Značka: Decentralization

Web3 helps Taiwan secure information against cyberattacks

The Taiwanese Ministry of Digital Affairs (MODA) plans to implement decentralized technology into its web portal in an effort against cyberattacks. InterPlanetary File System (IPFS) is a Web3 technology that government officials will employ for decentralized file sharing. IPFS identifies content through file hashes, which allows files stored by multiple parties to be found anywhere and can be accessed by simple HTTP. This development comes after the controversial visit of United States House Speaker Nancy Pelosi to Taiwan, despite warnings from mainland China. Since the visit, government websites have faced multiple attacks sourced from the mainland. This includes a distributed denial-of-service (DDoS) attack rendering the sites inaccessible. Pelosi’s visit to Taiwan not only rocked the boat geopolitically speaking but also made waves in the crypto market. Bitcoin rose to its daily resistance of $23,500 on Aug. 3, the following day. Related: ‘Nobody is holding them back’ — North Korean cyber-attack threat risesHowever, the new MODA site is getting a makeover through the implementation of Web3 technology and currently has files and the original site index available on IPFS. Taiwan’s Digital Minister Audrey Tang told official state media that until now, the MODA site has not been attacked since it debuted on the same day the Chinese military began its drills. Tang said the site uses a combination of Web3 and Web2 tools. “It uses a Web3 structure, which is tied to the global blockchain community and the global Web2 backbone network. So if it can be taken down, everything from Ethereum to NFTs will be taken down, which is unlikely.”According to officials in Taipei, Taiwan saw nearly 5 million daily cyberattacks or at least scans for system vulnerabilities last year.The implementation of Web3 technology is a positive step toward emerging technology implementation. Though Tang did highlight the risks of other Web3 assets like crypto in activities such as money laundering. Related: Decentralized finance faces multiple barriers to mainstream adoptionTaiwan’s relationship with crypto ebbs and flows. Recently, the country indirectly banned buying cryptocurrencies with credit cards after the chief financial regulator compared cryptocurrencies to online gambling. Nonetheless, the country, like many others around the world, is piloting its own central bank digital currency (CBDC). Currently, it’s distributing its digital currency to five Taiwanese banks for distribution.

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BREAKING: Curve Finance team warns users to avoid using site until further notice

On Aug 9, automated market maker Curve Finance took to Twitter to warn users of an ongoing exploit on its site. The team behind the protocol noted that the issue, which appears to be an attack from a malicious actor, was affecting the service’s nameserver and frontend.Don’t use https://t.co/vOeMYOTq0l site – nameserver is compromised. Investigation is ongoing: likely the NS itself has a problem— Curve Finance (@CurveFinance) August 9, 2022Curve stated via Twitter that its exchange — which is a separate product — appeared to be unaffected by the attack, as it uses a different DNS provider. The team still encouraged users to exercise caution when interacting with the site, however.Although you need to proceed with caution, but https://t.co/6ZFhcToWoJ seems to be unaffected – uses a different DNS provider— Curve Finance (@CurveFinance) August 9, 2022

Twitter user LefterisJP speculated that the alleged attacker had likely utilized DNS spoofing to execute the exploit on the service:It’s DNS spoofing. Cloned the site, made the DNS point to their ip where the cloned site is deployed and added approval requests to a malicious contract.— Lefteris Karapetsas | Hiring for @rotkiapp (@LefterisJP) August 9, 2022

Other participants in the DeFi space quickly took to Twitter to spread the warning to their own followers, with some noting that the alleged thief appears to have stolen more than $573K USD at time of publication.Alert to all @CurveFinance users, their frontend has been compromised!Do not interact with it until further notice!It appears around $570k stolen so far #defi #crypto $crv— Assure DeFi (@AssureDefi) August 9, 2022

Back in July, analysts suggested that they were favorably eying Curve Finance, despite the market downturn which continues to affect the larger DeFi space. Among the reasons cited by researchers at Delphi Digital for their bullishness, they specifically called out the platform’s yield opportunities, the demand for CRV deposits, and the protocol’s revenue generation from stablecoin liquidity.This followed the platform’s release of a new “algorithm for exchanging volatile assets” in June, which promised to allow low-slippage swaps between “volatile” assets. These pools use a combination of internal oracles relying on Exponential Moving Averages (EMAs) and a bonding curve model, previously deployed by popular AMMs such as Uniswap. This story is in development, and will be updated as more information becomes available.

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Blockchain and NFTs are changing the publishing industry

Web3 has become the most sought-after investment sector of 2022, as use cases for nonfungible tokens (NFTs), the Metaverse and other blockchain applications come to fruition. Therefore, it shouldn’t come as a surprise that different segments of the publishing industry have begun to use Web3 technologies to transform traditional models. For example, the textbook publishing giant Pearson recently announced plans to use NFTs to track digital textbook sales to capture revenue lost on the secondary market. Time magazine, which was founded 99 years ago, has also been using NFTs to create new revenue streams, along with a sense of community within the publishing industry. Keith Grossman, the president of Time, told Cointelegraph that the magazine is demonstrating the new possibilities of engagement that Web3 brings to the publishing industry. He said:“Web3 can evolve one’s brand in a world where individuals are moving from online renters to online owners, and privacy is beginning to move from platforms to the individual.”Web3 enables a community of content ownersWhile it may seem non-traditional for one of the oldest, most renowned magazine publishers in the industry to host an NFT gallery, Grossman explained that Time has dropped nearly 30,000 NFTs to date. He added that these have been collected by over 15,000 wallet addresses, 7,000 of which are connected to Time.com to remove the paywall without having to provide personal information. “Along the way, the TIMEPiece community has grown to over 50,000 individuals,” Grossman pointed out. To put this in perspective, Grossman explained that in September 2021, Time launched a Web3 community initiative known as TIMEPieces. This project is a digital gallery space hosted on the NFT marketplace OpenSea, which has brought together 89 artists, photographers and even musicians. “The number of TIMEPiece artists has grown from 38 to 89. It includes the likes of Drift, Cath Simard, Diana Sinclair, Micah Johnson, Justin Aversano, Fvckrender, Victor Mosquera and Baeige, to name a few,” Grossman said. Isaac “Drift” Wright’s piece from the Slices of Time Collection. Source: Keith GrossmanWhile notable, the more important aspect of this growth lies within the distinction of “audiences” vs. “communities.” According to Grossman, very few people in the publishing sector distinguish between these two groups, yet he noted that Web3 provides a “tremendous opportunity for those willing to explore this oversight.” For instance, Grossman explained that an audience simply engages with content for a moment. However, he pointed out that a community aligns around shared values and is provided with the opportunity for constant engagement. He said:“Healthy ‘communities’ have moats making them harder to disrupt or circumvent. However, they take a lot of work to develop and nurture. The long term benefit of a community is stability — and publishing is anything but stable.”Indeed, NFTs may be key for providing the publishing world with the stability and audience interaction it requires to advance. As Cointelegraph previously reported, brands are using NFTs in a number of ways to better engage with customers over time.Other sectors of the publishing industry are starting to employ NFTs for this very reason. For example, Royal Joh Enschede, a 300-year-old Dutch printing company, is entering the Web3 space by providing its clients with an NFT platform for “crypto stamps.” Gelmer Leibbrandt, CEO of Royal Joh Enschede, told Cointelegraph that the postage stamp and philately world is very traditional, noting that nonfungible tokens will allow for expansion. He said: “The crypto stamp opens up a global market that will appeal not only to the classic stamp collectors but also to collectors in their teens, twenties and thirties who buy, save and trade NFTs. This is naturally very appealing for our main customers — over 60 national postal organizations worldwide.”The crypto postage stamps are launched as NFT collectibles, but they can naturally also be used to mail documents. Source: Royal Joh EnschedeAccording to Leibbrandt, Royal Joh Enschede started thinking about ways to use blockchain technology over two years ago, yet the Dutch printing firm decided to start with crypto stamps due to the utility and market fit. Leibbrandt explained that not only will stamp collectors be able to own a unique NFT, but the nonfungible tokens will also serve as “digital twins” intended to provide an extra layer of security and authentication to its physical products.Leibbrandt also pointed out that linking physical objects with their digital counterparts offers customers additional features. While he noted that crypto stamps are just the beginning of Royal Joh Enschede’s Web3 journey, he explained that the company has started developing “notables,” which are meant to rival secure printed banknotes. He explained:“Through the use of special printing techniques, we can add, among other things, augmented reality, which in turn provides access to special online promotions and a communication platform. Notables are unique and the NFT element can be used as a collector’s item, along with a means of payment in the Metaverse.” Like Time, crypto stamps and notables are enabling Royal Joh Enschede to build a community of collectors capable of engaging with the platform and each other. “All kinds of new applications can be linked to these, such as access to real-life events like Formula 1 or Tomorrowland, where only a few notes give entitlement to VIP packages. We are building our business for the next 100 years,” Leibbrandt added. Furthermore, independent news organizations are starting to apply Web3 technologies to solve one of the biggest challenges facing the media industry today — “fake news.” For example, Bywire is a decentralized news platform that uses artificial intelligence (AI), machine learning and blockchain to identify false or misleading news content. Michael O’Sullivan, CEO of Bywire, told Cointelegraph that the platform has built and deployed a “trust or not” algorithm. “This can provide readers with an ‘at-a-glance’ reassurance that the content served on the Bywire platform is trustworthy, and those who produce it are indeed accountable,” he said. O’Sullivan explained that Bywire’s AI technology is capable of “reading” an article in a matter of seconds before it goes live to determine the trustworthiness of the content. Once this has been established, the algorithm generates a recommendation, along with the reasoning behind its determination. “The why is vital because it helps consumers become conscious of the motives and intentions of content producers,” O’Sullivan remarked. While innovative, O’Sullivan pointed out that any independent news organization can aggregate their news content to Bywire, exposing it to tens of thousands of readers per month. Like other publishers using Web3 technology, O’Sullivan noted that Bywire has a community of readers associated with the platform, noting that these individuals are incentivized to read the content. “Every reader gets a free EOS account and can start earning token rewards immediately, which can be later used in the democratic oversight of the network.”Will Web3 advance the publishing industry?Although Web3 has the potential to transform the publishing industry by allowing various sectors to reach and interact with new audiences, the impact remains questionable. For instance, it’s been noted that there is still a lack of clarity among publishers regarding how blockchain can and should be used.Lars Seier Christensen, chairman of Concordium — the Swiss blockchain firm powering Royal Joh Enschede’s NFT platform — told Cointelegraph that nonfungible tokens currently mean nothing to most organizations. However, he believes that NFTs and other Web3 technologies will soon become the norm:“Let’s take one step back from the acronym NFT because it can be confusing. What has been proven is that a blockchain can store immutable data — i.e., the records are final and unbreakable, and this data is fully transparent to everyone by simple access to the chain search engine.” Regarding consumers, Grossman also mentioned that individuals should not be using the word “NFT,” adding that they certainly do not need to know what blockchain platform is powering these applications. “They should be engaging with brands based on the experiences being provided,” he said. Grossman further remarked that the rise of computers sparked constant discussion around technology until Steve Jobs explained that the iPod could hold “1,000 songs in your pocket.” Grossman believes that a moment similar to this will happen for Web3 but has yet to come:“Most people’s perceptions of NFTs and blockchains are defined by the extremes — extreme good and extreme bad. The reality is that an NFT is just a token that verifies ownership on a blockchain, and education is needed to provide companies and individuals with the many ways in which it can be used to provide value.”

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Decentralized finance faces multiple barriers to mainstream adoption

Decentralized finance (DeFi) is a growing market popular with experienced crypto users. However, there are some roadblocks regarding mass adoption when it comes to the average non-technical investor. DeFi is a blockchain-based approach to delivering financial services that don’t rely on centralized intermediaries but instead use automated programs. These automated programs are known as smart contracts, enabling users to automatically trade and move assets on the blockchain.Protocols in the DeFi space include decentralized exchanges (DEXs), lending and borrowing platforms and yield farms. Since there are no centralized intermediaries, it’s easier for users to get involved in the DeFi ecosystem, but there are also increased risks. These risks include vulnerabilities in a protocol’s codebase, hacking attempts and malicious protocols. Combined with the high volatility of the crypto market in general, these risks can make it harder for DeFi to reach wide adoption with average users. However, workarounds and advancements in the blockchain space can address these concerns.Regulatory concerns with DeFi Regulation can benefit the DeFi space, but it also conflicts with the core principles of decentralization. Decentralization means a protocol, organization or application has no central authority or owner. Instead, a protocol is built with smart contracts executing its main functions while multiple users interact with the protocol. For example, smart contracts take care of the staking and swaps with a DEX, while users provide liquidity for the trading pairs. What can regulators do to prevent an anonymous team from pumping up a token’s value before withdrawing liquidity from DEXs, otherwise known as rug pulling? Due to the decentralized nature of the DeFi ecosystem, regulators will face challenges when trying to maintain a certain level of control within the space.Despite the challenges, regulation isn’t completely out of the picture regarding decentralized finance. In Q4 2021, the Financial Action Task Force released an updated version of their guidance to virtual assets document. The update outlined how developers of DeFi protocols could be held accountable in a crisis. While the protocol may be automated and decentralized, the founders and developers could be called virtual asset service providers (VASPs). According to the state where they are based, they may also need to be regulated. Regarding regulation within DeFi, platforms can also build protocols that comply with regulatory requirements. For example, Phree is a platform that builds decentralized protocols while considering regulatory concerns where possible. One of the ways they do this is by working with traditional finance entities to build DeFi protocols that meet standard regulation requirements. This would entail adding processes like Know Your Customer and Anti-Money Laundering checks to DeFi platforms like DEXs and lending or borrowing platforms. In addition, making traditional finance (TradFi) compatible with the DeFi ecosystem would help to spread its adoption due to the dominance of organizations in the TradFi space.Ajay Dhingra, head of research at smart exchange Unizen, told Cointelegraph, “Incompatibility with traditional finance ecosystem is one of the major challenges. There is a need to connect the CeFi regulatory framework with on-chain identities and real-time regulatory reporting so that Defi becomes accessible to financial institutions that deal in trillions.”Recent: Education and aesthetics: Bringing more women into the MetaverseCentral bank digital currencies (CBDC) have been suggested as an answer to stablecoins after the Terra algorithmic stablecoin collapse earlier this year. Swiss National Bank executive Thomas Moser previously told Cointelegraph regulators might favor centralized stablecoins over decentralized ones. However, he also mentioned that it would likely take time and that current financial regulations could make the DeFi ecosystem obsolete due to conflicting principles.Security concerns within the DeFi ecosystemSecurity issues are a major concern within the DeFi sector, with malicious actors in the space taking advantage of vulnerabilities within bridging protocols and decentralized applications (DApps). Adam Simmons, chief strategy officer of RDX Works — builders of the Radix protocol — told Cointelegraph, “The dirty secret of DeFi right now is that the entire public ledger technology stack has a huge number of known security issues, as demonstrated with the billions of dollars lost in hacks and exploits in the last few years.”Vulnerability exploits are still taking place in the DeFi space. Recently the Nomad token bridge was drained of $160 million worth of funds. It is also estimated that $1.6 billion worth of funds has been stolen from DeFi protocols this year alone. Lack of security within the DeFi space makes it less likely for new users to get involved while discouraging people who have fallen victim to protocol exploits. In order to combat this problem, there needs to be a greater emphasis on vetting protocols within the space to discover vulnerabilities before hackers can take advantage. There are already platforms like CertiK that carry out audits on blockchain-based protocols by checking the smart contract code, so that’s a good start. However, the industry needs to see increased auditing of DApps before they go live to protect users in the crypto space.User experience issuesUser experience (UX) is another potential roadblock for users who want to get involved in the DeFi ecosystem. The way investors interact with wallets, exchanges and protocols isn’t a straightforward intuitive process, leading to some users losing their funds due to human error. For example, in November 2020, a trader spent $9,500 in fees to execute a $120 trade on Uniswap after getting the “gas limit” and “gas price” input boxes confused.In another example, a rock nonfungible token (NFT) worth $1.2 million was sold for less than a cent when a user listed it for sale at 444 WEI instead of 444 Ether (ETH). These examples are known as fat finger errors, where users lose money due to mistakes they make when inputting values for prices or transaction fees. For DeFi to be widely adopted by the masses, the process must be simple for regular, everyday people. However, that is currently not the case. In order to use a DeFi application, users need to own a noncustodial wallet, or a wallet where they control the private keys. They also need to back up the recovery phrase and keep it in a safe place. When interacting with a DApp, users need to connect their wallet, which can sometimes be complicated, especially when using a mobile wallet. Recent: Lido’s market dominance and Ethereum decentralization post-MergeIn addition, when sending or receiving payments, users need to copy the addresses involved in the transactions, and in some cases, they need to input the amount of gas they want to spend on a transaction. If a user doesn’t understand this process, they could use a low gas setting and end up waiting hours for their transaction to be sent since the gas fee is so low. The process gets even more complex when dealing with tokens built on networks such as the ERC-20 and BEP-20 standards. When you transfer these tokens, you need to pay for the transaction with the cryptocurrency of the network it belongs to. For example, if you want to send an ER-20 token, for example, USD Coin (USDC), you’ll need to hold ETH in your wallet to pay for the gas, which adds more complexity to the transaction.Developers in the DeFi space need to make the ecosystem more user-friendly for beginners and regular non-technical users in the space. Building wallets and DApps that prevent fat finger errors (by auto-inputting values, for example) is a good start. This is already the case with centralized exchanges, but it needs to be brought into decentralized platforms and noncustodial wallets for the DeFi sector to grow.

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Self-custody isn’t for everyone: WisdomTree exec on ‘be your own bank’

While some experts believe that self-custody is one of the genuine purposes of crypto, this way of storing coins is not really suitable for everyone, according to a WisdomTree executive.Will Peck, head of digital assets at New York-based asset manager WisdomTree, believes that self-custody will be a growing trend in the future, but custodial solutions should not be underrated.Some crypto users prefer to self-custody, and WisdomTree supports and respects that decision, the exec said in an interview with Cointelegraph. “That will be a growing segment of the market, and over time we want to build products and services for them,” he stated.As self-custody requires some technical skills and the responsibility to not lose one’s private keys, many may find self-custody way too uncomfortable or too hard to handle, Peck noted.“Of the billions of people and numerous institutional investors on the planet, a large number will lack the technical wherewithal, workflows or interest in holding their own private keys, which introduces a different set of complexities and risks,” the WisdomTree’s executive said. According to Peck, well-structured custody solutions, including products like crypto exchange-traded products (ETP) or regulated custody tools, can make crypto more accessible to a broader range of people. However, it requires vigilance and understanding of what users actually sign up for to avoid any risky activities with customers’ assets.“If you’re concerned about “not your keys — not your coins,” you should just understand who this firm is, what the reputation is, how they are embracing regulation, or they are not embracing regulation,” Peck said. He added that self-custody has been trending in the community over the past few months as firms like the crypto lender Celcius were pausing withdrawals due to liquidity issues amid the massive crypto winter of 2022. “They were doing incredibly risky things with those deposits,” Peck noted.Related: Self-custody is key during extreme market conditions: Here’s what experts sayThe latest remarks by WisdomTree’s head of digital assets come amid the company debuting its proprietary custodial wallet solution, WisdomTree Prime. The platform aims to provide exposure to major cryptocurrencies like Bitcoin (BTC) and Ether (ETH), as well as tokenized versions of physical assets like the U.S. dollar and gold.One of the largest crypto ETP providers, WisdomTree has launched eight crypto asset ETPs on Börse Xetra, SIX, the Swiss Stock Exchange and Euronext exchanges in Amsterdam and Paris. With the launch of WisdomTree Prime, the firm expects to expand its operations beyond ETP issuance. The wallet is currently live in beta and expected to be rolled out later in 2022.

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First Binance soulbound token BAB targets KYC user credentials

Binance cryptocurrency exchange is moving towards decentralized identity tools by launching its first-ever token designed to certify verified user status on the platform.Binance on Monday announced the launch of the Binance Account Bound (BAB) token, aiming to address identity issues in the decentralized society (DeSoc).In contrast to traditional crypto assets like Bitcoin (BTC), the BAB token is introduced exclusively for online identification purposes and belongs to a type of Soulbound Tokens (SBT). Proposed by Ethereum creator Vitalik Buterin, SBTs are non-transferable, non-financialized tokens designed for DeSoc.According to the announcement by Binance, the ​​BAB token is the first-ever SBT issued on the BNB Smart Chain. The token is aimed at many different use cases in the DeSoc but will initially only serve as Binance Know Your Customer (KYC) user credentials.The BAB token will specifically be displayed on wallets to indicate the wallet’s owner has passed KYC verification on Binance. The token will function as a Binance identity and can be used by third-party protocols to verify BAB tokens for a variety of purposes, including avoiding bots, airdropping nonfungible tokens, voting and others, Binance said.“As DeSoc use cases evolve, Binance may issue other types of BAB tokens in the future,” the announcement notes.The BAB token is introduced as a pilot project and will only be accessible via the Binance mobile app, allowing KYCed Binance users to mint their BAB directly on their Binance wallets.Binance CEO Changpeng Zhao pointed out that SBTs will play an important role in the way Web3 credentials will work in a DeSoc, stating:“This will transform how we connect, as blockchain technology will give society greater authority to determine how communities interact based on their credentials or affiliations.”Related: Major South Korean telecom company plans launch of blockchain wallet for crypto and NFTsThe CEO added that Binance will be collaborating with the community to work on new use cases for the BAB token in order to “develop this revolutionary vision of decentralized society.”The new token is launched amid online reports claiming that the Binance crypto exchange has lost up to 90% of its customers and billions of dollars after adopting obligatory KYC verification in August 2021. Binance did not immediately respond to Cointelegraph’s request for comment.

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Decentralized storage providers power the Web3 economy, but adoption still underway

The promise of owning and managing one’s own data is revolutionary, creating increasing interest in Web3 platforms and applications. For instance, recent findings show that the Web3 market was estimated to be worth around $2.9 billion last year, yet this number is expected to reach $23.3 billion by 2028. Web3 is also capturing the interest of venture capitalists, as Cointelegraph Research found this sector to be the most sought-after investment deal in 2022. The rise of Web3 has also resulted in the need for decentralized storage solutions, which will ultimately allow users to archive, retrieve and maintain their own data. Findings from Huobi Research Institute further show that increasing global storage data volume will elevate the cost of security and high power consumption, which will fuel the trend toward decentralized storage. The report states, “World storage system demand has progressed from remote storage to instant cloud storage, and now blockchain decentralized storage which we shall call Web3 storage.” Breaking down decentralized storageIn order to better understand the potential behind decentralized storage, it’s important to explain what these solutions provide and how they differ from centralized platforms. Marta Belcher, president and chair of the Filecoin Foundation — the organization facilitating governance of the Filecoin network — told Cointelegraph that decentralized systems offer an alternative to centralized systems for storing data and making websites available. She said:“Today’s internet is centralized — right now, the majority of data making up the many websites we use every day sits in data warehouses owned by just three companies: Amazon Web Services, Microsoft Azure and Google Cloud. We have often seen these companies suffer blackouts, and swaths of the Web go down for hours — that’s the problem with having single points of failure.” With these challenges in mind, Belcher explained that decentralized storage providers like Filecoin are capable of creating a better version of the Web by combining the storage capacity and computing power of many individual devices into a supercomputer-like network that can store multiple copies of data. “On this decentralized version of the internet, websites stay up even if some nodes fail, and the availability of information is not dependent on any one server or company,” she said. To facilitate this, Belcher explained that Filecoin uses a programmable money concept to create a decentralized storage network. “If a user has extra storage space on their computer hardware then they can ‘rent’ it out to others who will pay them with Filecoin tokens. We think of this as a foundational technology for the next generation of the web,” she remarked. Belcher elaborated that Filecoin is based on an incentives model, which means users get paid each time they store information on the network. To date, the Filecoin model has been successful, as Belcher shared that the network has 18 exabytes of storage capacity and over 4,000 storage providers powering more than 1,460 new projects. While this may sound unbelievable, Belcher pointed out that centralized storage providers like AWS are dependent on a particular server or company to store and provide information. Yet, Filecoin is built on top of the InterPlanetary File System, or IPFS. “Rather than retrieving content where it is located, the IPFS retrevies content by what it is through leveraging content addressing with a cryptographic hash,” she explained. As such, content availability is no longer dependent on one server or company, meaning information can be retrieved faster while also decreasing latency in networks. Belcher explained the Filecoin Foundation recently announced a partnership with defense contractor Lockheed Martin to make InterPlanetary networking possible from space. She said: “Imagine there is a satellite on the moon and there is a multi second delay with data going back and forth from the moon to earth. IPFS could allow satellites to retrieve data from the closest locations without having a delay. This makes networking across systems faster.” We’ve got news! @FilFoundation is working with @LMSpace to bring @IPFS to space! pic.twitter.com/o1JeHYjoik— Filecoin Foundation (@FilFoundation) May 23, 2022John Gleeson, chief operating officer of decentralized storage network Storj, told Cointelegraph that decentralized infrastructure is the most credible disruptor for the centralized internet:Although the concept is revolutionary, Belcher noted that the project is currently in an exploratory phase. “We are still identifying the right demonstration mission that will make this viable for space technology.” In terms of data storage, Belcher pointed out that many users may not even realize that they are using the IPFS today, noting that the vast majority of nonfungible tokens (NFTs) are stored on IPFS. She added that Starling Lab — a project from Stanford University and the University of Southern California’s Shoah Foundation research center — uses the Filecoin network to house sensitive digital records of human history. “Starting a service to compete with AWS, Google or Microsoft in Web2 requires billions of dollars. Through crowd-sourced capacity, trustless abstraction layers and token-based incentives, decentralized infrastructure can provide more private, secure, performant and economical infrastructures than Web2 hyperscalers.”Similar to Filecoin’s incentive model, Gleeson explained that the Storj network consists of “storage nodes” that are used to store data for others. Contributors are paid for allocating their storage and bandwidth. “All data stored on storage nodes is client-side encrypted and erasure-coded,” he said. Gleeson added that Storj uses “uplink clients” to enable developers to house information on Storj decentralized cloud storage. Files are then split into 80 pieces and distributed across the network of storage nodes. “Each of the 80 pieces is stored on different diverse storage nodes with different operators, power supplies, networks and geographies, etc., yielding tremendous security, performance and durability advantages,” Gleeson explained. While the features provided by Filecoin and Storj are very different from those offered by centralized systems, a number of Web3 platforms specifically require these solutions. For example, the decentralized Web3 infrastructure provider Ankr Network helps a number of blockchain companies run their node infrastructure. Greg Gopman, chief marketing officer of Ankr, told Cointelegraph that 17 of the top 20 proof-of-stake blockchains use Ankr’s remote procedure call (RPC) service to allow access to their blockchain data. Every time Ankr handles an RPC request, a node is required to fulfill it, which Gopman mentioned is Ankr’s core service. According to Gopman, Ankr uses both Filecoin and Storj to store images of nodes, along with blockchain transactions. He said:“BNB Chain, Polygon and Avalanche use our solution, and behind the scenes we use decentralized storage providers to make our operations faster. When we need to spin up a new node we can do it 90% faster using decentralized storage providers versus AWS.”To put this process in perspective, Gopman explained that Ankr manages archive nodes for different blockchains. “The ‘archive node’ is all the historical data of every transaction that happened on a blockchain network,” he said. Ankr manages these archive nodes for different blockchains, meaning the platform needs to have a snapshot of all transactions that have occurred on a specific network. This information is then put on a server and spun up to create a new node. Gopman added that Ankr initially used AWS for this process but that the platform was slower and more expensive. “AWS wasn’t optimized for Web3. AWS is set up for distributed systems, yet we run profiles on servers for decentralized infrastructure. Moreover, AWS only has 13 geo-locations and we have around 30.” The rise of decentralized web servicesIn addition to storage, other solutions are being offered to ensure an entire suite of decentralized web services for the Web3 economy. For example, Akash Network is a marketplace for underused compute resources. Greg Osuri, CEO of Akash, told Cointelegraph that the core of Akash consists of an auction marketplace that allows users to place an ask with providers who have endless amounts of computing power. According to Osuri, prices are market-driven, making cost savings 97% less expensive than AWS. In terms of use cases, Osuri mentioned that Equinix Metal — one of the world’s largest data center and infrastructure providers — integrates with Akash to offload their compute resources in a decentralized manner. Web3 projects are also taking advantage of decentralized computing platforms. For example, Colin Pape, CEO of decentralized search engine Presearch, told Cointelegraph that users could run nodes for their platform on top of Akash. According to Pape, Presearch user nodes collect search results from across the web and are used to power the Presearch network. Like other incentive-based models, node operators are rewarded with Presearch’s PRE tokens when they successfully handle a user query.Pape shared that there are more than 70,000 user nodes around the world powering the Presearch network. Although many of these nodes are running in data centers using a virtual private server (VPS), he pointed out that Presearch encourages node operators to use as many different platforms as possible to run their nodes. He added that decentralized cloud providers are helpful for ensuring an additional layer of resilience to the network since they are more distributed than nodes that operate in a single instance.It’s also interesting to point out that solutions capable of aggregating different types of decentralized storage networks are coming to fruition, highlighting market growth. For example, Max Li, chief operating officer and founder of Computecoin, told Cointelegraph that the company aims to provide all key AWS services such as computing, storage and machine learning in a decentralized manner. “Our storage solution — Oortech Storage Service (OSS) — provides a decentralized storage solution with a Web2 user experience. Rather than building the infrastructure from scratch, OSS aggregates all types of decentralized storage networks such as Filecoin, Storj and Crust — similar to Expedia, which aggregates hotels,” he explained. According to Li, OSS aims to simplify the process of leveraging decentralized storage solutions. He believes this is necessary, noting there is a steep learning curve for end users utilizing decentralized web solutions. “Developers require at least a few weeks to understand how to deploy a website on Filecoin. It may take less than one hour to deploy a website on AWS,” he said. Li added that non-crypto native users need to learn how to use crypto wallets for purchasing Filecoin tokens on exchanges and then leveraging them for data storage. Will decentralized storage solutions overtake centralized web services?Yet, the benefits provided by decentralized web solutions may outweigh any issues associated with utilizing these platforms — at least for Web3 projects. For instance, Gleeson pointed out that decentralized storage solutions offer enhanced privacy, performance, durability and cost-efficiencies. “All data stored on the Storj DCS service is encrypted (both data and metadata) and users own their own encryption keys. This means that users are in control of their data and that data can’t be compromised or mined,” he explained. Gleeson added that decentralized cloud storage takes a completely different approach by crowd-sourcing capacity via operating expenditures rather than capital expenditures. He said: “By tapping into massive latent capacity all around the globe and paying only for what’s used, decentralized cloud storage delivers comparable durability and availability to centralized cloud storage, at a price that is 80% lower than AWS.”Given this, the question remains if centralized storage solutions will soon become irrelevant. According to Gleeson, as the decentralized tech matures, the use cases will crystalize and the benefits will be realized by enterprises. In turn, he believes that adoption will accelerate, especially as the rest of the decentralized stack evolves with compute and tool kits for common integration patterns. However, Gleeson is aware that decentralized storage and other services are still new technologies and must therefore undergo development. “IPFS for instance provides content addressing and is innovative, but some of the largest IPFS pinning services store data on centralized providers,” he remarked. Wilson Wei, co-founder and chief operating officer of CyberConnect — a decentralized social graph protocol — further told Cointelegraph that AWS as a whole provides a much wider range of services beyond storage. Therefore he believes that AWS won’t die out. Wei added that most current decentralized storage systems are only robust when providers work under some economic incentives. Yet, he noted that these incentives could become extremely volatile and lead to performance/data availability degradation. He said: “It’s easy to host a simple front-end page using IPFS, but if the website needs some complex computing environment, developers still need to spawn a computing instance on cloud providers like AWS since the centralized servers can offer the most efficient and performance computing resources. Choosing between centralized and decentralized storage always carries trade-offs.”

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What are the long-terms goals for the Ethereum blockchain? Vitalik Buterin explains live at EthCC

On Thursday, Vitalik Buterin, co-founder of Ethereum, shared his long-term vision for the namesake blockchain live at the annual Ethereum Community Conference, or EthCC, in Paris. As told by Buterin, Ethereum is currently at an inflection point, or period of rapid change, before the ecosystem’s capability will eventually settle down. Currently, the foremost priority for Ethereum is building an easy-to-use light client for consensus layer, execution layer, and layer-two solutions by default. Next is better support for home stakers or those looking to validate network transactions when Ethereum transitions to a proof-of-stake blockchain but possesses less than the required 32 Ether. Finally, Buterin believes it’s critical that Ethereum can eventually be run on a full node with lighter hardware.As for the long-horizon roadmap, Buterin plans to upgrade Ethereum with better cryptographic technologies, potentially for quantum resistance, if they come out and additionally further integrate with zero knowledge Ethereum Virtual Machines, or zk-EVMs should they work out. “We also need to keep an open mind,” says Buterin. “We don’t know exactly what the needs of 2032 will demand.”But the Ethereum co-founder also shared his skepticism about a few other potential opportunities. These include adding support for multiple, complex virtual machines, getting too comfortable with blackbox technologies such as zk-SNARKs, or making the protocol too complex to render it incomprehensible overall without the aid of specialists. Ethereum is on the verge of its proof-of-stake transformation dubbed the “Merge.” Despite being over two years in the making, some developers are still skeptical about whether there will be a safe transition. Vitalik Buterin speaking at EthCC | Source: Cointelegraph Events Manager Maria A. 

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FTX CEO and Solana co-founder offer advice for building Web3 ecosystems

The blockchain ecosystem is constantly evolving, yet there always seems to be one overarching sector dominating at a given time. For example, decentralized finance (DeFi) projects received an impressive amount of venture capital funding in 2021, making it the most invested sector last year. Findings further show that nonfungible tokens (NFTs) were the second most invested sector, while Web3 and infrastructure ranked third. Now, Web3 is proving to be the most sought-after investment sector in the blockchain industry. New findings from Cointelegraph Research confirm this, showing that Web3 captured around 42% of all individual deals during Q2 this year, while DeFi came in a distant second at 16%. Increasing interest in Web3 has also become apparent as venture capital giants like Andreessen Horowitz (a16z) close billion-dollar funds dedicated to investing in Web3 projects. Web3 has also captured the attention of Wing Venture Capital, a Silicon-Valley-based investment firm focused on early-stage enterprise technology companies. Wing recently hosted a virtual Web3 Builders Summit with Sam Bankman-Fried, CEO of FTX, and Anatoly Yakovenko, co-founder of Solana, to help early-stage founders better understand best practices for building Web3 ecosystems. Zach DeWitt, partner at Wing and host of the summit, told Cointelegraph that the firm has been investing in Web3 since 2017 but that structurally there is more capital than ever before dedicated to the sector. “The best time to invest is in bear markets historically. Prices are down and tourists are scared off,” he said. Come join me tomorrow at 10am PST for discussions with @SBF_FTX and @aeyakovenko about building in Web3!https://t.co/aARnfa9GRM— Zach DeWitt (@ZacharyDeWitt) July 18, 2022Yet, confusion around Web3 still remains, as DeWitt noted that although Wing conducts many interviews with founders, there are still a handful of early-stage companies that may not be aware of how to build and scale. Given this, DeWitt commented that the recent Web3 Builders Summit aimed to address these issues. “We wanted this virtual summit to focus on building, scaling and founder lessons — things that the early Web3 community can absorb and which will hopefully make the whole ecosystem stronger,” he remarked. Learning from mistakesWing’s Web3 Builder’s Summit began with Bankman-Fried discussing some of the mistakes he made early in his career. “There were plenty of things we screwed up,” the executive admitted. For example, Bankman-Fried shared that an embarrassing moment for him occurred when FTX was initially launched, noting that, at the time, he thought that 99% of uptime would be a great achievement: “I thought this would be damn good, even though 100% would have been better. But this didn’t turn out to be correct, as it turns out that it’s incredibly important for customers to trade whenever they want to trade. It would be horrific if we are down for even 10 minutes every month, so we had to go back and rework some of our systems.”Bankman-Fried also mentioned that early on, FTX was focused heavily on product prioritization, yet he noted that many products the crypto exchange initially launched did not receive traction. Recent: Demand for widely used euro stablecoin is huge, says DeFi expert“When you look at institutional traders, order throughput means a lot. We should have prioritized that earlier,” he said. Bankman-Fried further pointed out that FTX customers were phished during the exchange’s early days. He said that FTX had security features that could have prevented this, yet these were optional. “Many of these features are now mandatory because we realized this was really important for our users. Security can’t be optional,” he remarked. Yakovenko, who formerly worked at Qualcomm leading the development of operating systems, told Cointelegraph that he has helped develop products such as the Amazon Fire phone and other devices that have previously failed. With this in mind, Yakovenko explained that he intends to build Solana’s Android mobile device Saga for a small audience consisting of the Solana developer ecosystem and the crypto community. “The initial user target are developers, hard core Solana folks that use Magic Eden NFTs and DeFi. There are already about 2 million monthly active users, but our goal is to reach 50,000 active Web3 mobile users moving forward,” he said. During his fireside chat, Yakovenko added that founders launching Web3 products should pick their partners intelligently. To put this in perspective, Yakovenko explained that he connected with Bankman-Fried early in his career, noting that the FTX CEO told him there was a need to make blockchains faster. Yakovenko explained that FTX’s engineers then slammed the Solana network, which led the company to develop Project Serum, a decentralized derivatives exchange for Solana. “Early-stage founders need partners who are aligned on their visions and can help execute immediately,” said Yakovenko. According to DeWitt, one of the biggest takeaways from the Web3 Builders Summit was hearing Bankman-Fried and Yakovenko discuss their mistakes. “It’s just awesome to watch those CEOs operate with such humility and transparency,” he said. DeWitt further pointed out that both Bankman-Fried and Yakovenko are quick to announce platform issues on Twitter to keep their communities informed. “Twitter is where the core of the crypto community is, which is why it’s important for FTX to use the platform regularly,” Bankman-Fried commented. Evaluating Web3 hiring cultureThe Web3 hiring process was also a topic of conversation during the Builders Summit. These takeaways are key, considering that Web3 developer growth has skyrocketed since 2021. Bankman-Fried initially stressed the notion that many companies tend to overhire rather than under hire. However, he pointed out that this often leads to less productivity in the long run. He said:“When running a business it’s easy to fall into a trap where you hire a lot of good people and then end up with a total diffusion of responsibility. You then have too many cooks in the kitchen and no one is sure what anyone should be doing.”Bankman-Fried also said that companies shouldn’t hire new employees unless they will be entering a team that is already run well but has too many responsibilities allocated. “The current team needs to have been at the company long enough that they know how to do their jobs. They also need to have the management capacity to teach someone new,” he said. In terms of hiring developers, Yakovenko shared that during the 2018–2019 bear market, this was difficult due to the lack of interest in layer-1 blockchains. “We hosted small events and sometimes I was the only one there,” the founder said. Yet, Yakovenko explained that Solana’s developer ecosystem took off following FTX’s incubation of Serum in July 2020. Best Web3 use casesAlthough Web3 is quickly gaining traction, it’s important to recognize the potential behind different use cases. For instance, Yakovenko explained that NFT marketplaces like Solana’s Magic Eden and OpenSea are both generating billions in revenue each year without using any elements of the Web2 economy. “There are no ad exchanges involved or stealing of user data,” he remarked. Yakovenko believes this demonstrates a fundamental shift in how businesses can operate moving forward in terms of digital ownership. Yakovenko also mentioned that it’s becoming critical for Web3 applications to operate on mobile devices, noting that crypto has “been stuck on desktops” for years:“If you look at most of the activity and sales happening on Magic Eden and OpenSea you will see that everything is mainly taking place on desktops. This is crazy, considering that every application now is mobile first.”According to Yakovenko, this is due to poor user experiences of crypto-based applications on mobile devices. He said that app stores still don’t support crypto natively, noting that the newly released Solana Mobile Stack aims to solve these challenges by making “crypto first class citizens on mobile.” Yakovenko stated that Web3 applications built on the Solana Mobile Stack will not require usernames and passwords, as they will be privacy-first by default. “Everything will be designed through a ‘mobile wallet adapter,’ which is a protocol for connecting web apps and native Android apps to wallets on mobile devices. Once developers have the opportunity to build user experiences, we will see apps drive adoption for Saga.”While Web3 mobile experiences are compelling, Bankman-Fried pointed out that FTX is interested in blockchain-based social media platforms. “I think blockchain can help bridge different social media platforms, creating unifying layers of data transfer,” he said during his fireside chat. Bankman-Fried also highlighted this use case in a detailed Twitter thread he posted on July 16. 31) Let’s say that, instead, we put messages on a blockchain.So if you used Blockchain-Twitter (BT):–You type the message in BT’s interface–BT posts the message on a public blockchain–Your friend pulls out Blockchain-Facebook (BF)–BF reads your message and displays it— SBF (@SBF_FTX) July 16, 2022

Driving mainstream adoption for Web3Recent data from Apptopia found that apps with “Web3” in the title or description available for download on iOS or and Google Play are growing almost 5x faster in 2022 than in 2021. But, mainstream adoption of Web3 platforms and applications is still very much underway. According to Bankman-Fried, the biggest hurdle to mainstream adoption is scalable blockchains. “We need to get blockchains up to a million transactions per seconds to support a billion users,” he said. In addition, he believes there should be native integrations with mobile devices and point-of-sale devices that can accept blockchain payments. While these elements will help boost adoption, however, Bankman-Fried is also aware that regulatory clarity is required in order for these features to be achieved. He said, “Having regulator clarity will allow institutional investors to get involved in this space and feel more comfortable.”Yakovenko mentioned that product market fit is another challenge facing Web3 growth, noting that it’s been challenging for teams to develop “good products that people want.” Although Yakovenko is optimistic that Saga will revolutionize mobile devices, he commented that Solana’s recent network outages have been the biggest hurdle to overcome. Recent: Technicals suggest Bitcoin is still far from ideal for daily paymentsWhile Solana suffered full or partial outages at least seven separate times over the past 12 months, Yakovenko explained that Solana’s recent 1.10 release has helped the network run smoothly. “There are a lot of technologies in that release that we haven’t activated yet to make the network stable from the congestion attacks we have seen,” he added.Fortunately, Web3 is still in its early stages and both Bankman-Fried and Yakovenko are optimistic about where the sector is headed. Bankman-Fried concluded his fireside chat by sharing that FTX is focused on becoming a leader in market structure, noting that the exchange is currently working on building this out to ensure improvements. He also mentioned that FTX is looking into creating a payments network. As for Yakovenko, he explained that his victory lap will occur when a Web3 application becomes so compelling that consumers buy Web3-enabled mobile devices as a result. “Crypto revolutionized how people use the web, as we’ve seen chrome extensions utilized. If we can prove this in mobile devices, that will be a game changer.” 

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Will intellectual property issues sidetrack NFT adoption?

The rapidly growing but loosely regulated nonfungible token (NFT) industry already touches many areas of human endeavor “from academia to entertainment to medicine, art, and beyond,” wrote recently two United States senators in a letter to the U.S. Patent and Trademark Office (USPTO) and the U.S. Copyright Office. The legislators were requesting a study to explain how this emerging technology fits into the world of intellectual property (IP) rights, including copyrights, trademarks and patents. It is an area that some say is marked by ambiguity and inconsistent application of the law, and sometimes indifference from the courts. “Many feel it is time for Congress to step in and provide the predictability needed for innovation to flourish,” Michael Young, partner at Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, told Cointelegraph.The joint study that senators Patrick Leahy and Thom Tillis requested from the agencies, due June 2023, has as background a recent slew of high-profile lawsuits — Nike v. StockX, Hermès v. MetaBirkins and Miramax v. Quentin Tarantino — that raise some sticky questions about NFT creation, ownership and dissemination.In one case, an NFT was minted — without permission — featuring sneakers with a Nike Swoosh. In another, NFT-related digital images were created of Hermès’ Birkin handbags, covered in fur, not leather, but also unlicensed. In a third, a famed movie director created NFTs from a film he directed but didn’t own. A “wave of litigations has already begun for trademarks and copyrights, and courts are grappling with applying principles crafted long before the NFTs existed,” Anna Naydonov, partner and co-chair with Young of Finnegan’s Blockchain, NFTs, and Other Digital Assets industry group, told Cointelegraph. “The lack of clarity surrounding patent subject matter eligibility for software remains a top concern for NFTs and other crypto-based innovations in both the U.S. and abroad,” said Young. Much the same could be said about trademark and copyright issues, especially the secondary liability of marketplaces like OpenSea, as well as metaverse virtual worlds and similar platforms where copyright infringement can occur, added Naydonov.Still, not all agree that new legislation is needed. Some believe that government intervention in the U.S. and elsewhere would be not only superfluous but could stifle NFT adoption and innovation.Is current law sufficient?The real problem, as Gina Bibby, partner at Withers Bergman LLP, told Cointelegraph, could simply be “a lack of education about what NFT ownership really means.” A key thing that people seem to overlook is that: “Absent a contractual agreement — e.g., smart contract — that expressly includes intellectual property (IP) rights, purchasing an NFT does not convey any copyright, patent or trademark rights or even ownership interests in the physical world asset on which the NFT is based.”Are there, arguably, some false ideas out there about NFT ownership and puzzlement over who can do what? Recent: The regulatory implications of India’s crypto transactions tax“Yes,” Eric Goldman, associate dean for research and professor at Santa Clara University School of Law, told Cointelegraph. “In the offline world, the buyer of a painting or sculpture doesn’t automatically buy the associated copyrights.” That is unless the copyright is separately transferred, the artist or sculptor “can commercialize depictions of the art/sculpture and prevent the chattel owner from doing the same.” Even if the average consumer isn’t always aware of this, the U.S. Copyright Act expressly states:“Ownership of a copyright, or of any of the exclusive rights under a copyright, is distinct from ownership of any material object in which the work is embodied.”Goldman sees “a lot of erroneous claims” being made these days to the effect that “that owning one piece controls the other,” i.e., the NFT owner controls the IP or the IP owner controls the NFT. People often fail to recognize that, just as in the physical world, a piece of art and the item’s copyright are often owned by two different people, so too “an item of IP and its NFT can and often will be owned by two different people.” Growing pains of a new industry?But, every new technology brings with it novel questions, and maybe the current debate is just another example of technology moving faster than the law. Will regulators and lawmakers struggle to keep pace with changes?“It’s the opposite,” Joshua Fairfield, a professor of law at Washington and Lee University, told Cointelegraph. “The law is already in place and has been for hundreds of years. Property is one of the oldest disciplines of law. There is no reason at all that someone cannot own an NFT like we own cars, houses, stocks, or the money in our bank accounts — after all, each of those property interests is also an entry in a database of who owns what.”The problem here, Fairfield continued, is that intellectual property law grew to overshadow personal property interests online, telling Cointelegraph: “If I own a book, I own the copy, despite the fact that the book contains copyrighted material. But online, I don’t own an e-book because too many courts only recognize the intellectual property interest.”That is beginning to change now, however, as courts recognize that intangible assets like domain names or NFTs are no different from any other kind of personal property interest that we want to own, added Fairfield.In Goldman’s view, the problem here “is similar to the issues about domain name ownership we wrestled with a quarter-century ago.” A domain name can be a piece of personal property even if it’s not protected by trademarks, he said, predicting that “the non-IP rules developed to protect those domain name owners will help resolve NFT ownership disputes.”Bibby, for her part, doesn’t agree that intellectual property law has grown to overshadow personal property interests online. “When intellectual property laws are applied in a thoughtful and measured way, other interests including personal property interests are likely to be respected.”Confusion along these lines isn’t restricted to NFTs, of course. A decentralized autonomous organization (DAO), SpiceDAO, recently paid over $3 million at auction for the unpublished manuscript for the Dune film, intending to make an animated limited series about the book for a streaming service. We won the auction for €2.66M. Now our mission is to:1. Make the book public (to the extent permitted by law) 2. Produce an original animated limited series inspired by the book and sell it to a streaming service3. Support derivative projects from the community pic.twitter.com/g4QnF6YZBp— Spice DAO (@TheSpiceDAO) January 15, 2022Then it learned, too late, that in the U.S. and Europe, buying a manuscript of creative work does not grant the buyer its copyright too. SpiceDAO was ridiculed on Twitter, among other places, for its oversight. As Andrew Rossow, a technology attorney and Ohio law professor, told Cointelegraph in February:“The Spice DAO and Dune fiasco was a landmark in its own right that sends a very powerful message to everyone involved in the NFT space — creator or owner. The $3-million mistake that was made proved that intellectual property’s dominion in digital fine art is essential to its success and longevity.”Asked about needed clarifications, whether through laws or other means, Fairfield answered that people need to know the owner of an NFT owns the copy of the photograph or artwork, “just like we own a car or a painting or a book, and can sell it and capture its rise in value regardless of attempted restrictions hidden in license agreements.” “Right now, when people put millions of dollars into an NFT, they’re being told they don’t even own the right to capture the rise in value. That makes investment unsustainable,” he said. What is needed is “recognition that ownership of an NFT is an ordinary everyday ownership of personal property,” added Fairfield, further explaining:“It means NFTs pass to heirs after death. If an NFT is stolen, the owner can go to court to get it back. If an NFT is damaged or destroyed the owner can get its value from the person who did it. An owner knows that they will be able to capture the rise in value of the NFT if it turns out to be a good investment.”Rising fraud could prompt a crackdownSome believe that there are risks if governments get too aggressive with regulatory and legislative reforms in emerging technologies. “Government intervention into new technological arenas always creates a risk of misregulation that harms or hinders the development, especially when the technology is rapidly evolving or the government regulators don’t understand the technology,” noted Goldman. But, the status quo may not be sustainable here because at present, “NFTs are being used to perpetrate consumer fraud,” added Goldman. “When the fraud numbers are large enough, the government must intervene to protect consumers.”This, in turn, could lead to over-regulation. “Unfortunately, the fraudulent angles of NFTs have a real risk of overshadowing the activities of the legitimate NFT players. The legitimate players are potentially going to be hurt by government crackdowns even though they were doing the right thing all along,” Goldman said. Recent: Burdensome but not a threat: How new EU law can affect stablecoins“Such risks always exist, which is why intellectual property and marketing lawyers in this space hope that the U.S. Patent and Trademark Office, the U.S. Copyright Office, the Federal Trade Commission and/or legislators work closely with key industry stakeholders to understand the main legal challenges and the technology behind NFTs, and come up with workable solutions,” said Young. Naydonov added that “regulation and legislation without input from the industry could set the U.S. back as compared with other jurisdictions.” “People need to be educated”Bibby, however, sees no need for wholesale legal reform. What is required instead is “a discussion about what we currently know about NFT ownership,” she told Cointelegraph. People need to be educated and understand that a basic NFT purchase brings with it no copyright, trademark or patent rights — unless express language declares otherwise. She added:“Throughout modern history, laws have been tested by innovation and survived. The U.S. Constitution is a perfect example. The real need is to understand how existing intellectual property laws apply to recent innovations like virtual assets, including NFTs, virtual goods and the like.”Moreover, decisions in several pending court cases, including Nike v. StockX and Hermès v. MetaBirkins, will probably be sufficient to “resolve many of these outstanding questions,” Bibby told Cointelegraph.Meanwhile, the senators gave the USPTO and Copyright Office until June 9, 2023, to complete their study, but given the breathtaking speed at which NFTs and digital assets are being created and disseminated, the market itself might provide some answers before the agencies’ joint work ever sees the light of day.

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DeFi for financial services: Alex Tapscott’s ‘Digital Asset Revolution’

Decentralized finance (DeFi) has massive potential to transform traditional financial services. Data from Emergen Research recently found that the global DeFi platform market size is expected to reach $507 billion by 2028. Moreover, the total value locked within DeFi currently exceeds $75 billion, demonstrating fast-paced growth compared to previous months this year.Yet, DeFi’s potential may still not be realized by business leaders unfamiliar with the blockchain ecosystem. This notion is highlighted in Alex Tapscott’s recent book, Digital Asset Revolution. Tapscott, co-founder of the Blockchain Research Institute and managing director at Ninepoint Digital Asset Group, told Cointelegraph that he believes digital assets are going to be an important building block for a new internet, along with a financial industry that will change business models and markets. However, Tapscott noted that, to date, very few resources have been available to help enterprise leaders understand the relevance of digital assets. He said:“Words like nonfungible tokens, central bank digital currencies and stablecoins are alien to people who are not involved in the world of crypto and blockchain. It’s our goal at the Blockchain Research Institute to illuminate the potential behind different digital assets, explaining what these are and why people should care about them in language that is easy to understand.”How DeFi relates to the financial industryIn order to help readers understand the concepts behind DeFi, the first chapter of Digital Asset Revolution gives a broad overview of how decentralized finance could reinvent financial services. Tapscott begins by briefly summarizing how DeFi relates to nine specific functions of the finance industry: storing value, moving value, lending value, funding and investing, exchanging value, insuring value and managing risk, analyzing value, accounting for and auditing value and authenticating identity.For example, in regard to storing value, Tapscott mentions that individuals and institutions can use noncustodial wallets like MakerDAO to act as their own banks. In terms of funding and investing, Tapscott notes that aggregators such as Yearn.finance and Rariable could potentially disintermediate investment advisers and robo advisers. Given these different use cases, Tapscott points out that the lines between traditional finance and DeFi will eventually blur as adoption rates grow. Yet, this most likely will not be the case in the immediate future, as skepticism around DeFi still remains.Chapter one also addresses how a new ecosystem of digital assets is emerging from the growth of DeFi. This is an important aspect of the book, as co-author Don Tapscott told Cointelegraph that business leaders are still very much confused about what crypto represents. In order to clarify this, Digital Asset Revolution describes nine different digital asset classes, focusing on cryptocurrencies, protocol tokens, governance tokens, nonfungible tokens (NFTs), exchange tokens, securities tokens, stablecoins, natural asset tokens and central bank digital currencies (CBDC).Cover of Digital Asset Revolution. Source: Blockchain Research InstituteWhile each of these assets is important, readers may be inclined to focus on the digital assets that are gaining momentum today. For example, the book features an entire chapter on stablecoins, demonstrating how these hold the potential to transform legacy payment infrastructures like SWIFT.Recent: Crypto payments gain ground thanks to centralized payment processorsThis does appear to be the case with some stablecoins, like Circle’s USD Coin (USDC). USDC was recently adopted by Banking Circle, a European bank focused on cross-border payments. But, some stablecoins are proving to be controversial. This was displayed following the collapse of the algorithmic stablecoin TerraUSD Classic (USTC) or Luna Classic (LUNC). As such, readers of Digital Asset Revolution should still conduct their own research when looking into different digital asset use cases, especially since the sector is constantly evolving.CBDCs are another interesting topic mentioned throughout the book. Chapter four is dedicated entirely to CBDCs and features an edited transcript from a webinar hosted by the Blockchain Research Institute with J. Christopher Giancarlo, former chair of the United States Commodity Futures Trading Commission and co-founder of the Digital Dollar Project.In this chapter, Giancarlo explains what a “digital dollar” represents, noting that the concept is very different from stablecoins, which are often tied to another asset of value. Giancarlo remarks that a digital dollar, also known as a CBDC, is a thing of value itself. While a number of concerns remain around CBDCs, Giancarlo also details why privacy is important in order for a digital dollar to be successful:“At the Digital Dollar Project, we believe that developing the jurisprudence around the U.S. government’s approach to commercial activity using the sovereign currency, if it’s done right, could be a feature of a digital dollar that could be superior to other global reserve currencies.”The chapter on NFTs may also pique readers’ interest, given the hype surrounding these digital assets. Alan Majer, founder of Good Robot — a company exploring artificial intelligence, robotics, blockchain and the metaverse — contributed to the chapter on NFTs, noting that “NFTs breathe life into digital notions of ownership.”Given this, the author points out that enterprise leaders must start thinking creatively about tangible and intangible property rights. For example, Majer includes a chart here that displays NFT use cases, one being for intellectual property. The chart states that “NFTs could potentially confer licenses or titles not just of copyrighted works but also trademarks and patents as with 3D printing design files.” Another interesting use case displayed relates directly to DeFi, as NFTs have the potential to expand the range of assets to securitize, customize and derive additional value.Digital assets aside, interoperability is discussed throughout chapter two of the book. According to Tapscott, interoperability is important for enterprise leaders to understand because this essentially allows different blockchain networks to communicate with one another.“Smart contract platforms must interoperate seamlessly for DeFi and other new blockchain use cases to reach their full potential,” he writes. Tapscott then points out that smart contracting platforms like Cosmos and Polkadot were developed to address this issue. Anthony Williams, co-founder and president of the Digital Entrepreneurship and Economic Performance Center, elaborates on this throughout the second chapter, explaining how Cosmos and Polkadot allow blockchain networks to transfer value in a trustless and efficient manner.Challenges of DeFi adoptionWhile Digital Asset Revolution provides an in-depth overview of how different digital assets associated with DeFi can impact traditional finance, Tapscott is also aware of the challenges associated with adoption. The author mentions these dilemmas at the end of chapter one, noting that DeFi is still in its early days and requires growth.For instance, he explains that blockchain networks powering DeFi applications still require a lot of energy. While a number of DeFi applications are built on Ethereum, statistics show that Ethereum’s annualized footprint in electricity consumption grew during 2021, exceeding the consumption of countries like Colombia or Czechia.Tapscott also notes that governments may regulate DeFi, which could hamper growth. Additionally, Don Tapscott mentioned that DeFi may become bigger than the billion-dollar fintech sector, but this would require senior executives and intermediaries like banks to understand the value of decentralized finance. “The challenge of course is that leaders of the old middle are typically last to embrace the new middle,” he said.Recent: Blockchain-based solutions aim to address US disaster reliefAll things considered, though, Tapscott ends his overview in chapter one, suggesting that organizations that fail to implement DeFi aspects will be engulfed by “this hot new industry.” Tapscott added that releasing a book on DeFi during a bear market demonstrates a valuable lesson. He said:“We are in crypto winter, which is actually the best time to drill down on ideas and get educated. Bull markets are for earning while bear markets are for learning.”The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com.

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Why is there so much uncertainty in the crypto market right now? | Market Talks with Crypto Jebb and Crypto Wendy O

In the fourth episode of Market Talks we welcome YouTube media creator and crypto educator Crypto Wendy OCrypto Wendy O is a YouTube Media Creator and Crypto Educator. Wendy became interested in Cryptocurrency and Blockchain technology in November of 2017. She has been into crypto full time since summer of 2018 and focuses on providing transparent marketing & media solutions for blockchain companies globally. Wendy also provides free education via YouTube and Twitter to her growing audience of over 170K. Oh and she is also the largest female crypto influencer in the world.Some of the topics up for discussion with Wendy are, the new consumer price index (CPI) numbers and how they might impact the crypto market going forward and why there is so much uncertainty in the market right now?As everyone tries to figure out where the Bitcoin (BTC) bottom might lie, we ask Wendy what her opinion on the matter is where she think the bottom might be. We also discuss whether Ethereum (ETH) has out performed BTC during this current bear market and what that might mean for the second largest cryptocurrency.With more and more crypto platforms filing for bankruptcy, we discuss how much longer the crypto contagion will continue for and what is the best way to safeguard your assets so you don’t lose your hard earned money. Are hardware wallets a better option rather than keeping your crypto on online exchanges?Have you been wondering what makes a good investor and trader and when is the right time to get in the market if you haven’t already? We ask Wendy for her insights and tips on how you can up your trading game and figure out when might be the best time to get in the market. Lastly, we discuss whether it is always a good strategy to have diamond hands or should one constantly take profits as well? We have an insightful conversation about this and also let you in on which altcoins might be a good bet in the current market conditions.Tune in to have your voice heard. We’ll be taking your questions and comments throughout the show, so be sure to have them ready to go.Market Talks with Crypto Jebb streams live every Thursday at 12 pm ET (4:00 pm UTC). Each week we feature interviews with some of the most influential and inspiring people from the crypto and blockchain industry. So be sure to head on over to Cointelegraph’s YouTube page and smash those like and subscribe buttons for all our future videos and updates.

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