OG Status in Crypto Is a Liability

OG Status in Crypto Is a Liability

“Bitcoin is rapidly becoming the crypto version of Australian wildlife. We separated ourselves, blocked all cross-pollination, and now there’s an isolated gene pool producing weird versions of everything.”

So security researcher and Summa founder, James Prestwich, contended in a tweet thread last summer.

Is bitcoin complacent? An austere monolith? A hermit kingdom? I don’t know. Bitcoin is probably fine, but underlying Prestwich’s hot take is a larger point that’s relevant beyond BTC: a lengthier crypto tenure does not equate to greater wisdom.

Related: Bitcoin’s 2021 Returns Destroy Everything on Wall Street, Goldman Sachs Says

In the crypto culture, there’s a strong tendency for folks to flex about when they bought in. For me, I feel like the right date marking the beginning of my blockchain journalism is September 2015, when I wrote enough about Imogen Heap’s music-rights tracking project to become curious.

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But the allure of greater vintage is so tempting here, so I can date it to December 2013, when I first started following Charlie Shrem, a scrappy young Brooklyn, N.Y.-based tech entrepreneur, though truthfully my interest in bitcoin was really only ancillary then, going no further than the fact that it counted as “tech.”

Tenure yields respect; not as much respect as heavy bags, mind you – but in absence of bags, time counts.

Related: How the NFT Boom Explains Square’s Tidal Buy

But it shouldn’t count for that much. In fact, having watched this space roughly as long as the Ethereum blockchain has existed, I’m happy to go a step further: tenure can be a liability.

Tenure is, in particular, a liability for those who have dipped out and come back. But some who never left remain stuck in ancient ways.

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Time is not data

One way to measure how much data can be gathered in a particular time period is by counting people. Of course we can’t count people in crypto very easily, but we do have counts of active wallets, which is a decent proxy (noting, obviously, that many crypto users have more than one wallet — as they should).

So let’s say you were super early to the space, say from late 2011 to early 2015. You lived in a world that had only a little over 10,000 active bitcoin wallets and faded out when there were under 200,000. There were zero ethereum wallets.

Now let’s compare you to a relative newbie. Say they showed up in early 2017, before the BTC price really started sailing high but close enough that you could smell a change in the air. There would have been 500,000 active bitcoin wallets and 20,000 or so ethereum wallets.

If they stuck around for roughly the same amount of time, they would have the opportunity to meet vastly more people, watch vastly more experiments and learn vastly more lessons. There’s just more going on now.

And lest we assume these new arrivals are just random, it’s worth noting how many blockchains have healthy and growing developer communities.

These days, more people show up for the first time in one year than were ever present early on. Framed like that, it’s crazy to presume perspectives gleaned in those hazy bygone days are inherently superior to more recent ones. This isn’t some fantasy story about lost and forgotten magicks. This is technology.

One of the chief blind spots that I see in the OG’s is dismissing anything that’s new. There’s the Bitcoin Maximalist and the Ethereum Maximalist. The two are largely caricatures, though. Many bitcoiners grudgingly accept Ethereum is here to stay and vice versa, but there’s still a knee-jerk attitude of not just skepticism, but dismissal of any new coin or consensus mechanism.

Moar chainz

“Scam” and “s**tcoin” get thrown around much too flippantly, which diminishes the charge’s impact when it actually should stick (and often enough it should).

For anyone who left and missed the mid-2010s, this is understandable. The space was awash in cash grabs then. But the quality of new blockchain architects has changed: Polkadot is not equivalent to TrumpCoin. Tezos is a more thoughtful piece of software than Bitshares.

Once upon a time, most new cryptocurrencies were lame forks of bitcoin (or forks of forks) with some marketing slapped on. Auroracoin, anyone? Remember potcoin? Dogecoin.

But that’s simply no longer true. Today, many new blockchains are initiated by talented, well-resourced teams. No doubt many of them will fade off into obscurity, but so do many startups. Startups are afforded the benefit of the doubt and new blockchains by well-intentioned creators should be, too.

When they do fail, there are lessons to be learned for the whole industry. Old heads who dismiss them out of hand will miss out on those lessons.

Not every OG has failed to adjust their thinking to the modern reality. For example, consider Boost VC. In 2014, it promised to back 100 bitcoin startups. In 2018 we reported that it hit its goal, but the firm also changed the terms of its pledge. It had funded 100 crypto startups, not just on bitcoin.

Boost co-founder Adam Draper explained at the time that it just wasn’t kosher in 2014 to talk about anything but bitcoin, but times changed and Boost changed with it. Not everyone has. Later in his thread, Prestwich wrote, “Our Core Dev ivory tower is now sitting next to a small skyscraper, and it’s past time we walked out and asked the neighbors what they’re up to.”

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PayPal Holdings (NASDAQ: PYPL) is acquiring Curv, a provider of cloud-based infrastructure for digital asset securities such as cryptocurrencies. Terms were not disclosed, but a report last week suggested PayPal may pay as much as $500 million for the Tel Aviv, Israel-based firm. A second report from Calcalist reported the sale price would be between $200 million and $300 million. “The acquisition of Curv is part of our effort to invest in the talent and technology to realize our vision for a more inclusive financial system,” said Jose Fernandez da Ponte, vice president and general manager of blockchain, crypto and digital currencies for PayPal, in a statement. “During our conversations with Curv’s team, we’ve been impressed by their technical talent, entrepreneurial spirit and the thinking behind the technology they’ve built in the last few years. We’re excited to welcome the Curv team to PayPal.” PayPal had previously tried to purchase BitGo, a similar company to Curv, but that deal fell through in December. Curv provides secure, distributed architecture for digital transactions taking place on blockchain technology. Subscribe to Modern Shipper AM The payment provider announced in November 2020 that U.S. account holders could buy, sell and hold cryptocurrencies in their PayPal wallets, with a weekly purchase limit of $20,000. PayPal’s system accepts Bitcoin (BTC-USD), Ether (ETH-USD), Bitcoin Cash (BCH-USD) and Litecoin (LTC-USD). PayPal has a separate business division dedicated to blockchain, crypto and digital currencies. Curv was founded in 2018 by CEO Itay Malinger and CTO Dan Yadlin. “As a pioneer in security infrastructure for digital assets, Curv is proud to be recognized as an innovator and trusted partner to leading financial institutions around the world,” said Malinger. “Now, as the adoption of digital assets accelerates, we feel there’s no better home than PayPal to continue our journey of innovation. We’re excited to join PayPal in expanding the role these assets play in the global economy.” PayPal expects the transaction to close in the first half of this year. John Rainey, CFO and EVP of global customer operations for PayPal, while speaking during the Morgan Stanley Technology, Media and Telecom Conference last Tuesday, noted the potential for cryptocurrencies and digital currencies in the U.S. “Asia, to me, is like it’s a shining example because in many ways, they are far ahead of the rest of the world in digital payments,” he said. “And you just take Asia broadly, 40% of in-store payments are done with the digital wallet. In the U.S., that’s less than 10%. And so not only is there a lot of addressable market or opportunity in Asia, there’s even more in the U.S. in some of our core markets. So this is where we see a lot of that growth.” Rainey added that PayPal believes it can continue to provide the services its customers need without creating a financial institution. “Our current expectations are that to provide the services that we want for our merchants and consumers around the world, we don’t need to be a bank, at least as it pertains to the United States … but this is where I think we can partner with many others, whether we’re talking about crypto or high-yield savings account or even financial services,” he said. Read: Cryptocurrencies gaining traction as e-commerce payment option Payment firms are quickly adopting cryptocurrencies, believing they provide a streamlined experience for global e-commerce by eliminating the need for sellers to convert funds to local currency and allowing the global consumer to pay in whatever form is easiest for them. In its year-end earnings report, Square (NYSE: SQ) said it had purchased approximately 3,318 bitcoins at a cost of $170 million. The company previously had purchased $50 million in bitcoin. Square lets users buy bitcoin with its Square Cash App, accelerating adoption of its app. Japanese e-commerce giant Rakuten recently announced holders of Bitcoin, Ethereum and Bitcoin cash could purchase items on its platform. Luxury performance apparel retailer Ultracor also announced that it would accept cryptocurrencies as a payment method. On Feb. 17, OLB Group (NASDAQ: OLB), a provider of omnicommerce and payment solutions for small and midsized merchants, announced its SecurePay payment platform could conduct transactions in cryptocurrency. Cryptocurrency wallets can be used directly at any point of sale utilizing OLB’s OmniSoft cloud-based business services platform solutions, it said. Also, general-purpose wallet services — including Apple Pay and Google Pay — can be used to make purchases at any point of sale serviced by OLB’s SecurePay gateway. Josh Brooks, head of marketing at OnBuy.com, said that cryptocurrencies represent an opportunity for retailers to reach new customers. “With the ability to appease consumer demand for immediacy and security, while expanding market share for retailers, cryptocurrencies could prove extremely beneficial for the e-commerce industry if adopted efficiently,” Brooks wrote in a recent commentary for Global Banking and Finance Review. “More and more companies have grown to understand these benefits, leading to a surge in consumer attention, and it may not be long before we start to see the commercial use of cryptocurrency as standard.” Click for more Modern Shipper articles by Brian Straight. You may also like: Social Auto Transport raises $1.5M in seed funding to expand gig economy auto-moving business Bringg’s collaboration with Uber opens new doors for e-commerce Walmart to begin drone delivery pilot this summer See more from BenzingaClick here for options trades from BenzingaDid COVID Kill Retail Stores? It’s ComplicatedCan The Postal Service Bridge The Food-insecurity Gap?© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

What Is an NFT? Inside The Next Billion-Dollar Crypto Sensation.

March 8, 2021 6 min read

Opinions expressed by Entrepreneur contributors are their own.

If you haven’t heard of them now, it’s only a matter of time. Whether its digital sports cards or digital artworks, NFTs have been taking the internet by storm and have simply doubled their total volume in USD in the month of February alone. So what are these digital assets selling for fortunes, from niche marketplaces to world-famous auction house Christie’s?

What does NFT mean?

An NFT is a non-fungible token existing on a blockchain. A token is the sign of ownership of an asset. For example, a concert ticket is a sign of ownership of one space for a concert. A Bitcoin is the title of ownership to the underlying value of the Bitcoin. A token is a digital asset, stored on the blockchain. As the blockchain is transparent, it is easy for all to see who is the owner of what token.

Fungible refers to an asset that is easily exchangeable. A dollar is very fungible, you can give me a dollar in exchange for some good and I can then re-exchange it for another service. A neighbor could borrow a pound of sugar to bake a cake and buy me another one in a few days when he goes to the supermarket. It doesn’t matter that the sugar is different, it is easily replaceable and exchangeable.

A non-fungible token is a unique token that isn’t easily exchangeable with another. The foremost use case is artworks. Artworks have been selling on the blockchain for millions of dollars (or in this case a blockchain native currency, Ethereum). Examples abound but the most famous NFT artist so far is Beeple who first sold 21 pieces of artwork on digital marketplace Nifty Gateway for a total of $3.5 million. He then went on to sell his masterpiece “EVERYDAYS: THE FIRST 5000 DAYS” at Christie’s for $6.5 million. Beeple is Mike Winkelmann, previously a graphic designer from Charleston South Carolina.

Artworks are not the only things exchanged in these marketplaces. More and more volume in the NFT space is coming from digital sports trading cards. In fact, fans of basketball have already spent $230 million trading NBA Top Shot cards. These cards represent certain classic moments for the sport and there is only a limited amount of each. The ownership and the scarcity of these cards are insured by the Ethereum blockchain. Recently, a rare Lebron James highlight sold to the highest bidder for a crisp $200,000.

Related: How Esports and Gaming Are Bringing Crypto to the Masses

Why would anyone pay for this?

The crazy thing about these purchases is that anyone can download Beeple’s artwork or Lebron’s highlight. It is as simple as clicking ‘save image’ on your laptop. What buyers are after is not the artwork in itself but the proof of ownership for that artwork. The buyers are akin to art collectors putting their most prized possessions on display in museums. NFTs represent a way for art collectors to encourage financially their favorite artists online.

As humans evolve more and more, especially in lockdown, it seems only natural that we decide to buy art in the digital world as well. One step further, certain platforms such as Decentraland allow users to buy land or real estate in a digital world.

While this has been no more than a niche sector of the internet, in the last six months it has truly exploded onto mainstream media and seems to be here to stay. While the first experiments with NFTs date back to 2013-2014, the market seems to arrive to a certain maturity and mainstream appeal in 2021.

Several issues remain with the NFT market, however. As the main currency of exchange and the network on which marketplaces are built is Ethereum, transaction fees are very high and it is commonplace to have to pay $50 to transfer the property title of an NFT from its creator to the buyer. On platforms such as Rarible or OpenSea, the current market leaders, not only does each transaction (creation of the NFT, bids, transfer of ownership) costs users large sums, they also amount to the terrible carbon footprint of the Ethereum network.

There is hope, however, as Ethereum is planning to change its architecture by the beginning of 2022 to be much more eco-friendly. In the meantime, certain marketplaces have found technical solutions to these limitations. Drops.is, an upcoming NFT project that lets you do a lot more with NFTs than just buy and sell. It allows users to create NFTs, bid, stake, take loans by using your NFT as collateral. It’s also using a Layer 2 solution by building on Polygon network, reducing both the costs of these transactions to a few cents (which are paid for by the platform itself) and the important environmental costs.

Related: This Rainbow Kitten Image Was Auctioned for More Than $500,000

The new creator economy

The most exciting part of the NFT revolution is that artists specialized in digital arts will finally be compensated for their work. Until now, it was very hard for artists to monetize their creations because of the very nature of digital art and its infinite reproducibility. Now, true fans of the artists will be able to directly support them with any middle-men or platform.

Mainstream artists seem to have caught on to this trend with artists such as Grammy-winning Kings of Leon releasing their latest album as an NFT. It’s also the case of Grimes, Lindsay Lohan or even Soulja Boy who all released NFTs representing music, digital artworks or even the ownership of a limited-edition vinyl.

But it is not only artists who can make money from NFTs, the market for digital sports card for example has already exploded. Soccer trading card platform Sorare has seen the unique 2020-2021 Kylian Mbappé card sell for $65,000. Cashing in on sports fans stuck at home has turned out to be extremely profitable for these platforms, so much so that it has brought the attention of gaming giant Ubisoft who has now partnered up with Sorare for future projects.

NFTs are the hottest item in the recent crypto craze and as mainstream artists start to discover them they will only become more popular and coming soon to a digital market near you.