. 

Fundamentally, defining what is a ‘good idea’ is incredibly difficult. At the moment, only humans decide on which ideas are good for which situation – and we’re not really great at doing that. We’ve all embraced an idea only to generate a terrible result, and vice versa, misjudged ideas that ended up having great outcomes. 

So it cannot be the outcome alone that decides the goodness of the idea. Other factors play a role, and are all context-dependent. If you are an artist, originality will dictate what is a good idea. If you are a mother, the safety and wellbeing of your children will play a major role.

Some good ideas are established. They have a brand reputation. For example these would be:

•  Going to the dentist regularly
•  Not spending all the money you have and investing some of the money you save
•  Have enough food to avoid constant trips to the supermarket (or to survive the winter)
•  Don’t go outside naked

The conclusion I draw here is that ideas are as good as the context in which they were made. Evaluating any one of them requires great understanding and awareness of the physical, emotional, and mental state of the person that made them, as well as their worldview, knowledge, and desires.

In other words, only you (and sometimes your psychiatrist) could know what a good idea is. 

In your experience, what has made an idea good or bad? Is it its impact, its uniqueness, or something else entirely? Share some stories in the comments.

So when we talk about AI generating ideas, it’s not enough to ask if those ideas are new or unique. We must also ask if those ideas are impactful, relevant, and emotionally resonant. Because that’s where AI currently falls short. It simply can’t evaluate these aspects; it just confabulates based on what it’s been trained to do.

AI and Human Creativity: A Symbiotic Relationship

Credit: Zoran Spirkovski

It would be shortsighted to dismiss AI and LLMs as mere tools with zero utility. This is precisely why we don’t see anybody argue that LLMs are useless. In fact, they are great and can do a better job than an average person in some tasks, but they still need at least an average person to be able to do the job. So collaboration is in order.

AI can act as a brainstorming partner, throwing out hundreds of ideas a minute. This ‘idea shotgun’ approach can be invaluable for overcoming creative blocks or for quickly generating multiple solutions to a problem.

Take the instance of the short film Sunspring, written by an AI but directed and performed by humans. The AI provided the raw narrative, but it was the human touch that turned it into something watchable, even if they didn’t edit it at all. This was created seven years ago. The LLMs we have today like ChatGPT would do a much better job. Yet somehow the crew managed to turn it into a compelling story.

Consider musicians who use AI to explore new scales, filmmakers who use it for script suggestions, or designers who employ AI to create myriad design prototypes. They’re not using AI to replace their own creativity, but to augment it.

Here’s the key: the human mind filters these AI-generated ideas, selects the most promising ones, refines them, and brings them to life. In other words, humans provide the ‘why’ and ‘how’ that AI currently lacks. Fundamentally, human creativity is simply priceless.

Why use AI in your creative work?

•  Speed: AI can rapidly generate ideas
•  Diversity: It can cover a broad spectrum of topics
•  Insight: But it lacks the depth of human intuition
•  Skill Enhancement: Write better or create unique art (even if you are not an ‘artist’)

Personally, I’m not worried. I see AI as an extension of my creativity. AI can be a powerful ally in our creative endeavors, serving not as a replacement but as an enhancement to human creativity.

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Bitcoin Whitepaper: Satoshi’s Halloween Monster Turns 15

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

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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Against Contractionism: Enabling and encouraging open minds, rather than constricting understanding with blunt labels

A dangerous label

Imagine if I said, “Some Christians deny the reality of biological evolution, therefore all Christians deny the reality of biological evolution.”

Or that some Muslims believe that apostates should be put to death, therefore all Muslims share that belief.

Or that some atheists (Stalin and Mao, for example) caused the deaths of millions of people, therefore atheism itself is a murderous ideology.

Or, to come closer to home (for me: I grew up in Aberdeenshire, Scotland) – that since some Scots are mean with money, therefore all Scots are mean with money. (Within Scotland itself, that unkind stereotype exists with a twist: allegedly, all Aberdonians are mean with money.)

In all these cases, you would say that’s unwarranted labeling. Spreading such stereotypes is dangerous. It gets in the way of a fuller analysis and deeper appreciation. Real-life people are much more varied than that. Any community has its diversity.

Well, I am equally shocked by another instance of labeling. That involves the lazy concept of TESCREAL – a concept that featured in a recent article here on Mindplex Magazine, titled TESCREALism: Has The Silicon Valley Ruling Class Gone To Crazy Town? Émile Torres In Conversation With R.U. Sirius.

When I read the article, my first thought was: “Has Mindplex gone to Crazy Town!”

The concept of TESCREAL, which has been promoted several times in various locations in recent months, contracts a rich and diverse set of ideas down to a vastly over-simplified conclusion. It suggests that the worst aspects of any people who hold any of the beliefs wrapped up into that supposed bundle of ideas, can be attributed, with confidence, to other people who hold just some of these ideas.

Worse, it suggests that the entire “ruling class” of Silicon Valley subscribe to the worst of these beliefs.

It’s as if I picked a random atheist and insisted that they were equally as murderous as Stalin or Mao.

Or if I picked a random Muslim and insisted that they wished for the deaths of every person (apostate) who had grown up with Muslim faith and subsequently left that faith behind.

Instead of that kind of contraction of ideas, what the world badly needs nowadays is an open-minded exploration of a wide set of complex and subtle ideas.

Not the baying for blood which seems to motivate the proponents of the TESCREAL analysis.

Not the incitement to hatred towards the entrepreneurs and technologists who are building many remarkable products in Silicon Valley – people who, yes, do need to be held to account for some of what they’re doing, but who are by no means a uniform camp!

I’m a T but not an L

Let’s take one example: me.

I publicly identify as a transhumanist – the ‘T’ of TESCREAL.

The word ‘transhumanist’ appears on the cover of one of my books, and the related word ‘transhumanism’ appears on the cover of another one.

Book covers of David Wood’s ‘Vital Foresight‘ and ‘Sustainable Superabundance,’ published in 2021 and 2019 respectively. Credit: (David Wood)

As it happens, I’ve also been a technology executive. I was mainly based in London, but I was responsible for overseeing staff in the Symbian office in Redwood City in Silicon Valley. Together, we envisioned how new-fangled devices called ‘smartphones’ might in due course improve many aspects of the lives of users. (And we also reflected on at least some potential downsides, including the risks of security and privacy violations, which is why I championed the new ‘platform security’ redesign of the Symbian OS kernel. But I digress.)

Since I am ‘T’, does that mean, therefore, that I am also ESCREAL?

Let’s look at that final ‘L’. Longtermism. This letter is critical to many of the arguments made by people who like the TESCREAL analysis.

‘Longtermism’ is the belief that the needs of potentially vast numbers of as-yet unborn (and unconceived) people in future generations can outweigh the needs of people currently living.

Well, I don’t subscribe to it. It doesn’t guide my decisions.

I’m motivated by the possibility of technology to vastly improve the lives of everyone around the world, living today. And by the need to anticipate and head-off potential catastrophe.

By ‘catastrophe’, I mean anything that kills large numbers of people who are currently alive.

The deaths of 100% of those alive today will wipe out humanity’s future, but the deaths of ‘just’ 90% of people won’t. Longtermists are fond of pointing this out, and while it may be theoretically correct, it doesn’t provide any justification to ignore the needs of present-day people, to raise the probability of larger numbers of future people being born.

Some people have said they’re persuaded by the longtermist argument. But I suspect that’s only a small minority of rather intellectual people. My experience with people in Silicon Valley, and with others who are envisioning and building new technologies, is that these abstract longtermist considerations do not guide their daily decisions. Far from it.

Credit: Tesfu Assefa

Concepts are complicated

A larger point needs to be made here. Concepts such as ‘transhumanism’ and ‘longtermism’ each embody rich variety.

It’s the same with all the other components of the supposed TESCREAL bundle: E for Extropianism, S for Singularitarianism, C for Cosmism, R for Rationalism, and EA for Effective Altruism.

In each case, we should avoid contractionism – thinking that if you have heard one person who defends that philosophy expressing one opinion, then you can deduce what they think about all other matters. In practice, people are more complicated – and ideas are more complicated.

As I see it, parts of each of the T, E, S, C, R, and EA philosophies deserve wide attention and support. But if you are hostile, and do some digging, you can easily find people, from within the communities around each of these terms, who have said something despicable or frightening. And then you can (lazily) label everyone else in that community with that same unwelcome trait. (“Seen one; seen them all!”)

These extended communities do have some people with unwelcome traits. Indeed, each of T and S have attracted what I call a ‘shadow’ – a set of associated beliefs and attitudes that are deviations from the valuable core ideas of the philosophy. Here’s a picture I use of the Singularity shadow:

A video cover image from ‘The Vital Syllabus Playlist’ where David Wood examines the Singularity Shadow. Credit: (David Wood)

And here’s a picture of the transhumanist shadow:

A video cover image from ‘The Vital Syllabus Playlist’ where David Wood examines the Transhumanist Shadow. Credit: (David Wood)

(In both cases, you can click on the caption links to view a video that provides a fuller analysis.)

As you can see, the traits in the transhumanist shadow arise when people fail to uphold what I have listed as ‘transhumanist values’.

The existence of these shadows is undeniable, and unfortunate. The beliefs and attitudes in them can deter independent observers from taking the core philosophies seriously.

In that case, you might ask, why persist with the core terms ‘transhumanism’ and ‘singularity’? Because there are critically important positive messages in both these philosophies! Let’s turn to these next.

The most vital foresight

Here’s my 33-word summary of the most vital piece of foresight that I can offer:

Oncoming waves of technological change are poised to deliver either global destruction or a paradise-like sustainable superabundance, with the outcome depending on the timely elevation of transhumanist vision, transhumanist politics, and transhumanist education.

Let’s cover that again, more slowly this time.

First things first. Technological changes over the next few decades will place vast new power in billions of human hands. Rather than focusing on the implications of today’s technology – significant though they are – we need to raise our attention to the even larger implications of the technology of the near future.

Second, these technologies will magnify the risks of humanitarian disaster. If we are already worried about these risks today (as we should be), we should be even more worried about how they will develop in the near future.

Third, the same set of technologies, handled more wisely, and vigorously steered, can result in a very different outcome: a sustainable superabundance of clean energy, healthy nutrition, material goods, excellent health, all-round intelligence, dynamic creativity, and profound collaboration.

Fourth, the biggest influence on which outcome is realized is the widespread adoption of transhumanism. This in turn involves three activities:

• Advocating transhumanist philosophy as an overarching worldview that encourages and inspires everyone to join the next leap upward on life’s grand evolutionary ladder: we can and should develop to higher levels, physically, mentally, and socially, using science, technology, and rational methods.
• Extending transhumanist ideas into real-world political activities, to counter very destructive trends in that field.
• Underpinning the above initiatives: a transformation of the world of education, to provide everyone with skills suited to the very different circumstances of the near future, rather than the needs of the past.

Finally, overhanging the momentous transition that I’ve just described is the potential of an even larger change, in which technology moves ahead yet more quickly, with the advent of self-improving artificial intelligence with superhuman levels of capability in all aspects of thinking.

That brings us to the subject of the Singularity.

The Singularity is the point in time when AIs could, potentially, take over control of the world from humans. The fact that the Singularity could happen within a few short decades deserves to be shouted from the rooftops. That’s what I do, some of the time. That makes me a singularitarian.

But it doesn’t mean that I, or others who are likewise trying to raise awareness of this possibility, fall into any of the traits in the Singularity Shadow. It doesn’t mean, for example, that we’re all complacent about risks, or all think that it’s basically inevitable that the Singularity will be good for humanity.

So, Singularitarianism (S) isn’t the problem. Transhumanism (T) isn’t the problem. Nor, for that matter, does the problem lie in the core beliefs of the E, C, R, or EA parts of the supposed TESCREAL bundle. The problem lies somewhere else.

What should worry us: not TESCREAL, but CASHAP

Rather than obsessing over a supposed TESCREAL takeover of Silicon Valley, here’s what we should actually be worried about: CASHAP.

C is for contractionism – the tendency to push together ideas that don’t necessarily belong together, to overlook variations and complications in people and in ideas, and to insist that the core values of a group can be denigrated just because some peripheral members have some nasty beliefs or attitudes.

(Note: whereas the fans of the TESCREAL concept are guilty of contractionism, my alternative concept of CASHAP is different. I’m not suggesting the ideas in it always belong together. Each of the individual ideas that make up CASHAP are detrimental.)

A is for accelerationism – the desire to see new technologies developed and deployed as fast as possible, under the irresponsible belief that any flaws encountered en route can always be easily fixed in the process (“move fast and break things”).

S is for successionism – the view that if superintelligent AI displaces humanity from being in control of the planet, that succession should automatically be welcomed as part of the grand evolutionary process – regardless of what happens to the humans in the process, regardless of whether the AIs have sentience and consciousness, and indeed regardless of whether these AIs go on to destroy themselves and the planet.

H is for hype – believing ideas too easily because they fit into your pre-existing view of the world, rather than using critical thinking.

AP is for anti-politics – believing that politics always makes things worse, getting in the way of innovation and creativity. In reality good politics has been incredibly important in improving the human condition.

Conclusion

I’ll conclude this article by emphasizing the positive opposites to the undesirable CASHAP traits that I’ve just listed.

Instead of contractionism, we must be ready to expand our thinking, and have our ideas challenged. We must be ready to find important new ideas in unexpected places – including from people with whom we have many disagreements. We must be ready to put our emotional reactions on hold from time to time, since our prior instincts are by no means an infallible guide to the turbulent new times ahead.

Instead of accelerationism, we must use a more sophisticated set of tools: sometimes braking, sometimes accelerating, and doing a lot of steering too. That’s what I’ve called the technoprogressive (or techno-agile) approach to the future.

Credit: David Wood

Instead of successionism, we should embrace transhumanism: we can, and should, elevate today’s humans towards higher levels of health, vitality, liberty, creativity, intelligence, awareness, happiness, collaboration, and bliss. And before we press any buttons that might lead to humanity being displaced by superintelligent AIs that might terminate our flourishing, we need to research a whole bunch of issues a lot more carefully!

Instead of hype, we must recommit to critical thinking, becoming more aware of any tendencies to reach false conclusions, or to put too much weight on conclusions that are only tentative. Indeed, that’s the central message of the R (rationalism) part of TESCREAL, which makes it all the more ‘crazy town’ that R is held in contempt by that contractionist over-simplification.

We must clarify and defend what has been called ‘the narrow path’ (or sometimes, simply, ‘future politics’) – that lies between states having too little power (leaving societies hostage to destructive cancers that can grow in our midst) and having too much power (unmatched by the counterweight of a ‘strong society’).

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