What is the Metaverse? The Immersive, NFT-Powered Future Internet

In brief

  • The metaverse is a future evolution of the Internet based on persistent, shared virtual worlds in which people interact as 3D avatars.
  • Blockchain technology may provide the backbone of the metaverse, with interoperable NFT assets that can be used across different metaverse spaces.

If you pay attention to the tech, gaming, or crypto worlds, then you might have heard about the metaverse well before late 2021. But even if you aren’t immersed in those spheres, chances are good that you’ve seen the marked increase in chatter since Facebook marked out its grand plans to build the metaverse.

What is the metaverse, exactly? Well, that’s tough to pin down in a quick snippet. Effectively, it’s a future vision of the Internet that could be more immersive and all-encompassing, with virtual reality (VR) and augmented reality (AR) headsets likely to play a big role as online experiences look and feel more real—and potentially replace some real-world activities.

How the metaverse will work and who will control it both remain to be seen, however, and the term has recently been used as a catch-all for a wide array of forward-looking tech, gaming, and NFT-centric initiatives. Plus, it could be years before we’re all vibing online as avatars. For now, however, here’s what you need to know.

What is the metaverse?

While there are potentially competing visions for how the metaverse will function, this much seems to hold true: it’s viewed as the next major evolution of the Internet, shifting from the text-driven websites and oft-closed ecosystems of today into shared, overlapping 3D spaces in which users interact via avatars.

Proponents believe that the metaverse will be used for a wide array of things, from socializing to events, gaming, shopping, and even work. The metaverse won’t be one site or platform, but rather an array of online destinations that will support customizable avatars and assets that you can move from one virtual place to another.

That last element could rely on NFTs and blockchain technology. Non-fungible tokens are digital assets with programmed scarcity, and as such are an ideal tool to represent ownership of virtual assets like in-metaverse items or plots of virtual land. Popular NFTs like the Bored Ape Yacht Club and CryptoPunks could be transformed into 3D avatars that owners can bring into metaverse worlds, for example. These virtual assets can also be traded, customized and even monetized. 

The metaverse as a concept predates the current surge of interest in it; the term itself first appeared in Neal Stephenson’s iconic cyberpunk novel “Snow Crash,” while Ernest Cline’s “Ready, Player One”—and especially the Steven Spielberg-directed film adaptation—brought the concept to a wider audience.

What’s so special about it?

Some of what you just read above might sound familiar. It’s true: virtual world games have been around for a long time now, particularly Second Life, which debuted in 2003. If you play Fortnite or Roblox, then you’re probably already familiar with the idea of a shared server in which users control avatars to play and socialize.

One of the big differences between games like that and the potential blockchain-fueled metaverse is the idea of true asset ownership. In Fortnite and Roblox, you pay money for virtual currency that can be exchanged for digital items, but they remain on the centralized servers of the game maker. You can’t resell them for money on third-party marketplaces, or move them into other games. It’s a one-time transaction and that’s that.

In the proposed NFT-powered metaverse, you can own things like avatars, land, digital apparel, and other items, and migrate them across platforms via your crypto wallet. Interoperability is the key here for crypto startups pushing the tech: it’s not just about being locked into a single platform from Facebook, Google, or any other tech giant.

Furthermore, metaverse advocates believe that it will unlock additional economic opportunities for users and creators alike, whether through play-to-earn video games (like Axie Infinity), creating content and items that others can purchase as NFTs, or even designing games and places that users can explore and enjoy for a fee. A crypto-powered metaverse may better democratize the Internet, and accrue significant value to users rather than just platform operators.

Given that the metaverse is billed as a more immersive Internet, it’s no surprise that VR and AR headsets will surely be a key way to experience the 3D worlds. Meta calls the metaverse an “embodied Internet” made more robust and believable not only through 3D graphics, but also an improved sense of digital presence and interactivity. But the metaverse won’t be purely for headsets: expect it on computers and smart devices, too.

Did you know?

Samsung opened its own virtual store in the metaverse—in the Ethereum-based game, Decentraland—via a digital recreation of its flagship New York City store.

How does it work?

In Facebook’s vision of the metaverse, users would interact together in 3D spaces and have the ability to shift between different experiences. For example, you could share a room with other users and chat or play cards, and then pop out with a pal into a 3D surfing game. From there, you could hit an NFT art gallery, pop into a digital casino, or check out a live concert. And then you can get some alone time in your own personal, customizable home base.

But it won’t just be Facebook building experiences: it’ll likely be an array of companies and creators, large and small. The unifying element may be the use of a crypto wallet or similar functionality to log in to services and tap into your owned assets. Whether it’s equipping a 3D avatar, playing with in-game items, or loading up a personal location that you own as an NFT, you’ll want access to your own digital stuff no matter where you’re at.

In other words, the metaverse won’t be a single destination run by a single company or community. It’s expected to be more open than that, but all built on an interoperable, potentially blockchain-based framework that enables easy movement across places and spaces.

Decentraland is one current example of a metaverse-style game experience. The Ethereum-based game lets users purchase plots of land—which are sold as NFT assets—in the shared world and then build on top of it, creating things like NFT artwork galleries and other interactive experiences. It’s primitive compared to Facebook’s vision, but it’s up and running now and has been live for a couple of years.

The Sandbox is an upcoming game with a similar approach, sporting a Minecraft-esque visual design and the ability to monetize land plots by creating premium experiences. Land owners can even rent out their plots for a fee. The Sandbox has recruited an array of celebrities and brands into its world—from Snoop Dogg to Adidas and The Walking Dead—and adjacent plots have often sold for a premium over other land chunks.

Who’s building it?

Lots of companies, apparently—and the list keeps growing over time. Beyond Facebook, we’ve seen Chinese tech and gaming giant Tencent dedicate a lot of resources to the metaverse, and Microsoft said that its planned acquisition of Activision is about building up to the metaverse.

In the crypto space, there are seemingly countless startups and communities building parts of the metaverse, whether it’s game worlds, interoperable assets, or infrastructure. Because the concept of the metaverse is still pretty nebulous and difficult to succinctly describe, it feels like nearly anything blockchain-related could potentially be a piece of the coming metaverse.

It’s also worth asking: who’s buying in the metaverse? Digital land sales spiked in late 2021, even topping $100 million worth in a single week, and we’ve seen multi-million-dollar land sales across Decentraland and The Sandbox. One company in particular, Republic Realm, is pouring millions into prime digital real estate—including buying a single Sandbox plot for $4.3 million in November 2021—with plans to build premium destinations in the metaverse.

The future

Part of the reason why the term “metaverse” feels so nebulous right now is that it’s probably still years away—at least in a polished, cohesive form. It’s early days for crypto games and NFTs, and blockchain-driven decentralized apps (dapps) still have a long way to go before they’re accessible and easy enough for mainstream consumers to use.

Facebook says its vision for the metaverse is potentially five to 10 years out. That’s a large gap, but it likewise reflects just how far off a lot of this is. It’s going to take years to build the infrastructure for the metaverse, not to mention establishing best practices, adding interoperability between platforms, and plenty more. VR is hardly mainstream, AR headsets aren’t ready for consumers, and your average home laptop or tablet today can’t handle heavily populated, super-polished 3D worlds with ease.

Nevertheless, there’s a potentially massive opportunity ahead. Bloomberg estimates that the metaverse market could be worth $800 billion by 2024. Grayscale, on the other hand, sees the metaverse as a potential $1 trillion market at some point in the future, but didn’t specify when. Again, a lot about the metaverse is currently uncertain, but investors and startups see dollar signs ahead.

Even if the broader vision of the metaverse is years out, you can get a taste of it today in apps like Decentraland and CryptoVoxels, for example. We’re sure to see rapid, albeit gradual growth elsewhere in the months and years to come. It might be a long time before we’re really “living” in the metaverse, but it should be very interesting to see it take shape in the years to come.


Tagged : / / /

What Are Play-to-Earn Games? How Players Are Making a Living With NFTs

This story comes out of PubDAO, a decentralized news wire.

Throughout the 50-year history of home video gaming, games have been a diversion, something to take your mind off a hard day’s work. But now, a new generation of video games is using blockchain technologies like NFTs to reward gamers with cryptocurrency.

In some countries, these “play-to-earn” games are already enabling gamers to make a living by playing video games, with scholarship programs and academies springing up to help players navigate this strange new world.

While some have welcomed the advent of play-to-earn games, arguing that they enable users to receive rewards for an activity they previously would have undertaken for free, many gamers have expressed disquiet over the unwelcome intrusion of commerce into the escapist world of gaming.

What are play-to-earn games?

Simply put, play-to-earn games are video games where the player can receive rewards with real-world value.

While people have been earning money from playing video games for many years through practices such as “gold farming” and unofficial marketplaces for in-game items, the emergence of blockchain technology and NFTs has, quite literally, changed the game.

NFTs, or non-fungible tokens, are cryptographically unique tokens that can be used to prove ownership of content such as images or music. In blockchain games, they enable users to take ownership of in-game items, such as virtual clothing or plots of land.

Unlike in regular games, where in-game items are held on walled-off data networks and owned by the companies that created the game, NFTs enable players to own the unique assets that they purchase. Moreover, once you own the NFT, you can freely sell it outside of the platform where it was created, something that’s not possible with regular games.

That means that NFTs representing in-game items can be traded and sold for fiat currency on any NFT marketplace. And because those NFTs have scarcity, they have real-world value.

With regular games, there’s no incentive to play other than pure enjoyment. The relationship is one-way: you pay for the game, and unless you’re a professional esports player or a streamer with a big following, you will never be able to monetize your playtime. By contrast, blockchain gaming offers players the opportunity to earn real money.

Because blockchain technology enables users to transact wherever they are, players can transfer value and be paid to play irrespective of who they are, or where they are in the world.

The rise of the play-to-earn model

The biggest play-to-earn game by far is Axie Infinity, a Pokémon-style monster-battling game launched in 2018 by indie studio Sky Mavis. The game sees players collecting cartoon creatures called Axies, represented by NFTs; each Axie has unique strengths and weaknesses, and players can adventure, battle, and breed their Axies as they play. Players earn Smooth Love Potion (SLP) crypto tokens as rewards for battling, while Axie Infinity Shard (AXS) tokens are used to vote on decisions regarding the game and its future development.

Axie Infinity screenshot
Axie Infinity sees you collect cute monsters to battle with. Image: Axie Infinity

With 2.8 million daily users and a total trading volume of $3.8 billion, Axie Infinity has become one of the dominant play-to-earn games—and in countries like the Philippines and Indonesia, people are even playing Axie to support their families. “Axie scholarship” programs like that offered by Yield Guild Games have sprung up, too, enabling Axie owners to loan their NFTs out to other players.

Play-to-earn gaming is helping crypto adoption, too; according to Axie Infinity co-founder Aleksander Leonard Larsen, half of the game’s players have never used any crypto application before. However, there are costs required to play the game, and before you can start, you must purchase three Axie NFTs—each of which can cost hundreds of dollars. Larsen has acknowledged the challenges of onboarding new players to the game, saying that, “It’s really hard to begin playing Axie right now.” To address that problem, Axie plans to launch free starter Axies with limited earning potential to give new players a taste of the game.

Other play-to-earn projects are merging NFT gaming with elements of decentralized finance (DeFi). Aavegotchi, an experimental startup funded by DeFi money market Aave, enables players to stake Aave’s aTokens inside cartoon creatures represented by NFTs, meaning that each Aavegotchi generates yield on Aave.

The mainstream gaming industry has also been enticed by the prospect of NFTs and play-to-earn; French video game giant Ubisoft has already announced plans for Ubisoft Quartz, a platform that lets players earn and purchase NFTs based on the Tezos blockchain. But other publishers who’ve dipped their toes into the NFT waters have been met by a furious backlash from gamers, with S.T.A.L.K.E.R. 2 developer GSC Game World abandoning plans to include NFTs in the game following a Twitter campaign from players.

Some gamers, already fuming at publishers’ monetization of games through “pay-to-win” models and lootboxes, regard play-to-earn as a step too far; arguing that the introduction of real-world economic models and incentives will turn gaming from an escapist pursuit into a nakedly capitalist “investotainment” sector.

But with investment from the likes of FTX and Andreesen Horowitz flooding into the play-to-earn space, it shows no signs of slowing down any time soon.

Upcoming play-to-earn games

A growing number of blockchain projects are eyeing the play-to-earn space, perhaps most notably NFT avatar series Bored Ape Yacht Club, which announced an upcoming play-to-earn game in its latest roadmap.

Another prominent NFT collection with plans for a blockchain game is The Forgotten Rune Wizard Cult, which announced that they had partnered with metaverse developer Bisonic. The project plans to use a “create-to-earn” model, in which the community will generate game lore and custom NFTs in exchange for rewards. Although the semantics differ slightly, there’s no doubt that the wizards will be gaming in a world where they can own land, collect resources, craft items, mint NFTs and effectively, help build the virtual world around them.

Loopify is a renowned NFT collector, writer and creator who recently tweeted that 2022 will be “the year for the blockchain gaming sector”. He’s putting his money where his mouth is, developing the play-to-earn massively multiplayer online role-playing game (MMORPG) Treeverse. Reminiscent of classic titles such as Runescape, Treeverse will enable players to exchange in-game assets as NFTs, as well as rewarding them for playing.

Currently, Treeverse is still in the public alpha phase, as the team continues to refine the in-game art, inspired by the minimalist design of titles such as Journey, The Legend of Zelda: Breath of the Wild and Valheim. Just recently Loopify dropped Timeless, a collection of 11,111 characters that will be distributed in Treeverse to NFTrees holders for free.

Into the metaverse

Developing in parallel with play-to-earn gaming is the metaverse, a shared virtual world in which users interact as avatars, meeting up, working together—and, of course, playing games.

Blockchain, cryptocurrency and NFTs figure heavily in plans for the metaverse, with virtual objects and land parcels represented by non-fungible tokens.

Already, metaverse platforms such as The Sandbox, Decentraland, and CryptoVoxels are bringing NFTs into the shared virtual world, while mainstream companies such as Facebook (now rebranded as Meta, in a sign of its ambitions), Adidas, and Samsung have already staked out their claims in the metaverse.

Although we are in the early stages of what the metaverse could be, we are already seeing live concerts and meet-ups. Gaming is sure to follow; and with the metaverse’s promise of an interoperable world, and NFTs enabling in-game items to cross between metaverse platforms, it could act as a powerful catalyst for play-to-earn gaming.

Ultimately, what cannot be denied is the power of play to earn, where anyone, from anywhere has the chance to earn a living, simply by playing games that they enjoy.


Tagged : / / /

What Is Decentralized Finance (DeFi)?

In Brief

  • DeFi, shorthand for “decentralized finance,” is a catchall term for a group of financial tools built on a blockchain.
  • The idea is to allow anyone with internet access to lend, borrow and bank without going through middlemen.
  • DeFi is one of the fastest growing areas of the blockchain and decentralized web space.

Bitcoin—a payment system in which anyone on earth can send money to anyone else—was just the start of the crypto revolution. The people building DeFi applications seek to take accessibility one step further. Decentralized finance has been touted as a possible solution to lowering the barrier of entry for those who struggled to access bank accounts. And more recently, it’s being utilized by cryptocurrency owners for another purpose: to make more money.

Let’s take a look.

What is DeFi?

Taken collectively, DeFi apps are financial products that run on a public blockchain, such as Ethereum. These products are permissionless, meaning they don’t use third parties. Instead of financial intermediaries, such as brokers and banks, everything is automated into the protocol via smart contracts

Want to take out a loan? You don’t need the bank to hand you money. You can get a loan directly from your peers. Ready to bet on Bitcoin futures and other derivatives? Forget finding a bookie. You can let the protocol handle it. Looking to swap one asset for another? Decentralized exchanges can facilitate the transaction without taking a huge cut.

Who invented DeFi?

There is no single inventor of DeFi, but DeFi applications first appeared on top of Ethereum, which was invented by Vitalik Buterin. They have since expanded to other networks that use smart contracts to automate transactions. These include Solana, Binance Smart Chain, and Avalanche.

Did you know?

Prominent venture capital firm

Andreessen Horowitz led multi-million dollar investment rounds in both Compound and MakerDAO–pillars of the current DeFi ecosystem.

What’s so special about it?

DeFi has several key features.

First, it’s “open,” meaning you can use the applications by creating a wallet—often without displaying any identifying information, such as name and address. That’s theoretically (if not technologically) simpler than having a bank account. 

Second, you can move funds around near-instantaneously via a blockchain, so no waiting for the bank transfer to clear. 

Third, the rates (for now, at least) are much better than at traditional banks, though transaction costs vary depending on the blockchain network.

Last, DeFi applications work together like “money Legos.” This “composability” allows anyone to create, modify, mix and match, link, or build on top of any existing DeFi product without permission. Unfortunately, this feature may also be DeFi’s biggest weakness, because if a key component, such as the DAI stablecoin, becomes vulnerable or corrupted, the whole ecosystem built around DAI may come crashing down.

What can you do with DeFi?

There are three basic types of DeFi applications.

Lending/borrowing: If you own cryptocurrency, you can lend it to a protocol such as Aave or Compound in exchange for interest and/or rewards. Likewise, you can borrow digital assets from such a protocol, which is particularly useful if you want to make a trade. Be careful, though! Most DeFi protocols use over-collateralization, meaning you must put up more than the amount you want to borrow; if the asset’s value falls too much, the protocol may take your collateral to avoid losses.

Many DeFi users utilize this as a way to earn assets through “yield farming,” in which they lock up funds in a pool of assets to get rewards. Since rates vary depending on protocol and asset, skilled yield farmers move their assets to capitalize on the best rates.

Trading: With centralized exchanges such as Coinbase and Binance, you’re relying on the exchange to take custody of your assets with each trade. Decentralized exchanges remove the intermediary so people can trade directly with one another. Moreover, DEXes such as Uniswap and PancakeSwap allow people to list new tokens for trading. The lack of vetting increases the risks, but it also allows people to “get in early” on new assets before they hit wider markets.

Derivatives: Sometimes you don’t want to be limited to trading particular coins or tokens. Derivatives platforms such as dYdX and Synthetix allow people to do more than spot trading. For example, users can make leveraged trades in which they bet more than they have, or even create “synthetic assets” that mimic traditional stocks and commodities.

How are DeFi applications produced? 

Anyone capable of writing smart contracts is able to create DeFi applications. There are several tools for testing and/or deploying smart contracts, among them Truffle and Ganache for Ethereum. After downloading a framework to build smart contracts, you can create a token that allows a protocol to utilize the blockchain network. On Ethereum, this is an ERC20 token; on Solana it’s called SPL; and Binance Smart Chain has BEP20s. 

Having a token allows the protocol to interact directly with the layer-1 blockchain’s coin. But projects have also promoted their tokens to push decentralization. Lending protocol Compound, for instance, uses COMP as a governance token; those who hold it get to make decisions about the protocol’s code and treasury allocations.

How do you use DeFi products?

Anyone can use DeFi products by going to an application’s website and connecting with a DeFi-enabled crypto wallet, such as MetaMask on Ethereum or Phantom on Solana. Most DeFi dapps do not require users to give up any personal information or register. However, because the applications are built atop a blockchain, you must use that blockchain’s coins to pay for transactions. ETH is required in order to pay for transactions on the Ethereum network, SOL is necessary on the Solana blockchain, and so forth.

The Future

As of November 2020, less than $20 billion worth of value was locked in various DeFi products, most of them on Ethereum. By the following year, it was worth more than $250 billion, with $19 billion coming from Binance Smart Chain alone. If the trend continues and the DeFi maximalists are right, this is just the beginning of a massive DeFi wave. True believers argue that the advantages of an open and decentralized financial system are simply too compelling to not capture trillions of dollars of value.


Tagged : / / / / / / /

Beginner’s Guide to NFTs: How To Mint a Non-Fungible Token on Ethereum

NFTs, or non-fungible tokens, are blockchain-based tokens that prove ownership and provenance of digital items such as images, video files and even physical assets.

They’ve shot to prominence in the last year, with multi-million dollar sales of NFT artwork grabbing headlines, while Twitter has been overrun by NFT avatars like Bored Ape Yacht Club, CryptoPunks and Pudgy Penguins. Even big brands and celebrities have jumped on the NFT bandwagon—but how do you go about creating a non-fungible token?

Minting an NFT—the fancy term for “creating on the blockchain”—is a seamless experience, if you follow these beginner-friendly steps.

In this guide, we’ll focus on Ethereum, the most popular blockchain for NFTs, and OpenSea, the most popular NFT marketplace.

Get a crypto exchange account

The first step in minting your NFT—or doing anything in crypto—is getting a crypto exchange account like Coinbase or Kraken. Crypto exchanges are where you can easily buy and sell cryptocurrencies.

You need a crypto exchange account because you need to buy Ethereum to pay for the one-off fee of minting NFTs—we’ll explain that in the next section.

And hey, if your NFT sells, you may want to cash out your earnings, convert to another cryptocurrency, or do other stuff a crypto exchange lets you do.

If you don’t have a cryptocurrency exchange account, here’s a guide to help you make a decision.

Buy Ethereum

Ethereum is the blockchain on which the majority of NFTs are built. Ethereum, or ETH, is also the name of the native currency of that network. So when you sell and buy NFTs, you’re most likely to use Ethereum.

Ethereum is listed on almost all crypto exchanges (it’s the second-largest cryptocurrency after all), so you won’t have trouble buying it.

But why buy Ethereum to sell an NFT?

To buy and sell NFTs, you’ll usually use an NFT marketplace, which are like eBay or Amazon for NFTs. By far the biggest one of those is OpenSea, which accounts for 97.8% of all Ethereum NFT trade as of October 2021. That’s the marketplace we’ll cover here.

Signing up for OpenSea costs Ethereum.

You’ll need to pay for what’s called “initialization”—a one-time fee paid in Ethereum to sign up for the platform.

How much Ethereum will you need? Well, the gas price (as the unit of Ethereum transaction fee’s called) fluctuates massively, so there’s no good answer. Depending on the network conditions (how busy it is), it can be as low as $30 or as high as $300.

Get a crypto wallet

NFT marketplaces like OpenSea work with crypto wallets. There are many Ethereum wallets out there. But by far the most popular is MetaMask (which, like an editorially independent Decrypt, is funded by Ethereum incubator ConsenSys).

MetaMask is a browser plugin, and it works best with Google Chrome or Brave. Once it’s installed, it lets you store Ethereum and Ethereum-based tokens (including NFTs).

Setting up a crypto wallet may sound daunting, but it’s quick and easy. Download and install MetaMask through their website, and follow the instructions.

Once the little fox logo appears on your browser, click on it. It will take you through a few quick steps. You’ll create a password. Separately, MetaMask will assign you a “Secret Recovery Phrase,” a 12-word phrase that generates your wallet. You’ll need to store this somewhere safe, like on a piece of paper in a secure spot, as anyone with the seed phrase will be able to access your wallet and the funds in it.

There’s also an option to buy Ethereum directly on your MetaMask, which we don’t recommend due to commission fees that are higher than exchanges.

Send Ethereum to your crypto wallet

Now that you’ve bought Ethereum on a crypto exchange and also have your MetaMask up and running, it’s time to load your crypto wallet with some Ethereum.

To send Ethereum from your exchange, go to your exchange’s “send” or “withdraw” page that lets you move funds to a crypto wallet. You will need to enter…

  • the amount in Ethereum you want to send
  • your Ethereum public address

When you set up MetaMask, it automatically generates an Ethereum public address for you. It’s displayed at the top of your MetaMask pop-up and starts with “0x”. Think of your Ethereum address as your bank account number on the blockchain.

Sign up for OpenSea using your crypto wallet

First, click on the little fox logo on your browser and enter your password to unlock MetaMask.

Then go to opensea.io (use the same browser where your MetaMask is installed). Once on the website, click “Profile” on the top-right corner.

You will be prompted to connect your crypto wallet, so choose your wallet.

OpenSea will ask you to accept the terms and conditions on your Metamask. It’s a sign that your wallet’s successfully connected with MetaMask! Click “Sign” if it all looks good.

Your “Unnamed” profile is created! You’ll need to enter a username and an email address to verify your account. You can include more details like social media, but none of it is necessary. Your Opensea account’s pretty much good to go.

If you’ve taken care of the verification email, then your profile should be all set! Now it’s time to create your NFT.

Create your NFT

To mint an NFT on OpenSea, click “Create” next to your profile picture (just a green dot in this case!) on the top right corner.

Or if you want to mint multiple NFTs as part of a collection, click “My Collections” under your profile picture.

But for the remainder of this article, we’ll only focus on “Create,” which is for one NFT.

Here’s the page where things get real!

You can upload a supported file from your computer as an NFT. You’ll need to name your NFT, but no other details are necessary. But it’s a good idea to write a brief description.

For your first experiment, you can leave the rest of the options as default. After uploading a file and naming your NFT, just scroll down and click “create.”

We’ll use a digital image as an example—a photo taken by your reporter in Antalya, Turkey.

And voila. This is how your NFT will appear on OpenSea:

But it’s not listed for sale yet. To list your NFT for sale, click “sell” on the top right, and the following page will appear.

You can sell it for a fixed price or you can put it up for auction. If listing for a fixed price, you won’t pay for the gas fee (remember, any transaction on Ethereum incurs these transaction fees). Instead, the buyer will bear the burden of gas. For auctions, sellers pay the gas. Let’s set an ambitious target of 1 ETH for this photo.

Remember, OpenSea will charge 2.5% in commission fees when your NFT sells.

When you’re ready, click “complete listing.”

Before it’s listed for sale, OpenSea will ask you to sign a few things through your MetaMask wallet.

Since it’s your first time selling on OpenSea, you’ll need to initialize your wallet. This is where you get to spend that Ethereum you bought and transferred to your wallet!

For wallet initialization, MetaMask will calculate a gas fee for you. If there’s not enough money in your wallet, the “confirm” button won’t appear (as is the case here). If there are sufficient funds, then just click “confirm” and you’ll be initialized in a couple of minutes!

OpenSea will also ask you to approve the item for sale, and it will ask you to confirm the price you want to list it for. All you need to do is just sign them off through MetaMask.

And that’s it​​—congratulations on minting your first NFT!

If you want to understand the buying side of NFTs, take a look at this guide.

Minting on other NFT marketplaces

OpenSea is wildly popular. But there are lots of other NFT marketplaces that differ in the way they handle the technical process, work with artists, attract audiences… or charge fees:

  • Rarible charges a 2.5% fee, paid both by the buyer and the seller.
  • Nifty Gateway charges 5% plus $0.30 on every secondary sale.
  • SuperRare charges a 3% transaction fee per purchase, paid by the buyer.
  • Foundation charges a 15% fee per sale, paid by the seller.

In most cases, you can also import NFTs minted through other marketplaces onto OpenSea.

Minting on other blockchains

OpenSea also offers cross-blockchain support through Polygon, a separate network that lets you move your Ethereum onto its network for gas-free trading.

It’s a process called “bridging.” But remember, bridging costs gas fees, and it makes sense to bridge lots of Ethereum at once than a few since the fee will be the same. Save for gas, the Polygon NFT experience on OpenSea is the same as Ethereum NFT. Another blockchain available on OpenSea is Klaytn, a blockchain popular in Korea but has limited global appeal.

Flow, an early NFT-centric blockchain, is another alternative to Ethereum. NBA Top Shot, an early NFT project, is based on Flow. Recently, NFTs built on the so-called Ethereum-killer Solana have also boomed. As of late September 2021, it’s also possible to send NFTs between Ethereum and Solana.


Tagged : / / /

Beginner’s Guide To NFTs: How To Buy An Ethereum NFT

NFTs, or non-fungible tokens, are blockchain-based tokens that prove ownership of digital items such as images, video files or (less commonly) physical assets.

Over the course of 2021, NFTs have exploded into the mainstream, with big brands and celebrities creating and buying up NFTs, while trading volumes have exploded.

Many of the NFT projects driving the craze, such as Bored Ape Yacht Club, CryptoPunks and Pudgy Penguins, are ERC-721 tokens built on the Ethereum blockchain. And on Ethereum, NFT marketplace OpenSea dominates the NFT trade: in September 2021, 97.8% of all Ethereum-based NFT activity took place on OpenSea.

In this guide, we’ll walk you through a few simple steps to get started with buying your first Ethereum NFT:

  • Buy Ethereum on a cryptocurrency exchange like Coinbase or Kraken.
  • Get a crypto wallet like Metamask.
  • Send Ethereum from your cryptocurrency exchange to your wallet.
  • Sync your wallet with an NFT marketplace like Opensea.
  • Buy an NFT on that marketplace with Ethereum stored on your wallet.


1.Buy Ethereum

You need Ethereum to enter the world of NFTs because it’s the native currency of the eponymous blockchain network, and the majority of NFTs are built on Ethereum.

To get Ethereum, you’ll need to head to a cryptocurrency exchange, such as Coinbase or Binance.

Not all exchanges let you buy and sell all cryptocurrencies. But as the second-largest cryptocurrency by market cap, Ethereum is listed on almost all exchanges. And if you’re absolutely new to crypto and have no idea which exchange to use, here’s a guide to help you make a decision.

Although most NFTs are on Ethereum, there are also many other alternatives. Some, like NBA Top Shot, are based on Flow, an early NFT-centric blockchain designed as an alternative to Ethereum. And more recently, NFTs built on the so-called Ethereum-killer Solana have also boomed.

Okay, back to Ethereum-based NFTs. Onto the second stage: getting a crypto wallet!


2.Get a crypto wallet

There are many Ethereum wallets out there. But by far the most popular is MetaMask (which, like an editorially independent Decrypt, is funded by Ethereum incubator ConsenSys).

MetaMask is a browser plugin, and it works best with Google Chrome or Brave. Once it’s installed, it lets you store Ethereum and Ethereum-based tokens.

Setting up a crypto wallet may sound daunting, but it’s often quick and seamless. Download and install MetaMask through their website, and once the little fox logo appears on your browser, click on it. It will take you through a few quick steps. Most importantly, you’ll create a password.

Separately, MetaMask will assign you a “Secret Recovery Phrase,” which you’ll need to store somewhere safe, like on a piece of paper in a secure spot. It’s a twelve-word phrase that can be used to unlock a MetaMask wallet.

MetaMask screenshot

Take extra care with your crypto wallet. Phishing scams targeting MetaMask users are common on social media. Sometimes they can be so realistic that even seasoned NFT collectors have fallen for them. But no need to panic: you’ll be safe as long as you don’t share your seed phrase.


3.Send Ethereum to your wallet

Now that you have Ethereum (step 1) and MetaMask (step 2), it’s time to fund your wallet with Ethereum.

You wouldn’t need this step if you could buy an NFT directly with Ethereum on your exchange account. But the way NFT trade works is a bit like going to a farmer’s market that doesn’t take cards, so you’ll want to carry cash in your wallet.

It’s also possible to buy Ethereum directly on MetaMask, which we don’t cover here. That option incurs higher fees than exchanges. Fortunately, sending Ethereum to MetaMask is straightforward enough!

Go to your exchange’s “send” or “withdraw” page that lets you move funds to a crypto wallet. It will ask you to enter the amount you want to send and a blockchain address, and so you will need to copy your Ethereum public address as displayed on your MetaMask (starts with 0x). Think of your Ethereum address (or “addy” in crypto slang) as your bank account number on the blockchain, sort of.

MetaMask screenshot

Remember, MetaMask automatically generates an Ethereum public address for you when you set up the wallet. In the future, you can separately create as many addresses as you want.


4.Sync your wallet with OpenSea

NFTs are traded on NFT marketplaces, and OpenSea is by far the most popular when it comes to Ethereum-based NFTs.

Signing up for OpenSea takes a few clicks. At the top-right corner of the OpenSea website, you’ll see a wallet icon. Click on it, and it will show you a long list of supported crypto wallets. Choose MetaMask, if you’ve followed the earlier step and got yourself MetaMask. If you’ve opted for an alternative, select the appropriate wallet from the list; many wallets support the WalletConnect protocol for connecting to websites.

OpenSea screenshot

Once you choose MetaMask from that list, OpenSea will show a pop-up window that says “Connect with MetaMask.” Click next, and your profile will automatically be created. And that’s done!

Until you customize your OpenSea account with a profile picture and a username, your profile will be “unnamed” containing only your Ethereum public address. But don’t worry about adding any details to it. OpenSea isn’t a social media platform, after all.


5.Buy an NFT on Opensea

Crypto industry isn’t known for user-friendly platforms and apps. But OpenSea is an exception: the site is mostly intuitive and feels like browsing any other e-commerce platform. But on the negative side, its customer service is nearly non-existent, though you’re unlikely to need much support.

After you decide on which NFT to buy, you will have three options on OpenSea: buy now, make offer, and place bid.

Buy now

OpenSea screenshot

NFTs may be listed by their owners at a fixed price (“current price”) often denominated in Ethereum. You can buy that NFT by paying the asking price. For that, you’ll need to click “buy now” and follow the steps. Make sure to have enough Ethereum on MetaMask before proceeding!

If you want to buy an NFT at a fixed price, you’ll need to pay transaction fees—known as “gas” in Ethereum—that are anything but fixed. The price frequently fluctuates, which can be confusing to newcomers.

You can check the state of gas here—an NFT transaction would incur gas similar to a ”ERC20 Transfer” so you can use that one as a rough estimate. MetaMask will suggest an amount depending on the network conditions at the time, so you don’t have to calculate it yourself.

Make offer

OpenSea screenshot

But perhaps you fancy haggling and think your counter-offer will be enticing. If so, you can make an offer and see whether the seller accepts it or not.

And if you make an offer on an NFT and the seller accepts your offer, then the seller pays the gas.

Place bid

Some sellers like a bit of competition for their NFTs so they’ll put them up for auction instead of selling them at a fixed price. Your only option is to place a bid at a price that you think is fair.

But your bid must be at least 5% higher than the previous bid. The highest bidder will win the auction, if it also meets the minimum bid requirement.

OpenSea screenshot

And finally, there are some NFT owners who don’t list their NFTs for sale—either at a fixed price or for auction. But that doesn’t mean you can’t try and lure them with an appealing offer. Those NFTs will only have a “make offer” option available. If you don’t ask, you don’t get.

If you’ve followed the steps so far and have made a purchase already, then congratulations on acquiring your first ever NFT! Click on your profile at the top-right corner, and you’ll see that your NFT purchases are listed there.

You can choose to hide your NFTs on your profile (just as Visa, Coca Cola and Budweiser should have!). But remember, you can’t hide them from your Ethereum public address (viewable on block explorers such as Etherscan). Unlike traditional finance, crypto is extremely transparent.


Tagged : / / /

How Do You Stake Cryptocurrencies? Earning Passive Income With Crypto

While the Bitcoin network is secured by mining, many newer cryptocurrencies use an alternative consensus mechanism known as proof of stake (PoS).

This involves users staking their cryptocurrency—pledging their crypto assets to the network to help the blockchain validate transactions.

But staking isn’t just an altruistic act to benefit the network. In exchange for staking, you get rewards, often in the form of the cryptocurrency you have staked.

Here we explain how you can get started as a crypto staker.

What is staking?

Blockchains are basically databases of transactions with no central authority to maintain them.

To solve the problem of securely validating transactions, proof of work (PoW) blockchains like Bitcoin rely on mining—powerful computers competing to solve cryptographic puzzles. But mining requires expensive hardware and high consumption of electricity, so it’s not accessible for most people.

Proof of stake networks like Polkadot, Cardano and Ethereum 2.0 replace all that with a mechanism of funds commitment known as staking.

Essentially, proof of stake involves selecting validators based on how much cryptocurrency they hold in their node. This crypto can either be staked by the validator themselves, or delegated with their node by other users.

Just like miners are rewarded with crypto for the work they have performed (all that gas-guzzling computation), the validator gets rewarded with crypto… when they stake crypto. Anyone who delegates crypto to the validator also gets a portion of the rewards, based on how much they’ve staked (less the validator’s cut, of course).

So staking can be a financially attractive option for crypto investors who hold—rather than day-trade—assets, however small they might be. The great thing about staking is, while it might be underpinned by complex mathematics, actually staking requires very little technical knowledge.

Which cryptocurrencies can you stake?

As of Q2 2021, there’s about $171 billion worth of assets locked in staking across PoS cryptocurrencies, according to the July 2021 report “The State of Staking”, by the US firm Staked.

Here are the top five ranked by market cap, with their average yield rates.

Yield rates vary across platforms and may change depending on the number of validators active in the network.

Did you know?

Cardano (ADA) has the highest staking rate of any major PoS cryptocurrency, with 71.7% assets locked.

Ways of staking and staking-as-a-service (SaaS)

Broadly speaking, there are two ways of staking.

The first is as a validator, running your own node. This method requires a bit of bootstrapping. You need to have a secure and stable technical infrastructure and the expertise to run a validator node yourself. The minimum amount of coins required to stake is often relatively high, too. To become an Ethereum 2.0 validator, you need to have a minimum of 32 ETH!

But more commonly, staking is done via delegation—you delegate your coins to a validator that has the appropriate set-up. Validators will do the hard work of maintaining a node for you, in exchange for a commission taken off your staking rewards. Easy peasy!

Now there’s even a whole industry that’s emerged called staking-as-a-service (SaaS).

Some of the major SaaS companies include:

  • Staked
  • Figment Network
  • MyContainer
  • Stake Capital
  • Stake.Fish

It’s important to note that delegating coins doesn’t mean you’re transferring custody of them to a validator. You keep custody of your assets at all times.

Typically, you don’t have to do anything about your rewards because they are automatically reinvested. Some staking platforms allow you to opt out of that, if you somehow don’t like the idea of your rewards compounding.

Staking through cryptocurrency exchanges

Most cryptocurrency exchanges run validators, allowing their customers to stake with them through the exchange’s user interface. They include:

The process of staking on exchanges is often similar (explained below). But exchanges’ staking offerings differ by which cryptocurrencies are available for staking, their fees, and the locking period (if any).

Some exchanges, like Kraken, list staking on their main menu, so it’s easy to find. But others, like Binance, will list it under “Earn,” which also includes other ways of earning passive income from crypto, like lending.

Not all major exchanges allow staking. Gemini’s “Earn” program allows you to earn interest on PoW cryptocurrencies like Dogecoin, but it doesn’t offer staking for PoS cryptocurrencies.

Robinhood, a popular trading app, said in July 2021 that it may offer staking in the future.

In line with regulations, exchanges may not let you stake if you live in certain jurisdictions, like New York or Hawaii.

How do you stake crypto?

Staking is a pretty straightforward activity that takes just a few clicks.

In the example below, we show you how to stake Polkadot on Okcoin—when it comes to staking, there are more similarities than differences between platforms, and so these steps can be easily replicated.

First, go to the exchange’s “Earn” page.

Okcoin screenshot

Click “Deposit” for DOT.

Next, enter the amount you want to stake or click “max” if you want to stake all of your DOT.

Okcoin screenshot

Exchanges will give you the opportunity to review the terms before depositing, like this one.

Okcoin screenshot

If that all sounds good, click “Deposit,” and that’s done!

Now that your DOT is staked, all you have to do is wait until the next day, and your earnings will start rolling in. DOT rewards are deposited into your funding account daily (at least in this example), and it will just keep compounding until you put a stop to it.

In most cases, you can quit staking anytime. Save for a few exceptions like Ethereum 2.0, staking is no strings attached!

Did you know?

It’s possible to stake Ether (ETH) because the Ethereum blockchain is currently moving from PoW to the PoS Ethereum 2.0. But the staked ETH remains locked until the transition is complete at an undetermined near-future date.

Staking and tax

As staking cryptocurrency is a relatively new concept, many tax authorities around the world have yet to assume an official position on how to tax it. In March 2021, the UK’s HMRC updated its tax advice to include guidance on staking, treating it broadly in line with crypto mining.

The U.S. Internal Revenue Service, meanwhile, issued guidance on crypto mining income in 2014, stating that mining would result in taxable gross income. Since mining is treated as a business, mined coins are immediately taxed as ordinary income upon their creation.

But this advice only applies to mining, not staking—and a lawsuit currently working its way through the federal court in Tennessee is challenging whether this position can be applied to staking. Plaintiff Joshua Jarrett argues that his Tezos staking rewards should be treated as property, and are only taxable when they’re sold or exchanged.

Others argue that because staking rewards have an established market value at the time of their creation, they should be taxed as income from the moment of their creation. But with some token rewards created by the minute, or even by the second, that would result in hundreds or thousands of taxable events (for example, the Cosmos blockchain creates new blocks every six to seven seconds; staking rewards would result in over five million taxable events over a calendar year).

The debate has yet to be settled, so in the meantime, the best advice for would-be stakers is to find a tax advisor with experience of cryptocurrency accounting.

The future of staking

The convenience of not having to leave cryptocurrency exchanges to participate in staking has made it a popular choice for less technically savvy crypto users, or those with sufficient holdings.

The projected annual rewards for staking based on Q2 numbers is $12.5 billion this year, according to staking company Staked. JP Morgan research expects this to increase to $40 billion by 2025.

One reason is a general trend in crypto toward proof of stake, fuelled by criticism of proof of work for its impact on the environment. It’s also easier to bootstrap and scale a new network on proof of stake.

Staking is likely to represent a larger share in the overall cryptocurrency market as Ethereum, the world’s second-largest cryptocurrency, transitions to PoS with its Ethereum 2.0 upgrade.

Around 5% of all ETH is currently staked in ETH 2.0. But Alex Svanevik, CEO of blockchain analytics firm Nansen, told Decrypt that we can expect to see a considerable increase in ETH staked after The Merge, when Ethereum 1.0 and Ethereum 2.0 interact with each other. Following that key development in Ethereum, investors will be able to withdraw their staked ETH, which at the moment isn’t possible and may explain why ETH staking is so low.


Tagged : / /

What Are Flash Loans? The DeFi Lending Phenomenon Explained

In brief

  • Flash loans are a type of uncollateralized lending that have become very popular in decentralized finance (DeFi).
  • While they’ve proved popular, flash loan exploits have been used to attack vulnerable DeFi protocols and steal millions of dollars.

To take out a normal loan, you need to provide proof of reserves, income, and more besides. Well, forget all that: flash loans are like lending on steroids.

But are they a good or a bad thing? That depends on who you ask. To some, because flash loans are both a hugely innovative and useful tool in decentralized finance (DeFi), primarily on the Ethereum Network. To their detractors, flash loans present an opportunity for unscrupulous actors to siphon off millions by exploiting poorly protected protocols.

Dig in and see why.

What are flash loans?

With a run-of-the-mill loan, the lender usually wants some kind of collateral to make sure they get their money back; the contract often takes a while to get approved, and the borrower pays back the loan, with interest, over a period of weeks, months or years.

Flash loans are the antithesis of that. They do what they say on the tin, and occur in an instant because the funds are both borrowed and returned within seconds—in the space of one transaction.

It’s made possible because of the innovative properties of smart contracts, which set out the terms, and also perform instant trades on behalf of the borrower with the loaned capital. Flash loans that result in a profit are typically charged a 0.09% fee.

If the borrower doesn’t repay the capital, or the trade doesn’t make a profit, the conditions set out in the flash loan smart contract aren’t met, and the transaction is reversed—just like it never happened, with the funds returned to the lender. So—in theory, at least—there’s minimal risk for both parties.

In a nutshell, flash loans are:

  • 🔓 Unsecured – Instead of providing collateral, the borrower immediately repays the loan.
  • ⚡️ Instant – The capital is borrowed and repaid in one transaction.
  • 🤖 Innovative – Flash loans use smart contracts to set out terms and perform instant trades.

Why have flash loans become so popular?

Flash loans were first introduced in 2018 by a forerunner to DeFi, open-source bank Marble.

They arrived on the Ethereum network in January 2020, courtesy of pioneering decentralized lending platform Aave. By July of the same year, Aave was regularly issuing more than $100 million in flash loans each day. In June 2021, the platform had issued almost $4 billion in flash loans.

Traders have taken to them because they can be used to profit from arbitrage opportunities, such as when a token’s value varies on different markets. A 1% difference in value may not seem like much, but with a large loan used for arbitrage, the profits can be substantial.

Did you know?

The biggest flash loan Aave has processed to date was about $200 million.

Some traders have successfully employed flash loans to speculate on new coins, without having to risk their own funds.

And, because flash loans bundle several smart contract transactions into one, they can reduce transaction fees (which can add up to quite a bit).

Are flash loans safe?

Flash loans are still very much a work in progress; the flip side of their rapid adoption by the decentralized finance community is that they’ve been used to exploit vulnerable DeFi protocols, and steal millions of dollars.

In February 2020, lending protocol bZX was the focus of not one but two flash loan attacks. A borrower fooled a lender into thinking the loan had been repaid by temporarily pushing up the price of the stablecoin being used for repayment. Most flash loans are denominated in USD-pegged stablecoins; in July 2020, MakerDAO’s DAI and Circle’s USDC made up close to 95% of all flash loans issued.

The bZx hacker used a clever set of instructions, executed in the form of a flash loan, to leverage current weaknesses in the DeFi ecosystem for their own gain. By using several decentralized financial tools, and a small dose of price manipulation, they were able to make off with a lot of Ethereum, netting around $1 million.

More flash-loan exploits followed in June and October 2020, when a hacker made off with $34 million from DeFi protocol Harvest Finance, due to an engineering error. Attacks have continued into 2021; in February, attackers were able to drain $37 million from the Cream Finance protocol for a cost of just $15,000 in transaction fees, using flash loans.

Poor oracle design was believed to be at fault in at least some of the exploits, and as a result many protocols have beefed up their security.

Where can you use flash loans?

Flash loans are used across decentralized finance protocols based on the Ethereum network, and more recently on Binance Chain (which has also seen flash loan attacks).

Aave is still the leading provider, but others such as dYdX and decentralized exchange (DEX) Uniswap have introduced flash loans. And flash swaps, on Uniswap, allow users to withdraw Ethereum-based tokens paired with other tokens, do whatever they want with them, and then immediately return the equivalent amount.

Flash loans were originally designed for developers, but since August 2020 platforms such as DeFi Saver and Furucombo have allowed less tech-savvy users to take advantage of DeFi and flash loans by removing the need for technical coding skills. Parts of the open-source smart contract code for Ethereum can be swapped out or connected together as a core feature of the protocol, technically termed “composability.”

The future of flash loans

Flash loans are still in their infancy, and are being used for ever more innovative purposes, such as borrowing funds to buy tokens in order to push through governance votes. Practices such as this could have long-standing repercussions for protocols, and some have made moves to curtail them.

Perhaps, as some believe, with the evolution of DeFi, these types of lending will be seen as a flash in the pan. But others argue for their evolution; with the design of ever more secure protocols, they have the potential to increase market efficiency by giving everyone money for nothing, and the opportunity to be a crypto whale—if only for a few seconds.

Decrypt DAO

This article comes from our Decrypt DAO, where Decrypt NFT holders can vote using Snapshot on what educational content they want to see on our site. To take part, download the Decrypt app and join the conversation on Discord.


Tagged : / / /

What are Meme Coins and Tokens?

In brief

  • Meme coins and tokens are based on Internet memes, current events, online communities and influencers.
  • Since Elon Musk started championing Dogecoin, they have proliferated, with two of the most popular including Shibu Inu coin, and Safemoon.

Influencers have always featured prominently in cryptocurrency culture, but never more so than recently. When Elon Musk threw his weight behind the original meme cryptocurrency, Dogecoin, it sparked a wave of imitators, promoted by influencers on social media platforms such as TikTok.

Some call investing in meme coins insanity, others think of it as a cheap bet with the potential to realize 1000% profits. Whoever’s right, interest in meme coins or tokens has surged in recent months. Here’s the lowdown.

What are meme coins and tokens? 

Typically, a meme coin has no inherent value, and often no utility. As the name implies, these cryptocurrencies are often—but not exclusively—themed around Internet memes: jokes and images shared on social media.

The original meme coin, Dogecoin (DOGE), is based on the long-running Doge meme, which originated with a picture of a Shibu Inu dog. It runs on its own blockchain, and as such is distinguishable from meme tokens, which run atop an existing blockchain.

Two of the most popular meme tokens are Doge-imitator Shibu Inu (SHIB), an ERC-20 token built atop Ethereum, and SafeMoon (SAFEMOON), which runs on Binance Smart Chain. But there are dozens more.

Did you know?

There are over 80 meme coins and tokens listed on price aggregator CoinMarketCap. Many are Dogecoin imitators, and many others reference Elon Musk—either positively or negatively.

How have meme tokens become so popular?

Since Dogecoin was launched in 2013, it’s become much easier to create a cryptocurrency, and meme tokens can be launched rapidly on the back of events, or become popular due to their associations with influencers. 

For example, in May 2021, Facebook CEO, Mark Zuckerberg posted a picture of his pet goats captioned “My Goats: Max and Bitcoin.” Soon afterward, a meme token called Aqua Goat saw its value increase by around 300% within hours of the social media post. 

When Elon Musk tweeted that if there was ever a scandal about him, it should be coined “Elongate,” an ELONGATE token was launched within an hour. Mercenary motives? Perhaps, but, to date, the developers claim to have donated $3 million of their profits from the rise of the token to charity.

How do you buy meme coins and tokens?

As the leading meme coin, Dogecoin is available on a wide variety of crypto exchanges including Coinbase, Binance and Kraken.

Meme tokens tend to be available on a more limited range of exchanges. Shiba Inu, for example, can be traded at Binance, Crypto.com and KuCoin, as well as decentralized exchanges (DEXs) such as Uniswap. A listing on Coinbase Pro has been temporarily delayed as of June 2021. Safemoon, being based on Binance Smart Chain, can be traded at Binance and on BSC-based DEXs such as PancakeSwap.

Often, when they are first launched, meme tokens are given away. Many small-cap meme tokens are only available on DEXs like PancakeSwap, and can only be purchased with other cryptocurrencies.

How are meme coins and tokens different from other cryptocurrencies? 

All cryptocurrencies rely on a strong community and influencer support. But meme tokens have gained popularity due to their disproportionate association with influencers, especially Elon Musk. The Tesla chief needs only to tweet about a topic, such as Baby Shark—based on a popular children’s song—to send the price of related meme tokens soaring. 

Meanwhile, meme token developers use publicity stunts to drive up the price. The team behind Shibu Inu coin decided to give half of all SHIB tokens to Ethereum co-founder Vitalik Buterin. But he foiled their plan when he dumped the tokens (giving the proceeds to charity), asking that projects not give him coins without his consent and stating that “I don’t want to be a locus of power”.

Meme tokens comprised around 2.8% of the crypto market cap in mid-June 2021, and the sector is worth over $38 billion, according to one aggregator. But wild price swings are not unusual. 

Typically, meme cryptos have a huge circulating supply—often in the quadrillions.

What are the most popular meme tokens?

CoinMarketCap lists the three most popular meme coins and tokens as Dogecoin, Shibu Inu and Safemoon (June 2021.) Here’s a quick snapshot of each. 

Dogecoin (DOGE)

Dogecoin was invented by developers Jackson Palmer and Billy Markus. It started off as a joke, but it’s become a serious proposition since Elon Musk began championing it in 2019. 

The dog-themed crypto has seen its value soar in recent months, hitting a market cap of $9 billion at its peak in January 2021.

Musk is now working with Doge developers to improve the platform, optimize it as a means of paying for goods and services, and reduce its carbon footprint.

Shibu Inu Coin (SHIB)

Shibu Inu was launched in April 2021 as an “experiment in decentralized spontaneous community building” and swiftly increased in value by over 2,000,000% before reaching an all-time high in early May. 

The token benefited from the attention received by Dogecoin, particularly when Elon Musk appeared on SNL last month, prompting a DOGE selloff after he apparently branded the coin a “hustle.” 

SHIB has a total supply of one quadrillion and is designed to allow users to hold billions or even trillions of tokens. Still, analysts have warned that it would need to climb about 12 million percent to hit its magic target of $1.


SafeMoon seeks to improve on Dogecoin’s tokenomic model. Unlike Bitcoin, which has a limited supply of 21 million coins, potentially, there’s an infinite supply of Dogecoin, giving it what’s known as an inflationary tokenomic model.

To remedy this, SafeMoon employs a deflationary tokenomic model. It means that every time a Safemoon transaction takes place, 5% of it is burned and a further 5% is redistributed to the remaining token holders. Therefore, the total supply of tokens is designed to constantly decrease, ensuring “safe” gains and less inevitability in respect of bubbles. 

In Spring 2021, the token soared over 1,500%, only to plummet by 73%; its market capitalization in June 2021 was $2 billion.

What are the dangers of meme tokens?

Not everyone sees the funny side to Dogecoin and its ilk. Thailand’s regulator ordered exchanges to delist meme tokens in June 2021, alongside NFTs and fan tokens. 

There’s also the ever-present danger of “rug pulls”—when developers hold a bunch of coins, get people to buy in, and then dump their coins. That causes the market to plummet, while they escape with their booty. Even experienced investor Mark Cuban has been a victim.

One way to mitigate the risk of rug pulls is to only buy coins and tokens that are vetted, audited, or have some sort of reliable third-party oversight. 

The future

Relying on crypto influencers to shill the next coin seems a fickle enterprise. But the ultimate success of individual meme coins and tokens is dependent on the strength of their communities, and influencer culture is not going away.

Inevitably, barring regulatory crackdowns (such as Thailand’s), the crop of meme tokens looks set to expand, as the tools to make them become ever more accessible. Meme.com, for instance, is a new marketplace where users can compare meme cryptocurrencies and mint their own “memetic tokens”, whose worth will be based on the perceived value of trends or memes they represent. 

Backed by nothing, a $38 billion asset has been memed into existence.


The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.


Tagged : / / / /

Who is Satoshi Nakamoto, The Creator of Bitcoin?

In brief

  • Satoshi Nakamoto is the pseudonym adopted by the creator of Bitcoin.
  • The real identity of Satoshi Nakamoto has never been definitively proven.

Bitcoin arrived in 2008 but its creator to this day is known only by the pseudonym they chose: Satoshi Nakamoto. Many have spun up theories about who Satoshi really is—either to solve the mystery or, in some cases, to further an agenda of their own—but no one has offered a definitive answer.

Satoshi Nakamoto: what we know

The first evidence of the Bitcoin we know today turned up in August of 2008 when someone anonymously registered the domain name bitcoin.org.

In October of that year, an author who went by the moniker of Satoshi Nakamoto published the Bitcoin whitepaper, “Bitcoin: A Peer-to-Peer Electronic Cash System” to metzdowd.com, a site for cryptography fans. It explained how a digital currency, which its author dubbed Bitcoin, would work.

A few months later, in January 2009, the Bitcoin network roared to life. Satoshi Nakamoto released the first version of the software that launched the network, and mined the very first Bitcoin. In the very first block of a blockchain that today consists of more than 680,000 blocks, Satoshi inscribed a text message. The message in that so-called “genesis block” reads:

‘The Times 3 January 2009 Chancellor on brink of second bailout for banks’

As well as providing a time stamp for the creation of Bitcoin, it refers to an article published by the Times newspaper. The choice of the Times has prompted speculation that Satoshi may have been based in the U.K., and that their motivation for creating Bitcoin was linked to the instability caused by fractional-reserve banking.

For the next 10 days Nakamoto was the only miner, harvesting more than 1 million Bitcoin.

Satoshi was active on the bitcointalk.org forum between November 2009 and December 2010, engaging in a number of discussions with users. Their posts have been pored over by the curious hoping to glean some hints as to Satoshi’s identity and philosophy; in one of their last posts, Satoshi addresses Hal Finney directly, implying that they’re separate individuals (though that could, of course, have been a ruse).

“If you don’t believe me or don’t get it, I don’t have time to try to convince you, sorry.”

Satoshi Nakamoto

In 2010, Nakamoto handed over control of the repository containing the Bitcoin source code to Gavin Andresen, a software developer. Then, on April 23, 2011, Satoshi Nakamoto sent their last email: “I’ve moved on to other things. It’s in good hands with Gavin and everyone.”

All activity from Satoshi Nakamoto stopped soon afterwards; the Bitcoin wallets tied to Satoshi have not been accessed or spent since mid-2009. In 2014, Satoshi’s P2P Foundation account briefly reactivated to announce that “I am not Dorian Nakamoto,” rebutting a Newsweek article that named the Japanese-American man as the creator of Bitcoin. Since then, Satoshi has remained silent.

Satoshi Nakamoto: the clues

Many have tried to uncover Satoshi Nakamoto’s identity. Satoshi never spelled their name using Japanese kanji characters, making a definitive translation of the name impossible; various attempts to translate the name have included “logic, reason or justice” and “basis”, “clear thinking, quick witted, wise” and “central origin”.

One (loose) translation is “central intelligence”, with some claiming it as proof that Bitcoin is a CIA plot (though quite why the CIA would blow their cover for the sake of an in-joke is unclear).

Some have suggested that the name is an amalgam of different companies:

  • Samsung and Toshiba together makes: Satoshi
  • Nakamichi and Motorola together makes: Nakamoto

In any case, Satoshi likely wasn’t Japanese. Although a 2012 P2P Foundation profile implies that Nakamoto was a 37-year-old man living in Japan, linguistic quirks such as British English spellings and expressions (and the use of the Times in the Bitcoin genesis block) suggest that Satoshi may have been of British origin.

One researcher tracked the times that Satoshi posted on the bitcointalk.org forum, indicating a “steep decline” in posts between 5am and 11am Greenwich Mean Time (or midnight to 6am EST), possibly indicating when Satoshi was asleep. And an analysis of early Bitcoin code has indicated that Satoshi may have used a Russian proxy server to mask their identity.

The candidates

A number of names have been put forward as the possible identity of Satoshi Nakamoto. Some even think that Satoshi may have been a group of people, further muddying the waters.

Some of the possible candidates who’ve been named as Satoshi (or put their own names forward) include:

  • 👨‍🚀 Hal Finney – A cryptographer and software developer, Finney was the first recipient of Bitcoin and interacted regularly with Satoshi Nakamoto on the bitcointalk.org forum. Finney died in 2014, which some have argued explains why Satoshi’s Bitcoin hoard remains untouched.
  • 🔐 Gavin Andresen – The creator of the first Bitcoin faucet, Andresen was the custodian that Satoshi Nakamoto entrusted with the Bitcoin source code.
  • 📝 Nick Szabo – A US computer scientist who created “Bit gold”, a precursor to Bitcoin, and who coined the term “smart contracts”—which form a key component of the second-largest cryptocurrency, Ethereum. Linguistic analysis has pointed to similarities between Szabo and Satoshi’s writing styles, while some have noted the coincidence of Satoshi Nakamoto’s initials being the inverse of Nick Szabo’s.
  • 👨‍💻 Adam Back – A cypherpunk and cryptographer, Back was one of the first recipients of an email from Satoshi Nakamoto, and was named as a possible Satoshi candidate by the Financial Times in 2016.
  • 💾 Len Sassaman – a contributor to the cypherpunk mailing list where Satoshi first announced Bitcoin, Sassaman was an expert in public key cryptography and worked alongside Hal Finney. Sassaman was memorialized on the Bitcoin blockchain following his suicide in 2011.
  • 👨‍💼 Craig Steven Wright – an Australian entrepreneur who convinced the BBC, among others. Wright has been involved in a lengthy court battle that hinges on his being able to access crypto addresses allegedly belonging to Satoshi Nakamoto. Several pieces of evidence purporting to back up Wright’s claim, including PGP keys, have been called into question.
  • 👨‍🔬 Dorian Nakamoto – a physicist and systems engineer based in California, Dorian’s birth name is actually “Dorian Prentice Satoshi Nakamoto”. Named as the Bitcoin creator in a 2014 Newsweek article, he has denied any connection to Bitcoin, while Satoshi’s P2P Foundation account briefly reactivated to announce that “I am not Dorian Nakamoto”. As a result of the publicity, his image appears repeatedly in Google Image searches for “Satoshi Nakamoto.”
  • 🚀 Elon Musk – The Tesla and SpaceX CEO was (briefly) considered as a possible Satoshi candidate in 2017, after a former SpaceX employee named him as the Bitcoin creator. But Musk emphatically denied it, tweeting that it was “Not true,” and that a friend had sent him “part of a BTC” but that he’d lost it. Since then, of course, Musk’s involvement with Bitcoin has ramped up, with Tesla’s acquisition of $1.6 billion in BTC.

Why has Satoshi hidden their identity?

The reasons for Satoshi Nakamoto deciding to mask their identity in the first place is also a topic of debate. One explanation relates to crypto creators’ outsize influence on the communities that spring up around their coins—Vitalik Buterin, for instance, has expressed disquiet over his own stature around Ethereum. This means Satoshi may have chosen to remain anonymous (and, eventually, walk away), so as to avoid exerting too much influence, and help Bitcoin avoid the pitfalls of centralization.

Satoshi may also have been displaying an abundance of caution—and with good reason. Given that Bitcoin has been increasingly recognized as a threat to the supremacy of central banks, they may have been concerned at painting a target on their own back. While governments might not be able to ban Bitcoin, they could certainly exert pressure on its creator to assert their sovereignty and dissuade others from following in their footsteps. It’s happened before, after all; in 2011, Bernard von NotHaus was convicted of making, possessing and selling his own private currency, the Liberty Dollar.

It’s not just lawmakers that Satoshi could be wary of, of course; law-breakers could also be very interested in the Bitcoin creator’s digital assets. Given that criminals have (violently) targeted large crypto holders in the past, and that Satoshi is by any measure one of the richest individuals in the world, they have ample reason to keep their identity under wraps.

How much Bitcoin does Satoshi have?

In the early months of Bitcoin’s existence, Satoshi Nakamoto mined as many as 1.1 million Bitcoin—a vast fortune that remains untouched to this day. As of June 2021, Satoshi’s Bitcoin stash would be worth over $40 billion; at Bitcoin’s all time high of $64,000, it would have been worth $71 billion, making Satoshi among the richest people in the world.

Researchers have suggested that Satoshi deliberately held back from mining even more Bitcoin in the early days of the network, curbing their hash rate in order to give other miners a fair chance at blocks.

What if Satoshi returned?

The big question is, of course: what if Satoshi were to return? It’s become an article of faith among the Bitcoin community that Satoshi is gone for good, and that the mammoth stash of Bitcoin they mined is locked away forever.

Were Satoshi to return, it could have significant repercussions for Bitcoin. First, they’d have to prove their identity; possibly by moving some Bitcoin from an address confirmed as belonging to them. Then would come the realization that over a million Bitcoin previously thought to be lost forever is suddenly active again, which could have an impact on Bitcoin’s price and volatility. On previous occasions when Satoshi-era Bitcoin has unexpectedly become active, it’s sparked sell-offs and panic in the market.

Once Satoshi’s dealt with their truly enormous tax bill, there’s the question of what their return would mean for Bitcoin’s community and development. Suddenly, Satoshi’s old bitcointalk.org forum posts would no longer be the only source of authority as to their intentions; the man (or woman, or group) behind the mask would be able to make public pronouncements on the current state of Bitcoin and where it should go next (perhaps weighing in on the debate around its energy consumption).

Regardless, Satoshi continues to be a source of inspiration for the Bitcoin community. In 2021, when crypto company Coinbase went public, it sent a copy of its public filing to Satoshi’s Bitcoin address in a symbolic gesture, and encoded its own message referencing a newspaper headline in the Bitcoin blockchain.

Satoshi Nakamoto statue illustration
A concept illustration of the Satoshi Nakamoto statue. Image: Gergely Réka

There’s even going to be a statue erected to Satoshi, in Budapest, Hungary. The creator of Bitcoin will be depicted with an anonymous, mirrored face, to reflect the viewer’s face back at them. Satoshi, it seems, is all of us.


Tagged : / / / /

What Are Privacy Coins? Monero, Zcash, and Dash Explained

In brief

  • Some cryptocurrencies, called privacy coins, shield potentially identifying information using an array of cryptographic techniques.
  • Privacy coins can be popular for ransomware and other illicit uses, and have come under increased scrutiny from regulators and government agencies.

The pseudonymous nature of Bitcoin addresses enables transactions without identifying personal information, but that doesn’t make it a completely anonymous cryptocurrency. Because the entire transaction history lives in public view on a blockchain, it can be possible for investigators and firms to piece together people’s identities based on the movement of coins and details held within addresses.

That’s where so-called privacy coins come in. Cryptocurrencies like Monero (XMR), Zcash (ZEC), and Dash (DASH) use varying cryptographic techniques to obscure details around transactions and better shield users from prying eyes.

Advocates of privacy coins argue that they can be used for perfectly legal purposes by anyone eager to avoid potential oversight by external parties, enabling the user to control what information they choose to share with companies and organizations. Furthermore, privacy coins bring the level of transactional privacy already enjoyed by users of physical cash to the digital economy.

However, the flip side is that privacy coins have become popular for ransomware payments, criminal transactions on the dark web, and money laundering. As a result, they’ve attracted significant attention from law enforcement and regulators. Here’s a look at how privacy coins work and the most popular coins today.

How do privacy coins work?

Varying privacy coins work in different ways, but the end goal is the same: they’re all designed to hide details like addresses and amounts transacted, so that it is extremely difficult if not impossible to piece together which parties participated in a transaction.

Some privacy coins create a new, single-use address for each transaction called a “stealth address,” so that there is no apparent way to link multiple transactions to a single source. Another technique called zk-SNARK (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge) uses advanced cryptography to encrypt identifying information. You can read much more about zk-SNARKs here.

Ring signatures are used by some coins, including Monero. They link together multiple user addresses to anonymously sign transactions without revealing which address ultimately signed it. Meanwhile, Mimblewimble—which, yes, really is named after a Harry Potter spell—is a streamlined blockchain design approach that keeps a more compact history than traditional blockchains, and does not reveal identifying information to the public.

Some coins also use a process called “CoinJoin” that mixes together transactions from various senders and then disburses the funds across recipients. CoinJoin is also available as an optional mixing service for Bitcoin, which helps obfuscate transactions.

Did you know?

Litecoin, which is not currently a privacy coin, may implement MimbleWimble as an opt-in privacy feature. As of March 2021, the proposed upgrade was code-complete and ready for auditing.

What are the main privacy coins?

Monero: Monero is the best-known privacy coin and has the largest market cap of the bunch, as of this writing. Forked from an earlier coin called Bytecoin in 2014, Monero anonymizes critical details such as both the sender and recipient, as well as the amount of the transaction, using techniques such as ring signatures and single-use addresses. Each coin is also fungible, unlike with Bitcoin, because they are indistinguishable and have no traceable history.

Monero is a favorite of hackers and is often used for ransomware demands, plus it thrives on the dark web: the popular White House market only accepts Monero, for example.

Zcash: Heavily influenced by Bitcoin (and featuring the same 21 million coin cap), Zcash implements zk-SNARKs to ensure that all needed conditions are met for a valid transaction without exposing any personal, confidential data. Zcash offers multiple transaction types ranging from fully public to fully private, so it’s potentially more regulatory-friendly than Monero, and fully shielded transactions can include private memos, as well. Zcash development is led by the for-profit Electric Coin Company.

Dash: Forked from Bitcoin with the aim of improving upon the original cryptocurrency, Dash can mix multiple transactions with CoinJoin (called PrivateSend) to obscure potentially identifying details. Dash similarly makes its privacy features optional, and also has an InstantSend option for rapid transactions that are confirmed within two seconds. Dash has found popularity in countries that have seen enormous inflation with their respective fiat currencies.

Did you know?

Dash was previously called Darkcoin. Given the name’s association with dark web marketplaces and other nefarious purposes, it was unsurprisingly renamed to Dash in 2015.

Are privacy coins legal?

Coins that enable anonymity, like the privacy coins mentioned in this article, have been banned in Japan and South Korea. They are currently legal in other jurisdictions where cryptocurrency is more broadly legal, but some exchanges are wary of potential battles with regulators ahead.

In June 2020, Coinbase founder CEO Brian Armstrong admitted that he personally wanted to list Monero, but that “behind-the-scenes conversations” with regulators convinced him that it wasn’t a battle worth waging right now. “We don’t know if this is a hill we want to die on, and we have to make a lot of tough calls like that,” he said. However, Armstrong believes that regulators will become more comfortable with privacy coins over time.

Fellow exchange ShapeShift delisted Monero and Dash in November 2020, while Bittrex delisted Monero, Zcash, and Dash in January 2021. The latter cited “evolving regulatory standards and other compliance issues” as part of its reasoning for delisting privacy coins. As of this writing, popular exchanges Binance and Kraken both list all three leading privacy coins.

The future of privacy coins

Along with the perceived threat of additional regulation, government agencies and analytics firms are also stepping up their attempts to crack privacy coins. In September 2020, the United States Internal Revenue Service (IRS) confirmed that it had awarded a pair of contracts worth as much as $1.25 million in total to firms attempting to develop Monero tracing tools.

In November 2020, blockchain forensics firm CipherTrace—which works with the US Department of Homeland Security—filed patent applications for Monero tracing tools. And in May 2021, Norway’s National CyberCrime Center revealed that it was trying to crack both Monero and Dash in a missing persons case. Whether any of these efforts produce reliable tracing tools remains to be seen, but there’s a lot of government interest in finding ways to break open privacy coins.

All the while, these coins are gaining popularity. Monero’s price soared 30% in May 2021 after the U.S. government announced a proposal to make businesses report high-value crypto transactions. Many crypto traders seemingly want to keep their transactions truly private, even amidst seeming regulatory and compliance challenges ahead.

Where can I go to find out more?

To learn more about the technologies underpinning privacy coins, and the coins themselves, check out:


Tagged : / / / / / / / /
Bitcoin (BTC) $ 42,234.32 3.66%
Ethereum (ETH) $ 2,244.29 4.43%
Litecoin (LTC) $ 73.33 5.77%
Bitcoin Cash (BCH) $ 234.71 5.62%