Category: Blockchain

Is Aave making the case for decentralized social media?

On By mehranmuslimiblogIn Blockchain, DeFi, Innovation, Web 3.0Leave a comment

What shall we call ‘decentralized social media’? Decentralized finance was easily turned into DeFi, but DeSM or DeSocMed doesn’t have quite the same ring. Still, somebody will come up with a shortened version in time.

One of the proponents of decentralized social media is Stani Kulechov, the founder of the Aave DeFi protocol. He has been tweeting teasers about his support for decentralized SM platforms, pointing out that there is a widespread belief that the current SM platforms generally ‘suck’. Twitter has also been talking about it, which surely points to that’s the way it is considering going.

According to The Defiant, five persons in crypto told the website that Kulechov has sent them a cryptic text asking them to sign up to ‘lens.dev. However, The Defiant was unable to find out from Aave or Kulechov any more information about this site.

The Lens Protocol

Follow the lens.dev link yourself and you’ll find yourself at a simple site that contains a  short letter expressing dissatisfaction with Web2.0 social media companies, such as Facebook and Twitter. The letter says, “Web3 brings forth a renewed hope for what social media can be. It offers the ability for us to control how our content is used. We can have the power to own and monetize our content and community with no middlemen or centralized data harvesting.”

Should you wish to sign the letter, you do so with a tweet. The tweet includes a cryptographic signature that uses their Ethereum wallet and text that usually reads “I should own this tweet @lensprotocol #digitalroots.”

This is not the first attempt to decentralize social media. Other efforts include STEEM, which emphasized blogging; FEEDWEAVE, which was built on Arweave and Cent is an experiment in selling content. None of them have made much impact on the SM world, but as The Defiant says, “the top minds in the space seem to believe that this is still a crackable use case for one blockchain or another.” Indeed, Sam Bankman-Fried of FTX said, “I think social media on the blockchain — I continue to think this could be absolutely huge. I think it solves a lot of existing pain points, which are really coming to the forefront of society right now.” Of the others who have been talking up the idea, one supporter is Vitalik Buterin, who has proposed an SM platform built on the Ethereum blockchain. However, perhaps Aave will beat him to it, and these cryptic tweets are just the beginning of the platform’s attempt to finally deliver a blockchain-based, decentralized social media platform. Then perhaps we’ll know what to call it!

Web 3 is nothing new

On By mehranmuslimiblogIn Blockchain, Metaverse, NFTs, Web 3.0Leave a comment

The idea of a decentralized web has been in the minds of many for around 20 years, but when you read much of the press about it today, you’d be forgiven for believing it was a brand new concept.

The concept is a response to the domination of Web 2.0 by the Big Tech companies, Facebook and Google in particular, explains Michael J. Casey, and their “data-driven economics.” Most of us understand by now exactly how those two companies in particular exploited the web and us, even as at the same time they reunited us with old friends, helped us grow businesses and made searching so more intuitive. After all, who remembers using search engines in the era Before Google? It was much slower and you really needed to know how to search.

However there is quite some debate raging around the concept of Web 3. On the one hand, as Casey reports, there is Chris Dixon who is a fervent Web 3 supporter and a believer that Web 3 projects are creating real value, and on the other, Jack Dorsey, who claims the “term is just a buzzword exploited by venture capitalists to boost their equity and token investment.” Casey says in response to this, “That smart people – including two famous “Tims” – have been exploring an exit from Web 2.0 for so long suggests Web 3 projects have worthy ambitions and that there will be public benefits and business payoffs if they succeed.” But he concedes, “this long history reminds us that solving a very big problem is hard and that investors would be wise to take grandiose promises with a grain of salt.”

It is possible not to side with either Chris or Jack, and instead focus on the core structural issues with Web 2.0 and why there’s a need to change them. The fundamental problem with Web 2.0 is the misalignment between the interests of the giant companies that dominate the Internet and those of the general public. Casey says that whilst blockchain is a solution, it is not the only one. As Casey says, “We need a mix of technologies (both decentralized and centralized), regulation and economic rationale to enable business models that bring those competing private and public interests together.”

Let’s not forget that Tim Berners-Lee, the father of the Internet, said in 2006 that the web needed an overhaul. He allegedly coined the term Web 3.0, in reference to the evolution of universal data formats and artificial intelligence removing the need for intermediation by third parties to allow a true “machine-to-machine” communication network.

Currently, Web 3.0 is primarily associated with blockchain, cryptocurrency and NFTs, and the debate is still ongoing about what Web 3.0 could potentially be in the end, but as Casey remarks, there is still a long way to go before we can escape The Matrix!

Solana boosted by Bank of America

On By mehranmuslimiblogIn Blockchain, DeFi, Ethereum, NFTs, SolanaLeave a comment

Alkesh Shah, a digital asset strategist at Bank of America, is sweet on Solana. This week in a research note he claimed that Solana, widely seen as a competitor to Ethereum, could become the “Visa of the digital asset ecosystem.”

Solana only launched in 2020, and since then has become the fifth largest cryptocurrency with a market cap of $47 billion. Its impressive growth spurt has outperformed that of Ethereum, and it has been used to settle over 50 billion transactions. It has also minted some 5.7 million NFTs.

Despite this performance, it still has its critics, and they argue that the speed at which it settles transactions comes at the cost of decentralization and reliability. Shah doesn’t buy this. He believes the benefits outweigh the drawbacks: “Its ability to provide high throughput, low cost and ease of use creates a blockchain optimized for consumer use cases like micropayments, DeFi, NFTs, decentralized networks (Web3) and gaming.”

In his note, Shah also pointed out that he believes Solana will take market share from Ethereum, simply because it offers lower fees, is easier to use and has greater scalability. He told Business Insider, “Ethereum prioritizes decentralization and security, but at the expense of scalability, which has led to periods of network congestion and transaction fees that are occasionally larger than the value of the transaction being sent.”

Ultimately he thinks Solana may take over the transaction settlement side of the market, while Ethereum focuses on “high-value transaction and identity, storage and supply chain use cases.”

But perhaps the most surprising element of Shah’s note is the comparison of Solana with Visa. Visa processes an average of 1,700 transactions per second (TPS), although if pushed to the max it could do 24,000 TPS. By contrast Solana has an upper limit of 65,000 TPS. Ethereum handles about 12 TPS. The difference is striking.

However, as Solana followers will know, the network has suffered a number of problems recently, something that Shah acknowledges. Already in 2022 there have been withdrawal issues on both Binance and Coinbase and an alleged DDoS attack on 5th January, something the network denies. And in December of last year there was a DDoS attack, as well as reports of network congestion. This does not seem to have deterred investors this week. After several rough days, Solana (SOL) has bounced back to $151, an increase of 8.56% from a 52-week low of $130, although it has some way to go before it reaches its former ATH of $260.  But if Shah is right, and Solana becomes the “Visa of the digital asset ecosystem” who knows how high its price may go.

Money in 2022

On By mehranmuslimiblogIn Bitcoin, Blockchain, Governments, Metaverse, Regulations, Smart ContractsLeave a comment

This coming year might see many changes in the financial world, especially in money itself. It’s difficult to predict how things might play out, although there have been predictions in the MSM that Bitcoin and crypto generally will crash and burn, but that seems unlikely for those of us that are more immersed in cryptocurrencies than MSM journalists and their readers.

One scenario revolves around central bank digital currencies (CBDCs). Will they be more influential this year as governments look to control digital currencies? Or will the stablecoins, such as Tether, issued by private companies rule the roost? Then there are the decentralised currencies, such as Bitcoin. Will they become the dominant force in finance?

Various factors are driving the debate around money. For example, China is rolling out its Digital Currency Electronic Payments (DCEP) project during the Winter Olympics in February. And the USA is developing regulations targeted at private issuers of stablecoins, whilst adoption of decentralized cryptocurrencies for payments continues to grow around the world.

The Regulations debate

In 2021, the US government debated crypto tax provisions in the infrastructure bill and the approval of a futures-based Bitcoin exchange-traded fund (ETF.) This year it is likely that the U.S. Securities and Exchange Commission will find ways to clarify its position on whether tokens are unregistered securities. At the same time, DeFi tokens may find themselves being included in this debate, which would be unwelcome.

The future of Ethereum

Although Ethereum still dominates DeFi, will its high gas fees for NFTs and other transactions become too expensive? It depends on the success of Ethereum 2.0. There are many big moves to be made before the full 2.0 project can be deemed a success. It has to merge its mainnet with the Beacon chain and that could disrupt token economics for miners and validators. And there are challenging upgrades within Eth 2.0, including sharding. The future of the dominant smart contracts platform depends on these going well.

Crypto and the climate

As climate change continues, crypto needs to shift the conversation away from how bad it is for the environment and towards one about mining-integrated energy systems that create incentives not only for miners to use renewable energy.

Web 3.0

Finally, there will be many discussions about Web 3. Jack Dorsey has been leading at least one discussion about its future, in which people will have greater control over their data and content. So far Web 3 is not really well defined, but there is a need to adjust our systems for managing digital property and for establishing users’ rights in this new era. We can expect this year to bring more clarity on Web 3 might be like and to get a better idea of the projects that will form part of it.