THE BIG QUESTION

Following volatility in the cryptocurrency fortunes (with an overall downwards trend), there have been a lot of fallout in the general DeFi sector , and in decentralized ‘everything’.

We have had the collapse of the stablecoin – LUNA.  We have seen the demise of Celsius, the insolvency of the 3 Arrows Hedge Fund, the operational contraction of CoinFLEX over a position taken by Roger Ver, and subsequent huge row with CoinFLEX CEO Mark Lamb

We’ve had layoffs in different segments of the Decentralized/Web 3/Crypto industry across the board, key case in point: OpenSea.

Side accusations of weak regulation began as some speculation on root causes was seen as ‘Singapore Based’… but Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), said troubled crypto firms reported by the media as being based in Singapore are not fully regulated in the country.

Menon focused in particular on crypto hedge fund Three Arrows Capital and Singapore-registered companies TerraForm Labs and Vauld during a press briefing for the presentation of the central bank’s annual report.

“In reality, these so-called “Singapore-based” crypto firms have little to do with crypto-related regulation in Singapore,” Menon said.

We hark back to a time, before the CBN ban when Nigeria was the second biggest trader of cryptocurrency by volume in the world. What is different now?

We have to ask ourselves what does this all mean, for the world as a whole, for Africa, and indeed for Nigeria.

BEAR MARKET

We had the COVID pandemic.  For sure it damaged production. It damaged hospitality and entertainment businesses. It damaged logistics and supply chain activity – by air, sea and road.

Did it damage business in the blockchain and decentralized space? Not really… why?

If anything, the pandemic fueled the growth of the decentralized space and metaverse.

Those already professionally involved have workload that lends itself well to working remotely. They too, as well as the unconnected global public had limited recreational options and that also meant limited ways of spending income. Travel and social restrictions meant people had to find things to occupy themselves while mostly confined to home, and investing or otherwise participating in the virtual world was an outlet.

Then came something very different – The Russia-Ukraine war. With it has come global crises on both food and energy supplies.

On the Barrons Investment Advisor site, Phillip Toews of Toews Asset Management has heralded a ‘Bear Market’. He has many Subject Matter Experts keeping his opinion company.

The question is… are there parts of the decentralized and blockchain world that are depression (bear market) tolerant?

This is a response I gave Prof Ndubuisi Ekekwe on LinkedIn when he reported on the Celsius debacle:

The fall out from the Russia-Ukraine war is not limited to the participants, it is global. Energy deficits are crippling manufacturing, lack of electric power are causing some to fry in 45 degree heat, while some in colder climbs may experience frost bite in a harsh winter for lack of heating. All around the world, there are whole regions, including Africa that are either already or will experience additional food shortages on top of prevailing challenges. It is hard to contemplate the lofty benefits of an intangible world of blockchain and metaverse when the very immediate concern is an empty stomach.

This war has forced a value reset.

ENDURING VALUE ON THE BLOCKCHAIN

Unfortunately, there is no sure quick way to make easy money, and humankind seems to never learn this no matter how often burnt. Many of the types of blockchain assets have subjective value. This means it is very difficult to empirically prove the presence of value, or the absence of it. This is particularly true of cryptocurrency and digital artwork, and they will struggle to stand up in a bear market.

However, there is the potential for assets with enduring value to be secured on a blockchain. Ultimately a blockchain is simply a decentralized virtual entity on which assets can be secured through the issuing of a long string of alpha numeric characters which acts as a C of O (Certificate of Ownership).

It doesn’t define what the asset is, or what class it belongs to, except that blockchains lend themselves better to securing virtual rather than real world assets.

The place where enduring value starts is always at the core. At its most fundamental level, that is at the coding of smart contracts, the development of dApps (decentralized applications) and the growth of the Decentralized Web (Web3).

A CONTRACTION

There will always be a speculating mentality which will get hit by Bear Markets when they come. They started on cryptocurrency. The market became depressed because of steps on sanctions, limitations and laws of individual states.

Then they moved on to hype up digital artwork of notional value, such as Cryptopunks and BAYC (Bored Ape Yacht Club). These create fluctuations in the demand for the products and services that support how blockchains work, and how blockchain assets get marketed and sold.

However, as speculative assets and their supporters take a hammering, there is a core of services and products at the back end that continue to be in demand. The bear market isn’t entirely a bad thing, because it forces entrepreneurs to refocus  on how to create and secure more enduring value on blockchains, building more resilient products and services. This will then build back capacity.

I am not saying cryptocurrency and certain types of digital artwork won’t bounce back. I am simply saying in the long game, their fortunes are not crucial to the decentralized and Web 3 world being successful.

WHERE WEB3 IS NOW

Recall my previous article on Web3 in March (just before I took assignment in a remote part of Imo State Nigeria for some months without reliable internet!)

https://www.tekedia.com/beyond-crypto-fintech-and-defi-is-africa-ready-to-enter-web-3/

In it, I did an analysis of the various Web 3 domain providers, and on balance, argued that ‘Unstoppable Domains’ was probably the market leader.

Every new technology must reach it’s apex timely, and until it does, the need that drives the evolution continues to get served by the establishment. The ‘establishment’ is currently ‘Web 2’ – the domains administered by ICANN and country registrars (known as gTLDs and ccTLDS).

And so, leaders of the new Web3, can only become apparent from visibility on Web 2 – at least for now!

As I visit ‘Unstoppable Domains’ after my hiatus since March, nothing useful has changed in four months. Browser adoption is key, and we are still in the same place with only Opera and Brave supporting Web 3 (decentralized) domains natively. Nobody (apart from recluse enthusiasts) has time to be downloading plug-ins to enable the most popular browser – Chrome, to get access to what is currently a very limited and obscure collection of content compared to what is available on Web2.

The other thing is search engines. There are a few obscure search engines for Web3, like ‘Bitsearch’ https://bitsear.ch/  , but none of the mainstream search engines operating on Web2, Google, Bing, or even Duckduckgo show any signs of becoming Web3 compliant.

Then there is services growth – talking about Social Media, in a discussion with Josh Gordon (twitter @justwavyj) Matthew Gould, Unstoppable Domains CEO (twitter @matthewegould) conceded:

‘New Social Networks are going to have a really hard time… because they are going up against Facebook and Twitter, who have a huge networking effect… there are some… ‘Aave’ (Social Media platform on Web3)… you can do some interesting things there… but again, they are going up against these huge, locked in monopoly networks, with these private algorithms, and it’s extremely hard to compete… I’m hoping we can build the tools in ‘crypto’ to make these things more open… but it is uphill… it’s an uphill struggle!’

I also notice they have dropped their live support from the site, and this was a major advantage when selling services based on unfamiliar technology.  However,  nobody else is doing any better.

CURIOUS RELATIONSHIPS AROUND UNSTOPPABLE DOMAINS.

There are a couple of things about UD, that are a bit curious. As we can see, earlier this year, Microsoft took on a huge chunk of ConsenSys, a company started by Ethereum Founder Joseph Lubin

In my March post, I referenced Moxie Marlinspike, creator of signal who cited the illusory nature of ‘decentralization’ in crypto and Web3  – ‘Blockchain application programming interfaces are mainly controlled by Alchemy and Infura, while cryptocurrency exchange traffic is primarily dominated by  Binance, Coinbase, MetaMask and Opensea.’

And when we look at the Consensys product suite….

We see two of the ‘suspects’ here. While UD provides compatibility with Alchemy, support engagement is definitely leaning towards Infura, and if you want support to assist you directly with minting your domain, MetaMask is the preferred wallet to help you with, unless you are insisting on something different.

There is other plurality with Polygon, the sidechain on Ethereum, but it could be all innocent and just down with the familiarity of support officers with specific solutions, so I will just stop short, labelling it ‘curious’ and no more.

I’m on the fence about Microsoft involvement. On the one hand it smacks of big business muscling in on the so called democratized decentralized community, but in other ways its like the old oil majors renaming themselves ending ‘Energy’ instead of ‘Oil’ and opening up business units focusing on wind farms and solar. There is this level of comfort seeing the behemoths of the Web2 era jumping in. It gives some reassurance that my effort in developing knowledge and skills is worth it.

But one of the ‘killer’ selling points of UD’s domains being minted to the polygon blockchain is one payment, never ever having to pay renewal fees as with Web2 domains…

The benefit of that cannot be realized until regular browsers, especially chrome, and search engines like google, can manipulate Web3 content on the polygon chain.

Google have built a team devoted to developing in house Web3 expertise, and they have some programs running which sponsors young people to learn about the decentralized web, but they haven’t jumped into any major acquisitions yet. With Microsoft out of the blocks, they may be hesitant to make their browser and search engine Web3 compliant until their own position has a commanding lead to benefit from them.

Expect Amazon, Apple and Twitter to be watching keenly, and with close to a billion dollars extra liquidity from the Bitcoin sale, who knows what Elon Musk might do!

A STORY

The year is 1994. I am in London, in Earls Court, at the Annual Computer and ICT Exhibition. There are about three hundred exhibitors stands. Most of the visitors are just curious enthusiasts looking for a techie day out. There is only a small hardcore of serious buyers. Public internet is being spoken about as a concept, but I didn’t know anyone that had it. Corporate Intranets are only in government and big institutions.

CD roms are only just appearing. Almost everything is still 3.5” floppies and everything is an ugly beige. No laptops yet. No smartphones. The masses are milling around the Microsoft or the Intel stands. AMD is also getting some attention.  There is a smaller number interested in the less popular processors such as Cyrix and Thompson. Some interest in the Corel and Open Office stands. Majority of visitors are only after promo freebies… mugs, pens, mouse mats, whatever.

The stingiest of enthusiasts are just picking up corporate promo floppies en-masse. These are made with the format lug absent, but taking a small drill bit and drilling through the corner of the disk where the lug should be, restores the re-write function.

I got advance promo versions of IBM PC DOS and Solaris for x86.

In a small corner, and a humble stand, I found this group of thoroughly miserable exhibitors which everyone was passing by. They wanted to start this company, and were looking for investors, and they were talking about this thing called ‘dot-com’. I listened and took a floppy.

The next year, they were back in US and met their objective. The company was called Verisign.

Over the next five years, the ‘dot.com’ boom and bust came and went.

Right now, the more I think about Web3 and the potential for dApps, it is like I am being transported through some time warp tunnel and being placed in that small corner, right in front of that humble stand. The eerie ether like atmosphere is causing mucus from my nose, and the air is so thick and tangible it feels like I can reach out and carve it with a knife. It is so surreal.

MY TAKE ON WHERE THE YOUTH OF NIGERIA, INDEED AFRICA, AND OTHER COUNTRIES WITHOUT HARD CURRENCIES SHOULD FOCUS

The global fallout from the Russia-Ukraine war is not necessarily a bad thing for Web3 and the potential for dApps, It’s slowed down where big business is focusing, and that buys young entrepreneurs and coding consultants some more time to upskill, strategize and prepare. Forget quick speculative turn-around with little mental effort. Be prepared to ‘break’ your brain. This is about onboarding enduring value.

Don’t entertain ‘fluffy’ vague ideas about describing yourself as a ‘Web 3 Community Manager’. These only exist where some of the Web3 pioneers (like Unstoppable Domains) have HQ presence. While the job can be done remotely, at minimum you will need 24/7 reliable access to fairly modern computer with a large VDU and a reliable, corporate strength internet connection. Unless you are moonlighting from the Project Engineering Department of MTN, that isn’t going to happen!

A lot of technical skills are needed for this job, as a ‘Web 3 Community Manager’ would typically be in charge of a team of live support officers guiding a customer community through problems such as minting a Web 3 domain to a blockchain, or sorting out the technical intricacies of a cross bridge transfer, moving a domain from one blockchain to another. A ‘Web 3 Community Manager’ will usually have the challenges escalated that the regular support officers couldn’t fix, and they will have to produce the goods live, and in the moment. Thinking the job is just about soft skills is an illusion.

I see profiles on LinkedIn with people describing themselves as a ‘Web 3 Community Manager’ when what they are is someone who is an enthusiast, has built their own little ‘LinkedIn Nation’ around them, and is engaging with like minds. This is all very commendable but the title doesn’t fit.  Some are at best freelance technical journalists on the topic, but it is very difficult to monetize that in countries such as Nigeria.

I will invite you to go online and look at the very first automobiles ever made. You will find they look like a rich persons horse carriage, with the horses missing at the front, and some odd looking machine contraption linked to the wheels.

Humankind has often pioneered new inventions not with the tools best for the job, but with the prevailing tools best suited to what this new invention is intended to replace. Visualization is great in theory, but ideal tools are ‘ideally’ crafted, when the product it is to be brought to bear on… the application is an existing reality.

So it was with blockchain, and initial efforts were coded from languages that already existed, and were created with other things in mind… C++, Javascript, probably the newest of them was Python.

Now we have new languages and tools which have been purpose built with crypto, Web 3, (the decentralized web) and blockchain in mind. Solidity, Rust, Vyper, tools like the Moralis SDK (Software Development Kit).

My suggestion is to explore opportunities to upskill to some of these languages and technologies while there is still time. Build enduring value within yourself. The market is not there in Nigeria yet. There are no UD paying customer communities, but they will develop over time. But there are service gaps in developed markets for these services right now. These services can be sold globally until a home market is available.

Most mainstream Nigerian banks now offer domiciliary accounts in several currencies, such as Dollars, Euros or Pounds. Or you can take a look at KlaDot, from Tekedia Institute’s sister company, Tekedia Capital.

Don’t be swayed by speculation illusions. Build your future proofing for these new opportunities before big business gets the chance to come, cut, and run.

All references were secured 21-22 July 2022: 

moralis.io/best-languages-for-blockchain-development-full-tutorial/

coindesk.com/policy/2022/07/19/singapore-based-crypto-firms-leading-market-meltdown-were-not-regulated-central-bank-chief-says/

youtu.be/XNyY5q2twSo Josh Gordon  @justwavyj interviewing Matthew Gould, Unstoppable Domains CEO @matthewegould

developerupdates.com/blog/programming-languages-for-web-3

tekedia.com/beyond-crypto-fintech-and-defi-is-africa-ready-to-enter-web-3/

polygon.technology/

bitsear.ch/

fullycrypto.com/luna-drops-under-7-as-ust-peg-reverses-gains

socialx.network/

infura.io/

decrypt.co/105113/coinflex-limited-withdrawals-dispute-bitcoin-evangelist-roger-ver

investopedia.com/terms/g/gas-ethereum.asp

.barrons.com/advisor/articles/opinion-ukraine-war-bear-stock-market-51647285190

globalfintechseries.com/banking/digital-payments/solana-mobile-stack-begins-new-era-of-web3-with-mobile-first-android-platform/