Features

Girl Gone Crypto has amassed a huge following on Twitter thanks to her interesting and unique take on crypto news.

Lea Thompson aka Girl Gone Crypto declares that she will not put her 225,000 Twitter followers to sleep with the same old boring breaking news tweets about crypto.

She explains that using breaking to share news that everyone knows is pretty lame.

It is kind of generic. It is easy engagement, and there is not any personality or anything interesting about it.

By the time Id have posted the news, five other accounts would have probably posted about it, Thompson says. 

Instead, Thompson likes to put a spin on the latest news, dish out some interesting commentary, or crack jokes to give her followers something different from the rest of the pack.

Its this quirky mindset that has made her a crypto sensation on Twitter, and it all began with her ukulele playing. 

Back in 2017, Thompson hopped on the Steemit bandwagon, a popular blogging platform at the time. She started posting videos of her playing ukulele covers and getting paid in Steemits crypto token, STEEM, whenever her stuff got upvoted. 

Although Thompson was raking in crypto for strumming out ukulele covers, she admits she wasnt even that good. 

Oddly, her ukulele crypto side hustle brought about unexpected invitations to speak at various crypto events.

We think your story about earning crypto playing ukulele is really cool; we want you to come share it at our conference, so I ended traveling all over the world and meeting so many cool people working in the industry. It was such a fun experience.

Thompson admits she was quite surprised considering she wasnt even making crypto content. However, it was a turning point for her as she realized that the corporate life in marketing and sales wasnt her true calling. 

Thompson ditched her job and made a bullish career move by going all-in on crypto: In 2019, I decided to launch a crypto channel. At that point, Id been using crypto, learning about crypto, launching some social channels, and what Ive been doing ever since.

Thompson says her family is proud of her but is totally clueless about what she does and what its all about. Her mom believes she works directly for Bitcoin, the company, which Thompson finds pretty cute.

What led to Twitter fame?

Thompsons way of getting almost half a million followers is kind of funny because she didnt even try to go viral.

People get caught up on the idea of going viral, and, yes, of course, that is really exciting when that happens and absolutely helps your account grow its not a necessary ingredient, she says.

As the old saying goes, Thompson believes that just showing up every day is the way to success.

I would attribute my growth on Twitter not to random viral moments: I have had a few, but not that many. I just showed up consistently every day for a long time, which is a much more sustainable way to grow.

People try too hard on trying to put out that viral tweet, versus playing the long, consistent game, she says.

Her approach seems to have paid off as she counts MicroStrategys Michael Saylor, Geminis Tyler Winklevoss, and Bitcoin podcaster Peter McCormack among her 225,000 followers.

What type of Twitter content?

Thompson says that her content is short, snappy, funny and entertaining. She takes this approach because when she entered the space in 2019, all the content was super serious and filled with complicated stuff.

When I first came into the crypto space, the content was very technical, very heavy and long form. If you wanted to find information you had to watch a 45-minute livestream.

While many crypto influencers try to jump the news cycle with their tweets by writing breaking, Thompson prefers to take a moment and find an original angle in the recent events.

Ill try to think of some really interesting commentary or a funny take or a spin on it, not sharing the actual news that is pretty boring, to be honest, she says.

When she is not smashing out crypto content, Thompson is all about staying active and averages around 25,000 steps per day. The adrenaline rush from all the activity keeps her mind buzzing with spontaneous ideas for crypto content, which she quickly jots down on her phone.

She says that her happy-go-lucky vibes she puts out on Crypto Twitter mean she doesnt get into the beefs like many in the crypto community.

My Twitter beefs would be a pretty lean burger, she jokes, declaring she has no juicy stores and that the burger pun is intended.

I try to stay out of any personal fueds or Twitter drama, stay on my own thing.

What type of content do you enjoy?

Thompson approaches her Twitter feed as if it were a buffet. She follows a wide range of notable names in the industry from Bitcoin maxis Saylor and McCormack to technical wizards Messaris Ryan Selkis and Ivan on Tech.

I would say my [Twitter] feed is a real mix. Some people I follow for news updates; other people I follow really good in-depth analysis of things that are happening in the crypto space or general financial markets, Thompson says.

Similar to her brand of content, she likes to follow crypto influencers who bring a lighthearted and humorous approach to their content.

I have people that are really funny or interesting that are happening in the industry, she says.

She explains that she loves memes, which stems from the fact that Crypto Twitter often bombards users with technical jargon. So, the occasional dog or cat meme brings a refreshing break to her feed.

Predictions?

Thompson is cautious about making any price predictions in the crazy world of crypto.

If I find a crystal ball, Ill be sure to let you know, she laughs.

However, every now and then, you will catch her dropping subtle tweets that reveal her bullish feelings for Bitcoins future price. 

She admits she is optimistic about Bitcoins future, particularly with all the ongoing talks discussing Bitcoin exchange-traded funds (ETFs):

If we finally see the approvals for these spot Bitcoin ETFS, it will be nothing but good news. It will allow ease of entry for more investors in the Bitcoin ecosystem. Whether it has a major price impact immediately or not, I think in terms of adoption, its a big step forward.

Subscribe

The most engaging reads in blockchain. Delivered once a week.

Email address

SUBSCRIBE

Jameson Lopp says none of the developers “deep into Bitcoin” think the protocol should be allowed to ossify: “There’s so much work to be done.”

Jameson Lopp has been on the front lines of the battle between technologists and those who want to preserve Bitcoin as it is since the scaling debates of 20152017.

The topic arouses such passion that many suspect it was a disgruntled Bitcoiner opponent who called down an armed SWAT team to his home, leading him to famously go underground.

Lopp blamed the 2017 incident on the same old same old: Bitcoin philosophy and scaling debate arguments. A few of the more extreme cases think Im some kind of manipulative monster.

Lopp, who is currently the chief technology officer for decentralized wallet service Casa, is an advocate for cautious progress who commands respect among the Bitcoin community.  

Speaking from an undisclosed location, Lopp says he worries the backlash against Ordinals NFTs might result in lower support for much-needed future upgrades. Ordinals were largely an unexpected result of the 2021 Taproot soft fork.

The problem that I see is that theres a lot of ossification proponents out there. And theyre pointing at Ordinals and inscriptions and saying, You see, this is what happens when you change the protocol. It gets abused and used in ways that were not intended, he says.

But Lopp says the alternative is every bit as risky. He has carefully considered the problem of  Bitcoins ossification where the network becomes so big it kind of gets crushed under its own weight and unable to change itself.

Lopp uses email as an example of an internet protocol that ossified in the 1990s, leaving it with little ability to deal with the massive volumes of spam that subsequently arose.

Instead, corporations constructed expensive centralized reputation services on top to sort out spam from legit emails, and today, large numbers of emails that dont comply with the arcane rules of the systems simply disappear into a black hole. And users are still deluged with spam.  

As of today, something like 90% of all email users are captured by five corporations. So, I think we have to ask ourselves: Is that the mainstream adoption of Bitcoin that we want to see? And if not, then what do we need to do to prevent that?

For Lopp, scaling Bitcoin something hes been agitating for, for years remains the big challenge as the Lightning Network is not going to fix everything.

If you talk to any of the developers, whore pretty deep into the protocol, youll be hard-pressed to find any of them who think that we should ossify the protocol now. Theres so much work to be done.

Honestly, I dont know how much time we have left to do that.

Historically, Lopps company Casa has been solely focused on Bitcoin, but last month, it outraged puritans on social media by adding Ethereum to its multisignature self-custody solutions. It highlights the fact Bitcoin has a fast-growing challenger snapping at its heels if it lets up the pace. 

Who is Jameson Lopp?

Lopp grew up in a fairly typical Southern American conservative household in North Carolina, where his fathers side of the family has lived since the 1700s. It was clear from early on that he was super bright, and his parents pushed him hard to achieve great things at school.

I read probably several grades above my reading level, and I read all the time. I had a special exemption at the library to check out more books than you are normally allowed to just because I was going through such a high volume of them.

Placed into high-level courses, he often wound up sitting on his own doing separate assignments from the rest of the class, something of a social outcast. 

On the social side, I would just get even more awkwardness and sort of abuse because I would sometimes use vocabulary that nobody else was using, and they were like, you know, Who is this alien guy?

Lopp ended up joining Mensa in 2010, mainly to see if he could pass the test requiring an IQ in the top 2%. Naturally, he set up a Mensa Bitcoin special interest group, though he says super-smart people dont necessarily get Bitcoin any faster than anyone else and points to the dismissive reaction to Satoshis original announcement about Bitcoin.

The people who were responding to that email were not stupid. They were incredibly intelligent people. But if youre intelligent enough, you can always find reasons why something wont work.”

Coming of age

After school, Lopp headed to study computer science at the very liberal University of North Carolina at Chapel Hill. Brought up to be a very conservative Republican, he says university swung my perspective a little bit more outside of the sort of family and household standards that I had been used to. He ended up voting for Obama in 2008, Libertarian in the following election, and now believes he can have more impact building decentralized financial infrastructure than voting.

These days, I view politics at a very arms length amused perspective.

He worked in email marketing for years in one of the tech areas near Raleigh, moving up from working on the web app to large-scale data analysis. Like most people in tech, he read about Bitcoin a few times and dismissed it as nerd money that was going to end badly before finally reading the white paper in 2012.

I was just blown away, he says, noting that Satoshi approached the double-spending and Byzantine generals problem from the exact opposite direction of the performance and efficiency mindset Lopp had been taught.

When I read the white paper and I saw the solution to the problem, I was amazed because it was both elegant and ass-backward, he says. 

The solution was to make everything really, really expensive in terms of resource usage. I was like, wow, I never in a million years would have thought to try that because it just goes against our nature as computer scientists.

Bitcoiners back then were primarily libertarians, cypherpunks and crypto-anarchists, and the chance to find an alternate way forward was part of the appeal.

We can build alternative power structures, alternative systems that dont rely upon any of the existing infrastructure. And basically, we can create our own rules for how these systems should operate.

Lopp forks Bitcoin Core

Within two years, Lopp had created a fork of Bitcoin Core called Statoshi to bring more transparency and understanding to the internal operations of a Bitcoin node. He applied for a grant from the Bitcoin Foundation to work full time on the project but never heard back. Five years later, he discovered hed been successful, but the foundation fell apart before he received any money.

Lopp also applied to work at Coinbase in 2015 and never even got an interview, but his work on Statoshi did land him a gig running the nodes for institutional custody and infrastructure provider BitGo. He also began to nurture his public profile, ramping up his research and writing hes written for CoinDesk, Cointelegraph and Forbes tweeting more often, organizing Meetups and presenting at events. Hes now a regular at conferences around the world, but it wasnt easy to start. 

Im definitely an introvert, though you wouldnt know it because I do all of these public speaking events. But that took a lot of practice to do.

Lopp says the block size wars (20152017) was the period when he started to become really well-known in Bitcoiner circles. Initially, he was on the big blocks side, writing an article in 2015 calling for an increase in the 1MB size of blocks to increase capacity and suggesting blocks may one day hit 10GB. He also supported the Bitcoin XT fork of Bitcoin Core, which ended up part of Bitcoin Cash.

That was really a result of what I had been doing as an engineer for the past decade, he says, adding that hed spend much of each year prepping for the Black Friday and Cyber Monday sales because if you couldnt handle that, then it would be a bad user experience, you would lose customers, you would lose money, and the business would not grow as quickly. He didnt want Bitcoin to lose potential users through a bad experience with the slow, expensive blockchain.

However, his perspective started to change when he realized the impact bigger blocks would have on his own work at BitGo, writing services that talked to the nodes.

I started to see the opposite side of the argument, he explains. Even with these tiny 1MB blocks, it was quite challenging for me to write services that could ingest all of this blockchain data at a very fast pace.

It took weeks sometimes to get a new indexing service up and running from scratch, and doubling or tripling the block size would require exponentially more resources to the point where only the largest enterprises who had a lot of money to throw at this problem would even be able to run the nodes and the services on top of them.”

So, while Lopp ended up strongly supporting SegWit as a practical solution and thinks Bitcoin is superior to any other cryptocurrency as sound money, he also sees room for experimentation on other protocols, and on Bitcoin.

A lot of people get very ideological and, in some cases, puritanical about this stuff, he says. Bitcoin is not a kitchen sink type of protocol there. Theres a lot of things that you cant do on Bitcoin that you can do with other protocols.

Su Casa, mi Casa

Lopp joined the decentralized Bitcoin self-custody service Casa in 2018 and was soon promoted to chief technology officer. He also has the title of co-founder. Casa is an alternative to centralized custodians and offers a range of multisignature wallet plans that enable users to avoid losing their funds in security incidents and to recover lost or stolen keys. 

Casa began support for Ethereum last month and claims its the first company to enable self-custody of both Bitcoin and Ether with up to five keys for distributed security. ERC-20 and NFT support is in the works. 

Obviously, there were a few clients who fell into the sort of extreme Bitcoin-only camp who went their own way, says Lopp, adding that this was expected. Really, its this loud, tiny minority that can seem a lot bigger than they are if youre on social media. But in reality, I would say most of our clients and most Bitcoiners, in general, are pretty moderate and kind of apathetic about all of the drama.”

He says the decision resulted from user demand because many existing clients do have more diverse portfolios, and they want to have that same level of security for assets other than Bitcoin.

The loud, tiny minority goes SWATing

The famous SWATing incident happened after his views began to evolve. A 911 caller claimed to be holed up at Lopps house with hostages, having already shot someone.

By my voice, you can tell Im not in a mental health state right now. Im on drugs. Im all over the place. I dont know what to do. [] If I dont get $60,000, Im going to blow the whole fucking block up.

Heavily armed cops arrived at his home, guns drawn. Lopp wasnt home at the time and arrived to find his neighborhood shut down and crawling with dozens of patrol units, a SWAT team, a mobile command post, a fire truck and a paramedic. He had a conversation with a cop to find out what happened, not realizing he was the suspect.

Following the incident, Lopp tweeted a video of himself firing off an AR-15 rifle as a warning to anyone trying to find him.

The incident also inspired Lopps radical privacy experiment to live off the grid and off the radar of the authorities. Apart from standard stuff like using VPNs, private mailboxes and using fake names, it also involved setting up a bunch of limited liability companies to apply for bank accounts and credit cards one step removed. He mainly spent cash, used burner phone numbers and even bought the crappiest, cheapest hole in the wall I could find that has a physical mailbox as a physical address to get a drivers license.

I determined that the amount of effort and especially money that is required to do it is going to price almost everybody out of doing this, he says, adding the fact that you have to lie to everyone was also likely to deter people from trying it.

Everyone in my physical proximity, my neighbors, they only know my pseudonym. And you know, I have my backstory, and I literally had to create this whole alternate persona, but not so different, it would be difficult for me to make it believable. So, like, Im still a software engineer who knows a lot about security.

Lopp maintains a GitHub list of known physical Bitcoin attacks, which spans from Hal Finney getting SWATed in December 2014 to a couple in Queens, New York who in mid July were mugged by assailants disguised as FBI agents that stole their car, $40,000 in cash and their crypto.

The No. 1 lesson to take from the list is that the fewer people who know they can rob you of your crypto by threatening you with a $5 wrench, the better. So its interesting to learn that prior to his SWATing, Lopp used to drive around in a flashy Lotus Elise with a BITCOIN license plate, basically inviting attacks.

Although many people thought it was a Lamborghini, Lopp says that it was actually a salvage title car that I got for $20,000. He eventually sold it, but he has the BITCOIN license plate hanging on the wall behind him during our interview as a memento. These days, Lopp drives extremely common vehicles that are mass-produced by the millions.

Future progress for Bitcoin

Pushing for progress on Bitcoin while not destroying all of the things Bitcoiners hold dear has always been a thorny problem. Roger Bitcoin Jesus Ver couldnt solve it and went off with the Bitcoin Cash camp, who then split off with Craig No, I really am Satoshi Wright heading up Bitcoin SV.

There are also Bitcoiners trying to change it from within, like Eric Wall and Udi Wertheimer, who have embraced Ordinals. Wall is also investigating scaling Bitcoin using the same zero-knowledge proof technology being used to scale Ethereum via Starknet.

Lopp says hes focused on a variety of improvements that can be made to let people start building more outside of the base protocol.

You dont need to go through the same onerous process to develop on a second layer, you dont have to make these sweeping consensus changes that are really risky, he explains.

Thats one of the reasons why I want to see a lot more second layers other than just Lightning. I want to see more sidechains, drive chains, rollups, so on and so forth. Because I think that that is going to enable more innovation, more experimentation.

Subscribe

The most engaging reads in blockchain. Delivered once a week.

Email address

SUBSCRIBE

Negative experiences in the music biz have seen artists like 3lau, Nas and The Weeknd turn to tokenized royalties for a fair deal.

Since 2021, pop superstar Taylor Swift has been rerecording and releasing her entire back catalog of albums in an effort to break away from her previous record label and gain greater control over her art.

The fact she has to go through such a painstaking, expensive process just to recover what most would consider rightfully hers highlights how the music industry can be a complicated, confusing place for young artists. It has a well-deserved reputation for being a space where enthusiastic musicians often unknowingly enter into unfavorable or exploitative record contracts. 

I would say maybe 10% of musicians have a good understanding, 1% of musicians have a great understanding, and 0.1% of musicians have an amazing understanding of the legal and financial structure behind the music industry, Justin Blau tells Magazine. Also known as 3lau, Blau is a popular DJ and the founder of Royal, one of a handful of companies working to bridge the divide between the traditional music industry and blockchain.

Web3 or blockchain is often hyped up as the Promised Land for musicians, where the music industry will be democratized and decentralized, and where musicians will earn a larger slice of the profit pie by connecting directly with fans through NFTs. 

One rising use case for music NFTs is tokenizing a songs royalties, allowing fans to earn a percentage of the revenue generated by their favorite artists music.

But music copyright law and royalty collection are highly complicated, and very much off-chain. So, where exactly does blockchain fit in, and what do artists and fans gain from its introduction?

A complicated starting point

To start with the very basics, each piece of recorded music has two copyrights associated with it: One represents the recording itself, while the other represents the underlying composition the written lyrics and music.

Depending on how many people and companies are involved in writing and releasing a song, any one track can have multiple rights holders. Musicians who release music through record labels are often required to sign over the master recording rights to the label.

Each copyright also generates its own associated royalties based on whether the song was played on the radio, listened to on Spotify, featured in a movie, etc. On top of that, different organizations are responsible for collecting each type of royalty.

With all that, its easy to see why the average artist may not fully grasp the business side of the music industry when entering into a recording contract that benefits their label more than them.

Very few people really begin understanding the business of music and how it works, let alone the legal part of it, Renata Lowenbraun, an attorney and CEO of Infanity a Web3 platform for independent music artists and their communities tells Magazine. 

The more informed you are as a recording artist or as a songwriter, the better off you are.

Putting royalties on the blockchain

There are three main companies working on tokenizing traditional music royalty streams Blaus Royal, Anotherblock and Bolero and they all follow the same basic premise.

A songs rights holders divest a certain percentage of their royalties, and those royalty rights are fractionalized as NFTs. Tokenholders receive regular payouts to their crypto wallets in USDC in proportion to their share of the rights. If they wish to sell their NFTs, they can do so on the companys website or secondary markets like OpenSea.

The core focus of Royal is streaming, and the platform has already worked with several high-profile musicians, including Nas and The Chainsmokers. Blau tells Magazine that streaming is where most of the income comes from, and that since fans can directly impact how often a song is streamed, it makes the most sense to give fans the ownership in something that they actually can affect the success of.

Royals NFTs live on Polygon and can be stored either in a custodial wallet managed by Royal or self-custodied using a wallet like MetaMask.

Anotherblock which has worked with musicians like The Weeknd and R3hab also focuses on streaming royalties and uses Ethereum. Investors can buy the NFTs with ETH using a self-custodial wallet or through the third-party wallet service Paper.

With all three platforms, the original rights holders retain ownership of the copyright itself all they give up is a share of the royalties. Anotherblock CEO Filip Strmsten tells Magazine, We think that the creators are the ones that have made the track, and they should be able to decide where their music is and how their music is being listened to.

Bolero is a more recent entrant to the business of putting royalties on the blockchain, launching the Polygon-based Song Shares in February. It has worked with musicians like Agoria and Yemi Alade.

While Royal and Anotherblock fractionalize just one of the royalty streams generated by a songs master recording, Bolero focuses on the master recording itself and its underlying IP.

As a result, NFT holders are entitled to a percentage of the royalties generated by multiple exploitations of the master recording, including physical sales, digital sales and sync placements (when a song is used in a movie, TV show, etc) in addition to streams. 

This is what we are trying to tackle here, William Bailey, Boleros co-founder and CEO, tells Magazine.

We are taking IP, we are fractionalizing, and thanks to this, we are able to offer multiple revenue sources.

Keeping the artists at the center

Many builders in the Web3 music space are motivated by their own negative experiences in the business.

Blau, who continues to release music and tour, says he wants to help musicians better understand the industry, know the true value of their music, and ultimately, retain more ownership. Everyones heard the saying artists dont get paid for music, he says. Thats true a lot of the time. But the statement music doesnt make money is not true.

Anotherblocks Strmsten is also a musician, and his negative experience signing a recording contract at 18 later inspired him to co-found the company so that artists could sell their catalogs directly to fans instead of giving them away for virtually free to record labels.

We want to emotionally and financially connect the consumers of music with the creators of music, he states. If you actually own something, then you are probably willing to pay more, and youre probably willing to support that creator more.

With a traditional recording contract, the label acts as a bank, giving artists cash advances and fronting the money to record their albums. But theres a massive catch: The label wants that money back, and the artist is technically in debt until the label recoups its investment.

For Boleros Bailey, selling a part of ones music catalog directly to fans is a way to get money upfront but not be indebted to a record label. Instead of taking an advance that will be really difficult to recoup, […] maybe you can simply share or sell a little piece of it. He adds:

Thanks to Web3, I can access a liquid market to trade my IP without losing creative control.

And when collectors decide to sell their tokens on secondary markets, artists can continue to profit from each sale. So while artists give up some of their future music industry royalties, they gain access to a different set of blockchain royalties generated from the secondary sales of their NFTs assuming traders sell them on markets with this feature enabled.

Whats in it for the fans?

So, what do fans gain from musicians tokenizing their royalties? The most obvious answer is that they can more directly support their favorite artists and get some skin in the game. The better a song performs, the more money fans can potentially make.

Purchasing music catalogs has historically been limited to a select few major institutional funds and record labels with deep pockets. But through fractionalization, the average Joe can actually access music rights, argues Strmsten.

Music catalogs for major artists are generally recognized as stable assets with reliable, lucrative returns for investors. Strmsten reports that Anotherblocks recent royalty payouts saw approximately 9% annualized dividend yields, which is much better than the stock market is performing, especially now.

You buy a catalog, and if the economics are right, youre going to have royalties coming in in the future, adds Infanitys Lowenbraun. She also points to the collectible nature of the NFTs themselves fans have a blockchain-based memento proving they are long-time supporters of an artist.

Think about the bragging rights you can have, right? Hey, I was an earlier supporter. I was into this in this person before anybody, before he blew up. But you can really prove that now.

This aspect has also been embraced by platforms such as Sound, which recently raised $20 million in a Series A funding round that included the participation of rapper and crypto connoisseur Snoop Dogg. Projects like Sound and Infanity let artists mint limited-edition music NFTs tied to new music releases, allowing fans to directly support them in exchange for perks like exclusive meet-and-greets and VIP concert tickets.

Boleros Song Shares include a clause where artists can buy back the IP they divested to collectors at the current secondary market price. If the tokens have increased in value, fans make a profit.

For Bailey, this ensures fans are properly compensated in the event an artist gains greater success and wants to pursue other lucrative deals.

The fans and the investors who are actually acquiring these pieces of catalogs, they are not lost in the process.

Blockchain, meet the real world

For all of the promises of Web3, the traditional music industry remains very much off-chain. As Royals Blau puts it, Its impossible to expect the world to just flip a switch and move everything on the blockchain. This effectively means that there is only partial decentralization, with these platforms acting as trusted intermediaries, collecting revenue from centralized off-chain sources before moving it on-chain. 

This irony isnt lost on Strmsten, who tells Magazine: I would say that is probably the biggest challenge. If you want to have a decentralized music industry to begin with, then anyone who listens to music has to do that on-chain, right? So, the royalties have to start on-chain in order for it to be completely trustless and completely decentralized in that way. And its pretty improbable, in my view, that in the short term that is going to happen.

Then there is the regulatory and legal ambiguity around crypto and NFTs, especially in the United States, which is the largest market for recorded music and home to the Big Three major record labels Universal Music Group, Sony Music Entertainment and Warner Music Group. (UMG is legally headquartered in the Netherlands but maintains its operational headquarters in California). For example, the question of whether NFTs can be considered securities in the U.S. is still up in the air.

The law, in general, always lags behind new technology because new technology just moves a lot quicker, attorney Lowenbraun states. Over time, the courts will slowly get used to this new technology and come up with ways of crafting the law, or rather to use existing principles to figure out what the heck things mean in Web3. I have full confidence in that.

She adds that while linking royalties to NFTs is an exciting idea, builders must tread carefully. For anybody working in it now, it just means youve got to make some logical best guesstimates based on where existing law is now on where it should be going.

Its still a little iffy depending on how you offer what youre offering.

The future is on-chain potentially

The Promised Land may still be some way with no easy path to get there. It would require music rights to be stored on-chain and royalties to be paid on-chain, both of which are technologically possible but dont seem to be an immediate priority of anyone in the traditional industry. 

Many traditional music industry players have little interest in shaking up the current model, as its complex and confusing nature ultimately benefits them and their ability to make money at the expense of artists. As Bailey says, They are making their bread and butter because it is complicated, you know?

But true believers still think well make it. Ljungberg believes that in a couple of years, its not unlikely, in my view at least, that Spotify will pay out royalties directly on-chain and get distributed automatically to all the parties that are involved since thats a lot more efficient way of doing it. 

According to Blau, its just a matter of patience:

People dont understand it yet. Any nascent technology just takes time to reduce friction.

Subscribe

The most engaging reads in blockchain. Delivered once a week.

Email address

SUBSCRIBE

Bitcoiners want to pass on their values to the next generation and BTC kids books aim to help. But is it education or indoctrination?

Any kid who doesnt learn something about Bitcoin is missing out, says Bitcoin advocate Ben De Waal.

De Waal explains that his 12-year-old daughter Samantha has already convinced a couple of her schoolmates and a teacher to hop on the Bitcoin bandwagon, though shes not attempting to orange pill the entire school yet.

Thanks to her upbringing in a Bitcoin family that has largely abandoned fiat currency, Sam is now a Bitcoin ambassador wunderkind nicknamed The Bitcoin Kid.

De Waal himself discovered Bitcoin around 2010 and dedicated his life to it around 2016 (sadly, after he deleted 200 Bitcoin!). Hes worked in engineering leadership positions at both Swan Bitcoin and Lightning Labs and explains he first introduced Sam to childrens books about Bitcoin when she was just 10 years old.

Just two years after she read her first Bitcoin book, Sam found herself on the grand stage of BTC Prague 2023 in mid-June, delivering a speech about Bitcoin.

Oh, and she had to follow MicroStrategys Michael Saylors presentation, too.

Seems like she nailed it, though she was the best speaker at the conference according to Peter McCormack, the host of the incredibly popular podcast What Bitcoin Did.

Its her second big conference appearance, following a presentation at Adopting Bitcoin in 2022. 

Adults shouldnt feel too bad, though kids have a natural advantage when it comes to understanding and learning about Bitcoin.

Scott Sibley, co-author of the childrens book Goodnight Bitcoin, believes this is because kids havent really latched onto a specific form of currency yet.

In many ways, its easier for kids to learn about Bitcoin because they dont have the baggage of thinking its new or different.

Goodnight Bitcoin is an origin tale recounting how Satoshi Nakamoto created Bitcoin and sent the first Bitcoin to Hal Finney.

Goodnight Bitcoin tells the story of Satoshi and Hal as they attempt to create the impossible: a new money called Bitcoin, Sibley says.

It brings children through various stages of the Bitcoin story.

The book touches on the perception that many had toward Bitcoin when it was first introduced, stating that many monsters thought it was impossible and very funny.

Also lightly touching on how the Bitcoin network operates, the book explains, In 2011, Satoshi slipped away to his hidden shelter. But dont worry, the helpers have kept the Bitcoin network running.

Another Bitcoin kids book author Graeme Moore (B Is for Bitcoin) believes that kids who are exposed to Bitcoin today will find it easier to form their own opinions about it later in life.

If its a thing thats been around forever since you were born, then you have a lot more confidence in pursuing it as a legitimate endeavor for a number of years, Moore says.

This is evident with Sam, who has been exposed to Bitcoin throughout her entire life.

She even accidentally orange-pilled her own school teacher.

Her teacher said to me, Hey, I learned some basics from your daughter, but you know, what is this [Bitcoin], can you tell me more about this? De Waal recalls.

Sam is mainly interested in reading allegory books with a hidden message.

Two of her favorite books so far are Bitcoin Money: A Tale of Bitville Discovering Good Money, a story that explores different types of money and helps kids tackle the Why Bitcoin? question, and 99 Bitcoins and an Elephant, a tale of a young girl lost in a huge department store that becomes flush with Bitcoin.

De Waal says that while these books didnt necessarily teach her all the fundamentals about Bitcoin, they firmed up her knowledge and made it clearer.

What do children learn from Bitcoin kids books?

The real question is: Does introducing kids to Bitcoin early via childrens book help create the next generation of Bitcoiners? And is it education or a form of indoctrination?

While there are no guarantees that simply reading books about Bitcoin to children will lead them to grace the stage at BTC Prague, Bitcoiner parents see benefits to be gained from planting the seed early.

The authors that Magazine speak to believe that getting kids familiar with the word Bitcoin and teaching them a few basic concepts is a good base of knowledge for further exploration. 

Moore explains that brand-new technologies do not really take off until they are accepted as inevitable.

There are kids now who were born in 2009, and theyve never been alive without blockchain, Moore says. (Samantha is a good example of this).

Bitcoin has always existed since they were born, so they assume they will always exist until the end of time.

Moore admits that children will not learn a ton about the mechanics of Bitcoin from his book, but there are some funny rhymes in the book that introduce larger concepts.

C is for consensus that the blockchain brings, D is for decentralization of all of the things, he quotes from B Is for Bitcoin.

Drawing inspiration from Dr. Seuss, his favorite author ever, Moore understands how powerful it is to instill certain words and ideas into children from a young age. 

He says that diving into all the nitty-gritty technical stuff isnt really necessary.

[Kids] dont have to know how proof-of-work actually works and how the difficulty adjustment makes it secure, and why the blockchain is immutable, Moore explains.

The book has become a hit within the Bitcoin community, with Moore occasionally waking up to a big order. 

Like a couple of people in Bitcoin, theyll call me randomly and be like, Hey, I need 20 copies, and Ill be like Cool, thats awesome. 

A famous billionaire Bitcoin investor even requested a stack of copies. 

Tim Draper bought 10 copies from me one time, Moore gleefully recalls. 

However, not all believe shoving Bitcoin down childrens throats is a good idea.

Jason Don, author of Rhyming Bitcoin, has a similar belief to Moore on just introducing the broad topic to kids and says it is important to just open their minds to the possibilities that Bitcoin offers.

Rhyming Bitcoin has a similar style to Alice in Wonderland and Dr. Seuss books, gently easing children down the Bitcoin rabbit hole in a fun and playful way.

While it doesnt tackle the technical details of how Bitcoin was created, it focuses more on the why.

The book doesnt shy away from taking a few playful jabs at fiat currency, proclaiming that dollars, like rocks, dont mean much and gently introducing them to inflation in a passive-aggressive way.

The Silly State prints dollars, all day and all night. They Keep printing dollars, and prices take flight! the book declares.

I just think its important that children understand that money isnt just what the government says it is and that anyone should be free to use whatever money they like.

Sibley believes that children dont have the ability to think fiat is weird yet, but hes confident that hearing these stories with an underlying message now will come in handy later in life.

I have no doubt that as they get older, they will wonder why people had cash, went to banks no different than people in their 20s and 30s today find writing a check so odd, he says.

The simple lessons conveyed in these books can serve as a foundation for children to engage in a chinwag with their schoolmates, allowing them to develop their understanding even further.

De Waal says Sam is pretty good at actually kind of talking about Bitcoin to other kids and explaining What is Bitcoin? Why does Bitcoin exist?

She read the [Bitcoin Money book] to the class, and you know, there were a lot of questions which came out of that, which was great.

Parents want to orange pill their kids during bull markets

Interest in Bitcoin kids books is much higher during bull markets than bear markets.

The sales of Bitcoin kids books perfectly track the price of Bitcoin, says Moore, adding he can forecast his earnings several months in advance just by looking at the price.

Two to three months after the coin price goes up, theres more frequent sales, and then when the price goes down, you know theres a lot less sales, Moore adds.

Its not necessarily a lucrative area, though, and authors often do it as a labor of love rather than as a money-making scheme. For example, Don doesnt have a marketing team and relies on Bitcoiners on Twitter sharing photos of the book to help grow the books audience.

Sibley explains that the majority of his sales are to people already in the Bitcoin space that have or are starting families and sees those embracing alternative approaches to education as a potential audience. 

We anticipate more homeschool families gravitating towards Bitcoin education, but that will take some time.

Similar to how Bitcoin requires time for mainstream adoption, the books for children are still a fair bit away from topping the charts anytime soon.

One of the most popular Bitcoin kids books sold on Amazon is Bitcoin Money: A Tale of Bitville Discovering Good Money by Michael Caras and Marina Yakubivska, which has more than 250 reviews and an average rating of 4.6.

My First Step in Crypto and Bitcoin Investing for Kids and Beginners: Simplified Introduction of Cryptocurrencies for Dummies by Sweet Smart Books and Kelly Rhodes is another hot product for Bitcoiners with 95 reviews and an average rating of 4.2.

But their success is relative: Mainstream kids books such as I Love You to the Moon and Back by Amelia Hepworth and Where the Wild Things Are by Maurice Sendak, have 66,074 and 33,920 ratings, respectively.

The authors personal motivations

The motivation behind creating a Bitcoin childrens book for many authors seems to originate from the desire to share their passions and beliefs with their offspring.

It is not uncommon for childrens books that tackle political or ideological concepts to be inspired by a desire from the author to communicate their beliefs to their own children.

For example, Ibram X. Kendi wrote Antiracist Baby to share his views on race and racism with his four-year-old daughter.

He said in an interview with the Los Angeles Times that the idea was to open up the conversation with parents and little children about racism before they can even understand it.

The idea is that when theyre older, they will have heard so much about it, it wont be anything mysterious or taboo.

Similar books include A is for Activist by Innosanto Nagara, which explores social justice and promotes LGBT equality through playful illustrations, and Ada Twist, Scientist by Andrea Beaty, which challenges traditional gender roles through witty writing and creative drawings.

While anti-racists, activists and Bitcoiners all see teaching their beliefs to their kids as education, opponents may view it as indoctrination.

DeFi Dad, a popular crypto podcaster and influencer with over 152,000 Twitter followers, tells Magazine he has refrained from exposing his two young children to Bitcoin kids books and would be cautious to do so anytime soon.

As a parent, despite how bullish I am on crypto, I would still be cautious of any Bitcoin kids books until I read them myself to verify they are objectively educational and not some form of propaganda.

Even if the books present themselves to be educational, he believes that these books should be complementary to childrens education about fiat currencies and not replace any such books.

In the United States, I would bet more than 99% of children are not exposed to any form of education on fiat or basic finance, he says, adding there was a real lack of financial literacy as a result.

De Waal explains that, while he introduced Sam to reading books about Bitcoin and is running a Bitcoin family, he is OK if she decides to go her own way too.

Maybe one day, shell come to me and say, Hey, dad, you know, I think Bitcoin is terrible. Ill say, Okay, tell me why, you know, Explain to me why, and well discuss this. Im not just going to say, Youre wrong.

Explaining a complicated subject

The authors have the best of intentions, however. Moore says that he wrote B Is for Bitcoin with his young niece in mind, wanting to have something special to read to her.

Sibley explains that as a family with a then infant, he wanted to expose her to Bitcoin before she could even walk.

We wanted to be able to make it easier for her to be able to jump down the Bitcoin rabbit hole as early as possible, he says.

For Don, who isnt a parent, the motivation behind writing the book was because he found most so-called entry-level Bitcoin books too complicated for beginners.

Bitcoin can be daunting, difficult to explain, and even more difficult to wrap your mind around, he says.

One day, I was reading a so-called beginner book, and it really wasnt for beginners. So, I thought, Why not try to create a beautifully illustrated book that would appeal to people of all ages, something to ease people into the rabbit hole and that explains why Bitcoin is so important.

Despite not having a child of his own to test the book on, he was able to recruit his mates kids.

I was able to send the manuscript and illustrations to a number of friends with children for feedback, which I think proved incredibly helpful, he says.

The authors opt for self-publishing

Don asserts that while there is a market for childrens books about Bitcoin, publishing houses are hesitant to take the risk. He sent the manuscript and illustrations for Rhyming Bitcoin to a publishing agent he has a relationship with, but they questioned how profitable the book would actually be.

The feedback in terms of marketability wasnt great. Rather than fight an uphill battle there, I opted for more control through self-publishing. 

Moore also opted for self-publishing, as he was reluctant to lose massively on sales, on the back end.

Although he acknowledges the advantage of getting your $200,000 advance through traditional publishing, he argues that relying on a publisher means betting less on yourself and forfeiting long-term rewards.

He draws a parallel to this arrangement, similar to being an employee rather than owning your own business. 

What has the feedback been like?

Moore says the feedback has been great besides those Bitcoin maxis who werent too thrilled about the inclusion of a non-Bitcoin currency.

So, a few people who just wanted to be Bitcoin strictly, you know, Bitcoin maxis, of course, they werent huge fans that E was for Ethereum.

But overall, the feedback has been positive, with many parents happy they can share their love of Bitcoin with their offspring.

Its being able to share something that you love with your kid while teaching them how to read. Thats been the really heart-warming feedback that I want.

Bitcoin should be introduced to children naturally

While it may be tempting for Bitcoin maxis to orange pill their child as young as possible, Sibley says it is better to take baby steps when introducing Bitcoin to children.

He says:

If there are ways you can work in little lessons throughout the day when things are happening, that will probably stick the best.

Sibley explains that integrating Bitcoin into everyday life, along with reading books, is the best approach.

There was a service light on in our car that our daughter noticed one day and asked what it was. I explained to her how people have jobs fixing cars and that ours might need something done, but that would cost money. She then asked if wed pay in Bitcoin, which shows how she is already thinking about transactions for value.

Subscribe

The most engaging reads in blockchain. Delivered once a week.

Email address

SUBSCRIBE

Serious crypto investors think memecoins are stupid. But smart people are making serious money from dumb memecoins. Here’s how.

Back in 1984, a U.K. television advertisement for Kit Kat chocolate bars was set in a music labels office where a keen young band played their demo for a bored music executive. Afterward, they were served the famous chocolate bars and the manager said:

You cant sing, you cant play, you look awful youll go far.

This is as close as I can get to explaining the appeal of memecoins to sensible, smart and intelligent people. But dont be fooled: Smart people are making a lot of money out of dumb memecoins invariably at the expense of not-so-smart people without good timing.

And timing is everything in memecoins, which typically have no utility for anything except having fun and making money. So, without any fundamentals to trade on, can you still take a smart approach to making money by trading memecoins?

On Yavin, co-founder and head of business at Syndika, comes in with a hard no to that idea.

Anyone who says they have any trading strategies with memecoins is talking absolute BS, he says, adding the only reason memecoins have experienced a rush of interest this year is because of the bear market and crypto winter.

People need to do something with their investments, and they cannot wait until the next bull run. These people are not interested in investing in the real projects that take years to build. And theyre all about flipping and all about making a quick buck. Thats the reason, says Yavin. 

Vitalik Buterins best-ever investment was DOGE

But no lesser figure than Ethereum co-founder Vitalik Buterin possibly the smartest person in the entire industry turned a $25,000 investment into the original memecoin Dogecoin into many millions. He told podcaster Lex Friedman in 2021 that hed sold $4.3 million of DOGE during 2020s lockdowns and reports at the time suggested his remaining stack of Dogecoin was worth $20 million.

That was one of the best investments I have ever made, he said, although he added that when he bought at $0.008, he certainly did not expect that return. He gave his profits to GiveDirectly.

Tom Mitchelhill is a financial journalist who worked for various cryptocurrency publications and now writes for Cointelegraph so, hes definitely on the smarter and better-informed end of the spectrum. 

He tells Magazine he finds memecoins fascinating. Mitchelhill discovered them early on in his crypto writing career and has been engaged ever since.

My interest is financial this is a for-profit play but its also fun, he says.

They can be dumb, but there is something about memecoins that is also culturally significant. Why else would a huge number of people get involved?

What should you look for in a memecoin investment?

Evgen Verzun, director of Kaizen.Finance a secure blockchain platform for token launches is a big fan of memecoins and understands the need to try and jump on what you think the next one might be. 

Lets say you have missed the hype train of Dogecoin but you still want to become a crypto millionaire. What do you do? You are looking for something similar that hasnt left the station yet, says Verzun.

For 120,000 or so hopefuls this year, the train gathering speed away from the station was PEPE. Based on the popular crypto meme of Pepe The Frog (but having no relationship to creator Matt Furie), the website cautions its totally useless, which strangely seems part of the appeal.

Mitchelhill, for one, likes PEPE:

When it comes to the most recent king of memecoins, PEPE, the founders categorically say there is no utility, and that makes me laugh, he says.

According to CoinMarketCap, the market cap of PEPE surged to $1.5 billion in early May, but then the price plunged around 80%. Showing the massive volatility for which memecoins are known, since the first draft of this story was written, the market cap has increased by $250 million to more than $600 million.

While the people who bought at the very top probably havent made a wise investment, plenty of smart people make money on the way up and get out before it plunges.

Mitchelhill claims to not be much of a gambler. He tends to invest small and hopefully exit with more. He explains the real killing is made by insiders who tend to buy half an hour into the launch.

With PEPE, once Mitchelhill had reached a 500% profit, he took his money out. This is typically how smart investors operate some gain, some risk, some returns. Having a clearly designed plan for when to take profits is a smart move. The vast majority of people hang on to their investments in the hope that:

a) They will go up further, or

b) They will get back to their peak price. 

Three-point plan for trading memecoins

Sara Jane Kenny, Algorand ambassador and founder of OffChain Ireland, is another investor who is very clear about what she is doing and says her portfolio has increased over the bear market as a result of trading memecoins. She has traded in the likes of DOGE, PEPE, SFM and COOP. 

There are pros and cons to everything, which Im excited to get into. Many memecoins at the beginning start as just speculation, then it can either grow to pump and dump or they start to build utility and a strong community around it these [latter ones] are the types of ones I go for.

Her three-point plan to make money while trading memecoins, in particular, is research, patience and efficiency.

Kenny uses the example of COOP where she researched the origin of the token, the team, the community and what progress was happening. After selecting a promising token, she then considers the most efficient way to trade, what fees might be included, transaction speeds and the different prices across different DEXs and CEXs.

She then advocates watching the market and learning the patterns for a time to see when the support comes in, and when the sells start happening. 

Buy low, sell high its easy on paper, but it takes a lot of time to get it right, so practice and keep notes, as the markets can be volatile. Remember to take profits, and only invest what you can afford to lose. You dont have to sell everything at once: dollar-cost average in, and out, to gain the maximum effectiveness with each trade, says Kenny.

She reckons the best memecoins are the ones that have a strong community, are building utility, and have some sort of meaning even if its a joke. Thats why she sees potential with COOP.

For the uninitiated, its an Algorand ecosystem coin based on a series of hilarious fictional videos by Cooper Daniels following an influencers quest to travel to Bitcoin Beach. Airdropped to the community, and with Daniels keeping zero tokens to himself, its sparked a ton of content and games related to COOP, which surged to become Algorands fourth largest token.

For the rubbish ones, you need to look out for the red flags, like the creator holding the majority amount of the token, if the team is not doxed, there is no progress being made with the token or community. Oh, and make sure the community is not just bots, too.

Being early is the same as being right

Harry Horsfall, CEO of Flight3, is bullish on memecoins. When asked why smart people buy memecoins, he points out that being early is for winners. A successful Web3 entrepreneur whose business was recently taken over by Steven Bartlett of Dragons Den fame, he likes to dabble because of the excitement and because he feels his finger is on the pulse and hes ahead of the retail punters.

I think the PEPE coin is brilliant. It very clearly says on the website that it has no utility and that there is no roadmap. Its just the network effect, he says.

Horsfall sees people having fun with memecoins but notes there are some serious marketers pulling the levers in the background.

We are investing in ideas and yes, 99% of them are not going to work, but there is always that 1%. If you look at Dogecoin, most people bought at 0.000… Here, Horsfall loses count of how many noughts, but suffice it to say that if Dogecoin ever goes to a dollar there are going to be some very happy people.

It is a bit like winning the lottery. We are all on a journey, working the day job, but maybe tomorrow we will win. 

NFTs are memes, too, really

Neil Bodl, full-time degen and founder of BodlNFT, took a break from his day job to explore dollar-cost averaging on Bitcoin and Cardano, but unfortunately, his entry coincided with a bear market. But as the market bottomed out, NFTs caught his eye.

Ive always been fascinated by digital collectibles and pop culture. Ive been watching Dogecoin from the start, for example, but in general, for memecoins to work, they need a certain momentum and push from a community.

Bodl has long been aware of the Pepe The Frog meme, and watching the chatter on Twitter, he reasoned quite early on that a memecoin based on cryptos most popular meme could quickly catch alight. 

A meme like PEPE is faster to share than text or words, he says, tying it all back to philosophy.

The psychology of all memecoins is awfully simple. People want just two things in life bread and circuses. Memecoins satisfy those needs, providing plenty of entertainment and dough. Generally speaking. It only becomes a question of balance because, in this world, nobody can have all the money and all the fun.

Bodl says that sophisticated traders can use the entertainment angle to make serious money.

Im not ashamed to say that Im a meme enjoyer, but my stance on memecoins reflects their own philosophy: I take them as the gag they are supposed to be. Crypto snobs think that memecoins demean and undermine the reputation of crypto as a whole, but Ill say that if the industry can be undermined by a bunch of memes, it probably has much bigger problems to worry about, says Verzun.

Subscribe

The most engaging reads in blockchain. Delivered once a week.

Email address

SUBSCRIBE

Shitcoins and NFTs invaded Bitcoin 2023, but most attendees didn’t seem to mind. Can Ordinals usher in a new era of Magic Internet Money?

Among the more memorable displays at Bitcoin 2023 is a real-life toilet with the logos of various non-Bitcoin cryptocurrencies. Its an ad for a booth selling buttwipes that are moistened with the tears of no-coiners. The marketing message is clear: Bitcoin is the real thing everything else is a shitcoin that belongs in the toilet. 

But only a few steps away is another booth selling trading solutions for BRC-20 tokens, which some have labeled shitcoins for Bitcoin. Across the walkway are more booths slinging NFT minting software also on Bitcoin. The conference even hosts a Bitcoin NFT art gallery. 

As Miami hosts the largest Bitcoin conference for the third year in a row in May, the air feels markedly different. Though there are only 15,000 attendees compared to last years 35,000, the atmosphere has an energy and freshness thats a world away from the gloom and bear-market blues that one might expect after the massive drops from the 2021 highs.

Whats changed this year is the ordinal renaissance, brought on by the recent reality of not only NFTs but tokens being issued on the Bitcoin blockchain. There are certainly haters with some calling for a fork to undo the Taproot updates that made spam possible on the chain. 

But despite the Bitcoin communitys traditional hatred for NFTs, tokens and DeFi, however, things are surprisingly quiet. Despite the blowback online, almost no one Magazine encounters at Bitcoin 2023 has anything particularly bad to say about Ordinals and some did not even realize they are related to Bitcoin. 

Among old-school Bitcoiners in circles where the cryptocurrency that starts with E can barely be mentioned without drawing comments of derision regarding monkey pictures and scam coins the Ordinal NFT phenomenon is decisively met with a quiet acceptance or shrug. Most old-timers arent interested but appear to accept that this is what the young people want today that Bitcoin needs to change with the times. 

Are Bitcoiners quietly accepting a new era where the network takes on a radically new role in the Web3 ecosystem, or is this the calm before the Bitcoin purist storm? 

Bitcoin Ordinals: A new era

With the exception of the Lightning Network, which made fast and cheap Bitcoin payments possible so as to make mass payment feasible, the Bitcoin ecosystem has been relatively unchanging over the years from an outside perspective. 

Mining, halvings every four years, the 21 million supply, hardware storage beyond these core concepts, Bitcoin has lacked a certain dynamism that has placed it largely outside of the more colorful Web3 space of competing protocols, smart contracts, ICOs, NFTs, DAOs, stablecoins and myriad different tokens.

Indeed, the Bitcoin community has so ardently held on to its core tenets rejecting new iterations, interpretations and innovations that it is unironically considered by some as a religion, and semi-ironically as such by multitudes more. 

But is a reformation or even renaissance in the works? 

A stroll through Bitcoin 2023 the worlds largest Bitcoin conference held in May in Miami suggests so. This is because in addition to the yearly fare of booths related to mining, physical art, exchanges, wallet solutions and various hardware, a new entrant is out in force: NFTs.

Well, no not NFTs. Bitcoiners call them Ordinals.

The word ordinal simply means a number used to put things in order: 5th, 6th, 7th, etc. Due to the November 2021 Taproot Bitcoin upgrade, individual satoshis, the smallest unit of Bitcoin, can now be individually numbered and thus made permanently identifiable. 

Uniquely numbered satoshis Ordinals are nonfungible, meaning that they can no longer be substituted for another. Being (1) nonfungible and (2) tokens, they are NFTs by definition.

In Miami, perhaps the most visible landmark to this new phenomenon is Ordinal Alley, the very first art gallery dedicated to Ordinal inscriptions where various Bitcoin NFTs can be viewed.

Subhan Syed, co-founder of YourFund Coin, tells Magazine that Ordinal art whether a JPEG or MP3 may seem irrelevant today, but as time goes on, collectors will look towards unique pieces that have truly been immortalized on the blockchain. 

The system is new and experimental, with Syed explaining that the way inscription works today might be completely different a few years from now, adding that its feasible that one day, there might not be enough satoshis to fill everyones inscribing needs.

We might need a more robust solution in the long term that does not carry a load on the blockchain timestamp.

NFTs and shitcoins Now on BTC

In March 2023, an anonymous developer named domo introduced the BRC-20 system, which uses Ordinals to enable users to mint and transfer tokens on Bitcoin, in a simplistic take on Ethereums ERC-20 standard.

According to BRC-20.io, at one point, the market cap exceeded $1 billion, although after the initial hype died down, the 187 tracked tokens fell to half a billion, and in the midst of the SEC-derived bear market, theyre worth around $132 million with a daily volume around $47 million (although the site is offline at the time of writing).

While the conference has several booths related to Ordinals mainly services for minting or inscribing them few openly promote BRC-20 tokens beyond offering functionality to hold or trade them. While Ordinal NFT images appear to have become accepted by the mainstream Bitcoin community, it appears that BRC-20 tokens viewed by many as shitcoins on Bitcoin have not yet received quite the same level of acceptance.

It will be interesting to see how this changes next year when the conference moves to Nashville.

Wizards vs. laser-eyes

At a talk titled The Great Ordinal Debate, Bitcoin experts Udi Wertheimer and Eric Wall appeared in Taproot Wizard costumes as they made a dancing entrance. The Ordinals project celebrates the Magic Internet Money meme from the early Bitcoin days and welcomes the return of innovations being built on top of the protocol.

Certain Bitcoin maximalists hate them and the spam of Ordinals, believing it undermines the true purpose of Bitcoin.

Wertheimer reported that friends reached out and implored me to reconsider going to Bitcoin Miami, due to many public violent threats from laser eye podcasters who believe NFTs have no place in the Bitcoin community.

The rift that Ordinals has caused in the Bitcoin community may well be summed as a conflict between the wizards and the laser-eyes the former representing the experimental and fun-loving early ethos of Bitcoin, while the latter conveys intensity, seriousness and an unyielding focus on their vision for the greatest form of money known to man.

After the conference, I connect with Logan Golema, who is firmly on the wizard side and has deployed a BRC-20 token for his project Galaxer, which is building a space-based AR capture-the-flag game to work on Apples Vision Pro artificial reality goggles. 

Believing that Bitcoin and its Ordinals will exist for eons into humanitys future, he argues that Ordinals whether art or money will be important much further into the future than the deployer today may intend.

While some in the laser-eyes camp have raised the possibility of a fork to roll back the Taproot upgrade that enables Ordinals, Golema thinks its unlikely. Recalling the block-size wars that were a key driver in the Bitcoin Cash fork led by Bitcoin Jesus Roger Ver, Golema explains that while disagreement certainly exists, it would take a lot for a chain fork to happen again. 

Although various ways to remove what some core developers consider spam have been discussed, Golema believes the innovations will be broadly accepted and integrated even if only begrudgingly because doing away with them may bring even more trouble. 

But Ordinals come with benefits, too, says Golema, helping to ensure Bitcoins transaction fees can sustain the network after the block reward halves away to nothing in the future.

Weve seen for one of the first times that the fee reward was bigger than the block reward thats very important for the future of Bitcoins security.

For Bitcoin miners, the new age means more BTC coming into their collective coffers because the minting, deploying and transfer of Ordinals and Bitcoin-based tokens all require paying miners fees. This could help solve the issue of what happens when theres no more BTC left to mine. Direct mining rewards will end in the year 2140, so fees will be all thats left to incentivize miners, Golema notes. 

Similar benefits may exist for BTC hodlers the long-term Bitcoin faithful. It is easy to imagine that as Bitcoin gains Ethereum-like capabilities, it will gain market share in NFTs and tokens, which will translate to demand not only in absolute terms but relative to competitors. 

Perhaps by bringing NFTs and tokens to Bitcoin, the wizards can even prevent the flippening, the potential ascent of Etereum to the top market cap position, which until now has been theorized to happen one day as a result of Bitcoin falling behind technologically while Ethereum innovates.

Bitcoin dominance is a metric that shows the relative values of various cryptocurrencies and is followed by many Bitcoiners. Starting the year at 40%, BTC has climbed to 48.1% of the market as of writing. Can JPEGs push Bitcoin back into the 60% range and herald a new bull market?

The Ordinals wizards

Some Bitcoiners are starting to rationalize Ordinals into their worldviews. 

According to Aravind Sathyanandham, chief strategy officer at Bitcoin DeFi platform Velar, the Ordinals community is markedly different from the primarily Ethereum ape community, which has a bad reputation among the Bitcoin crowd. 

These are Bitcoin guys these are people who had to figure out how to run an entire node to inscribe stuff on Bitcoin, the mother chain.

He is referring to a kind of do-it-yourself hardiness a rugged individualism emblematic of the money and tech conservatism of older stereotypical Bitcoiners as opposed to the also -stereotypical imagining of a more communal, liberal and younger Ethereum community. 

From this Bitcoiner perspective, Ethereum is viewed as little more than a sandbox for children, while Bitcoin is eternal. Ethereum, Sathyanandham says, is a great experiment for NFTs and DeFi to take their first form, and now its Bitcoins turn.

These Bitcoin wizards understood early on that the block space on Bitcoin is prime real estate its forever immutable and censorship-resistant data, he adds, not forgetting to add that Ethereum is semi-centralized.

The phenomenon also appears to be growing the Bitcoin user base.

Ordinals have on-boarded so many individuals onto Bitcoin new Bitcoin wallets like Hiro and Xverse that are akin to MetaMask have made it simple, Sathyanandham explains, referring to the wider ecosystem being built entirely for Ordinals that mirrors Ethereums in many ways. He notes that the Ethereum NFT communitys bleeding into the Bitcoin community is very evident on Crypto Twitter.

While Syed agrees with Ordinalist exceptionalism, he sees them more as technologists than strict Bitcoiners. Ive seen that BRC-20 and Ordinals early adopters are individuals who are slightly more tech-savvy digital collectible fans its not like some virtual flood gates opened up to bring in loads of Bitcoin maxis, he observes.

Syed notes that currently its the same people who collect ETH, Solana or BNB digital collectibles jumping in early. Early adopters always win and the bottom line is: We are all early.

When the next bull run comes, perhaps correlated with the BTC halving, we might see everyone rush over the BRC-20 and Ordinal narrative.

It certainly feels like magic internet money once again.

Subscribe

The most engaging reads in blockchain. Delivered once a week.

Email address

SUBSCRIBE

Fighting between GOP crypto maxis and anti-crypto Dems fails to appreciate blockchain’s importance to the U.S.’ long-term economic interests.

After nearly a decade of gridlock, the United States may finally be on the cusp of crafting a cohesive policy framework for digital assets. In Congress, lawmakers are mulling a variety of proposed bills governing everything from stablecoins and securities rules to sanctions. The 2024 presidential race, meanwhile, may be the first to see crypto as a focal point.  

While both sides of the aisle are playing valuable roles, Republicans especially influential congresspeople like Tom Emmer and Patrick McHenry have emerged as the industrys most important allies. However, the GOPs pro-crypto bias may also be its downfall. From uncritical crypto maximalism to Orwellian surveillance paranoia, Web3s industry bromides have crept into the partys campaign rhetoric and, worse, its policy proposals. In seminal upcoming legislative opportunities, such as the Houses draft crypto regulatory bill, Republican policymakers must focus on putting America first.

Memeified campaign rhetoric

During his presidential campaign announcement in May, Florida Governor Ron DeSantis insisted that the current regime, clearly, has it out for Bitcoin. The candidates populist red meat has been the Republican party line on crypto in this election cycle. So far, it has been difficult to differentiate the rhetoric of GOP presidential hopefuls from that of freedom-maximalist influencers on Crypto Twitter.

For candidates like DeSantis, protecting Americans from a federally controlled central bank digital currency surveillance state ranks high among blockchains potential use cases. Even GOP longshot Vivek Ramaswamy, a biotech entrepreneur who claims to understand this stuff in a much more deep and rich way than DeSantis, says he views Bitcoin as a decentralized alternative to the U.S. dollar and wants to make the 2024 election a referendum on fiat currency.

@GOPMajorityWhip Tom Emmer joined me in this critical fight to protect our markets: American investors and industry deserve clear and consistent oversight, not political gamesmanship. The SEC Stabilization Act will make common-sense changes to ensure that the SECs priorities

Warren Davidson (@WarrenDavidson) June 12, 2023

Meanwhile, at the other extreme, progressive Senator Elizabeth Warren and her anti-crypto army depict crypto as an omnipresent threat, simultaneously eroding investor protections, abetting money launderers and worsening Americas tax gap. What is lacking in this partisan hothouse is any informed appreciation of blockchains potential or its importance to Americas long-term economic interests.

Misguided policymaking

Among the rare exceptions are crypto-savvy GOP lawmakers such as Financial Services Committee Chair McHenry, who spearheaded the House Subcommittee on Digital Assets earlier this year. However, the influence of the crypto industrys memeified rhetoric is evident even in the partys innermost policy-making circles.  

Take, for example, the Digital Assets Market Structure (DAMS) bill. The watershed draft legislation, penned in part by McHenrys committee, marks Congresss most credible proposed regulatory framework for crypto to date. While, as Messari CEO Ryan Selkis said, DAMS is a 10x improvement over past bills, it still falls short of bringing regulatory clarity to the industry.

Unfortunately, the proposed bill does more to regulate Web3 as crypto natives imagine it to be than as the industry operates today. In keeping with Republicans long-standing preference, DAMS conceives of crypto assets primarily as digital commodities to be overseen by the Commodities Futures Trading Commission. Indeed, the bill paves a clear path for CFTC compliance.

Theres one catch: To qualify as a digital commodity, according to DAMS, each network to which the digital asset relates [must be] certified to be [] decentralized, which requires that no single person has the unilateral authority, directly or indirectly, [] to materially alter the protocol or to prohibit any person [from] deploying software that uses or integrates with the blockchain network.

In other words, much of the more than 160-page draft bill only applies, with any certainty, to two digital assets: Bitcoin and Ether. Meanwhile, protocols with any level of centralized operations (read: most) remain under the jurisdiction of the Securities and Exchange Commission. Though an improvement on the status quo, the path to SEC compliance under DAMS is comparatively convoluted.

America-first crypto laws

The GOP may soon have a shot at defining Americas crypto policy. Now is not the time to succumb to partisan talking points or industry bromides. Lawmakers must clearly assess Web3 as it exists today so that the U.S. can unlock its benefits for decades to come.

As a first step, Republicans must bury the half-baked notion that crypto is antagonistic to the traditional financial system. They also must overcome their aversion to the SEC. In fact, Web3 and TradFi are deeply compatible, and Americas gold-standard security laws are a feature, not a bug. In the near term, policymakers should create clear SEC exemptions for digital assets so nascent U.S. protocols can get off the ground. Longer-term, officials should embrace blockchains enormous potential to enhance the United States regulated financial sector.

Most importantly, U.S. officials must recognize that extending dollar dominance to Web3 is a strategic imperative. Forget about blockchain as an alternative to the dollar; it is a potent tool for extending Americas economic reach. Republicans should lead the charge.

The Houses latest draft stablecoin bill is a good start and underscores McHenrys policy chops in Web3, but lawmakers can do more. That includes supporting Circle Internet Financial, the issuer of USDC. In the Senate, Republicans should emulate Roger Marshall by working with crypto-savvy Democrats, including Warren, to draft industry-friendly KYC and AML rules. 

Crypto doesnt need to be a scam against the dollar. It can be a powerful strategic asset, but only if U.S. crypto policy truly puts America first.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or represent the views and opinions of either Umami Labs or Cointelegraph.

Subscribe

The most engaging reads in blockchain. Delivered once a week.

Email address

SUBSCRIBE

Real Bedford is moving up in the leagues and gaining followers worldwide through owner Peter McCormack’s love of Bitcoin.

Buying a small-town soccer club with the aim to propel it into the Premier League the worlds most popular football league is a script suitable for a Netflix series.

In fact, actor Ryan Reynolds bid to revitalize lower-league Welsh soccer team Wrexham FC has already caught the attention of Disney+ writers. 

Its a quaint, quintessentially British underdog story of how an ultra-rich Hollywood actor can do something different with his wealth. However, Reynolds has no connection to Wrexham; he flies in for most games, and hes unlikely to live out the rest of his days building out the deprived historic mining town.

The story has netted mainstream media attention from the likes of the BBC, the Guardian and Sky News.

In the Bitcoin world, a similar story is unraveling. However, its spearheaded by a local boy whos using Bitcoin not only to boost the Real Bedford Football Club but his hometown as well.

In the Bitcoin world, Peter McCormack is a familiar face, hosting the most popular podcast What Bitcoin Did. According to the Guardian and the BBC, he is a blogger and crypto guru invariably betting on Bitcoin 

Over the past two years, he has strived to turn around the beleaguered Bedford FC by using Bitcoin. Real Bedford reached promotion in May, buoyed by new uniforms, new logos and, crucially, a new legion of fans. 

However, Real Bedford is also what McCormack calls the Bitcoin football team. Not only does he achieve his boyhood dream of running a successful football team, but it also seeks to discretely encourage fans and onlookers to engage with the worlds largest digital currency, Bitcoin. 

But does the club have the legs to make it into the Premier League? And whats the point of putting the Bitcoin logo on the shirt, hosting Bitcoin meet-ups before every game, and inviting key opinion leaders of the Bitcoin world to games? And what on earth must the locals think of the orange-pilled takeover?

McCormack bought Bedford FC in 2021 during the heady highs of the bull run when BTC was comfortably above $40,00 and talk of the Bitcoin price hitting six figures dominated Cointelegraph headlines. Propelled by the high Bitcoin prices, the club secured half a million dollars in sponsorship for the first year. 

Media treatment

Despite buying the club being a boyhood dream, most people thought McCormack was mad to take on the running of a football club with the fanbase garnered from a volatile digital currency: 

I think this is one of these projects whereby I dont think anyone really understood at the start. Theyre like, Whatever doesnt make any sense.

Local media thought McCormack was crazier still. The BBC and other British mainstream media caught wind of the story, characterizing it as the latest crypto bro to splash out on a self-indulgent purchase.

Jeff Booth, the author of the Bitcoin book The Price of Tomorrow, tells Magazine that even if it is a wealthy Bitcoin investor splurging on a passion, its a non-issue particularly as Bitcoin is part of the project: 

Through his interests, he infects others through so other people that like football. Other people that want to follow his interests to take this to a championship, Premier League and everything else, now have an impression that they can join the ride and be part of it.

Ultimately, Booth explains, I couldnt care less what he wants to do […] Hes using this vehicle to be able to advance a whole bunch of other stuff, which is really cool.

Despite the critical treatment in the media, two years on, McCormack and his team are still wiping down tables in the clubhouse bar, traveling to away games, hosting Bitcoin meet-ups and even washing the Real Bedfords uniforms in his home all while the price per BTC has crashed and Bitcoin continues to take a beating in popular media. Plus, the club will sport a womens team with plans to expand into disabled and youth teams.

Real Bedford commentator Will Roberts compares McCormack to a pantomime villain […] who sort of comes in and radicalizes everything, changes everything, and everyone automatically goes against it. Its only natural that it ruffles a few feathers: 

But the closer you get, the more you understand what a good person he is and what a good organization hes running because it is an organization not just a football club. 

Bitcoin branding

The clubs Bitcoin branding isnt very subtle. The strips are bright orange with the Bitcoin logo on the abdomen. The club was established during a block height as opposed to a date, and almost everything can be bought or paid for in satoshis (small amounts of Bitcoin). Why bother? Why go to great lengths to advertise a volatile digital currency thats understood by a select group of Brits? 

McCormack is a marketer by profession, and Bitcoin is one of the most recognizable brands worldwide. There are now Real Bedford supporters clubs in Ghana, Tanzania and even Malaysia. The supporter base for Real Bedford rivals teams five divisions higher, and matches are live-streamed and enjoyed by Bitcoin advocates worldwide.

Gandalf (not his real name), who is part of the marketing team at Bitcoin mining company Braiins, tells Magazine:

If you just bought Bedford and called it Bedford and it was just the local team, we wouldnt all be here. Like, hes been very clever about making it a Bitcoin thing and then that gets new support and new attention into the club.

A local elected councilor for the Liberal Democrats, Jake Simpson attends the last game of the season. He explains to Magazine that, thanks to the Bitcoin takeover, Bedford is gaining international attention, which is bringing international money. And you know, when your business and you accept cryptocurrencies, your customer base expands massively. 

You know, youre attracting more people, which is why theres so many international people here already because theyre interested in cryptocurrency theyre interested in Bitcoin, which is bringing them here to Bedford. 

Bitcoin puts places on the world map from Bitcoin Beach in El Zonte to Bitcoin Lake in Guatemala or Bitcoin Jungle in Costa Rica. In doing so, it can raise up less economically advantaged communities and regions around the world. Thats the second part of the Real Bedford story, as McCormack says he wants to raise up his town.

What do the locals think?

Over the course of 30 street interviews conducted in Bedford, the overarching sentiment toward Bitcoin is negative. One Christian preacher says that the surveillance element to digital currencies was unnerving before realizing that he might be confusing CBDCs, or central bank digital currencies, and Bitcoin. 

Theres a huge sentiment gap between the Bitcoin believers and the Bedford locals. One Bedfordian simply says, Avoid; others call it an outright scam and that they wouldnt want to lose their money in such a scheme. Some locals have heard of the Real Bedford takeover; others knew of McCormacks story. 

Few locals can accurately explain what Bitcoin is or what it does highlighting that some of the criticism could come from a position of ignorance or an unwillingness to engage with the currency frequently labeled a threat to the environment or a dark tool by mainstream media. 

McCormack is aware of the negative views that cloak Bitcoin. There is no desire to force Bitcoin onto the people of the town its about using the team as a Trojan horse for greater levels of Bitcoin adoption:

I dont want people buying it and losing money and dont force it on people who come to the ground. They can see it, they can come to our meetups, but its a soft touch.

The Real Bedford website, for example, shows a statement saying, Why you shouldnt buy Bitcoin.

Some of the locals are converts, however. Sampson says, Its great to see Bitcoin come into my town […] Its massive, and it just makes me feel really proud to be from Bedford and makes me really excited, to be honest.

I think theyve still got to be a lot of education around it. On how, you know, my mom or my dad can go to a coffee shop and buy Bitcoin. They wouldnt feel comfortable about doing that yet. But that sort of thing happening in the town can only boost an economy in a way.

Whats the score so far? 

As opposed to bleating about Bitcoin to Bedfordians, McCormack has firmly stuck a flag in the ground and called Bitcoin advocates around the world to visit: 

I dont talk about Bitcoin much here because Bedfords a deprived town, and I dont want people thinking, Oh my God, theres that guy whos made some money on Bitcoin.

However, that hasnt stopped fans of Bitcoin or the team from taking Bitcoin adoption into their own hands.

From the trunk of a car in the Real Bedford parking lot, Chris Gordon of Bitcoin payments service Bridge 2 Bitcoin shows a local Bedfordian how to accept Bitcoin. He tells Magazine:

So, it was a business owner whos interested in accepting Bitcoin payments, and its a completely new concept to him. So, it so happens that I happen to have a point-of-sale device in the back of the car.

Gordon talks the local fan through the options in the hope that a few businesses in Bedfordshire start to accept Bitcoin soon. Bitcoin is already the payment of choice in the clubhouse, and for Real Bedford merchandise and given that paying in Bitcoin looks different from paying with Visa or cash it can raise some eyebrows. 

Moreover, the mingling of both Bitcoin and soccer fans in a relaxed, pitchside environment is an opportunity for those unfamiliar with the cryptocurrency to ask questions. Matches can be long, drawn-out affairs of 0-0 draws lasting 90 minutes with a 15-minute break. Asking about the giant B on the players shirts or the fact that the club was founded at a block height not on a date could pass the time.

Crypto own goal?

Bitcoins market cap is roughly half a trillion dollars. Crypto, however, has a far greater fanbase and is worth over $1 trillion.

Real Bedford, however, is a Bitcoin-only club. Its Twitter page is against fan tokens, NFTs and DAOs the entirety of the crypto world outside Bitcoin.

Commentator Roberts, who knew nothing about Bitcoin prior to working at Real Bedford, explains that the people of Bedford are getting there.

A lot of people are made further aware of potentially the differences between not just grouping cryptocurrencies tougher and that Bitcoin is definitely a separate entity to that.

The crypto distractions at the club are sponsors. Gemini, Casa and other crypto company logos are displayed on billboards around the stadium, which McCormack hopes to expand and renovate through Bitcoin sponsorship. Despite his devotion to Bitcoin, hes aware that taking advantage of the speculation in crypto could benefit the club:

If I did a shitcoin, I could raise a billion, and I would get this club in the Premier League in nine years because you have the money to do it. I could build a 200-million-pound stadium if I did a shitcoin. Its really tempting.

Ultimately, Real Bedford is a Bitcoin-only club. McCormack only holds Bitcoin and is focused on building Bedford with Bitcoin in mind. However, getting Real Bedford into the Premier League is a long-term, perhaps lifelong commitment. With the first promotion out of the way, itll be the 2030s before Bedford has a team in the most prestigious football league.

McCormacks undeterred, however. Im going to be here for the rest of my life here in Bedford at every game I can possibly be at trying to lift up my town. And the way to get this lower-league team into the Premier League? 

It requires hard work, a bit of luck and for Bitcoiners to get behind it. 

Is AI an existential threat like nuclear weapons, or as likely to kill us as a toaster? Why all AI fields advance at once, and dumb pic puns.

Just as we dont allow just anyone to build a plane and fly passengers around, or design and release medicines, why should we allow AI models to be released into the wild without proper testing and licensing? 

Thats been the argument from an increasing number of experts and politicians in recent weeks. 

With the United Kingdom holding a global summit on AI safety in autumn, and surveys suggesting around 60% of the public is in favor of regulations, it seems new guardrails are becoming more likely than not. 

One particular meme taking hold is the comparison of AI tech to an existential threat like nuclear weaponry, as in a recent 23-word warning sent by the Center of AI Safety, which was signed by hundreds of scientists:

Mitigating the risk of extinction from AI should be a global priority alongside other societal-scale risks such as pandemics and nuclear war.

Extending the metaphor, OpenAI CEO Sam Altman is pushing for the creation of a global body like the International Atomic Energy Agency to oversee the tech.

We talk about the IAEA as a model where the world has said, OK, very dangerous technology, lets all put (in) some guard rails, he said in India this week. 

Libertarians argue that overstating the threat and calling for regulations is just a ploy by the leading AI companies to a) impose authoritarian control and b) strangle competition via regulation. 

Princeton computer science professor Arvind Narayanan warned, We should be wary of Prometheans who want to both profit from bringing the people fire and be trusted as the firefighters.

Netscape and a16z co-founder Marc Andreessen released a series of essays this week on his technological utopian vision for AI. He likened AI doomers to an apocalyptic cult and claimed AI is no more likely to wipe out humanity than a toaster because: AI doesnt want, it doesnt have goals it doesnt want to kill you because its not alive.

This may or may not be true but then again, we only have a vague understanding of what goes on inside the black box of the AIs thought processes. But as Andreessen himself admits, the planet is full of unhinged humans who can now ask an AI to engineer a bioweapon, launch a cyberattack or manipulate an election. So, it can be dangerous in the wrong hands even if we avoid the Skynet/Terminator scenario. 

The nuclear comparison is probably quite instructive in that people did get very carried away in the 1940s about the very real world-ending possibilities of nuclear technology. Some Manhattan Project team members were so worried the bomb might set off a chain reaction, ignite the atmosphere and incinerate all life on Earth that they pushed for the project to be abandoned. 

After the bomb was dropped, Albert Einstein became so convinced of the scale of the threat that he pushed for the immediate formation of a world government with sole control of the arsenal.

The world government didnt happen but the international community took the threat seriously enough that humans have managed not to blow themselves up in the 80-odd years since. Countries signed agreements to only test nukes underground to limit radioactive fallout and set up inspection regimes, and now only nine countries have nuclear weapons. 

In their podcast about the ramifications of AI on society, The AI Dilemma, Tristan Harris and Aza Raskin argue for the safe deployment of thoroughly tested AI models.

I think of this public deployment of AI as above-ground testing of AI. We dont need to do that, argued Harris.

We can presume that systems that have capacities that the engineers dont even know what those capacities will be, that theyre not necessarily safe until proven otherwise. We dont just shove them into products like Snapchat, and we can put the onus on the makers of AI, rather than on the citizens, to prove why they think that its (not) dangerous.

Also read: All rise for the robot judge AI and blockchain could transform the courtroom

The genie is out of the bottle

Of course, regulating AI might be like banning Bitcoin: nice in theory, impossible in practice. Nuclear weapons are highly specialized technology understood by just a handful of scientists worldwide and require enriched uranium, which is incredibly difficult to acquire. Meanwhile, open-source AI is freely available, and you can even download a personal AI model and run it on your laptop.

AI expert Brian Roemmele says that hes aware of 450 public open-source AI models and more are made almost hourly. Private models are in the 100s of 1000s.

Roemmele is even building a system to enable any old computer with a dial-up modem to be able to connect to a locally hosted AI.

Working on making ChatGPT available via dialup modem.

It is very early days an I have some work to do.

Ultimately this will connect to a local version of GPT4All.

This means any old computer with dialup modems can connect to an LLM AI.

Up next a COBOL to LLM AI connection! pic.twitter.com/ownX525qmJ

Brian Roemmele (@BrianRoemmele) June 8, 2023

The United Arab Emirates also just released its open-source large language model AI called Falcon 40B model free of royalties for commercial and research. It claims it outperforms competitors like Metas LLaMA and Stability AIs StableLM.

Theres even a just-released open-source text-to-video AI video generator called Potat 1, based on research from Runway. 

I am happy that people are using Potat 1 to create stunning videos

Artist: @iskarioto https://t.co/Gg8VbCJpOY#opensource #generativeAI #modelscope #texttovideo #text2video @80Level @ClaireSilver12 @LambdaAPI https://t.co/obyKWwd8sR pic.twitter.com/2Kb2a5z0dH

camenduru (@camenduru) June 6, 2023

The reason all AI fields advanced at once

Weve seen an incredible explosion in AI capability across the board in the past year or so, from AI text to video and song generation to magical seeming photo editing, voice cloning and one-click deep fakes. But why did all these advances occur in so many different areas at once?

Mathematician and Earth Species Project co-founder Aza Raskin gave a fascinating plain English explanation for this in The AI Dilemma, highlighting the breakthrough that emerged with the Transformer machine learning model.

The sort of insight was that you can start to treat absolutely everything as language, he explained. So, you can take, for instance, images. You can just treat it as a kind of language, its just a set of image patches that you can arrange in a linear fashion, and then you just predict what comes next.

ChatGPT is often likened to a machine that just predicts the most likely next word, so you can see the possibilities of being able to generate the next word if everything digital can be transformed into a language. 

So, images can be treated as language, sound you break it up into little microphone names, predict which one of those comes next, that becomes a language. fMRI data becomes a kind of language, DNA is just another kind of language. And so suddenly, any advance in any one part of the AI world became an advance in every part of the AI world. You could just copy-paste, and you can see how advances now are immediately multiplicative across the entire set of fields.

It is and isnt like Black Mirror

A lot of people have observed that recent advances in artificial intelligence seem like something out of Black Mirror. But creator Charlie Brooker seems to think his imagination is considerably more impressive than the reality, telling Empire Magazine hed asked ChatGPT to write an episode of Black Mirror and the result was shit.

Ive toyed around with ChatGPT a bit, Brooker said. The first thing I did was type generate Black Mirror episode and it comes up with something that, at first glance, reads plausibly, but on second glance, is shit. According to Brooker, the AI just regurgitated and mashed up different episode plots into a total mess.

If you dig a bit more deeply, you go, Oh, theres not actually any real original thought here, he said.

AI pictures of the week

One of the nice things about AI text-to-speech image generation programs is they can turn throwaway puns into expensive-looking images that no graphic designer could be bothered to make. Here then, are the wonders of the world, misspelled by AI (courtesy of redditor mossymayn).

Video of the week

Researchers from the University of Cambridge demonstrated eight simple salad recipes to an AI robot chef that was then able to make the salads itself and come up with a ninth salad recipe on its own.

Subscribe

The most engaging reads in blockchain. Delivered once a week.

Email address

SUBSCRIBE

Every year countries are pressured to ramp up their climate change commitments at the COP conference — and Bitcoin mining is an easy target.

Each year at the annual UN Climate Change Conference (COP), individual countries are pressured to ramp up their emissions reductions promises and showcase evidence they are taking steps to meet them.

With Bitcoin mining blamed for using as much power as an entire country, and politicians searching for easy targets to strike, the industry appears to be on a collision course with these global commitments to achieve net-zero emissions.

While it’s not possible to ban Bitcoin completely, lawmakers and regulators can tank the price and make life very difficult in the years ahead for the number one cryptocurrency.

There are signs its already happening.

A report from the European Commission at the end of 2022 stated that EU countries must be ready to block crypto mining, and the trading blocks new MiCA rules were at one stage set to include a ban on Bitcoin mining. The recently adopted legislation still leaves this door ajar, however, aiming to reduce the high carbon footprint of crypto-currencies by making service providers disclose their energy consumption.

Across the pond, the Biden administration has proposed a 30% excise tax on the power consumption of U.S. cryptocurrency mining operations. The tax would be imposed regardless of whether the power is renewable, with the administration arguing Bitcoin minings power consumption of renewable energy will slow down the transition to Net Zero. Thats in contrast to a New York moratorium on Bitcoin mining in 2022 that exempted firms powered by renewable energy.

The U.S. government appears to be taking to heart the White House Office of Science and Technology Policys September 2022 report that claimed the environmental impact of producing cryptocurrencies could impede U.S. efforts to combat climate change.

Former member of the Bitcoin Mining Council and independent researcher Hass McCook doesnt mince his words about threats to ban mining.

Governments should focus on greening their grids, which miners rely upon, as opposed to trying to ban an unbannable technology.

The Swedish government was behind last years push to outlaw crypto mining in the EU and, last month, took steps to price Bitcoin miners out of the market by abolishing various tax incentives. Starting in July, Sweden will increase the electricity tax by 6,000% from 0.006 Swedish kronas ($0.0006) to an extraordinary 0.36 kronas ($0.035) per kilowatt-hour (kWh).

Governments around the world are actively looking at Bitcoin minings energy consumption, explains Brad van Voorhees, co-founder and CEO of Sustainable Bitcoin Protocol, which incentivizes the use of renewables for mining.

Sweden has already imposed a 6,000% tax on energy for BTC mining, and the Biden administration has proposed a 30% tax, which would undoubtedly mean miners move offshore, he adds.

The tax will likely never pass in the U.S., but nonetheless, the sector should focus on clean energy use and data transparency to mitigate this risk.

Others agree with van Voorhees that Net Zero is an opportunity to set Bitcoin mining on a new and more sustainable path. Morten Rngaard is a member of the Nordic Blockchain Association and CEO of Reality+, a Web3 and blockchain company.

The collision between Bitcoin and Net-Zero commitments is a call to action. Its an opportunity to harness the power of innovation and renewable energy, steering both towards a greener and more inclusive landscape, he says.

Good cop, bad cop

The focus on Bitcoin mining power usage was given additional impetus after Ethereum moved to proof-of-stake last year and saved 99.95% of its energy consumption as a result. While Bitcoiners believe PoS stands for piece of shit, the success of the blockchains energy transformation has made Bitcoin look like it is stuck in a corner using anachronistic tech.

There are now groups demanding changes to Bitcoins underlying protocol as well.

Greenpeaces Change the Code Not the Climate (Clean Up Bitcoin) lobby group is pushing to change Bitcoins consensus mechanism from proof-of-work, to proof-of-stake.

We know a basic software code change would reduce Bitcoins energy use by 99.9%. If only 30 people the key miners, exchanges, and core developers who build and contribute to Bitcoins code agreed to reinvent proof-of-work mining or move to a low-energy protocol, Bitcoin would stop polluting the planet. So why isnt Bitcoin changing its code?

This is misinformation, however, given the Bitcoin community needs to agree on a change, rather than a small group of just 30 people. The Bitcoin community split over the much smaller change of increasing the block size in 2017, leading to the Bitcoin Cash and Bitcoin SV forks, so the chances of an agreement to change the fundamental nature of the technology are hard to envisage at this point.

The industrys big hope to date has been that progressively moving away from fossil fuels to rely more on sustainable and renewable power, such as wind, solar and hydroelectric power, will placate governments.

But as the Swedish and U.S. governments have said, that may not be enough. For governments and regulators trying to comply with their international climate change commitments, there will be a bunch of hard decisions to be made. Even a mining industry 100% powered by renewable energy could be a target, as that emissions-free energy could be freed up at the stroke of a pen to help a more politically valuable industry, like manufacturing, meet emissions targets.

How much power does Bitcoin use?

The Cambridge Bitcoin electricity consumption site estimates Bitcoin network power demand and is updated every 24 hours and works with all major actors to cut down on carbon emissions. It conducts experiments to evaluate Bitcoins environmental footprint assuming the worst-case scenario.

By using the latest annual power consumption estimates of 143.63 TWh and, assuming that all this energy comes exclusively from coal, and is generated in an inefficient coal-fired power plant, the Bitcoin footprint would be 11 million metric tons of carbon dioxide emissions. Thats around 0.35% of the worlds total annual emissions.

Bitcoiners point out that the network uses less power than the banking system (200 TWh) and a majority of the power used by the industry is renewable. They also claim mining can incentivize renewable electricity generation and make marginal green power projects viable.

But even taking these factors into account, mining still uses a ton of power, to which Bitcoiners argue that its energy well-spent securing the hardest and best money known to humanity.

If you are anti-#Bitcoin mining you have positioned yourself against one of the world’s best technologies for advancing electrification and carbon free energy.

There is no technology available and ready today that can push us towards the future better than #Bitcoin mining.

Dennis Porter (@Dennis_Porter_) May 12, 2023

But non-Bitcoiners tend to look at the power use of the alternatives. The site estimates that Ethereum is using around 6.76 GWh per year. In other words, Bitcoin is using 21,000 times more power per year.

According to the Crypto Carbon Ratings Institute, before its transition to proof-of-stake, a single Ethereum transaction used 200.05 kWh of electricity, on par with how much the average U.S. household uses in 6.7 days.

According to Digiconomist, that consumption is now as low as 0.03 kWh, and the carbon footprint stands at 0.01 kgCO2, which is equivalent to the energy used when watching two hours of YouTube.

(Please dont email us to point out that the network uses the same amount of power regardless of the number of transactions we know, its just illustrative).

Digiconomists Ethereum Energy Consumption Index highlights just how radically different PoW power consumption is to PoS.

U.K.-based Block Dojo describes itself as the largest Bitcoin blockchain incubator in the world, but in fact, its based on the Bitcoin fork Bitcoin SV. It claims to be responsible for 24% of all blockchain investments in the United Kingdom. Chairman James Marchant says the energy use of Bitcoin is an opportunity for other blockchains like Bitcoin SV. 

The total energy use versus the number of transactions BTC can process per day is catastrophic. BTC does not implement the protocol as per the Satoshi white paper. We are seeing developers and entrepreneurs turning to a scalable blockchain solution away from BTC, and Net-Zero objectives is one of several key reasons for this, he says.

Movement for change

The people driving the crypto industry forward are likely to be the younger demographic, Generation Z, which is increasingly sensitive to climate change concerns.

But the industry is not hiding its head in the sand, with bodies like the Bitcoin Mining Council attempting to address such concerns.

Welcoming Bitcoin miners of all shapes and sizes it accounts for about half the worlds miners now the Council is a voluntary forum that shares best practices and educates the public on mining. 

Its most famous, and first, member is MicroStrategy boss Michael Saylor, who arranged the first meeting of the Council and is a strong adherent for managing miners energy use and employing sustainable alternatives.

Its latest quarterly report (based on self-reports from a survey and then estimated across the remainder of the industry) suggests miners are currently using a 58.9% sustainable energy mix. 

Renewable energy can potentially mitigate Bitcoins environmental impact. There are many examples of mining facilities now powered by solar, wind or hydroelectric energy or using stranded energy or mining using flared gas that would otherwise be wasted. If the renewable energy lobbys claim that green power is the cheapest form of electricity, then miners will inevitably use more of it, explains McCook. Bitcoin mining is a perfectly competitive industry. This means players will do anything to maximize profit. Anything. This means they chase the cheapest possible electricity available. This is increasingly becoming renewable, he says.

Darren Franceschini, co-founder of Fideum Group a Singapore-based crypto funding company agrees the industry is embracing wind and solar as much for economic reasons as anything else.

With fossil fuel prices soaring, miners are economically driven to achieve Net-Zero emissions, he says. Carbon pricing mechanisms and green energy subsidies could further promote the adoption of renewable energy sources within the mining sector.

Will regulators believe Bitcoin can incentivize renewables?

Bitcoin advocates like Nic Carter argue that mining can play a role in growing the sustainable energy sector by using excess electricity capacity for energy efficiency or helping to finance renewable projects.

The need for electricity in the creation of Bitcoin is obviously a concern. At the same time, it is one of the best-use cases for excess electricity capacity vital in the renewables sector, says Toby Lewis, co-founder of Ordinals Bot. With the right incentives, Bitcoin can become a financing mechanism for the renewable grid.

The question is not whether or not this argument is correct and its a source of contention even in the crypto community its whether governments and regulators can be convinced it is.

It will be a hard sell to convince lawmakers, but Josef Ttek, a Bitcoin analyst at hardware wallet provider Trezor, argues that Bitcoin mining is a net positive for climate change.

Contrary to some claims, Bitcoin mining is beneficial for the environment and bootstraps renewable energy generation, he says, noting mining pops up wherever theres cheap renewable power.

For example, just recently, we have learned that the kingdom of Bhutan has been mining Bitcoin with its hydroelectric stations for years.

It will be interesting to see whether the result of a clampdown on mining by bigger countries will see mining nomads shift operations to crypto-friendly countries that provide sustainable power like Bhutan.

The small hermit kingdom in the Himalayas is watered by glaciers in the mountains. It has huge stores of hydroelectricity, providing 30% of the countrys GDP and literally fuelling the homes of nearly all of its 800,000 residents. According to Forbes, the country is following the example of El Salvador by becoming one of two countries to run a state-owned mining operation.

Nick Jones, CEO of Zumo a crypto-as-a-service platform believes that crypto is well-placed to quickly reduce emissions.

All sectors need to rapidly decarbonize, and crypto has an opportunity to do this more quickly than most. Bitcoins carbon footprint is due almost entirely to electricity consumption, and we have the technology to rapidly decarbonize. Significant progress has been made, but there is still much to do, he says.

Surging demand for Bitcoin

The unexpected recent addition of NFTs and tokens to Bitcoin via Ordinals has created a huge wave of additional demand for the blockchain. Last month, the daily record for inscriptions using Bitcoin Ordinals was broken four times as users flooded the network with images, games and other content.

Daniel Santos, co-founder of Gamepay, argues that Ordinals is the first successful protocol built on Bitcoin and will result in more adoption, which in turn will mean more mining and more power to be generated.

Governments will step in and regulate mining for sure, especially as Ordinals take hold. There will also be a drive for green energy, even if a lot of Bitcoin mining is done with green energy, he says.

I suspect governments will require miners to have licenses to mine.

Ordinals could be the proverbial straw that breaks the camels back for Bitcoin and its energy consumption. Moreover, as the crypto winner begins to thaw, the demand for the currency is also expected to surge as the currencys price climbs.

This is an issue that will run for years to come. Prepare for demonstrations against Bitcoin and more proposals to ban either the protocol or mining.

While Bitcoin is unbannable, there is a need to address emissions and to be on the front foot in the public debate. Whether change comes from within the industry or via external intervention is a question the crypto community needs to urgently address.

Subscribe

The most engaging reads in blockchain. Delivered once a week.

Email address

SUBSCRIBE