With the Virtual pass, you can tune into Consensus 2023 from anywhere in the world to hear industry leaders explore all aspects of crypto, blockchain, Web3 and the metaverse. Learn more and register.
Policing Policies
Bahamas’ Prime Minister Philip Davis said the collapse of FTX in his country hasn’t soured its ”zeal for being at the forefront of the digital-assets industry.” Davis, who spoke at CoinDesk’s Consensus conference, said the island nation will remain committed to its recently revamped regulatory framework, and rejected the claim that lax oversight let FTX’s fraud slip through. Meanwhile, Grayscale CEO Michael Sonnenshein said the company should hear from the U.S. Securities and Exchange Commission (SEC) by the end of Q3 whether it will allow the company to convert its $17.5 billion Grayscale Bitcoin Trust (GBTC) into an exchange-traded fund (ETF). Grayscale, which is owned by CoinDesk’s parent company Digital Currency Group, filed a lawsuit against the agency for denying the firm’s proposal last year.
Big Tech!
Google Cloud is bringing its “blockchain node engine” – a fully managed node hosting service – to the Polygon ecosystem, helping developers easily build, launch and grow their Web3 products and applications on-chain. Developers will reportedly retain complete control over where nodes are deployed, a company executive said at CoinDesk’s Consensus 2023 conference. In other news, Cathy Hackl, the chief metaverse officer at consultancy firm Journey, said Web3 can be the “trust layer” that helps authenticate data produced by artificial intelligence, as the technology goes mainstream.
New ‘Horizons’
Popular trading platform Robinhood Markets (HOOD) launched a new feature that allows users to fund their Web3 wallets without having to exit a decentralized app. “Robinhood Connect” can also be embedded directly into on-chain systems, allowing users to buy and transfer funds using a self-custody wallet. Meanwhile, the Near Foundation announced the launch of NEAR Horizon, a type of community-led startup accelerator system that allows founding teams to receive funding and expert advice. Notably, Horizon has a “double-sided marketplace” that allows startups to review and rate their advisers and vice versa.
Though there have been recent signs of crypto winter thawing, developers have continued to make the most of the current builder’s market. NEAR, in particular, has seen significant growth in new projects and increased adoption over the past year.
NEAR’s expansion is due in part to some significant upgrades and announcements from its core team. Most recently, NEAR announced its transition to a Blockchain Operating System (BOS), an industry first that further establishes NEAR as the direct entry point into Web3. With the BOS, NEAR is no longer just a Layer 1 — it’s the OS for an open web, free from the centralized platforms of Web2.
*This is sponsored content by NEAR
The Takeaway: Valuable Ideas?
(CoinDesk)
One of the major selling points of crypto is that the industry is brimming with new ideas. For one reason or another, crypto tends to attract heterodox thinkers or would-be revolutionaries, much in the same way a loose-hanging community formed around the internet in the 90s. Part of this stems from the nature of the tech itself, which offers radically new ways to build code-based systems. Here are a few of the giga-brained ideas I heard while roaming around Consensus today.
The future of banking is in the past
Ethan Buchman, the founder of Informal Systems, wants to wage a revolution. Central banks have mishandled the economies they’re meant to support, the “petro-dollar” has caused untold suffering and there are layers of corruption at every level of the monetary system. Of course, blockchain presents a solution. But before he explains how, Buchman wants us to consider the past.
Imagine yourself as a Genoese banker in the 16th century, shortly after double-entry bookkeeping was discovered. At the time, Buchman said the banking industry was composed of a few family-run institutions that sprouted to supply a modernizing and globalizing economy with credit (perhaps for the first time in history). There were no central banks, no depository institutions and few, if any, bank notes.
Instead, what bankers offered at the time was “trade credit,” entries in a ledger that allowed for someone in Antwerp to transact with someone in Medina. Occasionally, because the environment was high-trust, the banking families would meet up to balance their books. To do this, they used an old term-of-art called the “payments graph.”
It’s hard to visualize, but if Cosimo owes money to Catalina, and Catalina owes Albrecht and Leonardo owes Cosimo, there is often a way to map out these deficits to allow everyone to settle their debts – without necessarily injecting extra liquidity into the system. This was done by finding “loops” and “cycles of debt” that allowed banks to zero out their books.
Buchman wants to resurrect this idea for the modern age. The game, which requires collaboration and communication, works because debt can be “cleared” (balanced on paper) without being settled (having funds actually transferred). To this end Informal Systems, which operates as a workers collective, is building Cosmos-based smart contracts and algorithms that allow communities to do this permissionlessly and automatically.
What Informal called “collaborative finance,” or CoFi for short, may not work at all. The company has not yet even released a full white paper. But in an age where my peers are saddled with student loans and where international trade imbalances reflect the “structure of power and production in the economy” after centuries of exploitation, maybe it’s worth thinking of an alternative.
For now, you can read more about the idea here. Or you can read the paper that inspired Buchman here.
Crypto and AI
Tarun Chitra, the founder of Gauntlet who is widely acknowledged to be one of the sharpest minds in crypto , thinks blockchains can be useful for AI. The long and short of it is: As more information is produced by machines it’ll become more important to know where all data is sourced from.
Zero knowledge proofs, a cryptography research area proposed in the 80s and thrown into hyper-drive by cryptocurrency funding, allows people to check whether someone else’s statement is true without that person having to show all their cards. (The standard description of a “ZK proof” is that a barfly can prove they’re over 21 without pulling out their ID, which also reveals their home address.)
ZK proofs can be deployed in a way that helps everyone prove whether some new data was produced by a human, by a machine or by a machine with access to some particular data set (like an AI trained on proprietary information on Q&A site Quora). “This is quite important because a particular output … is going to be the IP [intellectual property] of the future,” Chitra said on-stage at Consensus.
As mentioned, ZK-based systems do not necessarily need crypto to operate, but blockchain can still play an important role by providing immutable records of data provenance, he said. Verifiability is powerful in an increasingly trustless age.
Tech support
Finally, on Wednesday the NEAR Foundation announced a new project called Horizons that is essentially a start-up accelerator mixed with Uber. CoinDesk has a write-up of the system here, which will allow anyone with the idea for a startup to essentially crowdfund funding and business advice from experts.
The system uses a two-way marketplace that takes an idea from Uber, which allows startups to rate the level of support they received from their advisers and advisers to rate the founding team, Horizon co-creator Laura Cunningham told The Node in an interview. It’s what she called a “reputation graph.”
Obviously not every startup will make it, as some business ideas are just plain bad. But using smart contracts to inject a little visibility into the process perhaps everyone can learn. Because, as crypto has shown, sometimes an idea can be valuable even if it hasn’t been deployed.
On Wednesday, Consensus speakers including “The Hash” co-hosts Will Foxley, Zack Seward and Jennifer Sanasie were visited by an alpaca. There is still one day of Consensus left…
Drink Up, Boyo
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