Lưu trữ cho từ khóa: decentralization

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Pavel Durov’s arrest is not a free speech hill to die on | Opinion

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When word broke that the billionaire Telegram CEO Pavel Durov had been arrested in France over the last weekend in August, it became a flashpoint in the global battle over freedom of speech. But then the charges came, including that Telegram had protected users who shared pornographic images, among other crimes.

By the time the charges were announced; however, the internet’s staunchest defenders of free speech ideals had already taken to social media platforms, such as the X platform (former Twitter), to argue that Durov’s arrest was proof of a sinister plot by behind the scenes French and western elites.

Robert F. Kennedy, Jr., a former independent presidential candidate in the 2024 election, shared a similar sentiment:

Elon Musk called these “dangerous times” in a post on X.

French President Emanuel Macron, under fire that the action had been a political arrest, said it was run-of-the-mill law enforcement activities and not politically motivated. After the revelations in the charging document, it became clear that those who came quickly to Durov’s defense could be portrayed by a press corps ironically contemptuous as defenders of pedophilia.

The arrest 

Durov was arrested as part of an investigation by French authorities after allegations that the messaging service permitted crimes to occur on its platform. Durov said in April that governments have tried to collect information but that the app should remain neutral and not a geopolitical player.

Now, the self-professed libertarian has a cybersecurity gendarmerie unit, and France’s national anti-fraud police are grilling him while he sits in detention and awaits his first court appearance. 

And since Telegram stores data on its servers, unlike other privacy-focused messaging apps like Signal, which encrypts client-side, refusing to comply with data requests can open the service up to enforcement actions. 

The wider context

Defenders of free speech were already on edge, and perhaps rightfully so. European laws on the books could be seen as an attack on free speech rights, and this is precisely what defenders of free speech were lashing out against when they heard of Durov’s arrest.

For instance, one such law is the Digital Services Act, a primary threat to free speech worldwide. It has been designed to force social media companies to censor users who post content the authorities deem to be disinformation or too extreme. Laws like the DSA are slippery, but Durov’s is not the hill to die on. Yet, too many are lining up to do so. 

John Turley, Professor of Public Interest at George Washington University, told Fox News: “It is like arresting AT&T CEO, because the mob used the telephone to do its business.” The problem with Turley’s analogy is that AT&T is known for sharing information with the government in at least the Fairview program. Elon Musk, too, draws a line at illegal activity.

Durov is different because he is an “anything goes” tech tycoon. 

The real battlefield over free speech

Instead of helping in the fight against censorship, free speech defenders hurt it, showing they lack discernment and will throw their hat in the ring to defend the sexual exploitation of children, even if they did so by accident. The battle over free speech won’t be fought over the administrator of a platform censoring or not censoring information and being arrested or not arrested.

The battle over free speech will be fought—indeed, it is being fought already—over our freedom to access technology that preserves privacy without the need for a middleman. For instance, a platform like Signal encrypts messages on the client side, and the messenger service acts more as a relay, never having access to the encrypted messages sent across its network.

Telegram is a centralized service whose administrators have access to information that could aid serious criminal investigations. If they didn’t want that responsibility, they should have then designed better privacy-preserving tech. For whatever reason, they chose instead to mostly market their app as private rather than make it truly so. 

As for free speech defenders, their battle is elsewhere: defending decentralized tech that provides privacy without reliance on middlemen who can be strong-armed and compromised by governments.

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Theo Crypto News

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Helium token forms rare patterns; could rise by 46%

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Helium, the biggest Decentralized Public Infrastructure Network in Solana, continued its strong comeback this week.

HNT price rally continues

Helium (HNT) rose by over 8% on Aug. 29, outperforming all top 100 altcoins. It jumped to an intraday high of $7.5, bringing its 30-day gains to 50%. It has also soared by over 100% from its lowest point this month.

The rally followed the community’s overwhelming vote in favor of the HIP130 and HIP131 proposals. This means that all compatible Wi-Fi access points can be configured to support service providers like Helium Mobile.

Proposal HIP 131, conversely, allows service providers to begin affecting Hex boosting areas only within the highest earning areas. These proposals will start going into effect seven days after the announcement.

Helium also gained momentum after revealing its work with major US telecom companies to handle carrier offloading tasks, a process that reduces network congestion during significant activity, such as large events.

In these situations, such as concerts or sporting events, carriers can offload some users to the Helium Network, increasing HNT token burns and creating value for investors. The carrier offload test has over 500,000 users.

Helium forms a golden cross pattern

Helium price chart | Source: TradingView

HNT’s rally has occurred in a high-volume environment, indicating substantial demand. Data shows that open interest in the futures market has surged to $7.42 million, its highest point since April and much higher than this month’s low of $2.7 million.

HNT’s technical indicators suggest that the ongoing gains may continue. The token formed a golden cross pattern as the 50-day and 200-day Exponential Moving Averages (EMA) crossed, a widely recognized bullish sign.

Helium has also formed a cup and handle pattern, with the recent consolidation forming the handle section. It has moved to the fifth section of the impulse Elliot Wave chart pattern, which is typically bullish.

Further upside will be confirmed if the price breaks above the key resistance point at $8.036, its highest point on Aug. 18. If this occurs, the token may jump to $11.05, its highest point on Feb. 15, representing a potential 46% gain from the current level.

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Theo Crypto News

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How crypto can reach the next one billion users | Opinion

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Most crypto entrepreneurs love to brag. They’ll tell you their blockchain, protocol, or app will onboard the next one billion users—and finally make digital assets a mainstream and indispensable part of our day-to-day spending.

But scratch beneath the surface, and you’ll quickly realize this is a load of hot air. Why? Because many of these projects suffer from the same issues that have prevented widespread adoption for the past decade: a chronic lack of usability.

Around 0.4% of all crypto users claimed their domain using Unstoppable Domains over the last few years. It’s not because of lack of demand but because of poor user experience and lack of security, where anyone can trivially look up the user’s balance and transactions just by knowing their name. It appears that neither Unstoppable Domains nor friend.tech or Mastercard Crypto Credential hit the mainstream because of a fundamental lack of privacy.

Poll after poll after poll tells us why everyday consumers are reluctant to give crypto a try. Bombarded with headlines about multimillion-dollar hacks and bad actors, they openly wonder whether businesses in this space are up to the job of protecting their cash. While many payments to merchants and loved ones are free for the public in the world of traditional finance, the prospect of forking out several dollars to cover transaction fees is very off-putting. Why make the switch to new technology that’ll actually cost you money?

That brings us to the endless jargon that curious prospective customers are bombarded with when they visit a crypto website. From talk of zk-SNARKs to liquidity pools and from degens to DAOs, too many platforms make things way too complicated. It’s little wonder that beginners feel everything is written in a second language that’s impossible to understand.

All of this then feeds through into usability. Web2 users are accustomed to getting what they want done in a couple of clicks without needing a PhD in coding to know how things work. Even those who regard themselves as tech-savvy often find web3 platforms painfully complex to use, meaning crucial first impressions are blown because newcomers give up in frustration.

When you bundle all of this together, crypto’s challenges become crystal clear: complexities in how blockchains have been designed detract from the powerful benefits they offer with decentralization, censorship resistance, and financial inclusion. One big hurdle in the way of tackling all the hurdles we’ve mentioned is alphanumeric addresses.

Addressing the issue

Bitcoin addresses are 34 alphanumeric characters—a random bunch of letters and numbers that are both impossible to memorize and prone to mishaps. To illustrate what I mean, back in 2014, a group of 75 people in a study asked to learn a series of alphanumeric strings—varying in length from just six to 14 characters. Researchers found that, as the length of a string increased, so did the number of errors identified when participants were asked to type them out unprompted. The most common mistakes included incorrectly capitalizing letters, missing characters entirely, and typing them in the wrong order.

Now ask yourself this: if mistakes can creep in when trying to type just eight alphanumeric characters, what will happen when the string is four times longer?

Missing a single character can have disastrous ramifications when a crypto payment is being made. In all cases, if the wallet accepts the bad address, funds are lost forever.  Double-checking an address and scouring for mistakes is also easier said than done, with a slew of letters and numbers blending together into one decipherable bunch. This is why savvy crypto typically sends their crypto addresses via an encrypted chat to the sending party, and then they request the sender to send a test transaction for a small amount just in case the sender gets the address wrong. Once the test transaction goes through, the rest of the funds can presumably flow to the same address.  You must send an encrypted message with the correct recipient address in the smoothest instance of the proper process. The sender sends a test, the recipient confirms it, and then the sender sends the main amount. The address also has to be correct for the crypto being sent. Ethereum (ETH) addresses don’t work for Bitcoin (BTC) payments (again, total loss if you get this wrong).

The answer to all of this is simple yet staggeringly underutilized. Crypto users should be able to send to a human-readable name instead of a jumble of digits and characters. That name should also not reveal to the world how much money the owner of the name has. The user should be able to simply post their name anywhere, like a PayPal, Zelle, Venmo ID/QR code, and receive any crypto funds on any chain without hackers being able to divine how much funds were received. Crypto will never reach the same level of adoption as TradFi until it implements the privacy consumers are used to and, ideally, does everything TradFi does, only better.  Human-readable addresses can be thought of as the new digital real estate of web3. Just as owning property grants you an address, those names can carry real utility, unlike NFTs, empowering users with a unique identifier for seamless crypto transactions, digital assets ownership, and SSI.

On the security front, uncovering address poisoning scams, where malicious actors deceive unsuspecting users, could instantly become easier. Here, cybercriminals often generate alphanumeric wallets that are nearly identical to the addresses a victim has transacted with in the past—deceiving them into sending funds to an unintended destination.

This solution would also not need to rely on any Personally Identifiable Data (PID) to function and receive addresses computation, making it completely decentralized and, therefore, minimizing security risks. 

Human-readable addresses would also have a huge impact on ease of use, enabling consumers to enjoy the perks of digital assets without any of the fuss. Growing interest would, in turn, create a network effect as more and more users start to make transactions.

A good start—but what next?

The crypto industry may not wish to admit this, but human-readable addresses would only be the first step on a long roadmap to achieving mass adoption.

Account abstraction has been touted as a huge breakthrough in simplifying blockchains, as they enable funds to be managed through smart contracts. While this can offer greater customization to some extent—and move some of the technical processes behind the scenes—it remains complicated to implement and prone to security vulnerabilities, with the prospect of additional costs for end users.

That’s not the only headache that needs to be addressed. As of now, account abstraction only exists on Ethereum when many crypto enthusiasts make use of a constellation of other networks. Fragmentation between blockchains is getting worse—and because most wallets are built for specific ecosystems, they’re unable to communicate with one another. This gives users little choice but to rely on even harder-to-use bridges if they want to move wealth around.

Other vital steps that need to be taken with security include the implementation of multi-party computation and hardware security modules—vital safeguards that add another layer of protection for user funds in custody, all while making it prohibitively difficult for hackers to strike.

The future can—and should—be bright for digital assets. However, for blockchains, web3, and crypto platforms to achieve greatness, developers need to be brave, head back to the drawing board, and look at the user experience through the eyes of beginners who have never owned a single token. Then, and only then, can any claim of being able to onboard the next one billion users be taken seriously.

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Theo Crypto News

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Helium enters correction as crypto fear and greed index declines

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Helium token suffered a reversal on Aug. 15 amid profit-taking and worsening sentiment in the crypto industry.

The Helium (HNT) crypto price retreated to $6.50, down by over 13% from its highest point this week, indicating it has moved into a local correction.

HNT is up by 126% from August low

Despite its pullback, HNT remains one of the best-performing cryptocurrencies since Aug. 5, when most tokens retreated. It has surged by over 126% from its lowest point this month, pushing its market cap to over $1 billion.

Helium’s retreat coincided with the crypto fear and greed index dropping from this month’s high of 57 to 43. If the decline continues, the index could move into the fear zone, below 40.

The decline also occurred as Bitcoin (BTC), Ethereum (ETH), and other altcoins retreated. Bitcoin fell from this week’s high of over $60,000 to $58,000 while Ether, Solana (SOL), and Binance Coin (BNB) were down by over 4% in the past 24 hours. 

Helium has solid fundamentals

Helium has become one of the top-performing cryptocurrencies in recent months, bolstered by its ecosystem growth.

The network is reportedly in talks with two major U.S. carriers, who are conducting tests to offload their traffic onto the MOBILE network. Carrier 1 has over 185,000 subscribers, while Carrier 2 has over 122,000 users participating in the trial.

If successful, the carriers could save money and offer better coverage, while Helium would benefit from increased traffic and funds, which would flow to hotspot providers.

According to its stats page, Helium MOBILE has almost 20,000 active hotspots, while its IoT solution has 360,000 locations, and these numbers are rising.

HNT formed a golden cross

Helium price chart | Source: TradingView

Technicals suggest that the HNT token could resume its upside as it recently formed a golden cross pattern, with the 200-day and 50-day Exponential Moving Averages making a bullish crossover.

In most cases, this pattern leads to further upside. For example, the last time HNT formed this cross in November 2023, the Helium token soared by over 370%.

Helium has also formed a rounded bottom, another bullish pattern. A cross above this week’s high of $7.45 could signal more upside as buyers target the year-to-date high of $11.05, 70% above its Aug. 15 level.

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Theo Crypto News

Pháp Lý

Stablecoins bring financial inclusion, but their fate is still undecided | Opinion

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Stablecoins have grown to become an over $160 billion market. Yet, regulatory uncertainty across the globe threatens their future. We have seen the digital asset industry invest in effective lobbying campaigns. More of that is needed.

Numerous threats remain to the stablecoin market. For instance, regulators could reel in the market by mandating changes to issuer business models. As Tether (USDT) makes clear on its transparency page, stablecoins are not precisely backed by dollars. Instead, a pool of assets earning a little more than 5% for stablecoin issuers back the world’s first popular real-world asset. Issuers generally do not pass any of the yields they earn to holders. 

Tightening the regulatory belts 

Stablecoin sponsors argue this is why stablecoins are not securities and face a comparatively light regulatory regime compared to most tokens with centralized teams. However, stablecoins’ existence as a currency and a lightly regulated financial instrument could be coming to an end. While Donald J. Trump promises to allow the expansion of stablecoins in the United States, the European Union and Switzerland are exploring legislation that could undermine stablecoins. 

Questions remain over the future of stablecoins, which differ from many digital assets due to major stablecoins’ dependence upon central issuers. 

Even though stablecoins don’t produce profit for holders, they could still be considered a security. In fact, a February 2024 New York federal court ruling determined a stablecoin may become a security when combined with a yield. 

Stablecoins have an issuer who profits off the stablecoin: companies like Tether, Circle, Coinbase, etc. In addition, Circle uses BlackRock as a “primary asset manager of USDC cash reserves.” Moreover, securitized bonds exist today with negative nominal coupons despite investors having no reasonable expectation of profit. 

Circle argued in a September 2023 amicus curiae brief in a legal battle between Binance and the SEC that stablecoins are not securities simply because users don’t expect to profit. The SEC, however, argued in a case against Binance that BUSD, Binance’s stablecoin, has represented security “since its inception,” mostly leaning on the fact that it offers yield.  

Indeed, Binance’s stablecoin places money into “profit-generating” opportunities. In addition, Binance promised “interest-like” payments to people in the US for “simply buying BUSD and deploying BUSD into yield programs.

The SEC approach

The SEC does not only rely on the Howey analysis. It could be argued, for instance, that stablecoins represent a share in an open-end company under the Investment Company Act of 1940, especially if the stablecoin looks like a money market fund, which have Net Asset Value of shares pegged 1:1 to the US dollar. 

It is therefore not unreasonable to think the SEC might view a stablecoin backed by a bundle of assets as an asset backed security. 

In the Binance case, the New York Department of Financial Services ordered Paxos to stop administering BUSD. A Paxos spokeswoman in 2023 said the company does not view their stablecoins as securities under Howey or Reves. Stablecoin sponsors argue that stablecoins do not meet the three-part Howey test of an investment contract and sponsors keep profits to themselves. They argue stablecoins preserve value and prevent losses, but do not create profit.

In a court of law, an SEC lawyer might argue that just because issuers keep all of the profit for themselves doesn’t mean stablecoins are non-securities. All it takes is for a judge to agree and make a ruling based on this argument. A stablecoin is, after all, a receipt for an off-chain asset. There are also secondary markets for stablecoins, as well as an issuer-investor relationship. Financial instruments representing underlying digital assets—such as the Bitcoin (BTC) ETF—are considered securities. So, why not stablecoins, as well?

Stablecoin proponents will have been wrong. For a stablecoin to constitute a security, the buyer of a security doesn’t necessarily need to expect to make or lose money by buying and selling a security. The crypto market would be upended since it operates based on the assumption that stablecoins are currencies and not securities.

Centralization, one more time 

What’s more, the dominant stablecoin model is highly centralized, both adding to concerns these might be securities and putting the stablecoin and broader crypto market at risk for government interference.  

US authorities—or any country authorities—could revoke stablecoin issuers’ access to the banking and financial system. If a USD stablecoins issuer is overseas, the US government could request foreign governments to disinclude such entities from their respective banking systems. Furthermore, US authorities could require stablecoin issuers to comply with anti-money laundering and know your customer procedures, as Swiss authorities have done with a recent guidance document.

If the digital asset industry exerts the influence it so clearly now has, then stablecoins can continue to proliferate and millions can reap the benefits of financial inclusion.

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Theo Crypto News

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DAOs and centralized organizations must work in tandem | Opinion

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Since David Chaum’s 1982 dissertation introduced decentralized blockchains, the goal has been to create systems free from central authority corruption. Decentralized autonomous organizations are now emerging as alternatives to traditional entities like LLCs or non-profits.

However, what if there were a way for DAOs to work in tandem with centralized organizations while still maintaining their fundamental purpose—to operate as self-governing, decentralized entities managed by the collective decisions of their members?

The Wyoming DAO law 

In 2021, the state of Wyoming enacted the “Decentralized Autonomous Organization Supplement.” This law allows DAOs to be officially recognized as LLCs, enabling them to enter into legal contracts and own property without the need for off-chain shell corporations. This new status provides DAOs with opportunities to raise funds through both token sales and traditional funding avenues.

Additionally, DAOs can leverage R&D facilities, employ staff, and utilize RegTech, all while preserving their decentralized, transparent, and democratic decision-making processes. This legal recognition opens up new avenues for DAOs to collaborate effectively with centralized organizations, combining the strengths of both models to foster innovation and growth.

The benefits of collaboration explored

Initially, blockchain projects were launched in a monolithic fashion, with everything bundled into a single stack. However, as the technology has matured, specialization and optimization at each layer became crucial for scalability and efficiency.

Centralized organizations possess substantial resources, structured processes, and access to traditional funding avenues. These advantages can significantly aid DAOs in scaling their operations and facilitating legal agreements.

Moreover, one of the most compelling benefits of such collaborations lies in enhancing governance and decision-making processes. DAOs excel in decentralized governance, enabling members to directly influence a project’s direction, thereby reflecting a broader stakeholder base. By integrating diverse voting mechanisms, such as Quadratic Voting, furthers fairer representation.

The opportunities are far from complete

To further grow this collaboration, we can leverage one of the major perks of DAOs and blockchain technology: transparency. By combining DAOs with decentralized finance, we can create systems where every transaction is permanently recorded and linked to a community vote. This ensures that all spending within an organization is fully transparent and accountable to its members.

This transparency can significantly change how traditional organizations track spending. It prevents fraud from going unnoticed and ensures everyone can see how and where the money is being used. For non-profits, this level of transparency is especially influential. Members and donors can see exactly where their money is going and how much is being spent, which can prevent situations like the Arts Center Scheme, where over $1.1 million was embezzled by a low-level accounts receivable employee.

Another major benefit is the use of smart contracts to automate processes. Smart contracts can streamline operations by executing predefined actions when certain conditions are met. This reduces administrative overhead and human error, making things more efficient. Plus, it ensures that everything is done transparently and according to agreed-upon rules, which strengthens trust and accountability in both centralized and decentralized environments.

The potential shortcomings

Anything that looks too good to be true is probably not true. Combining DAOs and centralized organizations presents many challenges and issues, but there are ways to prevent and mitigate many of these problems.

A primary concern with DAOs is the cost of voting. Since votes must be done onchain for the smart contract to execute, the transaction costs can quickly add up, especially with numerous proposals.

One proposed solution is voting off-chain. However, off-chain voting introduces the risk of manipulation and centralization. An alternative approach involves using zk-rollups, which execute transactions on a zk-rollup L2 chain. This method batches transactions and sends them to the L1 chain, drastically reducing fees and increasing efficiency.

Another major concern is that incorporating a centralized aspect into a decentralized system diminishes the value of a DAO and poses significant risks. While Wyoming’s DAO law does not require the main owners to verify their identities, operational and legal considerations, particularly when interacting with financial institutions or engaging in regulated activities, may necessitate individual verification.

The means for the future

The collaboration between DAOs and centralized organizations opens up exciting possibilities for the future. This partnership could transform how we handle governance, transparency, and operational efficiency across various sectors. By combining the decentralized nature of DAOs with the resources and structured processes of centralized organizations, we get the best of both worlds.

Looking ahead, we can expect more regions to develop legal frameworks similar to Wyoming’s DAO law. This will provide DAOs with the legal recognition they need to operate alongside traditional entities, paving the way for seamless collaboration and innovation.

This hybrid model preserves the transparency and democracy of DAOs while bringing in the efficiency and resources of centralized organizations. This blending of decentralized and centralized approaches is set to redefine how organizations operate, making the future of governance and operations more democratic and effective. 

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Theo Crypto News

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Blockchain technology is the key to grassroots financial freedom | Opinion

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Traditional finance has produced many good things, like near-instant payments, intuitive mobile apps, etc. But on the flip side, its centralized and siloed infrastructures have created deep financial inequalities across geographical and cultural lines. Roughly one percent of the world’s population owns over $87 trillion in financial assets, i.e., over 43% of the total global financial wealth. More than 63% of their wealth is in financial assets compared to 37% for the majority.

Blockchain can fix this. Grassroots inclusion is the ethos of decentralized wealth-generation protocols and financial networks. But we mustn’t take it for granted. Especially when legacy players like Blackrock, VanEck, etc., are entering the space with a range of centralized products and ETFs.

Institutions wield a two-edged sword

Besides macroeconomic factors like moderating inflationary pressure, exchange-traded funds (ETFs) have been crucial in bringing the bulls back to crypto. The optimism around such developments is understandable. Exposure to blockchain-based digital assets through familiar instruments could provide mainstream users with a stronger impetus to join. 

Could this be the inflection point we’ve been chasing all these years? Yes. Given we don’t inherit persistent problems like high barriers to wealth generation and optimize for inclusion instead. 

One needs a minimum of $2 to $5 million in investable assets to access wealth management firms in the US. Whereas big fund managers like Blackrock exclusively serve high-net-worth individuals with portfolios above $100 million. Only the global financial elite can meet either of these criteria.

It’s unlikely that offering crypto-related products will automatically make established institutions more inclusive. Because the roots of exclusionary business models run deeper than this or that company’s policies or intent. 

Widespread information disparity is inherent to the very structure—centralized and siloed—of traditional financial systems. This evolved over decades and led to an uneven playing field that’s rather challenging to fix. In fact, most attempts at finding viable solutions within legacy financial paradigms have failed so far. For example, the STOCK Act couldn’t stop insider trading by members of the US Congress. No Member of Congress has been penalized under this Act to date, mainly because it’s very challenging to determine the scope of ‘material information’ affecting a given trade, despite centralized ledgers. 

There’s no way such half-baked approaches to ensure a level playing field would work in the user-centric and pseudonymous world of blockchains. However, the underlying tech has unique capabilities to provide equal access for all while supporting fairness natively. 

Wealth and financial freedom for all

Blockchain is one of the strongest wealth and access equalizing technologies since the Internet. It brings novel revenue streams and investment instruments directly to the average user. The peculiar dynamics of the ongoing market cycle are making this clearer than ever. As Mike Mallazo recently wrote:

“The real egalitarian appeal to crypto is not that it will democratize payments—but that a wintergreen ZYN-fueled degenerate in his mom’s basement can outperform an MIT-trained quant who spent a decade at Goldman.”

Institutions have forerun retail users on certain flanks so far. Parallelly, however, grassroots users are also generating life-changing wealth through memecoins, etc. For example, a trader recently turned $2,275 into $2.6 million in about eight hours (not financial advice). It’s rather common these days. 

This has been possible because the entry barriers are very low and almost non-existent. Anyone can start their wealth generation journey with as little as they want. No gatekeepers. No questions. No minimum income requirements. The degen and the prince are practically on the same plane.

Unlike tradfi systems, blockchain-powered financial networks truly offer the underdogs a substantial and fair chance to rise. More so with advanced wealth-generation protocols where an average user can make millions investing alongside top asset managers. 

The emerging social investing paradigm unlocks a meritocratic environment where seasoned investors and amateurs can benefit mutually. While the former can monetize their battle-tested strategies, the latter gets a stress-free means to profit.

It’s also possible to build accessible wealth management systems that support a wide range of asset classes, including meme coins, defi, NFT, RWA, etc. This will further democratize the space and unleash financial opportunities available only to the wealthy elite. 

No matter who or where they are, everyone can become financially free using blockchain-powered tools. Users are the biggest winners in this shift. That’s fairness epitomized. 

Last but not least, robust blockchain-native infra is the way to offset the potential negative impact of widespread institutional adoption. We will fully leverage the upsides of greater institutional participation only when decentralized, community-oriented systems are equally strong. 

It’s a battle of narratives and perceptions, where crypto’s core voice must ring louder than those trying to misuse the tech for selfish interests. ETFs, etc., can bring new users, and that’s great. But native protocols and their communities must set the standards. We mustn’t repeat the historic mistake of exclusion.

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Theo Crypto News

Bitcoin

Bitcoin is the solution to an inevitable hyper-financialization | Opinion

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If there’s one thing that is becoming clear, it’s that hyper-financialization is inevitable, and our best chance to navigate it successfully is through Bitcoin (BTC). This decentralized cryptocurrency, which is known for its fixed supply and robust security, offers a unique solution to the upcoming problem of wealth inequality and concentration of power. By adopting Bitcoin, we can create a more transparent and resilient financial future, or we risk losing our financial sovereignty to a handful of corporations.

The hyper-financialization of the world has already begun with the financial sector becoming a relatively bigger part of the economy, growing in size and importance. Financial structures are now fast creeping up in other sectors as well. 

For instance, in 2023, Americans spent more than $100 billion on state-run lotteries, according to The Economist, which reported poorer citizens spent a staggering amount on tickets. Additionally, the online sports betting market, valued at over $100 billion, is projected to generate almost $46 billion in revenue this year, with a 3.9% user penetration. 

Moreover, Robinhood, a commission-free investing platform popular among retail, has seen its number of funded customers rise to 23.9 million and assets under custody surge to $129.6 billion, yet another prime example of the hyper-financialization trend. It was during the COVID-19 pandemic in 2020 that Robinhood started gaining traction, and the trend of hyper-financialization was exacerbated. For people stuck in their homes, the online world became their primary means of entertainment and social interaction. 

Then, the governments injected billions of dollars into the market, providing people with an incentive to bet their money on markets. The subsequent surge in inflation and the weak economy around the world have now further intensified this trend as people bear the burden of survival. 

It has led to a heightened proliferation of financial structures in different spheres of life, which means that both builders and consumers are taking this route. 

The crypto industry

As we can see in crypto, it has grown from less than $150 billion in March 2020 to now worth $2.7 trillion. This explosive growth is not only turbocharging the hyper financialization trend for finance with yield farming, restaking, points, rewards, and meme coins but also for art via NFTs, social dynamics through social tokens and platforms like Friendtech, gaming with play-to-earn concepts, and physical assets via tokenization.

Then, there are prediction markets that allow people to bet on all kinds of events. These range from the US 2024 Presidential election outcome to whether Bitcoin will hit $100k by year-end, if Drake’s verse in “Wah Gwan Delilah” is AI, what will be ‘Bad Boys: Ride or Die’ Opening Weekend Box Office, or if Fed will raise rates this year?

This growing trend of hyper-financialization is detrimental to society, given that it broadens the already widening wealth gap by increasing wealth concentration and contributing to economic inequality. Not to mention, this will lead to even bigger asset bubbles, short-term focus over long-term approach, and more interest in speculative investments. 

Here, crypto can help provide a better way to approach hyper-financialization. After all, middlemen are where the wealth lies, and the use of blockchain technology removes this third party from the equation, bringing trustlessness, traceability, and immutability to the market. Blockchain actually allows the hyper-financialization to be fair and transparent.

Before crypto, not everyone was allowed to participate in markets. But through disintermediation and permissionlessness, crypto has made markets more efficient and accessible. Not to mention, one gets total control over their data, mitigating the risk of data manipulation and privacy invasion.

A better way to deal with hyper-financialization

This is where Bitcoin provides the perfect solution. This decentralized peer-to-peer network enables financial inclusion and resistance to censorship, which is critically important in today’s world, where organizations and governments are encroaching on people’s rights. This network has a decade-and-a-half-long history behind it, offering a robust and secure platform for people to achieve financial sovereignty.

The trillion-dollar asset class further serves as a hedge against inflation, allowing holders to preserve their wealth over time. Unlike fiat currencies, which are devalued through policies, Bitcoin’s fixed supply and decentralization safeguard it from such pressures, making it the perfect asset to be owned in a world where everyone is competing to extract value.

The largest crypto network has now also been seeing experimentation as both developers and investors use it as a base to build a truly decentralized future of finance and value.

For so long, Bitcoin has been a low-activity blockchain, its key role being a store of value. While Bitcoin has been playing a passive role in the blockchain world all these years, it finally changed with the Taproot upgrade that brought NFTs into the BTC realm. Then there has been an increasing interest in tokenization, that too from institutions like Blackrock. 

This focus on expanding Bitcoin’s utility has sparked a wave of innovation, and the day is not far when BTC might dethrone Ethereum to become the go-to blockchain for decentralized finance. Several aspects, including Bitcoin’s robust security framework, widespread recognition, and institutional interest, are positioning Bitcoin at the forefront of defi innovation. 

So, with these developments, Bitcoin is now evolving to start its new era of utility and innovation after fulfilling its original vision of being a peer-to-peer electronic cash system. 

As everything turns into a financial asset and becomes tradable, attention, which is a scarce resource, will become even more critical. Bitcoin has already solidified its position in the attention economy, and the newfound interest in regulatory complaints and the widely adopted BTC to drive productivity will see it lead the future of digital economies. This points to a world where crypto is leading the charge for hyper-financialization, with BTC in the driver’s seat.

So, to conclude, the resilient Bitcoin network that survived the test of time spectacularly may have started as a way to facilitate the transparent flow of monetary value, but today, it has become a foundation of hope to not just protect yourself from a future that is going to be super fixated on financialization aspect but to take advantage of it to build wealth and thrive.

Tổng hợp và chỉnh sửa: ThS Phạm Mạnh Cường
Theo Crypto News

DeFi

From niche to necessity: Why defi literacy matters | Opinion

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Embarking on a journey into decentralized finance is akin to navigating a new and vast wilderness. Unlike traditional finance, defi offers a platform where everyone can be more than just a consumer; they can be active participants, decision-makers, and even innovators. For novices, this is an exhilarating but complex terrain. Structured education is not just helpful—it’s essential. It functions as a compass in the vast, sometimes perplexing landscape of defi.

The promise and perils of defi

Defi offers the allure of financial transactions without traditional intermediaries, promising greater efficiency and reduced costs. More significantly, it holds the potential to democratize finance. Defi provides essential services directly to consumers through blockchain-based smart contracts in regions where traditional banking systems falter. This empowerment, however, comes with substantial challenges.

Despite the total value locked (TVL) in defi, protocols have experienced massive fluctuations, peaking at over $180 billion in late 2021 and adjusting to market conditions with about $40 billion as of mid-2023, according to data from DefiLlama. This growth signifies a robust engagement, yet a significant gap in understanding persists.

Defi demystified: Mastering the basics

Diving into defi without understanding its foundational technology is like trying to navigate without a map. Structured educational programs help demystify this complex system by teaching the basics of blockchain, cryptocurrencies, and smart contracts in relatable terms. This grounding is crucial as it allows learners to grasp why defi can operate without traditional banks and how it offers enhanced transparency and security. Such knowledge is practical, equipping novices to make informed decisions and effectively manage their digital assets.

Risk management: Navigating safely

Autonomy in defi comes with significant responsibilities. The freedom to make financial decisions also includes the risk of making costly mistakes. Education in this field teaches critical risk management strategies and helps learners understand the volatility of crypto markets. For instance, novices learn about impermanent loss, the importance of due diligence, and how to spot potential scams—common pitfalls in the defi space. This knowledge is vital, as it protects individuals from the financial pitfalls that can occur when enthusiasm outpaces understanding.

Bridging the gap between theory and practice

Understanding defi concepts theoretically is one step; applying them is another. The best defi education bridges this gap through interactive learning—simulations, real-world case studies, and even sandbox environments where novices can practice transactions in a controlled setting. This hands-on approach is crucial for internalizing knowledge. It transforms theoretical understanding into practical skills, enabling learners to engage with real defi platforms confidently and competently.

The collective learning experience

Venturing into defi doesn’t have to be a solitary journey. Structured education often includes access to a community of learners and experts. This network acts as a dynamic support system where novices can ask questions, exchange ideas, and share insights. Such communities enhance the learning experience, keep members updated on the latest developments, and provide a forum for collaboration. In defi, where innovation happens rapidly, being part of a knowledgeable community helps individuals stay agile and informed.

Defi literacy is more crucial now than ever

The urgency for defi education stems from the sector’s rapid evolution and increasing relevance to everyday financial activities. As more financial instruments migrate to blockchain platforms, the line between traditional finance and defi blurs. Individuals who understand defi are better prepared to exploit emerging opportunities in this new financial paradigm.

Moreover, the global nature of defi makes it a powerful tool for financial inclusion. Due to stringent requirements or geographical barriers, traditional banking systems often exclude vast population segments. Defi, accessible to anyone with an internet connection, offers a viable alternative. Education in this sector equips people worldwide with the knowledge and tools to access financial services previously beyond their reach, fostering greater economic empowerment.

The path forward

The future of finance is increasingly decentralized. For novices, entering this new territory equipped with a comprehensive education in defi is not just beneficial; it’s imperative. This education goes beyond mere participation; it’s about thriving in a digital economy where those who understand and leverage defi principles can influence and lead.

Those on the brink of this financial revolution must remember that knowledge is power. In the context of defi, this is literal. Understanding how to navigate this landscape can lead to unprecedented control over your financial destiny. But it starts with education—structured, thorough, and continuously updated to keep pace with defi’s rapid evolution.

Thus, structured defi education isn’t merely about learning; it’s about transforming participation in the global financial ecosystem. It’s about preparing for a future where finance is not only digital but also decentralized, democratic, and diverse. This is why a structured educational approach is indispensable for anyone looking to navigate the promising yet complex world of defi. 

Tổng hợp và chỉnh sửa: ThS Phạm Mạnh Cường
Theo Crypto News