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Solana DeFi protocol Everlend shuts down over liquidity issues

With FTX’s ripple effect on market liquidity, Everlend is closing its doors and urging clients to withdraw funds.

Solana decentralized finance (DeFi) protocol Everlend Finance is closing down its operations and urging clients to withdraw funds from the platform.

The company announced the decision on Twitter on Feb. 1, stating that despite having “enough runway” to continue operating, it would be a gamble under current market conditions. In particular, Everland’s team noted:

“Unfortunately, rn liquidity is just not there and this is so not just about Solana and the B/L market (on which Everlend is 100% dependent) keeps shrinking. In these conditions pressing forward is a gamble. And even though we had enough runway, we decided to stop now.”

Everlend also noted that deposits from underlying protocols are now in vaults, and the app will be in withdrawal-only mode until the funds are cleared. “[W]e suggest our users withdraw their funds asap.”

The team announced that all raised and unused funds, along with third-party contractor payments, will be “covered” in the next two weeks, indicating that relevant parties will be made whole. The protocol will also open-source its codebase, allowing others to continue building solutions on it.

We are deeply saddened to announce that as of today our team has decided to close down https://t.co/UiTuuSdyrB and won’t continue its development

— Everlend (@EverlendFinance) February 1, 2023

Founded in 2021, Everlend’s roadmap for the coming months included the launch of its governance platform and money market. Investors in the protocol included GSR, Serum and Everstake Capital.

According to DeFi Llama, Everlend held almost $400,000 in total value locked (TVL) during its peak. However, the protocol suffered a significant decline in the wake of FTX’s collapse, which had a negative impact on market liquidity. 

Everlend is the second Solana-based DeFi protocol to shut down within a few days due to crypto winter. On Jan. 27, Friktion platform announced it would be closing down its user interface, citing a “tough market for DeFi growth” for its decision.

The move came nearly a year after Everlend announced it had raised $5.5 million in a funding round. In November, the company even launched undercollateralized lending targeting institutional investors’ demand for DeFi, shortly before FTX contagious struck.

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Avalanche ‘bull trap’ risks pushing AVAX price down by 30% in February

The price of AVAX has more than doubled in 2023 but a growing divergence between several key metrics hints at a bearish reversal ahead.

Avalanche (AVAX) bulls should brace themselves for impact led by a growing divergence between severalkey indicators on the daily-timeframe chart.

AVAX price chart paints bearish divergence

The daily AVAX chart shows a classic bearish divergence between its price and relative strength index (RSI), a momentum oscillator forming since Jan. 11.

In other words, the price of AVAX has been making higher highs since the said date. But, on the other hand, the coin’s daily RSI has been forming lower highs. This divergence suggest a slowdown in the  momentum of the AVAX/USD pair, which may lead to a price reversal.

AVAX/USD daily price chart. Source: TradingView

In addition, the declining volumes during the course of AVAX’s ongoing uptrend also hints at the same bearish cues.

The price-RSI and price-volume divergences appear as AVAX price continues its 2023 uptrend . Notably, Avalanche has rallied by more than 100% year-to-date to $22.50 as of Feb. 2, helped by improving risk-on sentiments and  news of its partnership with Amazon.

On Jan. 31, Avalanche partnered with Intain, a structured finance platform that facilitates more than $5.5B in assets across more than 25 deals to run its digital marketplace IntainMARKETS via IntainMARKETS Subnet.

The price of AVAX rallied nearly 20% after the announcement.

Avalanche price risks drop 30% in February

AVAX’s price has successfully closed above two key resistance levels: a multi-month descending trendline (blacked) and its 200-day exponential moving average (200-day EMA; the blue wave) during the ongoing rally. 

AVAX/USD daily price chart. Source: TradingView

Avalanche now eyes a breakout above $22.75, which has been serving as resistance since August 2022, for a potential breakout to $30 as its next upside target. This level also coincides with the falling wedge breakout target discussed in this analysis.

In other words, an approximately 30% gain from the current price levels. 

Conversely, a pullback from the resistance level, fueled by the bearish divergence indicators discussed above, could send AVAX price toward its 50-day EMA (the red wave) at approximately $15-$16, down about 30% from current prices.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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Bitzlato CEO arrested by Spanish police: Report

Authorities seized an estimated $19.8 million worth of crypto, fiat and luxury goods from Bitzlato executives related to an ongoing money laundering investigation.

According to a Feb. 2 report by Turkish news agency Anadolu, Spanish authorities have arrested the CEO, sales executive and marketing director of Hong Kong cryptocurrency exchange Bitzlato. In total, six Russian and Ukrainian nationals related to the exchange were arrested in a joint effort between France, Portugal, Cyprus and United States law enforcement. 

As told by Spanish police, the exchange’s anonymity allowed it to become the platform of choice for criminal organizations seeking to launder money via cryptocurrency. Authorities seized $19.8 million (18 million euros) in digital assets, luxury cars, cash, smartphones and other items related to the investigation and blocked over 100 exchange accounts.

The move comes just two days after co-founder Anton Shkurenko stated in an interview that 50% of the Bitcoin (BTC) held in Bitzlato wallets could be withdrawn the same day the exchange relaunches after investigators seized approximately 35% of users’ funds held in the exchange’s hot wallets. Regarding this matter, Shkruenko also explained that the new Bitzlato will be based in Russia and “out of reach of law enforcement authorities.”

Related: Bitzlato kept a low profile, but did not go entirely unnoticed before DOJ action

On Jan. 18, the U.S. Department of Justice announced an enforcement action against Bitzlato, alleging that a lack of Know-Your-Customer and Anti-Money Laundering compliance helped cybercriminals launder over $700 million via the Bitzlato exchange. The same day, Bitzlato websites were shut down, with a portion of exchange funds seized by police. Its co-founder, Anatoly Legkodymov, a Russian national and resident of the People’s Republic of China, was arrested in Miami around the same day.

Bitzlato homepage after enforcement action 

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The Magic of the U.K.’s Ancient Stone Circles: Will We Ever Know the Truth?

With a title like that, it’s clear to see what this article is about! Let’s begin. Our foray around the United Kingdom begins. Back in August 2000, a man named David Farrant – a now-late, self-described vampire-hunter, and the author of The Vampyre Syndrome, Shadows in the Night, and Beyond the Highgate Vampire – claimed to have seen, late one night, the stones that comprise Kit’s Coty House, spinning at an absolutely furious speed, but without affecting or damaging the formation in any way, at all. And, with not even a solitary bit of damage to the surrounding grass when the spinning was over, either. Farrant said that on that appropriate dark, August night, he was hanging out at Kit’s Coty House to perform a midnight ritual that, he said, was designed to bestow wealth on he or she that cracks the secrets of the moving stones of Kit’s Coty House. Farrant – in a fascinating, but cloak and dagger type fashion – claimed that he had cracked the secrets of moving the stones of the county of Kent. He said the answer was (in one, single word): magnets. Rather frustratingly, that’s all Farrant would say. However, the strange issue of magnets raising heavy and large stones will crop up later – and in an equally fascinating story.

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Neanderthals Impressively Hunted and Butchered Massive European Elephants

During the Middle and Late Pleistocene eras, between 781,000 and 30,000 years ago, Europe and Western Asia were ruled by a massive beast – the straight-tusked elephant (Palaeoloxodon antiquus). These massive pachyderms put modern elephants to shame – they reached 4.2 meters (13.8 feet) in height, and weighed up to 16.5 ton (33.000 pounds). For comparison, today’s African bush elephants, the largest modern pachyderm, top out at 13,000 pounds and 11 feet in height. One would think that no other animal or human ancestor would mess with a colossal straight-tusked elephant. One would be wrong. New research shows that one extinct species of archaic humans was brave enough to hunt, kill and butcher the giant straight-tusked elephant – the Neanderthals. Wait … what? How did the Neanderthals accomplish this impressive feat … and why didn’t that skill and all that meat prevent them from becoming extinct?

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Senate Banking Committee’s priorities for new Congress include crypto: Report

Senator Tim Scott, who became the committee ranking member following the departure of Pat Toomey, reportedly plans to make a crypto regulatory framework a priority in 2023.

South Carolina Senator Tim Scott, the Republican ranking member on the United States Senate Banking Committee, reportedly plans to develop “a bipartisan regulatory framework” for cryptocurrencies.

According to a Feb. 2 report from Politico, Scott included the crypto framework as one of his priorities for the 118th Congress. He reportedly was skeptical of some aspects of crypto, alluding to the collapse of exchanges like FTX — “high-profile failures resulted in lost consumer assets” — and potential uses for illicit finance.

Scott recently took over the ranking member position from former Senator Pat Toomey, who served out his term without seeking re-election. Toomey supported many legislative efforts encouraging innovation in the digital asset space, while committee chair Sherrod Brown called on Treasury Secretary Janet Yellen to work with financial regulators and lawmakers on comprehensive crypto legislation.

Related: US Senate banking chair floats possibility of banning crypto

The Senate Banking Committee held a hearing in December aimed at exploring the collapse of FTX, with the possibility of continuing its investigation in a new session of Congress in 2023. The House Financial Services Committee, under the leadership of Representative Patrick McHenry, may likewise hold another hearing on FTX.

With the Republican Party taking control of the House of Representatives, McHenry has the authority to set the legislative agenda for the financial committee. He reportedly plans to create a new subcommittee focused on digital issues, given the “big hole” in previous committee structures.

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Top 7 blockchain courses and certifications for beginners

Blockchain courses and certifications help individuals understand the underlying principles and applications of blockchain technology.

Blockchain courses and certifications can play an important role in helping individuals gain a comprehensive understanding of blockchain technology and its applications. By completing these courses, individuals can develop technical skills, stay current with industry developments, enhance their career opportunities and increase their earning potential.

Here are seven blockchain courses and certifications for beginners.

INE’s Blockchain Security

INE’s Blockchain Security course is an online course offered by Internetwork Expert (INE) that provides a comprehensive overview of the security aspects of blockchain technology. The course covers various topics such as consensus algorithms, cryptography, network security, smart contract security, and blockchain attacks and defenses.

Related: What is a smart contract security audit? A beginner’s guide

This course is available as a monthly or annual subscription. The course is suitable for security professionals, developers and anyone interested in learning about blockchain security and how to secure blockchain solutions. There are seven modules in the course, as follows:

Blockchain security fundamentalBlockchain security advanced conceptsBlockchain risk managementBlockchain auditsVulnerabilities and vulnerability remediationBlockchain platform security considerationsCourse review

Throughout the course, students will be exposed to hands-on projects, case studies and real-world examples that help reinforce the concepts covered in each section. The course is modular, allowing students to learn at their own pace and revisit topics as needed.

Certified Enterprise Blockchain Professional (CEBP)™

Certified Enterprise Blockchain Professional (CEBP)™ is a professional certification program offered by 101 Blockchains, an industry-leading provider of training and research in the area of enterprise blockchain. The course is organized week by week into the following topics and can be completed in four weeks:

Blockchain technology fundamentalsEnterprise blockchain platformsBlockchain in trade financeBlockchain applications and use cases

The CEBP™ certification is intended for professionals involved in the development, implementation and management of blockchain solutions in their organization. It demonstrates the individual’s expertise in the field of blockchain and can enhance their career opportunities and marketability. The overall cost of the certification course is $399.

To earn the CEBP™ certification, candidates must pass a comprehensive exam (20 multiple-choice questions) that covers topics such as blockchain architecture, cryptography, consensus algorithms and smart contracts, among others. The exam is designed to test the individual’s knowledge of the concepts and their ability to apply that knowledge in real-world scenarios.

Certified NFT Professional (CNFTP)™

The Certified NFT Professional (CNFTP)™ is a certification program offered by 101 Blockchains that focuses on the concept of nonfungible tokens (NFTs) and provides a comprehensive understanding of the technology and its applications.

The program likely covers a range of modules related to NFTs, including:

Blockchain fundamentalsToken fundamentalsNFT fundamentalsNFT use casesNFT benefitsNFT challenges and risksHow to get started with NFTsHow to create your first NFT collectionTrading NFTs

This certification course is valid for a lifetime at the price of $179. By completing the Certified NFT Professional (CNFTP)™ certification program, individuals can demonstrate their expertise in nonfungible tokens and their potential applications, making them more competitive in the job market. The certification can also help individuals stay up to date with the latest developments and trends in the NFT space.

Certified Blockchain Expert (CBE)

Certified Blockchain Expert is a professional certification offered by the Blockchain Council. It is designed to verify the skills and knowledge of individuals in the field of blockchain technology. The course features various modules, including:

Introduction to courseOrigin of blockchain technologyIntroduction to blockchainTokenize everythingBlockchain ecosystemBlockchain miningTransactions UTXO vs. account modelSecurity and privacyOther consensus mechanisms in blockchainBlockchain solutions – steps and measuresUse-cases of blockchainOther use-cases of blockchain

This self-paced course is available for $179. To earn the CBE certification, candidates must pass a comprehensive exam (conducted for a total of 100 marks) with 60 or more marks. The exam covers topics such as blockchain architecture, cryptography, consensus algorithms, smart contracts and other related topics. The exam is designed to test the individual’s understanding of the concepts and their ability to apply that knowledge in practical scenarios.

Blockchain Specialization

The Blockchain Specialization is a series of courses offered by Coursera in partnership with the University of Buffalo and the State University of New York. The specialization covers the fundamental concepts and technologies behind blockchain and how they are used to build secure, decentralized applications.

There are four courses in this specialization, namely:

Blockchain basicsSmart contractsDecentralized applications (Dapps)Blockchain platforms

Each course includes a mix of video lectures, quizzes and hands-on projects to help learners apply their knowledge and develop practical skills. The Blockchain Specialization is intended for professionals and students interested in learning about blockchain technology and its applications. Completing this specialization can help individuals develop the skills and knowledge needed to work in the field of blockchain technology and enhance their career opportunities.

Blockchain A-Z™: Learn How To Build Your First Blockchain

Blockchain A-Z™: Learn How To Build Your First Blockchain is a course offered by Udemy that teaches the basics of blockchain technology and how to build a blockchain from scratch. The course is designed for individuals who are new to blockchain and want to learn how it works and how to create a blockchain solution. The course costs $74, includes 14.5 hours of on-demand video and includes modules like:

How to build a blockchainHow to create a cryptocurrencyHow to create a smart contract

Related: A step-by-step beginner’s guide to creating your first cryptocurrency token

The course includes video lectures, quizzes and hands-on projects to help learners apply their knowledge and develop practical skills. By completing this course, individuals can gain the knowledge and abilities necessary to work in the field of blockchain technology and improve their employment options.

Blockchain – Principles and Practices

Blockchain – Principles and Practices by Pluralsight is an online course that provides an introduction to the concepts and practices of blockchain technology. The course covers the basics of blockchain, including its history, architecture, consensus algorithms and security.

It also explores various use cases for blockchain in various industries, such as finance, supply chain and healthcare. To access this course, users must have a Pluralsight membership, which is about $29 per month or $299 per year. Free access to this course is also available with a 10-day free trial. The table of contents of this course is organized as follows:

Course overviewIntroductionUnderstanding the cryptographic principles used with the blockchainStoring transactions in blocksApplying proof of workMaintaining consensusCourse summary

The course is designed for those new to blockchain technology, but it may also be helpful for those who want to deepen their knowledge and expertise in this field. Individuals can learn the underlying principles of blockchain and how the technology can be applied to real-world scenarios by completing this course.

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Tether CTO Paolo Ardoino on taking the bull by the horn

Stablecoins may have suffered an identity crisis in 2022, but Tether chief technology officer Paolo Ardoino is bullish about the utility the sector provides.

Stablecoins have been under much scrutiny since the implosion of the third-largest stablecoin by market cap, TerraUSD (UST), in May 2022. The UST saga led to a lot of skepticism that caused consumers to question the safety of stablecoins. 

In the seventh episode of Hashing It Out, Cointelegraph’s Elisha Owusu Akyaw (GhCryptoGuy) interviews Paolo Ardoino, Tether’s chief technology officer, about how stablecoins work, and the two discuss frequently asked questions about stable tokens.

Fear, uncertainty and doubt (FUD) rocked the boats of stablecoin issuers after TerraUSD depegged in 2022. Tether was one such issuer at the receiving end of the FUD. Ardoino claimed that some of the FUD was being spread privately and publicly by competitors. Nevertheless, the Tether chief technology officer said that the FUD only served to improve trust between consumers and the company.

“I like the FUD so much because we can respond to it with facts.”

One such fact was the ability of the company to withstand the pressure that came as a result of panic in the market. Ardoino pointed out that Tether was able to process $7 billion in redemptions in 48 hours, which was 10% of the company’s reserves. According to him, it was an achievement that will be recorded in the history books of global finance.

On how to ensure that the industry does not again end up in a situation similar to what happened with TerraUSD, Ardoino argued that developers should stick to making stablecoins the traditional way and avoid the more experimental algorithm-based method. He believes that algorithmic stablecoins are inefficient and unsafe.

Related: Bitcoin advocate Najah Roberts explains why BTC is a tool for empowerment

Furthermore, Ardoino mentioned that algorithmic stablecoins might work only in instances where the stablecoin is heavily collateralized with more proven cryptocurrencies like Bitcoin (BTC) instead of cryptocurrencies issued by the same developers building the stablecoin.

“The problem with Terra was that their backing was a token they also created. Tether’s backing is the U.S. treasury bills, is the U.S. economy, so you cannot have traders attacking us because we have all the reserves.”

In the episode, the two also discuss:

How stablecoins work Algorithmic stablecoins vs. traditional stablecoinsThe TerraUSD deppeging sagaUse cases of stablecoins in developing economiesTether Peso and Tether Gold “Stablecoins war”: Tether (USDT) vs. USD Coin (USDC) vs. Binance USD (BUSD)Stablecoin regulationCentral bank digital currencies vs. stablecoins

Listen to the full episode on Spotify, Apple Podcasts, Google Podcasts, or TuneIn to get all the insights on stablecoins and Tether. You can also check out Cointelegraph’s catalog of shows on the new Cointelegraph Podcasts page.

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Community mocks Charlie Munger for his obsession with China’s Bitcoin ban

The online community has expressed bewilderment over how China’s crypto ban aligns with the United States’ proclaimed principles of freedom.

The cryptocurrency community has ridiculed well-known Bitcoin (BTC) critic Charlie Munger, vice chairman of Berkshire Hathaway, for calling the United States to follow in the footsteps of China and ban crypto.

In an op-ed article in The Wall Street Journal, the 99-year-old investment veteran has once again slammed crypto, calling a cryptocurrency a “gambling contract with a nearly 100% edge for the house.”

Munger also said that a cryptocurrency is “not a currency, not a commodity, and not a security,” adding that “obviously” the U.S. should enact a new federal law that would ban crypto.

According to Munger, the best way to approach crypto is to follow the example of China, which put a blanket ban on crypto in September 2021. The Berkshire Hathaway vice chairman stated:

“What should the U.S. do after a ban of cryptocurrencies is in place? Well, one more action might make sense: Thank the Chinese communist leader for his splendid example of uncommon sense.”

The community was quick to react to Munger’s latest anti-crypto arguments, with many expressing bewilderment about how measures like China’s crypto ban stack up with the United States’ proclamations that it supports freedom.

“The battle lines are being drawn. Freedom or tyranny. Non-custodial wallets are the hill we can’t surrender,” NFT APE author Adam McBride wrote on Twitter.

Others also mocked Munger for not understanding that crypto is virtually unbannable. Indeed, even after “banning” crypto in 2021, China has continued to be the second-largest Bitcoin miner in the world, and possessing crypto is apparently still legal. Moreover, the idea of lifting the crypto ban has been floating around in China for a while.

It’s sad that Charlie munger believes he’s doing something by calling for a ban. Doesn’t understand it’s math and can’t be banned. Old age deteriorates critical thinking skills.

— 941 (@level941) February 2, 2023

Given that Munger called cryptocurrency a “gambling contract,” it’s worth noting that gambling is legal under U.S. federal law, despite people losing significant money from it.

Related: EU lawmakers vote for more restrictive capital requirements on banks holding crypto

According to data from the American Gaming Association, U.S. casinos and mobile gaming apps hit a record $54.93 billion in revenue during the first 11 months of 2022. The revenues came at the cost of Americans losing more money on gambling than ever before by the first quarter of 2022.

Many European countries also allow at least some gambling, with about 420,000 British gamblers losing more than $2,000 per year.

Despite casinos causing significant losses for investors, Europe and the U.S. have not followed in the footsteps of China, which banned most forms of gambling back in 1949.

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Is the Metaverse really turning out like ‘Snow Crash’?

Neal Stephenson’s science fiction novel Snow Crash predicted the Metaverse in 1992. This cult book has the amusingly-named Hiro Protagonist running around in an artificial cyber world, trying to stop a virus that wipes minds, aided by his hacker friend Y.T. Reality is a place to escape from, a neoliberal future wrecked by hyperinflation and […]

Snow Crash by Neal Stephenson

Neal Stephensons science fiction novel Snow Crash predicted the Metaverse in 1992. This cult book has the amusingly-named Hiro Protagonist running around in an artificial cyber world, trying to stop a virus that wipes minds, aided by his hacker friend Y.T. Reality is a place to escape from, a neoliberal future wrecked by hyperinflation and inequality and run by corporations and gangsters and insane bureaucracy.

In many ways, the book is horribly prescient. (Its also horribly written in places, more like an info dump than a novel.) The Metaverse was a place where people had digital avatars, where they hung out with friends, went shopping and attended concerts. It was full of ads, the infrastructure was owned by a billionaire, and a virus was wreaking havoc on society. It all sounds familiar.

It wasnt COVID-19 of course. The Snow Crash virus caused the infected to lose the ability to think for themselves, and they start speaking in tongues.

Obviously, at the time, we didnt have social media, Stephenson told The Washington Post, but added, I was writing about just a long-standing human trait, which is this tendency for the mind to get hijacked by ideas.

The metaverse cant enslave you, yet, but the addictive nature of social media suggests its possible you might get hooked on a better virtual world, where your hotter-looking avatar interacts with people from all over the planet and has adventures that are not possible in reality.

Macbeth Final Production

To give you one crazy example of the possibilities, there is an actual theater company in the zombie-infested online wasteland survival game Fallout 76 that puts on Shakespeare plays. So, you can be part of the audience, or even audition and act, if you desire. Almost normal, except you may have to blast a few zombies in the middle of Romeo and Juliet. The ushers patrol the perimeter with chainsaws and AK-47s to annihilate any undead critics seeking to make their analytical discourse upon the performance.

This is all very Snow Crash. There is a real tension between the use of virtual worlds for escape or leisure and the impetus for profiteering. Many corporations see the metaverse and metaverse platforms as new continents to be colonized and exploited. If the metaverse develops under a centralized model, then it will be Amazon, Facebook and Google all over again: whale time. A decentralized metaverse built around blockchain technology would be more egalitarian and put the power back in the hands of users.

Enter the metaverse, stage left

Dr. Christina Yan Zhang Z (Supplied)

Dr. Christina Yan Zhang, nicknamed Dr. Metaverse, wrote her 2012 thesis about MMORPGs and the early metaverse platform Second Life, so shes been thinking about this longer than most. Shes now the CEO of the Metaverse Institute.

I think the beauty about the current development of the metaverse is basically the convergence of a whole range of different technologies coming together. Many of them are getting more advanced to really help to create the next generation of internet, which is more immersive, interactive and intuitive. 

She sees the metaverse as an enabling technology to improve interaction in both real and digital worlds.

Gaming writer Wagner James Au has just finished a book that will be published in June titled Making a Metaverse That Matters. Back in the early 2000s, he was the virtual journalist named Hamlet in Second Life. His white-suited avatar (a nod to Tom Wolfe) went around submitting dispatches from that virtual world. 

He envisions there being multiple metaverses: Its going to be based on the community; its going to be based on culture and aesthetics. For example, Roblox is huge, but its primarily with kids. And the aesthetics are very intentionally looking like Legos. You could jump from Roblox to Fortnite, then Fortnite to VR chat. So, it will not be a single, virtual world.

Wagner James Au in Second Life (New World Notes)

He continues, I define it very directly from what Snow Crash described: It was a vast virtual world with user creation tools and highly customizable avatars that is integrated with the real world economy.

In other words, you can make money from it and also integrate with external technology so you can actually hook it up to other technology beyond the immersive 3D experience.

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The Metaverse is awful today… but we can make it great: Yat Siu, Big Ideas

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Terra hit us incredibly hard: Sunny Aggarwal of Osmosis Labs

Snow Crash and capitalist realism

Science fiction and fantasy are known for creating new worlds to experience through literature, art and cinema. These genres have roots in the pervasive zeitgeist of their time, so they can often end up being unimaginative about new political or social opportunities. Tragic, influential British culture theorist Mark Fisher (who committed suicide in 2017) defined this as capitalist realism, the notion that capitalism is the only political structure and even visionary literature can rarely rise above imagining variations on this.

Mark Fisher Tribute Archive

Snow Crash posits a dystopian real world that makes escape into an alternative fantasy more attractive: Hiro is a pizza delivery boy in real life; in the Metaverse, he is the greatest swordsman alive.

The greatest tragedy would be if the specter of capitalist realism made the metaverse a mirror of the existing world. A virtual world where we peddle virtual crap to each other to keep our likes or crypto coming in. Roblox is a classic example: Its business model involves kids creating stuff with other kids that provides an income stream from their creativity. Web1 promised liberation but didnt fulfill it. Web3 needs decentralization so that corporations do not overwhelm it as they have with previous iterations of the internet.

The metaverse is not without its challenges. Magazines Jillian Godsil looks at some issues here. Author and futurist Bernard Marr also highlights some serious drawbacks.

Seven big problems

Bernard Marr. (BernardMarr.com)

Author and futurist Bernard Marr says, Im super-excited about this technology, but that comes with a warning about the potential perils of the metaverse. He has identified seven major problems and disadvantages highlighting the downsides to the virtual worlds. Most are quite knotty challenges, which wont be easy to solve in a malleable, constantly evolving world open to deviant behavior. 

Privacy issues

We already have privacy concerns when we browse the web, Marr says. The technology that is already tracking our behavior online will also exist in the metaverse, and the tracking is likely to become even more invasive and intense.

Wearable, haptic devices could measure all kinds of physical effects such as heart rate and sweating. Enormous amounts of data could be collected and used by companies for marketing or other purposes, Marr continues.

Safety of children

As parents, its already difficult to track what our kids are doing online, and that challenge will continue with the metaverse. Understanding what our kids are doing in the metaverse will be even more challenging because we cant see the world theyre looking at in their VR headset, and there is no process in place for monitoring their screens using tablets or phones, Marr opines.

Health concerns

The result of spending your entire life in the metaverse could result in everyone looking like the Axios Humans in Wall-E. VR hangovers are also a thing: The sadness and angst that come from leaving a very intense, absorbing experience and returning to reality can create a comedown similar to drugs or drinking. Gaming or internet addiction is already impacting mental and physical health, so it could potentially be even worse in the metaverse.

Axios Humans in Wall-E (Pixar)

Access inequality

Bernard Marr says, In order to use augmented reality, we need the latest smartphone and handset technology, and VR experiences require high-tech, expensive headsets as well as strong and reliable connectivity, he says.

How can we make sure that everyone in the world has equal access to the metaverse, and not just the people who have the most money and live in developed countries? This issue concerns Zhang, too. She sees Starlink as a way forward: The reason I mentioned Starlink is because one-third of the global population are still suffering from the digital divide, so they do not have access to the internet. Those smaller Starlink satellites can cover the most remote areas in the world.

Laws and regulations

A significant problem with all new technology is how slowly legislators and regulators are to formulate appropriate legal responses to the challenges presented. With something thats immersive, global and anarchic, which includes cryptocurrencies as well as the metaverse, authorities have difficulties keeping up with these technological changes.

Desensitization

Marr also worries that even more realistic violence will desensitize people to real-life violence. Although the zombie-hunting amateur thespians of Fallout 76 seem pretty balanced when Magazine chats with them. The counterargument might be that therapeutically killing orcs and zombies or catapulting angry birds is a relief valve for real-world stresses. These are not exclusive issues for the metaverse of course and have been leveled at games for years.

Identity hacking

If your avatar is hacked, a malicious entity could spread damage or possibly steal from you. This is yet another use case for blockchain technology in the metaverse as NFTs or blockchain-based identity technology is a solution suggested by Marr. So, your avatar could be anyone, but to enter the world, you would have to produce a digital, verified identity. That is similar to KYC processes to sign up for most crypto exchanges.

Interoperability

Au believes that there will be many different metaverse platforms, catering to different audiences. Wang disagrees, believing that interoperability will be an important way to ensure that users can move between experiences in the metaverse, via agreed protocols of interoperability, standardization of the metaverse and all additional assets by organizations worldwide. Interoperability and one unified Metaverse were the vision in Snow Crash.

Theres also disagreement over the level of immersion. Wagner thinks that there is sufficient computing available for most people to have a reasonably immersive experience via their smartphones, without needing VR headsets. Zhang disagrees, feeling that a large increase in computing power and probably quantum computing will be needed to fully realize an immersive VR system with millions of users.

Where is the metaverse heading?

In this difficult time in the crypto universe, many metaverse projects seem to be reorientating themselves. People are exploring ventures with a longer timescale to reach fruition. Zhang thinks that it will take 10 years to reach mass adoption. She views the European Unions provisional agreement on the Markets in Crypto-Assets (MiCA) proposal which aims to safeguard investing while fostering innovation as an important step forward for regulating the sector.

Wagner sees the drivers of the metaverse as users at both ends of the age spectrum: kids because they will find value in the play space, and seniors, driven by disability or social isolation, but able to interact via their avatars in ways that wouldnt be so easy in the real world. Wagner quotes the example of an 86-year-old blues guitarist he met busking in the street in Second Life.

Interestingly, Snow Crashs Stephenson has now launched a metaverse startup called Lamina1. 

Wagner says, Neal Stephenson launched it with a major player in the Bitcoin industry, Peter Vessenes. Theyre making what they call a metaverse-as-a-service so, a way for creators to monetize their content across various, multiple metaverse platforms.

Metaverse-First Blockchain Lamina1 Launches Rolling Fund for Web3 Builders https://t.co/vjZmahKK7o pic.twitter.com/kuykhtBLMQ

— Bunch Of Social (@BunchOfSocial) December 27, 2022

Vessenes, a Bitcoin pioneer, called it the base layer for the open metaverse: a place to build something a bit closer to Neals vision one that privileges creators, technical and artistic, one that provides support, spatial computing tech, and a community to support those who are building out the metaverse.

Lamina1 is very much built around the interoperability vision: that there should be one internet-like platform where players big and small can mutually coexist and flourish. That said, Web1 and Web2 arguably didnt reach that goal, so it isnt certain that a future version wont get dominated by big players as the web is now.

The metaverse is another new technology that has enormous potential for both financial and social rewards. It also has significant negatives that could stifle its growth. But Zhang opts for the glass-half-full viewpoint:

Fundamentally, we want to use technology to really benefit more people to have a more diverse, equal and sustainable world. We dont want the technology to be for a few people who have privilege or they are lucky to be financially free. So, I think there needs to be a really coordinated movement by governments, investors, NGOs and individuals coming together to ensure the rest of one-third of the population, in countries where the basic infrastructure is not in place, can be given more opportunity to flourish so no one is left behind. That needs to be addressed on a much higher level internationally.

See, the world is full of things more powerful than us. But if you know how to catch a ride, you can go places.
Neal Stephenson, Snow Crash

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