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Surviving Crypto Winter — Part One: Mattereum and the Internet of Agreements

As crypto evolves from Ether → Plasma → Matter, the material transmutation must be flawless. We hope this critique helps us get there. At , we’ve been big fans of Mattereum ever since pulled us by the scruff of the neck and told us that “for years, has been talking about CleanApp-type services.” CleanApp Foundation Cryptech Vinay Gupta For a while now, we’ve also been stressing that crypto needs to take a concerted turn towards material cryptonomics . Our reasoning is simple: (1) (& always will dwarf digital assets because people eat fructose & cellulose apples, not silicone apples); (2) developing . the material economy dwarfs digital assets a crypto-material-economy is vital to offset the clear systemic threats posed by crypto-finance We’ve been researching and trying to understand Mattereum’s plan to put physical assets on chain. In addition to , Mattereum’s recently-published “litepaper” (summary whitepaper) — offers a great introduction to one of today’s most audacious plans to bridge the crypto and physical realms. ( !) Mattereum’s website Hat tip to BookLocal for sharing the best insights from DevCon4 The point of this article is to give some initial thoughts on the litepaper, with the express disclaimer that everything here is meant as constructive critique. We have nothing but the utmost respect for the project. we want to give the project the same treatment has gotten from its best critics. That’s why our whitepaper What is Mattereum? For context, let’s start with a screenshot from . Mattereum’s website Here’s what we notice straight off the bat: . What does Mattereum actually do? In our read, Mattereum will serve as a legal layer between a core blockchain (such as Ethereum 4.8.1) and different end-user-oriented blockchain applications. Mattereum is a LegalTech project We’ll get deeper into the shortly. how For now, it’s important to take a moment to appreciate how of the bullet points above is a legal form and/or legal relation. each one Mattereum seeks to crypto-legalize physical assets, and physically-enforce digital legal decrees. Mattereum = LegalTech Please note, we’re not sure whether our characterization of Mattereum as LegalTech squares with how Mattereum describes Mattereum. The project description is far more ambitious (and ambiguous) in scope than our description, so of course, you should read all of these materials for yourself. But in our view, LegalTech is nothing to shirk from. In a way, all of crypto is a big LegalTech enterprise thus far. Even CryptoKitties is in the midst of a massive IP turf war. Crypto projects that acknowledge crypto’s legal genesis blocks (and the imprint of those blocks on the conceptual architecture of crypto) will thrive. Those that continue to labor under the anxiety of legal intervention will eventually have to give way or fold. Mattereum is wisely adopting the path of greatest adoption, which means greater integration with existing legal processes. Kudos. That’s a smart strategy. What’s most remarkable about Mattereum is that it’s orders of magnitude more legalistic than even projects like . At scale, the two may well evolve into fierce competitors (Mattereum as Amazon; OpenLaw as EBay). Like Amazon & EBay (or Westlaw & LexisNexis, for that matter), Mattereum, OpenLaw and other LegalTech players will find plenty of ways to complement one another. OpenLaw The key viability (market-potential and feasibility) question is whether all stakeholders will coalesce around the hyperutility proposition of transaction-level crypto-legal interoperability. To us, the potential gains for all sides are so vast that it’s a no-brainer. But crypto is a very tribal place, so who knows what will happen. Where Is Mattereum? In terms of blockchain development layers, here’s how Mattereum sees itself: In reality, the little red lines need to go to many more boxes. For instance, it’s not clear why Mattereum is saying it won’t be involved in credit management, since the most immediately obvious use-case for Mattereum is collateralization and asset-tracking. Mattereum says as much in its litepaper: As Mattereum extends its services into developing economies, the benefits of collateralizing movable property will become extremely important because it fuels economic growth. And credit management collateralization. When debtors will ask Coinbase to refinance the 3rd equity line of credit on their bicycle, what Coinbase wants to know is: (1) where the moveable collateral is right now; (2) what other collateral can be added to the collateral portfolio to secure the loan that Coinbase will desperately want to approve. is The same is true for advertising. In a Mattereum future of fractional asset ownership, subjective emotional ties to assets like cars and apartments are weakened. Owners will be even more incentivized to monetize their assets in novel ways. So apartments rented out through can have entire walls serve as digital billboards; refrigerators within those apartments can serve as chain-verified market survey mechanisms. So long as everyone consents to the transactional chains, it’s easy to see retailers like Ikea or Amazon demo-ing product lines within short-term apartment rentals. BookLocal If you’re renting a car for a day, and can get a 25%, 50% or higher discount for plastering magnetic placards on your rental (placards that you can remove before you arrive at your destination) — and the ad placements can be securely verified, then . advertisement rights become some of the most valuable property rights in all of crypto It’s not clear why Mattereum limits its own scope. The two examples above — blockchain short-term apartment rentals & car rentals — are plucked directly from the litepaper. We observe in the way Kik/Kinit talk about Kin. the same paradox Who knows; maybe understatement is a new crypto trend. Mattereum Math-ereum The way that Mattereum describes its approach to smart property is essentially assigning a digital identity to the maximum number of physical assets, and then apportioning rights of access to the property by, say, time (like time-sharing). Additionally, Mattereum introduces age-old property law forms — such as the divide between possessory interests, reversionary interests, and titular interests (without using the legal jargon, thankfully). Here’s how the litepaper describes it: An automated custodian becomes an asset’s legal owner and registrar, maintaining the authoritative register of interests in the asset. This enables the unbundling of [1] legal ownership, [2] financial beneficial interest, and [3] possession or use of the asset. Unbundling suggests fractional ownership — the registrar owns 1/3 of the property; the user owns 1/3 of the property; and a financial institution owns 1/3 of the “financial beneficial interest.” In reality, the first thing that the financial institution will do with its “financial beneficial interest” is somehow encumber that financial beneficial interest, whether through existing derivative structures, or through some as-yet-uninvented bit of FinTech wizardry. It’s not just financiers who will try to fragment their stakes in an apartment or car to squeeze more value out of them: owners and users of the property have every incentive to do the same thing. Instead of , what emerges looks more like : fractional ownership fractal ownership Mathematically and biologically, the fractal is an exceedingly elegant and efficient form. To the extent something like can be coded, seems intuitively reasonable: by permitting property cell division into smaller and smaller blocks, the system gives each resulting block the highest likelihood of finding most efficient use. smart property fractal ownership So, returning to the apartment-sharing example from the litepaper, we can imagine the emergence of extremely diverse micro-property markets, with firms paying small amounts to do product placement on micro-property-surfaces (example: displaying a classic Coke bottle or a framed photo of a local bar in a prominent place). Perhaps the reason fractal ownership is not addressed is the fear that it would complicate enforcement of property rights. But enforcement is already complicated by the myriad permutations of “smart property” x “smart contract” rights anticipated by Mattereum. How Are Rights Enforced? This is the biggest conceptual and operational weakness in the paper. Given that enforcement is the fulcrum on which “smart property” v. “smart contract” will perform their balancing act, it’s a big deal. Mattereum knows it’s a big deal. Here’s how the litepaper opens: What if code really did have the force of law behind it? The litepaper states the problem perfectly: today’s crypto legal instruments lack clearly articulated and well-theorized enforcement mechanisms (our restatement of the paper’s core thesis). But the litepaper’s proposed solutions restate the problem, rather than solving it. Here’s how the litepaper claims to solve off-chain enforcement of on-chain arbitral awards: (1) ; (2) (“removing the legal obstacles between an arbitrator making an award and the successful counterparty actually receiving compensation.”). dispute minimization disintermediation The way that Mattereum claims to accomplish #2 is by introducing a novel legal form: (3) an . automated custodian An automated custodian is the perfect legal counterparty to a smart contract. An automated custodian becomes an asset’s legal owner and registrar, maintaining the authoritative register of interests in the asset. Unfortunately, the litepaper does not explain how the automated custodian — a bot whose job is to maintain a micro-title registry — will actually do en-force-ment. Here’s the litepaper again: Being the asset’s legal owner, the registrar [a bot] is in the strongest position to enforce these constitutional requirements in respect of the asset. But the only way a bot can en-force any legal requirements (constitutional or contractual or property) is if the bot has legitimate law en-force-ment authority in the physical realm. That implies RoboCops. Short of RoboCop en-force-ment, Mattereum cannot and should not describe its processes as automated enforcement in the physical realm. If Mattereum means to actualize Szabo’s original “smart property” plans of self-repossessing cars (#autorepoauto) and self-locking apartments, then it must say so and open these important governance and policy questions to public debate. Right now, the litepaper claims that the Mattereum protocol will allow the deployment of “a simple API for the control of off-chain assets.” But as its own graphic makes clear, the actual mechanism of control is not physical control, but actually just another layer of legal rights — (1) transfer rights; (2) collateral rights; (3) IP license rights; (4) insurance rights. In the event of a dispute concerning these rights, arbitration, adjudication, and enforcement would be done off-chain. If parties want to arbitrate, then Mattereum would presumably integrate with an arbitration provider like OpenCourt, providing somewhat greater on-chain control. But at the end of the day, actual en-force-ment would be done in a non-Mattereum enforcement forum. Smart Stradivarius The litepaper uses the example of a rare Stradivarius violin (worth $9m). Mattereum claims that this violin will be the first that it turns into smart property. The violin is then used to illustrate several aspects of the Mattereum protocol. The litepaper gives several examples of what can be done with the violin, including automated registrar oversight with respect to given custodial instructions. So if the property owners & contract parties wanted to specify that the violin be used in “6 concerts in 3 countries over the course of a year,” the suggestion is that this violin would be used in “6 concerts in 3 countries over the course of a year.” But the key question is — ? How will Mattereum enforce these property+contract hybrid rights? Again, the only conceivable way that this could be done autonomously is if the automated custodian is a robot who is programmed to deliver the violin to each of the 6 concert venues and then bring the violin back to a secure vault somewhere. But even in that scenario, what happens if the violinist at the 5th concert returns a fake? What happens if she refuses to return the violin to the robot? how The key point is that “smart contract” self-enforcement is illusory. It’s an oxymoron. Mattereum elides this problem through two means: (1) by not using self-enforcement terminology ( !); (2) by inventing a third party property law mechanism — the — that will do the enforcement. thankfully automated custodian But that just kicks the can down the road. The automated custodian cannot do enforcement. It is not a law en-force-ment body. “Smart Contracts” v. “Legal Contracts” Even though we’re thrilled to see a major blockchain project consciously move away from “self-enforcement” terminology, Mattereum’s legal architecture is still underdeveloped. The clearest illustration of this is the continuing reliance on “smart contract” terminology despite principled argumentation and clear countervailing trends. against this usage These are not semantic choices, aesthetic considerations, or “opinions.” At this caliber, continued misuse of Legalese after clear corrective signals leads to only one outcome: further conceptual fragmentation and confusion. When Mattereum writes that its “infrastructure [turns] smart contracts into legal contracts that can be efficiently enforced all over the world,” Mattereum’s contrastive frameworks only make matters worse. There’s no conceptual divide in law between “smart contracts” and “legal contracts,” just like there’s no conceptual divide between “legal contracts” and “contracts.” Adding the adjectival “legal” is unnecessarily redundant. A contract is, by definition, a legal form. No clear trade usage attaches to the term “smart contract” or to the term “legal contract.” On the contrary, crypto discourse has far too much inaccurate equivalence between different genres of “smart contract” and variously “self-enforcing” legal contracts. Here’s the actual answer to how “smart contracts” are turned into “legal contracts” — The resounding “maybe” is a far cry from claims that Mattereum contracts “can be efficiently enforced all over the world.” The best thought exercise for moving away from efficient enforcement and getting closer to maybe is to return to the Stradivarius and to imagine a complex provenance dispute -or- a hybrid contract + property + tort dispute arising from damage to the violin occasioned by an angry violinst protesting the onchainization of art, or whatever. It doesn’t matter how clear the chain of title may seem now; in a large stake dispute, it’s impossible to contain the parties to on-chain dispute resolution mechanisms — irrespective of their prior consent to on-chain arbitration. Underneath Mattereum’s Hood Here’s our theory on the actual inner workings of Mattereum’s . automated custodian Mattereum’s automated custodian seems to be a clandestine way of converting a property law form (such as a bailment) into a contract form. Mattereum is doing this type of legal alchemy in order to (property law is quintessentially local; contract law is far more cosmopolitan, with robust international legal mechanisms for enforcement of arbitration awards). internationalize & harmonize property law Conveying property to a centralized or decentralized registrar is an attempt to contract-ize a given asset (to change its legal essence from a property form to a contract form). Despite best efforts to do this (with advice of great lawyers), any claim of ease of enforcement, ease of implementation, and/or easy efficiency gains must be very closely scrutinized. Next Steps We close with several questions and requests for clarification. The Mattereum website states: “Where contracting parties have agreed that their obligations will be secured against registered assets, registrars will recognise and enforce an arbitration award directly against the assets.” Q: What is Mattereum’s preferred arbitration mechanism? In our understanding, the decision to on-chain a Stradivarius is motivated by a desire to chose a high-profile asset with an indisputable provenance. Q: Are you open to prototyping Mattereum with other asset classes, but where title is unclear, and provenance can be disputed ? Thank you to the Mattereum team for blazing a new path forward in the evolution of the broader global blockchain project. Your litepaper’s innovative suggestion to marketize carbon and pollution data is a major milestone in blockchain history. We applaud it wholeheartedly. We see Mattereum’s full potential as custodian protocol of a similar but broader physical asset class: a blockchain embodiment of Open AR Cloud. We’d be honored to share our ideas for integrating blockchain processes with physical assets to unlock entirely new transactional spaces.

Mattereum Litepaper {Pros & Cons}

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Andy Warhol’s ‘Alexander The Great’ colour screenprint is to go to auction in mid-April. The piece will be sold as an NFT (non-fungible token) via the marketplace Rarible, where the owner will have ownership of the physical piece itself as well as the NFT. The famous white and yellow screenprint, signed by Andy Warhol, was commissioned in 1982 by Alexander Lolas. As part of the commission, Warhol created a series of colour silkscreen prints of the Macedonian Conqueror, Alexander the Great. The physical art piece connected to this NFT has been exhibited in the National Gallery in Greece (14 June - 31 July 1993). You’re probably wondering ‘How does this NFT differ from others?’ The concept of NFTs becoming the future of how tangible works can be certified, exchanged, and sold, is the fundamental motivation for the owner to sell this magnificent piece. says current owner Aris Sarlis. “I am hoping that this NFT will be part of history and hopefully the beginning of many other significant pieces from other artists,” “Furthermore, because this is the first ever Warhol to be sold as a NFT, it adds a tremendous deal of significance to the item.” The key benefits are that once the NFT is generated and warranties are in place, the art can be transferred immediately. Provenance and bills of sale are promptly entered into the NFT's history, ensuring that all information is recorded. says Aris. The owners of these NFTs have the power to instantly display their collection because of this. Another significant benefit is that Aris states, “The advantage is that you can showcase your collection and prove ownership instantly while your collection is vaulted” “owners and subsequent owners can sell their physical objects without the high fees at a traditional auction” “while still receiving identical assurances on provenance, security, and guarantees.” Bringing your physical assets into the NFT realm is as straightforward as it gets with Mattereum's unified system. Mastering the legal aspects allows you to buy and trade truly valuable, unusual, distinctive, and fascinating NFTs while avoiding many of the drawbacks that have befallen others within the market. Mattereum CEO Vinay Gupta said: “Mattereum is delighted to be able to help bring Alexander the Great to market. It’s a fabulous piece, and will be the first physical artwork secured by a Mattereum Asset Passport on Rarible. It’s been a pleasure working with Aris and the team, and we look forward to bringing more beautiful physical things to Rarible in future”. NFT at Rarible Passport Carbon Offset The total carbon output for the production of the NFT paired with this asset as described in Certification 2 (NFT) of this Asset Passport has been estimated as below 300kg using the NFT CO2 footprint calculator provided by . CryptoArt A quantity of carbon offset certificates equaling the total carbon output presented above were purchased from Nori Inc. at a cost of $17.25 per ton (inclusive of a transaction fee of $2.25) on 25 October 2021 for a total of $17.25. These carbon offset tokens were expended to offset the total carbon output of this asset's corresponding NFT described in Certification 2 (NFT) of this Asset Passport. Mattereum Asset Passport The asset purchaser is protected, up to a stated level of liability, by the warranties contained in the Mattereum Asset Passport which is bound to the asset’s NFT. The certifiers of the physical artwork are liable if any information which they provide in the warranties contained in the Mattereum Asset Passport do not correspond to reality. In the event of a dispute, the certifications can be legally enforced via arbitration, recogniseable in over 160 jurisdictions worldwide.  The smart contracts ensure that any transactions including the activation of the warranties when the asset is sold are immutably recorded on chain. The NFT acts as a digital receipt for the “Real World Asset”, a category that includes collectibles, fine art, antiques, and other valuable asset classes. Any physical asset can be paired with a Mattereum Asset Passport for a bullet roof legal framework. About Mattereum Mattereum is an impact-driven venture capital-backed technology enterprise with a new protocol for digital trade. We are setting out to change the world by redefining the relationship between physical assets and distributed digital commerce. Established in 2017 by a trans-disciplinary team with a track record in designing and launching nation state-level infrastructure, and headed by former Ethereum release coordinator Vinay Gupta, Mattereum is the global leader in designing systems for digitally representing and trading valuable real-world assets including fine art, gold, and real estate. More at: https://www.mattereum.com For more information, contact: warhol@firecask.com Press release by FireCask

Andy Warhol Artwork to be Auctioned as an NFT

Destiny 2 has been out for some time now. The popular sci-fi shooter has had many different iterations and in-game seasons over the years. With every season comes new challenges, gear and light levels. Destiny 2 relies on a level system based on what is known as light. Essentially the higher your light, the more powerful your guardian. To reach high light levels, you need to use upgrade modules to upgrade your power level. Here's how to get the Destiny 2 upgrade module. The article contains the following content: What is the Destiny 2 upgrade module? Where to find the Destiny 2 Upgrade Module Why is the Upgrade Module Important? What is the Destiny 2 upgrade module? An upgrade module is a consumable item used in Destiny 2 that allows you to upgrade your armour and gear to increase its power. Upgrade modules work by using high-powered equipment to power up gear. It effectively allows you to use high-level but more common equipment to increase the power level of rarer armour/weapons. For example, say if you have a common shotgun at power level 1200, that is more powerful than your rarer 1180 legendary purple shotgun. You can use an upgrade module to upgrade your legendary shotgun to power level 1200 through the blue shotgun. Where to find the Destiny 2 Upgrade Module You can find the item in several places. Firstly, you can find upgrade modules by talking to Banshee-44. Banshee-44 is located in the Tower, and upon interaction with him, you can find the item. You can buy the item for one enhancement core, ten legendary shards, 5000 glimmer and 25 planetary materials that rotate every week. Banshee-44 is a known supplier of the item, and you can regularly buy them from the vendor. Secondly, you can get the module from your season pass. By conducting basic gameplay or completing seasonal challenges, you can level up your season pass, allowing you to get upgrade module rewards. You can unlock upgrade modules both on the free side of the pass and the paid. Thus, playing the game generally through completing challenges and carrying out guardian activities will allow you to obtain modules. Similarly, you can also obtain upgrade modules by playing the vanguard playlist through strikes and weekly nightfalls. When doing this, it is advised that you purchase what is known as a concentrated mattergem from the Eververse store. A concentrated mattergem increases the chance of a boss dropping an upgrade module. The item can be purchased through the store using bright dust. Finally, you can also obtain upgrade modules in the crucible by reaching at least rank 4 in valor and infamy. To do this, you need to partake in many PVP matches in the crucible to get to rank 4. Doing so will grant you three upgrade modules, which resets each week. Lastly, you can increase the chances of the item dropping through activities by equipping modularity mods to your ghost shell. Why is the Upgrade Module Important? As highlighted, the Destiny 2 upgrade module is used to upgrade your weapons and armour to the highest level. The module allows you to upgrade the power level of your best gear while also allowing you to discard your old equipment. Increasing your power level also means your light level will increase. A high light level is needed to take on the game’s distinguished challenges such as raids, dungeons and strikes. Likewise, it would help if you had a high level when competing against the game’s very best in the crucible. Thus, the upgrade module is an essential item needed to increase your guardian's power and light level to compete at the highest level in the game. Final Thoughts Overall, the Destiny 2 upgrade module is an essential item needed to become the best Destiny player. It can elevate your game, allowing you to equip your most prized and powerful gear in the fight against the encroaching darkness. It is an exciting time for Destiny players as the game enters the second half of the Season of the Splicer and the next central DLC expansion, the Witch Queen. As always, Hacker Noon will cover it all. For more Destiny 2 related features and articles, subscribe to our newsletter in the footer below. Also, check out, 1. Destiny 2's Witch Queen Lives Amongst Us 2. 3 Best Kotor Builds Even Vader Would Approve of 3. 7 Scariest Roblox Horror Games: The Absolute Scariest

How to get the Destiny 2 Upgrade Module

Mastering Shitcoins II - The Poor Man's Guide to Getting Rich

In the rapidly developing public chain and dApp landscape, decentralized governance and dispute resolution has emerged as the key missing piece to protecting users’ rights and assets and driving user adoption. In short, blockchain security should have two layers: (1) cybersecurity and (2) governance. Although the focus tends to be on cybersecurity, regular users encounter conflicts/disputes more often than security hacks in their day-to-day usage, making governance just as important as cybersecurity. This is even more true in decentralized ecosystems that do not (or should not) have centralized arbitration services. In this article, I examine different approaches to blockchain governance and dispute resolution and compare them with what I am working on at . Oath Protocol ECAF The EOSIO Core Arbitration Forum The EOSIO Core Arbitration Forum, or ECAF, is established by the EOS Constitution. Here is : the specific language that mentions ECAF All disputes arising out of or in connection with this Constitution shall be finally settled under the Rules of Dispute Resolution of the EOS Core Arbitration Forum by one or more arbitrators appointed in accordance with the said Rules. The is comprised of vetted arbitrators, trained to consider the special context of blockchain disputes. The arbitrators have to meet certain , including fluency in English and minimum education level, and complete an apprenticeship training process, in which they are mentored by a more experienced arbitrator, before being allowed to rule on a dispute in their own right. Currently, there are six arbitrators who have been cleared to arbitrate mostly complex cases, which are then executed by EOS block-producers (BPs). ECAF criteria By , one arbitrator is appointed to decide the case. Appeals and disciplinary cases are heard by a panel of three, led by a senior arbitrator. In exceptional circumstances, the (single) arbitrator may request the appointment of two additional arbitrators. default To review and arbitrate a case, ECAF charges a nonrefundable filing fee, paid by the claimant. The minimum fee is 6 EOS, for disputes valued at 1–250 EOS, and goes up to 7,560 EOS for claims valued at 5,000,000+ EOS. At the current exchange rate of USD ~$2.40/EOS (historically, on the low end, per ), the minimum filing fee equals USD ~$12. For cases with no immediately calculable monetary damages, the default filing fee is 150 EOS (USD $360). The final arbitration cost is decided by the arbitrator and takes into account the arbitrator’s fees and expenses, the costs of experts and translators, and any other costs related to the conduction of the case. CoinMarketCap What is the difference between ECAF and Oath Protocol? While ECAF’s jurisdiction is limited to the EOS chain, Oath Protocol provides a scalable and chain-agnostic solution that is compatible with any public chains and dApps. This also allows us to tap into the entire blockchain ecosystem to grow our juror community. ECAF imposes a minimum arbitration fee that varies depending on the value of the case at issue, whereas Oath uses the free-market principle, allowing the disputing parties to set juror awards. ECAF sets strict criteria for potential arbitrators. At Oath, practically anyone can become a juror after completing our community-led KYC process to establish identity and assign attributes, and our credit level system will differentiate among jurors with differing experience and expertise levels to ensure appropriate juror selection for cases of varying complexity. Kleros The Blockchain Dispute Resolution Layer is a dispute resolution protocol, built on Ethereum, that works as a decentralized third party to arbitrate contract disputes. It “relies on game theoretic incentives to have jurors rule cases correctly.” Kleros Kleros is an opt-in court system, comprised of the General Court and specialized courts and sub-courts. Each token holder (and potential juror) can register in at most one sub-court of each specialized court where they have activated their token during the sign-up. This ensures that jurors self-select the specialized courts they believe they are most skilled at. The arbitration fees are determined by the sub-courts. Once the dispute is initiated, disputants deposit the fees in the smart contract, and failure to do so results in a default judgment in favor of the depositing party. At the conclusion of the case, the losing party pays the arbitration fees, and the other deposits are refunded. Kleros implements a staking incentive as their juror reward mechanism. This means two things: (1) the more tokens a potential juror deposits in the sub-court, the more likely he is to be selected to decide cases, and (2) at the conclusion of the case, the losing jurors’ staked tokens are distributed to the winning jurors who correctly voted for the winning party. In addition to receiving the losing jurors’ tokens, the winning jurors also receive the arbitration fee. The figure below demonstrates token redistribution after the vote with seven jurors. Tokens are redistributed from jurors who voted incoherently to jurors who voted coherently. Bob lost the dispute and pays the arbitration fees. Kleros allows unlimited appeals, but disincentivizes them by automatically “doubling plus one” the number of jurors on each follow-up appeal, which exponentially increases the fees. What is the difference between Kleros and Oath Protocol? Kleros requires its jurors to hold and stake the native platform tokens, whereas anyone can become an Oath Protocol juror, no token required. Kleros’s staking and re-distribution incentive system may prevent tentative jurors from voting (and risk losing their staked tokens), thereby lowering the overall participation rate. Oath’s positive incentive system, combined with juror reputation system, ensures a robust and high-quality juror pool. All actions on Kleros occur as on-chain transactions. This means two things: (1) Kleros will depend on technological milestones to solve scalability on the Ethereum network and (2) the cost of dispute resolution on Kleros will depend on needed to record those transactions. As a semi-off-chain solution that requires only two on-chain transactions (dispute initiation and recording of result), Oath can scale right away and manage high traffic as well as maintain relatively low gas fees. gas fees In contrast to Kleros’s unlimited appeals, Oath Protocol allows two appeals, keeping the same number of jurors, but selecting more experienced jurors with higher credit levels for subsequent appeals. Aragon Democratizing Governance aims to “be the first community governed decentralized organization whose goal is to act as a digital jurisdiction, an online decentralized court system that isn’t bound by traditional artificial barriers such as national jurisdictions or the borders of a single country.” Aragon The arbitration mechanism requires an individual that has a dispute to open a case and post a bond. The bond will be locked for the period of the arbitration process and returned if the case is resolved in the applicant’s favor. If not, the bond will be kept as a “network reserve.” When the arbitration begins, five judges will be randomly selected from a pool of volunteers. Volunteers are individuals that have posted a bond indicating their interest in serving as a Judge. The five selected judges will vote on the outcome of the case. If the applicant is unsatisfied with the ruling, he or she has the option to appeal by posting an even larger bond than before. For the appeal round, all the judges of the Aragon Network will be able to participate. If the applicant is still unsatisfied, there is the Supreme Court of the Aragon Network Jurisdiction, where the judges will be composed of the top 9 judges by ANJ payout. In other words, these are the individuals with the highest ranking in resolving Aragon Network Jurisdiction cases. The judges of the previous round will get rewarded or penalized according to the ruling of the Supreme Court. If they agree with the previous round’s judges, the judges from that round will be rewarded. And in the opposite decision, the judges of that round get penalized for a call that was overturned. Currently, Aragon is still investigating the most efficient arbitration criteria for its platform, and the above framework is subject to change. What is the difference between Aragon and Oath Protocol? Aragon implements a bond (i.e., staking) system to select case jurors, whereas anyone can be a juror on the Oath Protocol platform. Aragon uses a group of five judges to resolve first-instance disputes. Oath Protocol allows the disputing parties to select the number of jurors, with a minimum set at eleven, to ensure a more decentralized and fair process. Aragon’s five-person jury is selected randomly, whereas Oath Protocol relies on computing algorithms and party input to create diverse and fair juries. Aragon does not appear to set time limits on juror deliberation and dispute resolution process. On Oath Protocol, the entire process takes eight days, start to finish. Aragon Network Jurisdiction appears to be designed for dispute resolution within the Aragon Network. Oath Protocol is a a scalable and chain-agnostic solution that is compatible with any public chains and dApps via APIs. JUR Justice as a Service on the Blockchain proposes a dispute resolution system that utilizes blockchain technology to instill transparency and immutability in the legal industry. Jur’s dispute resolution solution uses a series of smart contracts to provide an incorruptible decentralized oracle that delivers fair and fast dispute resolution at near zero cost. Jur To participate in dispute resolution, voters on the Jur platform will need to stake tokens in a smart contract. Voting is therefore restricted to JUR token-holders, which is meant to incentivize outsiders to purchase the token. Jur provides two different models of voting: open votes or closed Hub votes. Users can choose to enter their contracts in the open dispute resolution or any closed Hub in the Jur ecosystem. In open votes, any voter can choose to participate. Although there is no centralized barrier to entry, rational voters will only choose to vote when they are more than 50% confident that they can predict the majority position, or else they risk losing their staked tokens. In closed Hubs, only certain voters are allowed to vote. Admins can establish Hubs with requirements that Oracles must meet in order to vote, creating an ecosystem in which Hubs with vetted oracles are in competition to provide the best service. Hubs do not charge fees directly. Hub administrators earn revenue by selling the contracts that are used on the Hub. Built on Ethereum, Jur depends on the further development of the technology as it relates to scalability. Presently, Jur is considering the implementation of side-chains, modeled on Loom or Raiden Network, for example. Jur is available to third parties via APIs for a monthly subscription fee, making it less likely to become the standard industry solution. What is the difference between Jur and Oath Protocol? Built on Ethereum, Jur depends on solving the scalability dilemma and is actively researching alternative solutions, such as side chains. Oath Protocol offers a semi-decentralized solution, where only two transactions are recorded on-chain (case initiation and resolution), allowing for immediate scalability. Jur charges third parties monthly subscription fees to use their APIs and refer disputes to the Jur Platform. Oath Protocol charges a one-time implementation fee for partner integration via APIs. Jur’s staking system is intended to prevent tentative jurors from voting, thereby increasing vote confidence level, but lowering the overall participation rate. Oath’s juror incentive system, combined with juror reputation system, ensures a robust and high-quality juror pool. The Jur jury pool is limited to JUR token holders. With Oath Protocol, anyone can become a juror, which allows us to create a large and more diverse jury pool. Mattereum Smart Contracts for the Real World is an “Internet of Agreements” project to manage legal rights over physical property, intellectual property, and eventually even real estate, on the blockchain. It combines smart contract engineering and legal expertise to enable legally enforceable digital agreements or, in other words, pair the smart contract code with a written legal contract. In parallel, part of this project is to build the ecosystem on the other side of this infrastructure, including mechanisms for ensuring that disputes are handled by suitably equipped dispute resolution professionals. Mattereum What is the difference between Mattereum and Oath Protocol? Mattereum is building a platform for creating legally enforceable blockchain-based contracts, linked to an arbitration panel for dispute resolution. Oath Protocol is building a layer 2 infrastructure to resolve disputes through a decentralized community. Mattereum will create a decentralized, international panel of independent, technically competent arbitrators for dispute resolution. Oath Protocol relies on a diverse jury pool of regular blockchain users. Mattereum contracts will interface with a system for selecting and appointing an arbitrator, who will then be able to give a binding ruling on any disputes that arise. Oath Protocol will use computing algorithms to select a jury of at least eleven peers to resolve factual disputes, leaving execution to our partner dApps and chains via smart contracts. Oath Protocol Decentralized Governance and Dispute Resolution Oath Protocol is a blockchain dispute resolution and governance protocol. Modeled on the common law jury system, it combines one of the most reliable legal systems from the real world with blockchain technology, cryptography, and other concepts to provide a layer 2 cross-chain infrastructure for a decentralized, standard, and extensible public chain-agnostic protocol that protects dApp users’ rights and assets. What are some of the key features of Oath Protocol? : Oath Protocol relies on regular blockchain users to form its juror community and decide cases. Jurors do not need to hold OATH tokens to qualify for juries (no staking), therefore eliminating concentration of power and potential for improper control of the platform. Larger juries (minimum of 11 jurors) more accurately represent community consensus and ensure decentralized decisionmaking. Community decisionmaking : only two transactions take place on-chain (and require gas fees to record): initiation of the case and recording of the case result. The evidence submission and voting take place off-chain, facilitating more robust case participation by the jurors and eliminating gas fees associated with fully on-chain voting. Semi-decentralized voting process : as an infrastructure layer, Oath Protocol does not have to solve the problem of enforcing case decisions. When chains or dApps use a smart contract that incorporates Oath, once the case is decided, the outcome is returned to the smart contract, which then self-executes. Layer 2 protocol : Oath’s dynamic allocation algorithm reduces the odds of the same jury members resolving multiple disputes to avoid collusion, and the categorized random algorithm, designed for reducing bias, selects jurors with diverse backgrounds to ensure fairness. The jury members’ identities are kept confidential through cryptographic techniques to ensure objectivity. Algorithms and safeguards to ensure fairness : via APIs, Oath Protocol is compatible with any chains or dApps, and our smart contract template library allows easy integration. Compatibility with any public chains or dApps : Oath’s credit level system and token reward mechanism incentivize good-faith decisionmaking and protect the ecosystem from bots and bad actors. Oath will also collect and analyze data relating to jurors’ behavior to enable our selection algorithms to select the best jurors for cases. Credit level system and data analytics : Because users are not required to have specialized expertise to become jurors, the jury community can grow significantly. The credit level system will reflect the jurors’ decisionmaking reputation. For complex or high-impact cases, Oath will be able to select top-tier jurors with the highest credit levels. For simplest cases, Oath may use a broader juror pool, with no minimum credit level requirement. Scalability and tiers : Oath Protocol saves the jurors’ votes and stated reasons therefor on the blockchain to create an immutable and searchable record. Transparency In Summary Each project takes different approaches to jury selection, voting, recording of transactions, and juror incentives. In all cases, the goal is to create a system that is fair to users and incentivizes good decisionmaking by the jurors. Kleros, Aragon, and Jur all require their jurors to hold and stake tokens to be selected to decide cases, whereas anyone can be a juror on the Oath Protocol Platform, and our juror credit level system incentivizes good decisionmaking and inhibits bad actors. Both Oath and Kleros intend to be used as a layer 2 solution for other chains and dApps, and Aragon and Jur are working on independent, self-contained platforms. Only Oath Protocol offers a semi-decentralized solution, whereby only two transactions are recorded on-chain, which reduces gas fees and offers immediate scalability, not tied to the scalability limitations of the Ethereum network. As with any protocol, the value will ultimately come from the users’ trust and use, and the ability to remain robust and relevant in an ever-evolving ecosystem. With Oath Protocol, we have decided to uniquely focus on low-value/high-volume disputes in a semi-decentralized way that allows us to maintain scalability while preserving a fair and robust community decision making process. To learn more about Oath Protocol, sign up for email updates on our website . To stay up to date on Oath Protocol news and announcements, follow us on Medium , Telegram , Facebook , Twitter , LinkedIn , and join the conversation on Telegram . Special thanks to and . Michael Wurzinger Xu Yin

The Lay of the Land in Blockchain Dispute Resolution and Governance Designs

Hello Curious Hacker, The internet has so many best of 2018 articles right now… At , we’re forward thinking. Below are the best 27 stories of the year 2019 (so far). Hacker Noon But first, three short updates from around the Hacker Noon HQ : The Reg CF maximum raise is $1.07M. before it’s too over. Our equity crowdfund campaign is up to $986k from 893 people . Invest We’ll be media partner at @ San Francisco Marriott tomorrow (Jan 11th), with recording podcasts and recording video. , come meet the team. Blockchain Connect Conference: Academic 2019 Trent Lapinski Derek Bernard A few tickets are still available Longtime Hacker Noon contributor published a new book: “ ” via another long timer Hacker Noon contributor , and it included this really kind acknowledgement. Thanks Febin! We bought your too :-) Febin John James Ripple Quick Start Guide: Get started with XRP and development applications on Ripple’s blockchain Packt_Pub book And now onto the good stuff: THE 27 BEST TECH STORIES OF 2019 (so far): CRYPTO WINTER by and . Surviving Crypto Winter — Part One: Mattereum and the Internet of Agreements Daniel Jeffries Carly E. Howard, JD, LLM Time to build. From the ashes of competition, rises the phoenix. As winter hits, good projects buckle down and get to work building real technology that works in the real world. And that’s what this new series of articles is all about: Who will survive the crypto winter? I’m going to dig deep and profile companies with the best shot at surviving the bust and building something we can’t imagine living without in the coming years. by . Surviving Crypto Winter — Part Two: Blockstack and the Great Pendulum of History Daniel Jeffries AI went through two winters and it took 50 years for anyone to reap rewards like self-driving cars. The Internet looked like a joke for the first twenty years. 3D printing is still in a winter, after early hopes of a printer in every house failed to materialize without the reason to have one yet. And of course, the crypto market suffered a spectacular crash in 2018, as the markets lost 80% or more of their value over a long slow slide to despair. The winds of crypto winter are blowing furiously and the storm is taking many victims already. In this series, I cover who stands the best chance of rising from the freezing cold and thriving when spring comes again. 2019 Developments by . Best Coding Languages to Learn in 2019 Rafi Zikavashvili In an ideal world, your choice of programming language shouldn’t matter. Most of the popular languages share the same basic concepts, to the untrained eye most of them look the same, and let you achieve more or less the same outcome. From a developer’s perspective, a programming language is a tool and choosing the right one will influence one’s career, economic prospects, and future happiness. This article looks at five of the most popular programming languages, examines their individual and relative merits, and recommends which ones you should learn in 2019. by . Major Programming Trends to Prepare for in 2019 Constantin Trend #1: Could Python Catch up to Java? If you look at the chart above, you’ll see that Python is already the third most popular programming language in the world. According to Stack Overflow, it surpassed C# in popularity in 2018 and PHP in 2017. But Python only recently achieved this status. by . Useful Vim tricks for 2019 Cláudio Ribeiro Vim has a steep learning curve, let’s not try to cover it. But once you start getting the nuances of it you start discovering that Vim is full of time-saving tricks. That’s what we’re going to cover in this article. I’ve scoured the internet for Vim tricks. Some of them come from different websites, twitter posts and some of them are my own. Either way, some of these might be useful to improve your workflow in 2019. What if by . … we could verify npm packages? Steve Konves An npm package is just tarball of files. The fact is that all package managers (Npm, Nuget, Maven, etc) just distribute tarballs or zip files or some other bundle of content. Any responsible developer is going to keep their code in source control; however, this code may or may not be the only thing in the package. For compiled languages like Java or .Net, packages contain build artifacts, not source code. Especially if the build output is obfuscated, it is difficult if not impossible to casually discover security flaws in the package contents. Javascript is a bit different in that many simple packages are simply tarballs of unmodified source code. However, Typescript requires a transpilation step any many other non-Typescrpt codebases include some form of bundling or minification process before an npm package is created. Security concerns are exacerbated but the fact that minified code is hard to read. Making Career Moves by . How I Got Multiple Software Engineer Job Offers When Switching from Another Industry Weihe Wang Failure is the mother of success. I failed onsite interviews 4 times before getting my first offer. Sometimes you solved all problems brilliantly but failed the interview; while sometimes you struggled in one or two rounds but succeed in the end. There is an uncontrollable factor called luck that might be pivotal. It is frustrated to be rejected after an onsite interview, but don’t lose confidence and keep applying to other companies. PODCASTS by . Cowen, Andreessen, and Horowitz: Annotated Arnold Kling The view from 1995: Marc Andreessen and bhorowitz first collaborated in 1995, when Horowitz left an established, successful company, Lotus Notes, to work with Andreessen at a high-flying startup, Netscape. Andreessen points out that the big issue dividing the tech world was whether or not the Internet was going to actually solve the problem of connecting the world’s computers. As late as 1995, there were still many major companies that were working on technology that would be valuable if and only if the Internet did not work. That was a bad bet. with & . Hacking The Self Nick Seneca Jankel Trent Lapinski “What is purpose? Well, purpose is like love in action. It is that love and kindness that comes out into I’m going to take on this community issue, I’m going to take on a bigger social problem then I was before. Until we can access purpose within, and keep it stable within us, that control and protect mode of a monkey will keep going ‘forget the purpose, lets make another million, that would be really cool, then we’ll be loved’.” Listen on iTunes or Google Play Traction by . 24 Experts Weigh In: How Do You Get Traffic Without Budget? Kirill Shilov In my own personal experience, the best way to come up with new solutions is to find experts who have already achieved success in the same field as you and simply improve or repeat what they did. So I went ahead and asked experts from different fields about what they would do if they could start from scratch in 2019. And they answered! Venture Capital by . The Warning Label That Should Come With Venture Capital Founder Collective by . The 200 Black Women in Tech to Follow On Twitter List Jay Jay Ghatt Why Black Women? Since the first list was published three years ago, I’ve been asked why I only featured women on this list when the tech ecosystem is not inclusive of black men as well. My answer: the list of 200 Black Women in Tech to Follow on Twitter was created out of a need to fill a specific and articulated void after I learned that Black Women were less than 1% of StartUp Founders receiving VC Capital (less than .02%), and in essence were located at the bottom of the totem pole and represented the least , much less than black men, white women, Asian American women and other marginalized groups. Not only did this group not receive funding, it was the least represented on the staffs of tech companies and virtually absent on other “who to follow” lists in tech. Out of exclusion comes a solution. I wanted all to know that we’re here too and to make it easier to “find us”, offer a list of the group least represented to draw from so that could not longer be an excuse as to why we were not included. Hmm… the internet actually works for… by . Who’s Really Behind the World’s Most Popular Free VPNs? William Chalk Over half (59%) of the apps studied ultimately have Chinese ownership or are based in China, despite its strict ban on VPNs and its notorious internet surveillance regime. This raises questions about why these companies — which have such large international user bases — have been allowed to continue operating. The Chinese-owned VPNs have been downloaded by users in the US, UK, Latin America, Middle East, and Canada. Three of the apps — TurboVPN, ProxyMaster and SnapVPN — were found to have linked ownership. In their privacy policy, they note: “Our business may require us to transfer your personal data to countries outside of the European Economic Area (“EEA”), including to countries such as the People’s Republic of China or Singapore.” More Government Imagery by . As an engineer this is amazing, as a citizen the privacy implications are terrifying. Your average smartphone camera is around 12 megapixels. of Shanghai is 195 gigapixels. One megapixel equals one million pixels, a gigapixel equals one pixels. Put another way, this image is 16,250 times larger than the image you can take with your smart phone. Let’s see what that feels like through the BigPixel viewer looking at the roof top of a building a few miles away. See people’s faces from miles away in the 195 gigapixel photo of Shanghai. Ben Longstaff This image billion by . How to Download Live Images From Government Weather Satellites Alex Wulff Using nothing but your computer, some software, and a $20 radio dongle you can receive transmissions from NOAA weather satellites in the sky overhead. This is an incredibly exciting project that’s easy to do but produces great images. Think about it — you can receive images from a satellite almost 1000KM straight above you! Listing Infinity by . Infinite Data Structures In JavaScript Francis Stokes In the real world we deal with “infinite” ideas all the time. All the positive numbers is an example of an infinite concept we wouldn’t bat an eye at. But typically when we are programming we have to think of these infiniteconcepts in a finite way. You can’t have an Array of all the positive numbers (at least not in JavaScript!). What I want to introduce in this article is the idea of an Infinite List data structure, which can represent some never ending sequence, and let’s us use common operations like map and filter to modify and create new sequences. You Know the Value of Patterns by . Complicated patterns aren’t always that complicated. Usually it’s the “simple” ones that bite you. Patrick Lee Scott Staring at the maze of interconnected passageways of the microservice system, I immediately recognized the problems. I was sitting with a new client doing a review of their system. This was the first time they were showing me the code which was described as “very interesting” and “definitely one of the most complex I’ve worked on!” with excitement. I shuttered a bit. I thought about my ironically misquoted t-shirt with a picture of Albert Einstein.“Any intelligent fool can make things bigger, more complex… It takes a touch of genius — and a lot of courage to move in the opposite direction.” — E. F. Schumacher. Necessary Comparison of to the Weather Bitcoin by . Bitcoin: The Gathering Storm. How Thunderstorm Dynamics Are Similar To Bitcoin Market Cycles Charlie Shrem On a typical summer day in Florida, the sun rises and begins to heat the ground. This solar heating is transferred into the lowest part of the atmosphere near the surface, essentially the air near the ground begins to gain energy and buoyancy. This can be compared to how Bitcoin adoption increases, such as when thousands of Bitcoin ATMs are deployed and stores begin to accept Bitcoin, which pumps energy into the Bitcoin system. Necessary Comparison of Bitcoin to Light Itself by . The Bitcoin Light Bulb Moment Beautyon This is the central problem with the state interfering with technology; no one can predict the future. Now that the law is in force, we are in a situation where capital has been wasted and misdirected, resources wasted and misdirected and depending on the state of the decommissioning of the incandescent bulb lines, no cost less way back to the manufacturing of incandescent light bulbs. The state, by its nature, is incompetent . They cannot predict the future and they are not omniscient. In order to be able to legislate effectively, especially where technology is concerned, they would need to be omniscient, with perfect knowledge of every piece and field of ongoing research and technology, and the potential of each piece and field of research and technology. About Your Health by . Eat Fat, Get Thin? A Physician’s Approach to Reinventing Your Health in 21 Days Jordan “J” Gross I tested the strategies presented in Dr. Mark Hyman’s New York Times best-selling book, and here is how it went… My friends have called me the human guinea pig. I am a test mouse in a lab full of endless possibilities. I have gone seven days with only eating Chipotle, I have done a full year with no McDonald’s, I have talked to a new person every day for the last few years, and I have even gone a full month without going to the gym (that one was the hardest for me)… the self-experimental journey I embarked upon recently was actually not so much out of curiosity and adventure, but rather, it was out of necessity. About Those Other Coins “When Altseason?” — How to Time the Most Profitable Period in the Cryptocurrency Market . by Rekt Capital . Altseason, a shorthand for Altcoin Season, is the time of the year when the majority of the people in the cryptocurrency market develop a very positive sentiment about Altcoins. This translates into exponential gains across Altcoins (i.e. Alternative coins to Bitcoin). In the past, Altcoins have enjoyed immense gains during Altseasons. Most notably in December 2017 which saw most (if not all) Altcoins gained their initial market valuation many times over during a period of a few weeks of constant, almost uninterrupted uptrends. About Those Other Tokens… by . STO Market Outlook 2019 Tatiana Koffman 2018 will be remembered as having paved the way for a new generation of security tokens. Issuers and investors continue to remain curious about the benefits of tokenization such as increased liquidity, fractional ownership, decreased issuance costs, innovative structures and greater pricing efficiency. After conducting an independent study of 130+ STOs currently on the market, the following are some trends forming for 2019. ETHEREUM by . 2.0 — The Road To Constantinople And Beyond Vince Tabora The next system wide upgrade for the Ethereum network called Constantinople will be implemented in 2019 (originally set for 2018). It is also called as “Ethereum 2.0” or the “New Ethereum”, software version 3.5, part of the release called Metropolis . There is a lot on the line with the success of the Ethereum project, and these are the upgrades to scale the network. The Constantinople upgrade is scheduled for block #7080000. There will actually be three forks in the beginning of 2019 and this includes Constantinople. The two other forks are “hard forks”, meaning they will create a new cryptocurrency. These are Classic Vision and Ethereum Nowa. ETH holders should get an equivalent of those coins in their digital wallet after the fork, if supported by the wallet or digital exchange. DATA, DATA, DATA by (check out his whole series on ). Interview with Data Scientist at kaggle: Dr. Rachael Tatman Sanyam Bhutani machine learning heroes Dr. Rachael Tatman: As for technical speaking, the best two pieces of advice I can give you are, first, to practice as much as possible. Ask if you can give talks at local events or to relevant clubs. The more talks you give the less nerve-wracking they are and the more you learn what is effective for you. Practice is doubly important when you’re prepping a talk. I usually try to run through the talk at least twice a day in the week leading up to it, making little adjustments when I come across awkward places. Of course, I don’t do that with live streams. I pretty much treat livestreams like technical interviews; it doesn’t matter if I make mistakes so long as I’m telling you what I’m thinking so you can follow my thought processes. My second piece of advice is to be as specific as possible. One of my personal pet peeves are talks that are about how “data science is revolutionizing something” but that is super vague. I want information I can actually apply! If you built a model that does X, talk about why X is important, how you built the model, what makes your model different from other models and how it performed in various situations. Tell me about what specifically you did that didn’t work so I know not to try it. Think about what you wanted to know about whatever you’re talking about a year ago and then tell me those things. A Last Thought About Diversification by , who also wrote the definitive productivity post of the modern era: . Why Should Everyone Invest In 2019 (Attention, Engineers) Rafael Belchior Top 1,337 Productivity Tips For 2019, Or Any Other Year As we have just started 2019, 🎉 we have another perfect opportunity to review our lives, opportunities, values, and expectations. Source: https://dilbert.com/strip/2018-12-31 Despite being a tech addict ( DevOps , Blockchain ), my path presented me several ways of approaching life and the knowledge I have gained. At some point, I noticed that there is something that professors at my university are not teaching that would turn us into more independent persons. Money. In particular, I became very interested in the investments world, as it allows you to generate money using the money. If you don’t invest your money, it will never increase. You will likely spend, give it away or save it (and possibly spend it in a short-term wish). Now, you could be asking yourself : Why should we care about investments and money? What are the opportunities? Shouldn’t we just save money? How to start well? How to avoid being scammed by false gurus? What is the big picture that we should be aware? Shouldn’t we limit ourselves to the observation of the secret mysteries of this beautiful universe? 🌌 Until next time, don’t take the realities of the world for granted. Kind Regards, David Smooke We built 13 new collections this week to make easier to find great stories about: P.S. BioHacking , Bitcoin ETF , Blockchain Development , Coding , Cryptoeconomics , EOS , Learning to Code , Hacks , Ripple (XRP) , Security Tokens , Tech Economics , & Women in Tech . The Reg CF maximum raise is $1.07M. before it’s too late. P.P.S. Our equity crowdfund campaign is up to $986k from 893 people . Invest

BEST TECH STORIES of 2019 (so far)

Lessons learned from the Blockchain Circle’s workshop by and in . Workshop Blockchain Circle ConsenSys Rent24 Crypto markets get bloodier by the day. But does it mean, that the blockchain technology failed? Last Friday we started a and in . During the day we skimmed through the recent use cases of the technology. Here is a list of 20 remarkable use cases for 2018: workshop series of Blockchain Circle ConsenSys Rent24 1. Real estate tokenized the first real estate on the blockchain. is real estate shares. Brickblock Indiegogo tokenizing Photo by on Element5 Digital Unsplash 2. Voting 150 via a blockchain-app. E-Voting on the blockchain. Japanese city the test of a blockchain-based voting system for local development programs. West Virginians voted South Korea is testing Tsukuba completed Photo by on Element5 Digital Unsplash 3. Identity solutions Swiss Federal Railways are the identity solution. City of Antwerp is for the administrative tasks. is a blockchain powered id for refugees. testing uPort testing Jolocom MONI providing Photo by on Roland Lösslein Unsplash 4. Equity token offerings listed the first companies on it’s ETO (equity token offerings) platform. Recently they $3m in an ETO. NEUFUND raised Photo by on M. B. M. Unsplash 5. Marine insurance , a blockchain-powered platform for marine insurance (by EY, Guardtime, A.P. Møller-Maersk, Microsoft) is now in a . Insurwave commercial use Photo by on kinsey Unsplash 6. Crypto banking (in cooperation with ) licensed crypto and fiat banking. Bitwala SolarisBank introduced Photo by on Jonas Leupe Unsplash 7. FX transactions & bilateral payments and a foreign exchange transaction using blockchain. and the IBM for bilateral payments. Commerzbank thyssenkrupp replicated Goldman Sachs Morgan Stanley used solution Photo by on Floriane Vita Unsplash 8. Food safety Insurance is blockchain for beef exports. selected suppliers to use blockchain. is with the startup . Australia’s National Transport testing Walmart requires US Dairy company Dairy Farmers of America (DFA) cooperating ripe.io Photo by on Rachel Park Unsplash 9. Repurchase agreements Russia’s major bank a smart contract powered repurchase agreement. Sberbank completed Photo by on Artur Matosyan Unsplash 10. Stock exchanges is a bitcoin exchange, to securities on the blockchain in 2019, the blockchain to record shareholdings and manage the clearings. NYSE launching SIX offer SAX using Photo by on Aditya Vyas Unsplash 11. Tokenized ownership a $9M Stradivarius Violin. painting was on the blockchain. Mattereum tokenized Andy Warhols tokenized and sold Photo by on Baher Khairy Unsplash 12. Licensing & IP and blockchain startup a software license management application. Accenture Digital Asset rolled out Photo by on Fotis Fotopoulos Unsplash 13. Certificates Companies in renewable energy certificates on a blockchain of . Singapore can acquire SP (Singapore Power) Group Photo by on Efe Kurnaz Unsplash 14. AdTech with the blockchain startup to minimize the ad fraud. Toyota partnered Lucidity Photo by on Steven Roe Unsplash 15. Patient Data is on a network to support blockchain solutions for patient data. A in Taiwan a blockchain powered platform for medical records. BlackBerry working Medical University Hospital launched Photo by on rawpixel Unsplash 16. Land Registry The government of , Australia, is to trial a blockchain solution for the land registry. Africa’s first multinational land registry is in and . New South Wales planning to be launched Kenya Ghana Photo by on Breno Assis Unsplash 17. Power grid & peer-to-peer energy markets The is on a blockchain-based power supply system. Korean government working 18. Peer-to-peer payments Japenese telecom company the proof-of-concept for a cross-carrier P2P payment service. Softbank finished Photo by on rawpixel Unsplash 19. Automated devices a new patent application for automated drone delivery on the blockchain. Walmart filed Photo by on Diana Măceşanu Unsplash 20. Digital evidence is the use of blockchain to secure digital forms of evidence. U.K. Ministry of Justice exploring Photo by on Matthew Henry Unsplash Let’s keep in touch. Follow us on Telegram , Linkedin or sign up for our newsletter .

20 Blockchain Use Cases for 2018 You Should Know

The Pinnacle of Blockchain Technology: The Decentralized Man

What is the best measure of overall value created by crypto? As our interest in cryptonomics deepens, we’ve started thinking about different crypto value propositions. This applies to individual coins or tokens — such as, ? what is the intrinsic worth or valuation of crypto instrument X Crypto valuation analysis also extends to broader metrics of worth, such as the strength of a core developer network, the development status of various level 2 projects, a given network’s posture in ongoing governance debates, and so on. As analysis moves from superficial indicators of worth (like price), towards the valuation of certain intangible assets (like a blockchain project’s IP), one sees that crypto valuation today is far more art than science. Crypto market capitalization analysis says far less about the underlying crypto project(s) under review and far more about the breadth and/or limitations of the crypto-economic methodology being applied. In effort to make crypto valuation more robust, . we propose that the budding field of adopt a metric of the overall value added to the current global economy by crypto: Gross Crypto Product (GCP) cryptoeconomics What is Gross Crypto Product? As an economic measure, our conception of Gross Crypto Product (GCP) is expressly modeled on Gross Domestic Product (GDP). ( ) is the monetary value of final goods and services — that are bought by the final user — produced in a country in a given period of time (say a quarter or a year). Gross Domestic Product GDP Extending the metric to crypto, here’s one possible definition: ( ) is the monetary value of final goods and services — that are bought by the final user — produced using crypto instruments, networks, and/or assets in a country in a given period of time (say a quarter or a year). Gross Crypto Product GCP Immediately, the proposed metric can be attacked as overbroad and/or too narrow. Among other reasons, the proposed metric is overbroad because country-wide analysis fails to differentiate the value added on particular networks. The metric is too narrow and fragmented because information networks produce maximum value at global scales; thus, a country-by-country GCP methodology fails to capture the true global economic impact of crypto. These critiques are well taken. But they are not unique to this proposed crypto economic measure. The same methodological and empirical problems exist in GDP measurement as well. This is why we have measures like , , and why we have competing GDP measurement methodologies. nominal GDP GDP per capita PPP A map of world economies by size of GDP (nominal) in USD, _(_2014) (Source: Wikipedia) World Bank As with GDP measures, we expect the emergence of competing GCP methodologies. Our working definition of GCP is not meant to be preemptive or comprehensive. We need other definitions and methodologies, and look forward to helping develop them. For instance, although we advance GCP on a per-country basis, we do so as a heuristic device; that is how GDP is traditionally defined. Our analysis shows that country-specific methodologies could be useful for country-specific policy deliberations and/or comparative regulatory analysis. But far better models are possible and desirable for different analytical needs, such as questions of global governance. Why Have a GCP? As a measure of economic value, GCP helps us understand the real impact of crypto economic activities. This is useful for many ongoing debates, such as: of crypto environmentalist critiques ongoing crypto regulatory debates ongoing debates blockchain governance The core reason we need more complex valuation models is that valuation pegged to market capitalization for individual crypto coins or tokens — or even total market capitalization — fails to adequately capture the reality of the crypto economy. Here’s a screenshot from Coinmarketcap.com from October 31, 2018: Here’s a screenshot in the morning of Monday, November 19, 2018: Here’s a screenshot in the evening of Monday, November 19, 2018: Crude price modeling would suggest that some thing(s) happened in these intervening three weeks that wiped out $30B+ of overall crypto value. Then, on November 19, something rattled crypto’s value proposition such that crypto lost another $10B in market capitalization, just between morning and eve. Did something fundamentally bad happen? Not really. The crypto world was in the midst of its usual turbulent news cycle. Some big stories from this timeframe that could explain a downturn were things like the SEC’s announcement of a settlement with the creator of a decentralized Ethereum-based exchange — . Additionally, Bitcoin Cash (BCH) underwent a hard fork, splitting the coin in two. EtherDelta On the plus side of the valuation ledger, Christine Lagarde (Managing Director of the International Monetary Fund) extended an . As far as crypto news go, this was as encouraging and legitimating a development as it gets. Yet, if we look at price action, the story is radically different. open invitation to crypto to essentially create global public-private partnerships So, better quantitative metrics of crypto value are possible and desperately needed. These include: (valuation metrics that incorporate market price, but focus on the core economic value of the activity happening on a given blockchain) GCP measures for individual coins (e.g., (a) total value of goods and services in the crypto decentralized cloud storage market; (b) total value of goods and services produced in the blockchain ‘level 1’ platform (e.g., ‘crypto OS’) market; (c) valuation of different crypto money markets (e.g., CryptoLending, , et al.), etc.) GCP sectoral measures crypto debt collection (e.g., regional or state-wide assessments, especially for tightly-territorially-regulated coin use cases, like online gambling; this is extremely useful for understanding the effects and potential of crypto vis-a-vis economic development) GCP geographic measures (including models that can serve as functional equivalent to , Gross National Crypto Product (GNCP)); GCP global measures Gross National Product (GNP) a la etc. Sample GCP Measures You might be surprised to learn this, but there are several existing attempts to define something like Gross Crypto Product. Right now, there are very broad GCP measures and there are GCP measures that are very narrowly construed. After surveying these two approaches, we propose a balanced middle path. GCP: Broadly Construed The broadest conception of crypto economic outputs hails from the Economic Space Agency (ECSA). The ECSA does not use the term GCP in its work (as far as we can tell), but on sum, GCP is precisely what the are trying to model. (‘ ’ .) econauts Econauts is what members of the Economic Space Agency collective call themselves The ECSA , so we encourage everyone to brew a big pot of tea prior to delving into it. But generally, the key point is that we all benefit from inclusive crypto economic spaces and measures of crypto economic value that go far beyond price. cryptoeconomic argument is very complex The key insight developed and deployed by Economic Space Agency theorists is that crypto price is a rather poor indicator of the economic value produced in a given period of time. Price-based analysis is also a very poor predictive analytical tool for understanding the intrinsic value (& potential value) of different crypto instruments. GCP: Narrowly Construed The term Gross Crypto Product also has more narrow definitions. In our research, we find the first usage of the term in August 2017 by a crypto trader — . hirounsung Here’s in the hiro’s own words: hirounsung Without claiming to have a clear answer, using a different metric to market cap. Instead, using a “gross crypto product”. The GCP would let us understand if crypto is a bubble by how much wealth is created each period. The concept of the GCP lies on the production, which comes from staking, mining, etc. and the price at which these coins are being produced. Trying to find out the origin of the wealth created by coin creation is the core problem to be solved. For this, we can tell that the basic cost comes from electrical expenses, as well as equipment cost. Hirounsung’s insight is a brilliant one. We use it above as the basis for our first type of GCP measure: . GCP measures for individual coins ’s framework seems to be focused on the value of the inputs and outputs (as captured in a given crypto instrument’s price & other indicators). The model outlined by illustrates the importance of adding the cost of crypto mining inputs, and other inputs for “coin creation.” These metrics are certainly relevant at any scale, but they apply chiefly to mining-based blockchain projects. Hirounsung hirounsung As the blockchain space moves increasingly towards different proof-of-stake (POS) and other validation models, GCP measures would need to shift to other estimates of coin cost (such as, perhaps, the operational cost of interest necessary to run validator nodes in a POS environment). ’s framework is a narrow one, but it is useful in particular contexts precisely it is narrowly tailored. Hirounsung because GCP: Platform Valuation is an alternative middle path between the broad and narrow conceptions of GCP outlined above. The basic valuation question here is: ? GCP platform valuation what’s the total value of goods and services produced on, say, the Ethereum network in a given time period (2018) Price theorists and market fundamentalists could point to Ethereum’s market capitalization in a given point in time (or average it over a given time frame, like a quarter or year). One answer to the question above is that the value of the Ethereum network is reflected in the market price of Ethereum. The basic rationale for equating price with value is that “the market” accounts for all of the diverse material and immaterial, subjective and objective, intrinsic and extrinsic factors that weigh into valuation. Thus, today’s roughly $16B market capitalization of Ethereum already factors in things like legal risk (outstanding & potential liabilities), market risk, technical risk, regulatory risk, etc. Maybe crypto price already captures the full range of on-chain dynamics and off-chain risk factors and market realities. But maybe it doesn’t. For Ethereum, a crypto platform that has expressly positioned itself as a crypto base layer — something like a technical enabler or incubator for other budding crypto projects — alternative valuation models seem very desirable. For instance, in real material terms, the economic value of meek @Littercoin, an Ethereum-based blockchain reward for generating geo-spatial data, seems directly relevant to the overall valuation of Ethereum. The same is true for the thousands of other Ethereum-based token schemes that are already generating value globally. GCP Methodology Challenges GCP modeling is a big undertaking. Fortunately, classification work by , , and now, , is proof that crypto has many brilliant minds with the capacity to tackle a problem of this caliber. Parallel Industries Mattereum the IMF We’re mindful of the difficulty of building valuation methodologies that incorporate market price also focus on the core economic value of the activity happening on a given blockchain. (Gross Car Product = the total value of goods and services produced using Ford cars in a given year). and Asking what is Ethereum GCP is akin to asking what is Ford’s GCP But in contrast to Ford’s GCP, our intuition is that crypto-platform valuation methodologies can actually be based on . rigorous quantitative data Tracking the myriad ways in which Fords are used is inherently difficult. Understanding the myriad uses of Ethereum by different — and, often, competing — development teams is also difficult. But because the whole point of crypto is to keep track of economic activity on robust verifiable ledgers, something like an seems far easier to construct, refine, and optimize than something like a . Ethereum GCP Ford GCP Everyone knows Ford is a driver of economic growth. But nobody really knows how much growth is traceable directly to Ford. Public global blockchain projects are also drivers of economic growth, and nobody knows how much growth crypto is currently generating. While it is hard to measure crypto-economic impact, it is a lot easier than modeling the economic impact of Ford cars on the road. Crypto theorists should see the immense value of empirically-based pan-crypto, macrocrypto, and microcrypto economic analysis and Gross Crypto Product‘s place in that analysis. Lastly, advancements in blockchain forensic/auditing technologies suggest that complex GCP-like models may already be in use. If so, we hope the developers of these models open them up for public deliberation, peer-review, and adoption. What’s Next for Gross Crypto Product? We hope crypto theorists, economists, and crypto accountancies (like ’s ) engage with the Gross Crypto Product idea. Megan Knab Veriledger The value of deploying robust sets of valuation methodologies is that they allow us to understand how crypto contributes to the overall functioning of the global economy. That level of insight seems to be a prerequisite to the development, promulgation, and/or adoption of any global regulatory or governance framework. without stopping to analyze may drastically curtail crypto’s full potential. Rushing to regulate

GCP: Gross Crypto Product

What breakfast cereals, FOMO3D and a Shakespeare Doge all have in common… Introduction In my previous posts ( , ), I looked at various token designs that could be useful for capturing value. Basically, the aim of a crypto asset should be to become a Store of Value, charge fees or confer control. I believe that whilst the SoV argument is fairly well known, the ability for a crypto system to charge fees or deliver valuable control is often disputed (“just fork it”). part 1 part 2 crypto Q: How can a crypto system sustainably charge fees in a world of interoperable & open-source tech? A: The end-user is king. In this somewhat familiar B2C landscape, a focus on brand loyalty, switching costs, and network effects of scale could be key. For projects that don’t charge fees, governance can have a role in value creation. Climbing the Stack When thinking about where value may accrue across the crypto landscape, I found it helpful to think of the ‘web3.0’ tech stack and the type of user at each level. Stephan Tual’s Web Stack There has been an understandably large focus on the infrastructure level of the stack, with developers and investors working together to create potentially lucrative building blocks. However, if the technology becomes interoperable (the big assumption) then these building blocks become modular and interchangeable rather than ecosystem specific. These modularised components begin to lose their ability to extract fees and instead, value is only found at the top of the stack where the system interacts with the end user. This is an application of ‘aggregation theory’ first coined by Ben Thompson of Stratechery and later applied to crypto thinking here and here. With crypto, the differences between the users interacting with the technology is key. For example, a dev interacting with systems at the base/mid of the stack will be optimizing for ‘performance at a price’ and it’s their full-time focus to scour the landscape for this. Whereas at the top of the stack, if a ‘retail’ user of a fee charging dApp encountered a similar looking free version, would they bother to switch? How different is a retail user’s decision process compared to a professional developer’s? This is key to understanding the potential for sustainable crypto value capture. Hint: I believe the strength of the relationship between the end user and the crypto system will dictate this. The dev team in action Augur: dApp or Protocol? How can a dApp or protocol strengthen the relationship with its end user? Which aspects of a UX will be important to generate loyalty? I find it helpful when thinking about this to consider the popular example of the decentralized prediction market, Augur. This project charges fees for resolving prediction markets and these fees are distributed to the participating reporters via the REP token. Augur can be viewed as both a dApp and a protocol. When operating as a dApp, the Augur platform is facing the bet-placing end user. This is done through their proprietary . Whereas when operating as a protocol, Augur’s reporters and prediction marketplace provide a backend service for a competing 3rd party website. web app How could the fee potential of Augur’s REP token vary under these differing scenarios? Operating as a dApp: an exercise in consumer loyalty The user interacts directly with Augur through a proprietary web interface. Frequent, favourable experiences will reinforce classic consumer behaviours such as familiarity (saving the website to favourites), word of mouth (desire to use a service recommended by a friend) and ironically for a decentralised system, brand loyalty and trust. Why trust? Because when websites appeared, consumers were initially hesitant to enter their credit card details into these new systems. Likewise, it’s not unreasonable to expect similar scepticism from new crypto dApp users when presented with a new platform or forked ‘pirate’ version, if the user’s original crypto dApp is operating smoothly. A familiar use-case for crypto? And branding? Due to the complex nature of the service technology, mainstream users may be unwilling or unable to evaluate the potential pro/cons for a competing service, even if offered at a lower price. Instead of focussing on the ‘tough’ technical questions, the consumer may look for easier ways to resolve the consumption decision- a phenomenon referred to as ‘ ’. It’s possible that in this scenario, a strong dApp brand could dominate the decision process for a consumer. attribute substitution Likewise, ‘crypto’ itself can be a powerful brand when competing against the incumbents. The popular 'one liner' of the public is that a crypto system is ‘decentralised’. If a crypto project’s service is neither cheaper nor faster than the incumbent it may still attract users by offering something . Through changing the conversation to one instead about ‘decentralisation’, a consumer loyalty could be developed. centralised different The result of this could be that ‘lazy’ consumers stick with a service that is more expensive but perceived to be better (or different). This prevents the platform from leaking users to competitors and so maintaining its network effect of a critical operating size. The power of successful branding Operating as a protocol: the cost of becoming a module The user interacts with a 3rd party application that is built upon Augur’s prediction market. For example, a website specialising in financial market bets. The potential for Augur to charge fees has now been reduced for two reasons. Firstly, if there is another way for this financial prediction website to get the outcome data (e.g. conventional centralised service or an Augur competitor, Gnosis) then Augur could be modularised and replaced by the informed and fee conscious developer building the finance website. Secondly, if the Augur fees are excessive but there are no alternatives to its service, the 3rd party could consider forking the protocol. Kyle examines this scenario for ‘AugurCo’ . here However, it’s worth noting that there are limitations to protocol forking. Firstly, the new fork must directly contend with the established original. As per above, the consumers may be brand conscious, technically unskilled and ill-informed, making them unaware or reluctant to try the cheaper fork. Secondly, due to this competition for users it may be hard to achieve the required network scale and so worsen the UX, especially if it’s a marketplace service. And third, the security of the forked protocol may suffer if insufficient token value is achieved. To B2C? I think this example shows that the end consumer has the potential to be less fee-sensitive than a professional developer. Given this, I think that if a project’s interactions drift from direct user contact, from dApp to a protocol, the potential to be modularised increases. “To B2C…or not to B2C?” This is a similar argument to the relative merits of a B2C vs B2B business model. Since I am imagining this debate to be taking place in a future world with interoperable and technically replicable protocols, a B2C model seems to be more lucrative. However, this is clearly a crucial assumption. If you have a strong view or insight into this, please comment! blockchain Fattening the protocols How can a dApp/protocol’s fee and value capture potential be increased? If it doesn’t charge fees, apart from a SoV, how else can its value capture be increased? The ideas that I discuss above suggest that for a fee charging protocol, a first action may be to avoid providing mid/base level services and instead focus on the top of the stack, serving the more malleable consumer. The next action is to keep this user happy by i) satisfying competitive niches and maintaining a superior UX. This superior UX could be achieved by ii) generating switching costs for the providers of the platform’s service, making it harder for competitors to launch in a sufficient scale, and so concentrating the participants to one network. For protocols that do not charge fees, iii) governance functions may be able to increase value capture. Lastly, all of these actions to fatten the protocol/dApp should hopefully be reinforced by the iv) size of the network required to operate the service. i) Competitive niches Here’s an example of how to proactively fill competitive niches. If Augur was to launch a dedicated web interface (using a unique brand?) for each of the key prediction markets, users may be less likely to switch to a specialist competitor- an approach known as ‘brand proliferation’. This classic was seen in the breakfast cereal market in the 1970s and studies have attempted to explain why we have such a huge choice of cereals (and often provided by only a few companies). A common theory is that it is a strategy to ‘cover all the bases’ in order to prevent a competitor from entering. case study Bitflakes…c_oming to a store near you_ ii) Switching costs By introducing switching costs to providers of a protocol’s service, competitors or forks may find it harder to achieve the necessary operating scale for a good UX. This is one of the bootstrapping benefits of ‘work tokens’ such as Augur, which operate like a taxi license for platform service providers (see ). Further to this, work projects could increase their supplier switching costs by taking a page from Uber’s book. Uber offer services to their drivers such as car and discounted in an attempt to reduce churn. Similar to this, Augur could provide financing to new reporters, allowing them to pay for their required REP tokens over time. This becomes particularly effective when identity (and legality, see ) is added to the crypto system- making any default from this finance model increasingly costly. here financing insurance Mattereum A less conventional method for creating switching costs for service providers could lie within the popular dApp, . I am totally fascinated with the psychology and economic paradox behind this seemingly simple game (with a of 21.8k ETH and growing!). So simple that at first glance, I initially dismissed FOMO3D as an outright ! What I find particularly neat is a) using perpetual dividends to entice the initial users. This leapfrogs the backward induction obstacle whereby it’s usually not logical to begin playing these types of . And b) showing that it’s not a scam via open-source immutable smart contracts. This dApp is leveraging many blockchain powers…albeit for a fairly irrelevant purpose! FOMO3D prize pot scam games I think that transferring elements of this game to another dApp or protocol could harness its mechanisms in a more productive way. For example, Augur could integrate it in order to keep reporters loyal to the REP token system. Augur could have a mini version of the FOMO game, whereby a pot of ETH is awarded to the last reporter to have participated on the platform and so the lure of this pot is used to ‘jump start’ the reporting/betting. Forked versions of Augur would not have this prize pot of ETH available to reporters. These prize pots could even be partly funded by community resources eg from the Augur treasury, as it could be argued that it is enhancing overall platform liquidity and transaction fees. ‘The Donald’ distributing his prize pot to Puerto Rico As a general counter argument to creating switching costs, a platform could attempt to reduce these frictions by to own a participatory work token. This ‘free to work’ system would require the service providers to stake a SoV coin such as ETH or BTC. It could reduce the overall cost of service provision by removing the upfront capital cost that a new provider would have to amortise. removing the requirement However, although the service could be cheaper, without the community-coordinating tool of a work token the ability to provide a consistent service of similar quality/liquidity as before is unclear. If the service providers don’t have an incentive or coordination device to encourage them to return to the same platform (what the work token ensures), then their skills/liquidity could be fragmented across multiple competing platforms throughout the market, resulting in a poorer UX for all. iii) Governance The introduction of an on-chain governance function, to a network with a high portion of active participants, may help to fatten a protocol/dApp. I’m going to set aside the debate on the relative merits of on-chain governance and instead focus on the mechanical implication that this function could have upon a token’s value capture. A system that introduces on-chain governance via coin voting (ie the more coins you hold, the more votes you get) permits a degree of control over the protocol. If there are valuable dApps which are generating fees, the protocol on which they are operating can be considered a piece of mission-critical infrastructure. By owning some of the voting power, the dApp can attempt to influence the evolution of the critical protocol to ensure that its fee generation is not inhibited. “First comes the bitcoin, then comes the power” However, what number of votes should the dApp acquire? It’s been by that the of a protocol change could be a logical amount to spend in acquiring 51% of a governance token. Apart from the noted logistical problem of doing this, in practice a dApp is not operating alone on top of a protocol. If several dApps coordinated their voting, they could share the cost of this control and so spend less than they would if acting alone. At a higher level, it’s that a community of dApps and institutions that benefit from the protocol may wish to pay for this control and security certainty, in the form of a decentralization ‘tax’ perhaps. suggested Phil Bonello opportunity cost suggested This outcome may not be ideal, as it would mean returning to the conventional (off-chain) informal system of trust and politics to organize this. However, it gives a sense of the potential value that may lie in the governance function despite the difficulty in explicitly valuing it. This function may be an important source of value for protocols that don’t charge fees and don’t expect to become a SoV. iv) Coordinating the critical size For a rival network charging lower fees, in order to provide a compelling UX it must quickly bootstrap a critical number of users upon launch. The coordination required to bootstrap a network is a problem that crypto tokens are known to help solve. However, this ability may be lessened when it’s one crypto system vs another, especially if some of the earlier suggested defences have been actioned. Due to this difficulty, I believe it’s possible that the risks posed by fork networks can be overstated and that requiring a critical size can help reinforce protocol fattening. Caveat Emptor In order for these token mechanisms such as work or governance to release their powers, they must be owned by the network participants- not just by the investors. Although this is a common battle cry from the crypto community, by conducting the above thinking on how these systems can generate and sustain value, it helped me to better understand the importance of this. Network participants need to own the majority of the tokens, not just to ‘show usage’ to the investors, but in order for the token incentives to operate. If successful, these incentives should reduce the threat of forks and hopefully allow for larger, more holistic networks to grow. This happens when token investors HODL without active users? This creates an interesting predicament for the token acquiring investor. One solution may be to develop a new type of investment strategy, with participation in addition to capital being contributed to these networks. Ben Sparango is calling these ‘ . Another solution, that I described earlier, could be for an investor to lease their portfolio tokens to active network participants. Both solutions attempt to enhance the incentives to participate and invest. delegated work entities’ For fee-generating networks that don’t rely upon the token for coordinating the interactions, then the amount held by passive investors is less relevant. For example, see dividend distribution tokens like (KCS). KuCoin Shares Conclusions from my 3-part value capture series Over these three posts I’ve tried to outline some of my thinking around the potential for value capture to emerge within the crypto token universe. This was initially motivated by Pfeffer’s fantastic of the non-bitcoin space and the seemingly dire potential for tokens to charge fees or accumulate value. critique I started by looking at the drawbacks of the popular native payment token. Then I looked at the broader token universe, highlighting which token mechanisms could be helpful for capturing value. Finally, and discussed here, I did some thinking around how fees and value could be sustainably generated by these token systems. In a way, I find it somewhat reassuring that in a new and technically complex asset class an important driver of token value may be the familiar strategic challenges surrounding consumer behavior. Taking measures to entice users onto a platform, create a sense of loyalty, and increase the cost of their departure, . Although the distinction between a protocol or dApp can blur, if a service sits close to the end-user, it’s possible that these value-capturing measures will be easier to implement. a service can command valuable fees despite the threat of competition Perhaps less familiar, are some of the possible solutions that I think may be helpful to incentivise participants to remain on a platform such as . And other solutions to overcome the double-edged sword that passive token investment can create, like token financing and FOMO-style games token leasing and investors participating in the network. I hope that this 3-part series has shed some light on the relevant drivers of crypto value capture. I found that through writing these posts, I was often forced to rethink ideas or concepts that I had previously assumed to be true. There are still many (many!) different ways to approach the topics that I’ve focused on, so please get in touch with your thoughts and feedback. Many thanks to , & for your inital feedback on this post! Nathaniel Whittemore Joanna Hubbard Arek // Follow me on Twitter @CryptoBonsai for more debate :)

Capturing Crypto Value (Part 3/3): Fattening the protocols & dApps

Some things I learned while building a GPU rig for deep learning During this month’s , Apple said, paraphrasing, that they tried to put a in the 2013 Mac Pro, but it was too hot and caused the CPU to throttle. That was my interpretation at least. briefing on the Mac Pro TITAN X Apple has a tendency to put underpowered GPUs in their desktops, so it’s great to hear they’re seeking to improve this for the next Mac Pro. They’ve gotten plenty of that “pro” users want more powerful GPUs, such as NVIDIA’s or . feedback GTX 1080 1080 Ti by Pascal Eggert — [ ] 2017 Mac Pro concept Source Decades ago, CPUs added units (e.g. Intel’s ) for number crunching. Despite to improve use of the CPU, there’s no denying a recent away from the CPU to the GPU for this kind of computation. SIMD MMX techniques shift GPUs have become so powerful that we’re using them more, leading to a rise in general-purpose on GPUs. It’s a prominent time for GPUs now, AMD will be competing at the high-end again with their series, and NVIDIA is coming soon after that. computing Vega Volta “Most of the software out there that’s been written to target [certain kinds of high-end cinema production tasks] doesn’t know how to balance itself well across multiple GPUs but can scale across a single large GPU.”~ Craig Federighi It’s true don’t take much advantage of multiple GPUs, but the real point is that old weak GPUs won’t compensate for a new powerful one, and we shouldn’t beyond that context. It’s fairly likely that Apple will sell a Mac Pro configuration in 2019 containing two GPUs. some apps generalize So you need a fast computer A few years ago, if you were to buy a new Mac Pro, you could spend as much to upgrade the CPU ($3500) as it cost for the whole machine by itself ($3000). [ ] Source Earlier this month, Apple updated their Mac Pro configurations and pricing to something much more reasonable by today’s standards. A CPU upgrade from 6-core to 12-core is now merely : $2000 [ ] Source That cost matches the difference in Intel’s list price between the 6-core ( ) and 12-core ( ) processors, so Apple is simply passing along Intel’s suggested pricing. $580 $2600 Note that the clock speed of the 6-core unit is 30% faster than the 12-core one, so you’d be upgrading to slower cores. Apps that rely upon single-core performance will actually run slower on the more expensive CPU. Now consider that will buy you an NVIDIA . Last month this was the GPU available to the public. $700 GTX 1080 Ti most powerful For about the same cost as adding 6 CPU cores, you can have 3 of the most powerful consumer GPUs in the world. It’s a shame you won’t be able to plug all three of those monsters into the next Mac Pro. Assuming, that is, Apple designs it with similar expansion constraints as the cheese grater tower, which was the most expandable Mac Pro they’ve ever made. Two mid-range GPUs. Or a single high-end one. Apple supported dual GPUs before the 2013 trash can Mac Pro. In 2012, the cheese grater Mac Pro had a stock configuration that came with two AMD Radeon HD 5770 GPUs. A dual-GPU, modular Mac Pro (mid-2012) — Photo: / Tom Park CC BY-SA As with the GPUs in the subsequent 2013 Mac Pro, these were considered to be mid-range, not high-end. They are rated under 110-watts , so they draw less wattage and generate less heat than high-end GPUs (250 watts TDP is typical nowadays) of the sort that you’d want in a workstation-class tower. TDP “But you could replace those cards with more powerful ones,” one might say. While that’s possible, the box wasn’t designed to allow it. It has a decent power supply, . However, it provides only 150 watts to each video card, or a total of 300 watts. To support a pair of 250-watt GPUs, like the , you’d have to supply at least 200 watts more power somehow, possibly by wiring additional power cables from the drive bay ports or from the remaining two expansion slots. 980 watts GTX 1080 Ti Back in 2009–2012 when this Mac Pro model was being built, high-end GPUs tended to be 180–210 watts each, but even then you’d still be short at least 60 watts. In fact, Apple offered an alternative Mac Pro configuration with a single high-end AMD Radeon HD 5870, rated at - TDP. You couldn’t insert another one without additional custom wiring. The cheese grater case was simply not designed for a pair of high-end GPUs. 228 watts On the other hand, this Mac Pro had a replaceable CPU module that allowed upgrading the system from single to dual CPUs. That’s pretty cool — in most other computers, you’d have to replace the motherboard to upgrade to dual CPUs. But nowadays you’d want this kind of upgradeability with GPUs. OK, so let’s suppose Apple’s next Mac Pro is modular and expandable, like the cheese grater tower, and fitted with the latest tech: PCIe 4.0, Oculink-2, Thunderbolt 3, USB-C 3.1, M.2 NVMe SSDs, and LGA-2066 or possibly LGA-3647 sockets for high-end CPUs with 44 lanes of PCIe connectivity. That sounds promising, but how many GPUs will it support? Maybe two, if you fiddle with it? high-end Pfft, how many GPUs do you really need? This question reminds me of those people who were saying no one legitimately needs more than 16 GB RAM in a Macbook Pro. last year “Own the world’s greatest gaming computer and convince everyone it’s for your research” — http://imgur.com/wiLsGqA Three GPUs in a computer might seem ridiculous. Amongst the of Mac customers who buy a Mac Pro, an even smaller fraction would need more than two GPUs. single digit percentage There’d never be a controversy about Apple supporting only two GPUs. But if one came up, a person might claim that no one legitimately needs more than two GPUs. Then a person would be wrong. Two weeks, two weeks, two weeks If you try to make an AI program to recognize 1000 types of objects in a photo, one of the things you’d find out is that even with multiple GPUs it can take weeks or months to train a neural net. We can train a model from scratch to its best performance on a desktop with 8 NVIDIA Tesla K40s in about 2 weeks.~ Jon Shlens, Google Research The common advice to avoid this delay is to adapt one that’s already been trained, using a technique called “ ”. But depending on what you want to do, you can’t always be using someone else’s pre-trained neural net — at some point you’re stuck in a process where each iteration could take weeks. If at that point you’re using only one GPU, adding a couple more would reduce the turnaround time significantly. transfer learning Suddenly synthesized A common problem with neural nets created by “supervised training” is they need a huge amount of training data or else slight variations in input will fool them. That is, suppose you train a neural net to recognize cats, but your training data consists of photos where all the cats are sitting upright. It might not recognize a cat that’s upside down. Your program will handle these kinds of differences better if you augment the training set by adding rotated and resized copies of the originals. In a notable example, Baidu Research made a breakthrough in speech recognition, aided by layering noise over their initial data set. Baidu gathered about 7,000 hours of data on people speaking conversationally, and then synthesized a total of roughly 100,000 hours by fusing those files with files containing background noise.~ Derrick Harris, GigaOm But then they had 14 times more data, which takes that much longer to process. A few years ago Baidu . More recently they reported working with as many as or GPUs. used 8 GPUs 40 128 Now you have two problems Recently some of the coolest results in AI are based on a technique where two neural nets compete against each other (“ ”) to improve their ability to create and recognize types of data. generative adversarial networks With a larger model and dataset, Ian [Goodfellow] needed to parallelize the model across multiple GPUs. Each job would push multiple machines to 90% CPU and GPU utilization, but even then the model took many days to train.~ OpenAI Blog That means you’re training two neural nets, not just one. Again, you’ll want as much computing power as you can get. Would you pay extra for expansion slots? When I started doing deep learning work, I used GPU spot instances on Amazon cloud. After running up a small bill, I began looking into external GPU boxes, but ended up assembling a PC. The GPUs on AWS are now rather slow (one GTX 1080 is four times faster than a AWS GPU) and prices have shot up dramatically in the last months. It now again seems much more sensible to buy your own GPU.~ Tim Dettmers I bought just one GPU. But knowing that I might need to add more, I made sure that the PC would be able to take up to four. It’d been a long time since I’d built a computer from components, and way back then I wasn’t paying attention to how many GPUs I could put in it. To my surprise, many computers cannot support two GPUs at full bandwidth, and most cannot support more than two. There are only a few expensive motherboards that can support 4 GPUs simultaneously with x16 lanes of PCIe 3.0 connectivity. The ability to add 3 more GPUs cost me about $600. That’s about one-third of what the base system (w/o GPUs) would cost if built with standard components. This amount represents the higher prices for a quad-GPU capable motherboard, a big 1500-watt power supply, and a CPU with 40 PCI lanes (as opposed to 28 lanes). I literally paid extra for expandability itself. Would Apple sell additional expansion as an option? The Mac Pro is positioned as Apple’s most powerful computer, but computing power is coming in various forms. High-speed expansion slots provide the ability to upgrade computing power in whatever form it takes in the future. We’re not just talking about GPUs here — it might be , or like Google’s . Or . FPGAs ASICs TPU fast storage Computer manufacturers generally do not sell a single line of desktop computers with different cases. For example, you don’t usually see something like this: by Scott Richardson —[ ] 2013 Mac Pro concept Source Instead, the models of a computer line are positioned according to CPU speed, storage, and/or screen size. So this is what’s typical: https://www.apple.com/mac-pro/specs/ But doesn’t it make sense to sell optional expandability? It has value. You can put a price on it. C’mon you have to admit it’d be pretty cool 😎 I know what you’re thinking: “There’s no way Apple would do this. It’s not worthwhile because there aren’t enough customers for the bigger Mac Pro.” You’re probably right. And besides, it’ll have Thunderbolt-3, and maybe Oculink-2 which is even faster, so people can connect GPUs if they need them… you know, like this: external Photo: Peter Wiggins — [ ] Source Anyway, I’m looking forward to seeing how Apple rethinks the Mac Pro. When we hit three GPUs, we are technically in a niche category… From talks with ASUS, despite the fact that a product may be geared towards a niche market, that product may sell well to the standard market if it is perceived to be good.~ (review of multi-GPU boards) Ian Cutress, AnandTech Q&A Asking the tough questions. What’s the big deal about multiple GPUs — weren’t bitcoin miners putting 6 or 8 GPUs on a PC in a ? milk crate Yes, but cryptocurrency algorithms can run on a GPU without a lot of data transfer, so miners could use PCI riser cables or a PCI splitter, and connect each GPU using just one PCI lane. That means they didn’t need a 40-lane CPU and a quad-x16 slot motherboard. In bitcoin mining, GPUs were overtaken by ASICs. Won’t that happen in AI too? Probably, at least and are working on that. In the meantime, GPUs have versatility that make them useful for the future. Nervana Groq foreseeable ASICs have lower power requirements than GPUs, so wouldn’t a big power supply be unnecessary for multiple ASICs? Maybe, but then you might just get more ASICs on each expansion card. You mentioned FPGAs and ASICs, but what about quantum processors? Oh yeah, those too I guess. Why do you need 16 lanes per GPU? Games don’t show any difference between GPUs running on x8 vs x16. It’s true that games show no significant difference, but that’s probably because they’re tuned to run well on GPUs at x8. Games don’t saturate a x16 PCIe 3.0 connection, but other apps like deep learning programs can. How does a CPU with only 40 PCI lanes connect to 4 GPUs that each use 16 lanes? Right, 4×16 = 64, which is more than 40. The motherboard has two PCIe switches which each can multiplex 16 lanes of signal from the CPU to 32 lanes for two slots. So the 4 slots use only 32 lanes from the CPU. a similar kind of PCIe switch for the Thunderbolt 2 controllers in the 2013 Mac Pro. Apple used Don’t those PCI switches introduce a lot of latency? Some people say the latency is so bad that it’s better to just use 8 lanes, but that’s a . Apparently this idea spread due to game testing that showed slightly higher frame rates on x8 GPUs than on switched x16 GPUs. But games are not good for this kind of benchmark because they don’t exceed x8 bandwidth — you can get similar results on a unswitched x16 slot. myth I haven’t seen any good tests, but an NVIDIA showed very little latency or loss in bandwidth across a PLX (Avago/Broadcom) switch. benchmark Show us your rig. Pics or it didn’t happen. Here it is next to the cheese grater: An open case rig next to a Mac Pro 5,1 — Photo: / Tom Park CC BY-SA What the… ugly. Why no case? OK, so I have to vent a little about motherboard and case design. Cool desktop computer designs are totally thwarted by the way uATX, mITX, and ATX boards are standardized. This sector has so much room for innovation with non-standard motherboards and backplanes. A lot of people are calling for Apple to just put the next Mac Pro in a big box case, but I think it’d be a shame if that’s exactly what Apple does. They went to extremes with the 2013 Mac Pro but reverting to a standard tower box isn’t so appealing either. I wanted a smallish form factor but the motherboard is so big (extended ATX) that it would have to go in a fairly large case, and I didn’t like anything I saw. So I experimented with MakerBeam rails instead of imitating with a Carbide Air 540 case. It ended up being taller than I intended, but slim in other dimensions. NVIDIA’s DevBox A single-fan liquid cooler has been completely adequate for the CPU. The GPU is connected with a x16 riser cable and can slide all the way over the CPU, since the CPU doesn’t have a huge heat sink on top of it. That means multiple GPUs can be spaced apart with wide air gaps. It’s surprisingly quiet with two 140mm fans, even under sustained heavy load. What did make a huge amount of noise was a 5TB hard drive that was hammering away while feeding images to a convnet. After a couple annoying days of that, I switched to a SSD. It has no drive bays — there’s a M.2 drive and additional SSDs can be velcroed on a side rail.

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