Autor Cointelegraph By Ariel Shapira

In his monthly crypto tech column, Israeli serial entrepreneur Ariel Shapira covers emerging technologies within the crypto, decentralized finance (DeFi) and blockchain space, as well as their roles in shaping the economy of the 21st century.The post-mortem consensus on the crypto market crash among industry leaders ranging from Polygon co-founder Mihailo Bjelic to billionaire crypto investor Mark Cuban is that bear markets are a healthy way of cleansing the market. The latter even referred to a line used by long-time crypto critic Warren Buffet to express his opinion of the matter.“Only when the tide goes out do you discover who’s been swimming naked.”Of course, no one in the industry would dispute the claim that bear markets weed out the weak, or, in this case, the nakedly corrupt. But we’d be mistaken to leave the analysis at that as if more than $700 billion being wiped out overnight is something we should continue to accept from crypto markets. It’s important to understand the major factors in this last bull run that led to its massive demise, and how to foster a more stable market going forward.NFTs: Blessing or bygone?We’re five years out from the first monumental crypto crash spurred by the infamous initial coin offering (ICO) boom of 2017. As an industry still in its infancy, most of the projects sprouting during this period and driving investment were random coins claiming to be the next Bitcoin (BTC). The industry has developed quite a bit since then, and this time, other applications of blockchain drove the hype.So, what was the last bull run’s version of scammy ICOs? Several factors contributed to the latest market boom that propelled Bitcoin to almost $70,000 per coin. But perhaps the most similar at their core — and yet often more ridiculous — to the ICOs of yesteryear were nonfungible tokens (NFT), a market that reached a whopping $25 billion in 2021. The industry perhaps reached peak hype when the NFTs from the Bored Ape Yacht Club (BAYC) collection were selling for hundreds of thousands — and later millions — of dollars in Ether (ETH). Celebrities got involved, as well as industry icons such as Adidas, Coachella and even the Super Bowl.Related: Beyond the hype: NFTs can lead the way in transforming business experiencesThen it all went south when everyone discovered more than 80% of the NFTs created for free on OpenSea were either frauds or scams. The cash-grab culture was put on full display in person at the NFT.NYC event in late June.That being said, it’s not as though many in crypto deny that the technology behind NFTs will redefine ownership and play a major role in Web3. But how can we move toward that future without sams riding innovation’s coattails?It’s actually quite clear-cut. A path forward for NFTs and the technology behind them is to tie them to desirable physical assets and harness their ability to authenticate and secure products.For instance, companies in the luxury goods industry have been exploring utilizing NFTs as a means to combat the proliferation of counterfeit items. Projects such as the Aura Blockchain Consortium, headed by luxury behemoths LVMH and Prada Group, harness the power of NFT technology for product authentication, supply chain transparency and data ownership for their physical products.It’s not necessarily about selling a digital sneaker but enhancing the product and brand experience for their affluent clientele. Jewelry company Yvel, for example, launched a securities and trading platform tied to fine jewelry and precious metals as guarantees — actually pegging the NFTs to tangible products instead of JPEGS.Related: NFT 2.0: The next generation of NFTs will be streamlined and trustworthyBlockchain’s greener pasturesSurviving the bear market is not just an imperative for NFTs, but for more foundational crypto assets as well — which, by the way, haven’t totally corrected for their tendency toward scams either. The collapse of algorithmic stablecoins is likely to cause a serious aversion for casual holders and companies from meaningfully exploring how to tie crypto to traditional assets, but that does not mean all hope is lost. The path forward here really does lie in focusing on creating a product that meets a real, tangible market need — not unsimilar from the solution to the NFT market collapse.Related: What can other algorithmic stablecoins learn from Terra’s crash?That’s a take we’ve all heard before. So, how do we meaningfully get there this time? It all goes back to the basics of business. To thrive, startups need to find a problem that they are trying to solve, and that problem can’t simply be that the founder isn’t wealthy enough. So, what are the sectors on which meaningful coins can focus?Minimizing environmental impact and operating sustainably has long been a white whale for crypto and blockchain projects. A recurring critique of crypto and the blockchain as a whole are that they cause serious harm to the environment due to the emissions caused by token mining and other crypto byproducts. As of now, a majority of projects have been unable to shake off this stigma, but new developments can help spearhead a substantial change to this narrative.In the wider business world, sustainability has quickly become a core value for a modern company to embody. While many of these corporate commitments are either superficial or encompass anebulous promise to reduce carbon emissions by a certain year, there are more concrete steps that crypto can borrow from. One such development has been the adoption of corporate carbon credits, which, while imperfect, are a worthwhile way for corporations to offset their emissions and ecological footprint.Related: Green finance needs voluntary carbon markets that workThough there have been major blockchains leading the charge on eco-friendly operations, such as Cardano and Algorand, allowing crypto holders the option to join in on the carbon market is another way to encourage sustainable development. Projects offering crypto-specific carbon credits or tokens tied to external carbon credits, such as CC Token, which opens access to investing in carbon credit futures for businesses and individuals, provide investors tangible value. Others are working to make the second-largest blockchain by market capitalization, Ethereum, more eco-friendly.The crypto and blockchain industry has been defined by its rambunctious nature and revolutionary ambitions. While any emerging industry is bound to be subjected to volatility, downturns and roadblocks, the latest bear market should send a clear signal to projects: It’s all about finding a problem that needs to be solved, and actually using your product to solve it.This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.Ariel Shapira is a father, entrepreneur, speaker, and cyclist and serves as the founder and CEO of Social-Wisdom, a consulting agency working with Israeli startups and helping them to establish connections with international markets.

In his monthly crypto tech column, Israeli serial entrepreneur Ariel Shapira covers emerging technologies within the crypto, decentralized finance (DeFi) and blockchain space, as well as their roles in shaping the economy of the 21st century.While regulation is always a hot topic for the crypto scene, it is always interesting to take a sneak peek behind the curtains and get a sense of how the people writing the rulebook see the state of the game. In late May, Israel’s crypto enthusiasts and entrepreneurs got a chance to do just that as they converged for the annual Israel Crypto Conference, taking place on May 23–25. Participating on one of its panels was none other than Ilan Gildin, chief economist and strategic adviser at the Israel Securities Authority. Gildin joined other prominent panelists, including Maya Zehavi of a stealth-mode venture fund, and Jonathan Shek of Oz Finance, to share his thoughts on DeFi’s future prospects. That’s where he revealed that a whole array of Israel’s financial authorities had been preparing a comprehensive and holistic regulatory framework for digital assets. The document was coming in the near future, he shared, and the powers that be were looking to foster the growth of Israel’s crypto industry in a responsible and compliant way.Now, any Israeli will tell you that here, “near future” can mean anywhere between a few weeks and a few years, and the latter is more likely. Still, some in the audience were probably curious to hear about the upcoming rulebook, and Ilan’s acknowledgment that some of crypto’s unique features are indeed valuable. The crypto winter will show which ones those are, he said, as the DeFi space also has its fair share of hot air, too.Crucially, he also pointed at some of the key concerns that the regulators may take aim at. When code is law, someone has to explain it truthfully to those not in the know, he shared, and also pointed at stablecoins as the “glass ceiling” for the crypto industry — an understandable concern, given Terra’s recent meltdown and the response it produced from the authorities.[embedded content]We don’t need the Israeli authorities to tell us to do code audits, Maya snapped back, stressing that the industry was taking its own steps toward regulations and good practices. This was indeed the sentiment that I got from many of those attending. As regulators scramble to make their first moves, the industry is already figuring out its own ways and standards, moving at the pace of the business, not the government. Still, even more came out with a different plea: Give us certainty, any kind, the sooner, the better. And they were not wrong.Related: DeFi: Who, what and how to regulate in a borderless, code-governed world?Maybe yes, maybe noIsrael’s authorities have quite an ambivalent relationship with digital assets. A year ago, the country’s central bank, the Bank of Israel (BoI), was experimenting with a blockchain-based digital shekel based on Ethereum — a private, siloed fork, judging by the reports at the time. The body has a positive outlook for a digital national currency, as it revealed in May 2021, deeming the prospect to be beneficial for the Israeli economy. Later on, in November, Bank of Israel governor Amir Yaron told Reuters the body was stepping up its research efforts into the digital shekel and that the country was looking to spearhead the push into central bank digital currencies.The prospect indeed looks quite reasonable. Israel’s blockchain scene is bustling with innovation, so it would only make sense for the country to lead the charge in the field: From adding resiliency to payments infrastructure to helping the government weed out cash in efforts to tackle the shadow economy problem, as the Bank of Israel rightfully noted in its own report. More importantly, though, it would position the nation at the forefront of the digital economy and draw in foreign investment, allowing the country to work as the testing ground for the new financial paradigm.Related: US central bank digital currency commenters divided on benefits, unified in confusionAccording to María Luisa Hayem, El Salvador’s Minister of Economy, who also spoke at ICC 2022, this is exactly what happened with El Salvador after adopting Bitcoin as legal tender. The country had drawn in innovative companies looking to play-test their products with an eye on larger regional expansion, she told the attendees, welcoming them to join in. Israel could do the same for the larger Middle East, showcasing a new-generation economy powered by a strong and resilient blockchain infrastructure. It could even give Israel another common ground to explore with other forward-thinking nations in the region, such as the United Arab Emirates, which is also experimenting with the blockchain, and further advance its regional integration.[embedded content]Still, the Jewish State is not exactly there at this point, and despite the BoI’s overtures to digital shekel and instructing banks to open to profits from crypto — a real boon to crypto businesses, which used to struggle with their banking — there is a lot of room for progress. And frankly, a regulatory framework indeed sounds like a great starting point, as it would give companies a clear-cut system of coordinates to follow when launching and expanding their operations.On top of that, an opportunity to run as a fully compliant and regulated entity from Israel without having to seek a license from Gibraltar, Malta or other crypto-friendlier jurisdictions would make life more convenient for businesses. The regulated status does open doors, after all, especially if you are in the business of serving institutional clients, toward whom the crypto scene is growing increasingly friendly.All in all, Israel, like many other nations, stands a lot to win from opening up to blockchain and crypto assets. So, it’s no surprise that everyone I spoke with at the ICC was looking forward to more government action because certainty, in any shape or form, is the ultimate precondition for that to happen.This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.Ariel Shapira is a father, entrepreneur, speaker, and cyclist and serves as the founder and CEO of Social-Wisdom, a consulting agency working with Israeli startups and helping them to establish connections with international markets.

In his monthly crypto tech column, Israeli serial entrepreneur Ariel Shapira covers emerging technologies within the crypto, decentralized finance (DeFi) and blockchain space, as well as their roles in shaping the economy of the 21st century.The crypto market, just as any other market, runs in cycles. Even though digital assets are known, if not infamous, for being more volatile than many other asset types, their price action still follows a familiar pattern of ups and downs. Some of this, such as Bitcoin’s (BTC) four-year cycle, largely comes down to the algorithm’s intrinsic rules — more specifically, the halving of miners’ rewards. Off-chain factors, such as the U.S. tax-reporting rules, can also come into play.Still, while the market’s logic dictates change, the logic itself remains largely unchanging. In other words, in the same way a bull run eventually runs out of steam and hits a plateau, bears eventually lose grasp of the market as well, giving way to another upshoot.For now, of course, the market is still recovering from Terra’s crash and many other pressures that there has been no shortage of in the past few years. As fragile as its rebound attempts may be, and as red as every coin is compared to just a few months ago, the global crypto scene is hunkering down and powering on in wait for another bull run. So, where could it come from?Related: How to survive in a bear market? Tips for beginnersNational governments Just a few years ago, the very idea that Bitcoin could be legal tender in any given nation seemed like a far-fetched delusion. And yet, after El Salvador’s daring Bitcoin gambit, the Central African Republic (CAR) joined the fray in late April, granting Bitcoin and other cryptocurrencies the status of legal tender. These two countries make for an interesting comparison. It’s by now common knowledge in the crypto space that remittances from abroad make up a major portion of El Salvador’s budget, and this fact was seen as the economic rationale behind the experiment. While reports suggest the process is shaky, the nation’s government does shop for Bitcoin, embracing the “buy the dip” stratagem. With the CAR, things could not have been more different. The economy of the war-ravaged nation has been ailing for quite some time. Furthermore, only about 10% of the country’s population has internet access, according to World Bank data. In other words, the use of crypto will likely be restricted to a small portion of the population — and, given the geopolitical and local context of the move, the prospects can indeed be quite murky.Still, more emerging economies may choose to follow suit, especially given that El Salvador is not the only nation leaning a lot on remittance transfers for budget cash. Even the fact that there is precedent for that is big enough to get the momentum going, and should even one more nation join the club this year, the crypto markets will know it. Related: El Salvador’s Bitcoin Law: Understanding alternatives to government interventionBlockchain for institutionsWhile the early crypto rallies primarily came from private retail investors and traders, institutional investors have been joining the fray as well in recent years. From top banks and hedge funds delving into the crypto space to fintech giants adding support for digital assets to their platforms, institutional adoption is no longer a pipe dream — it’s reality.Even the inside-baseball use cases, such as JPMorgan experimenting with its private blockchain meant for interbank use or a group of top information and communication technology providers tapping ClearX’s blockchain solution for data-on-demand services, matter. They add extra credibility to the technology powering the crypto ecosystem, which adds to long-term investor confidence. Even though quite a few enterprise-grade blockchain projects will likely stay on private blockchains, the growing investor confidence in the technology is likely to further normalize crypto in the public eye and draw more eyes to the public blockchain space. Furthermore, such projects make for a whole niche market of solutions that will help companies build their private chains. Another niche may be in bridging these private chains with the public space. Crypto is, after all, all about connectivity and inclusion, so such aspirations only make sense. Asset managersThe first Bitcoin exchange-traded fund (ETF) in the U.S. took off in late 2021, and the amount of interest it drew from investors is another testimony to just how much appetite the market has for crypto exposure. We have come to the point where some financial advisors are recommending that everyone, regardless of their age and risk preferences, should have at least some exposure to crypto. Thanks to a change in sentiment like that, more and more asset managers will be looking into the crypto space, whether it’s on a client’s request or on their own inclination. By the same token, more and more high earners will be joining the ranks of crypto investors, bringing more value into the blockchain economy.With all due respect to ETFs and other traditional assets, any crypto-savvy user will tell you that actual crypto is better than a traditional asset mimicking its movements. The reason for that is that crypto is far more dynamic. Your Ethereum-pegged ETFs (if those pop up some day) will only sit with your broker. With the actual coins, on the other hand, you can stake, use yield farms, and tap various other DeFi services for more passive income. In this respect, it will be interesting to watch and see if traditional asset managers soon start losing ground to crypto-native alternatives such as EQIFi, backed by EQIBank. One of the platform’s key services is its yield aggregator, which effectively acts as an asset manager by allocating the user’s funds into various DeFi protocols to guarantee maximum returns. Such services make crypto more lucrative as an asset class that can work for its owner 24/7 through platforms that are always accessible and take just a few clicks to manage. Related: Elusive Bitcoin ETF: Hester Peirce criticizes lack of legal clarity for cryptoGames and gamersBlockchain games are not exactly something new, as anyone who remembers the CryptoKitties craze can attest to. Still, when Axie Infinity began making headlines as people in the Philippines turned to it in search of an income amid the COVID-19 pandemic, the play-to-earn industry stepped proudly into the limelight. Now, it’s hard not to wonder if some of this pride may have been misplaced, given the plights that Axie Infinity, the industry’s standard-bearer, is now facing. The game has long had an inflation problem as its underlying business model began to give way. Adding to this issue was the recent hack, one of the worst ones on record in the DeFi space. Axie Infinity’s pains could be just another case of a nascent industry figuring out its own best practices. A whole host of new projects is now gearing up to move this space further, aspiring to bring it to AAA-level polish in terms of visuals and gameplay. Once these new juggernauts enter the arena, we will likely see more gamers begin to explore crypto.It may be tempting to write blockchain gaming off as just another subset of the retail market, but there’s more to it in the long run. The video game industry is an undisputed powerhouse in the entertainment world, and wherever it goes, its adherents will follow. From esports to in-game ads, the traditional gaming industry has already given birth to a wide array of satellite markets, and all of those make for new use cases, new audiences and new business opportunities.This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.Ariel Shapira is a father, entrepreneur, speaker, cyclist and serves as founder and CEO of Social-Wisdom, a consulting agency working with Israeli startups and helping them to establish connections with international markets.

In his monthly crypto tech column, Israeli serial entrepreneur Ariel Shapira covers emerging technologies within the crypto, decentralized finance (DeFi) and blockchain space, as well as their roles in shaping the economy of the 21st century.Die-hard sports fans first got a taste of how digital assets could become the next sports memorabilia phenomenon back in June 2020, with the launch of Dapper Labs’ NBA Top Shot Moments nonfungible token (NFT) collection. Since then, the pro sports industry has actively capitalized on the NFT craze. That’s not at all a bad thing, considering NFTs solve the digital ownership question once and for all. There’s no reason sports shouldn’t enjoy the democratization this technology brings. There is also the potential, however, for sports giants — franchises, leagues, organizations — to take advantage of fans the way crypto companies have profited from naive investors in the past. That kind of opportunism should be stopped before it becomes the norm.More likely than not, fans simply won’t tolerate it.Exploiting fan loyalty Major sports franchises and leagues are valued at billions of dollars, and the industry as a whole is worth $620 billion. The foundation of this massive amount of wealth is built on the backs of die-hard sports fans, who have deep emotional connections with players, teams and the sports themselves. From $15 beers to $1,000 tickets and expensive cable-sports packages, fans are long used to having their loyalty monetized. Monetization is a normal and healthy part of business, but it must be within the bounds of honorable business, not the kind of profiteering we’ve seen in other crypto trends until now.The New Jersey Devils became the first National Hockey League team to try and milk the NFT hype last year by launching their own NFTs commemorating their past championships. The Devils, as one of the NHL’s 32 franchises, were able to benefit from that credibility and recognition. Selling branded merchandise such as a sweater jersey commemorating past championships is more than acceptable and has long been the norm. But when billion-dollar pro sports organizations create NFTs that play on fans’ emotional connections by tapping into their past glory without providing any utility, it has the potential for coming across as hype-beasting in poor taste.Related: What major sports are paying athletes in crypto?Leveraging NFTs to make more money, of course, makes total sense from a short-term business perspective, but taking it too far could damage relationships with fans in the long term, especially considering the reputation NFTs have after it was revealed that 80% of NFTs were scams or fraud, according to leading NFT marketplace OpenSea.NFTs with real valueSo, what does “going too far” mean in the context of sports teams issuing NFTs? Probably the best answer is “you’ll know it when you see it.” When the Chicago Bulls begin selling an NFT of some ridiculous ape wearing a jersey for half a million dollars, most fans might think of that as a brazen cash grab. The best way to avoid that perception is launching NFTs that offer tangible value or utility to fans beyond a trophy. Just like for other crypto projects to succeed, the key is to actually solve a problem, not just release a product that does literally nothing other than looking nice and being on the blockchain, and then sell it for an absurdly inflated price.Italian soccer club Como 1907 found a way to leverage NFTs that actually provides its supporters with an experience. By partnering with Mola, an Indonesian over-the-top media service specializing in live sports, Como 1907 auctioned off an NFT that included a pair of lifetime season tickets to watch its home matches, two first-class flights to Como from anywhere in the world, and a three-day trip complete with tours, Michelin-star dining, a theater night and more.Related: Beyond collectibles: How NFTs are revamping the ticketing industryWith such initiatives, the NFTs actually reward fans for their loyalty with a discount, quite in line with the vouchers and coupons used across industries in the last few decades. NFTs used this way are monetizing loyalty, yes, but in a way that is tactful and respectful — and perhaps most importantly from the business perspective, much more scalable because they don’t capitalize on short-term hype.Pro sports teams have endless opportunities to utilize NFTs that don’t involve trying to take advantage of their fans’ passion. A creative and completely different approach to leveraging NFTs teams could employ in the future involves scouting youth talent. As youth sports organizations continue to increase their levels of competition to prepare young athletes for the professional levels, platforms such as Leap may be tapped to expedite the process and reach a larger pool of talent.The youth sports discovery platform features social and gamification elements to help young athletes, especially those from disadvantaged backgrounds, showcase their skills and gain recognition and potentially endorsements from talent seekers by leveraging NFTs.Related: Showtime: NFT tickets take the stage in 2022, connecting artists and fansAs NFTs seep into more and more industries, their use cases within the vast world of sports will inevitably grow. And it is essential that professional sports institutions don’t shoot themselves in the foot by overstepping their fans’ limits for what they will tolerate.Die-hard sports fans will never fully abandon their team loyalty because their favorite team or league is exploiting a trend to make a little extra revenue that tries to capture a nostalgic feeling from a team’s past. However, if an NFT project is done in bad faith, the fan base’s voice will be heard, and the team or league’s pockets will be impacted.This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.Ariel Shapira is a father, entrepreneur, speaker and cyclist and serves as founder and CEO of Social-Wisdom, a consulting agency working with Israeli startups and helping them establish connections with international markets.