2 Weeks Ago

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

At their very core, digital assets are digital representations of almost every kind of tangible or intangible assets and their associated value. Furthermore, they permit issuing and transfer of ownership without the requirement for paper documents. Digital assets may include cryptocurrency, NFTs, images, data, equities, real estate, commodities, even cash in the form or CBDC and stablecoins, and many more.

According to economist, Philipp Sandner: “Digital assets have been dubbed the future of capital markets due to the diversity and usability of investable assets which will radically and significantly increase in the coming years.” 

Source: ledgerinsight.com
Types of digital assets include (although are not exclusive to): websites, photography, audio-visual media, logos, illustrations, presentations, spreadsheets, digital paintings, word documents, animations, electronic mails, and a variety of alternative digital formats and their individual metadata. The amount of various forms of digital assets is exponentially increasing thanks to the rising number of devices that are conduits for digital media, and particularly the expansion of the digital space - for example, smartphones. Due to explosive growth of software applications in the 2000s, vast diversity of user touch points and the rise of blockchain-based assets, the digital assets universe is growing.

What happens to digital assets if the owner dies? (and you don’t have the password):
There are many instances of digital assets being lost forever, the moment the owner dies and does not leave a clue of a password behind for accessibility. Digital assets management is a core issue to consider since management of digital assets does not only involve how well you hold and store your assets when you are alive, it also covers whether or not your assets will be accessible when you die. In 2019, it was reported that when the CEO of QuadrigaCX, Gerald Cotton, died, this resulted in the company’s customers' cryptocurrency assets being unobtainable since no one else had access to the password of the company's cold wallet. Resultant from this was that customers of Quadriga lost entire life savings.

Source: techcrunch.com

How can a dead man’s digital asset be recovered?:
The new generation of digital assets, which includes non-fungible tokens, cryptocurrency, tokens, tokenised assets, security tokens and central bank digital currencies (except the Chinese CBDC), are all based on blockchain technology which may pose great danger if the password to access a digital wallet is lost. It is advisable for those who own digital assets to set up a ‘dead man’s switch’ so that assets can be accessed in case of emergency. If you don't possess cryptocurrency yourself, chances are you are related to someone who does. About 16% of American adults say they have used cryptocurrencies and it seems that the % of people owning some form of digital assets is set to increase. Cryptocurrencies are no longer new but remain exciting, and many people certainly do not wish to miss out on what could be the next big investment trend - such as Web3, NFTs and decentralised autonomous organisations (DAOs). But new crypto investors do not necessarily think about what might happen to their digital assets in the event of an untimely death. This is bad news for many since currently there is no established way to ensure the passcode is passed on to the next relative. Without a plan, owners of digital assets can die and leave their heirs with no way in which to recover or obtain access to their assets.

Source: CipherTrace


Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

Due to its tamper-resistant nature, blockchain fits as an assurance of accuracy and transparency of data. This decentralised database of records is designed to facilitate raw data authentication challenges, transferring data of smart infrastructure or devices whereby improving both transparency and privacy.

Environmental, social governance (ESG) is “an approach to evaluating a company’s corporate social and environmental credit score compiled from data collected and related to the intangible assets of a company”. The social credit scores that are provided rank companies’ impacts on the world - for instance, pollution and modern slavery. Furthermore, the significance of ESG in determining the value of a company is gaining greater importance and attention from staff, clients, suppliers and shareholders. Globally, the value of assets now invested with an ESG mandate is estimated to exceed $53 trillion by 2025.

ESG-mandated assets are projected to be 50%+ of managed funds by 2024

Source: Deloitte
As mandatory corporate and sustainability reporting becomes common, accurate and verified documentation to support transparency becomes essential to satisfy various parties. Therefore, to comply with ESG standards, blockchain technology has increasingly been seen as valuable tool to help in verifying an organisation’s ESG credentials: 
data reporting - access to accurate, standardised information is key. Blockchain-enabled reporting tools allow companies to collect verifiable data and produce trustworthy reports which demonstrate their ESG credentials. Blockchain enables data standardisation whilst also providing the platform needed to support data transparency. The automation of data collection can be braced with other digital technologies, which allows various devices to communicate with each other automatically and share data and information without the need for human intervention. For example, to reduce the global carbon footprint companies are able to report the entirety of their emissions through a single blockchain platform thereby making a standardised space for data to be collected and tracked reliably, and consequently allowing for meaningful measurements.

supply chain transparency - an essential part of achieving the EU's sustainable goals is by improving supply chain sustainability. Blockchain technology shows the potential to transform supply chain management creating a database to record the transactions along the supply chain and bringing transparency, efficiency, traceability and reliability to supply chain management. Blockchains, coupled with Internet of Things (IoT), can automate data collection across different points of a company’s supply chain. This automation and real-time availability of information also helps companies detect issues faster and reliably trace the problem back to the source. Blockchain-powered platforms play a role in terms of responsible and ethical sourcing. The transparency it provides is crucial in tracking the materials and goods from source to end-use and helps ensure security for all participants by allowing them to access the records of transactions. This feature is particularly important when supply chains are global and can be complex, involving many different parties. 

Companies which are taking advantage of blockchain to support their ESG credentials:
As one of the leading energy companies in the world, Shell recently embarked on an ambitious energy transition agenda in a bid to move away from the use of fossil fuels and towards green and sustainable energy. It aims to reach net-zero carbon emissions by 2050 or sooner, and reduce emissions by 50% by 2030. To do this, Shell is leveraging game-changing technologies, such as artificial intelligence (AI), the internet of things (IoT),...


3 Weeks Ago

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

It has been over two years since non-fungible tokens (NFTs) came into attention and just over a year since the artist Mike Winklemann, otherwise known as Beeples, sold his NFT for $69million and made him the third most valuable living artist. However, the most expensive NFT ever sold was ‘The Merge’, by Pak, which was acquired by a consortium of over 28,000 buyers for $91million.

The hype built around NFTs makes it difficult for some to have an understanding, and many others get the wrong idea about these digital assets. For instance, some think of it as a Ponzi scheme and struggle as to why NFTs have attracted the interest and money that they have to date. The below table shows the total turnover of those NFTs that have been in excess of $0.5billion, as well as showing the numbers of buyers and number of transactions todate.

NFT collection rankings by sales volume (all-time)

Source: Cryptoslam
A brief explanation of NFTs is that they are unique codes which prove ownership of assets using blockchain technology. Anything can be an NFT, be it pictures, songs, videos, contracts, tickets, even data such as details about your home or your vehicle. NFTs have diverse use cases and are being used globally by different industries in many jurisdictions as well as major brands such as Adidas, Nike, Hermes. Below are some of the different uses for NFTs:

to sell tickets directly to people
to help content creators connect with their audience
for the identification and verification of health documents
for the representation of academic credentials at a time when falsifying academic records is still an issue.
for deployment across a supply chain
in artwork tracking
to transfer and record the ownership of properties - this covers intellectual and landed properties and patents.
With the different types of NFTs being established, it should be noted that there are many NFT marketplaces - i.e. some are niche-focused, whilst others are general marketplaces. The biggest NFT site is OpenSea, which has seen its value rise to be worth over $13.billion compared to only $1.5billion six months ago.
NFT landscape

Source: NFT TECH
Other significant NFT platforms include:
Rarible - with a ‘Spotify-like’ layout, this NFT marketplace is primarily focused on digital collectibles. RARI is the governance token here
Crypto.com - this allows users to trade digital collectibles from brands and celebrities
Foundation - with over a year in operation, most viral meme NFT sales, such as Pak’s Finite, Nyan Cat, etc, happened on Foundation
ZORA - a decentralised auction focused on helping artists take back the value which most brands, labels, or galleries take traditionally. Zora is built on ERC-721, which is the common standard for NFTs
SuperRare - this is a P2P marketplace focused on the trading of single edition artworks

However, unsurprisingly, there are both advantages and disadvantages of dealing with NFTs.

easy authenticating and record of ownership
NFTs can generate on-going income for the owner of intellectual property (IP) - similar to music royalties - as each time the NFT is re-sold, the creator can earn a % of the sale price
marketplace efficiency
since NFT stands for non-fungible tokens, the non-fungibility aspect makes them irreplaceable
profit potential
fractionalisation of ownership of physical assets
NFTs offer a new way to have greater diversification in an investment portfolio

uncertainty in value as the purchase does not always translate to ownership of the copyright 
NFT prices are volatile and can be illiquid
the value that comes with owning actual physical art means it cannot be digitised
from an environmental standpoint, some blockchains can be energy intensive -...

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

For the past couple of weeks, the Merge has been one of the most talked about topics in the crypto industry, and this is because of the precedents it will set for many other projects in the industry. The Merge encapsulates the merging of Ethereum Mainnet (the current one being used) with the Beacon Chain proof-of-stake system. This strips the network of any future need for energy-intensive mining by introducing staked Ethereum (ETH) into the picture.

The Beacon Chain is not changing the everyday Ethereum being used, but the proof of stake that Beacon Chain is introducing to Ethereum is a novel method of securing Ethereum. Unlike Bitcoin’s proof of works (PoW) energy-intensive cryptocurrency mining process, staking involves validators staking their ETH to initiate validator software. The Beacon Chain is not just appearing online - it has been live since 2020. As described on its website, the Merge is the consensus (Beacon Chain) and the existing layer (Ethereum Mainnet) merging so as to end further mining operations in the Ethereum network. Ethereum’s energy consumption will be reduced by 99.95% after the Merge,which is predicted to happen in the  for the end of 2022

Source: Coingape
The Merge is a welcome development in the crypto industry as it ends the energy consumption of a number of crypto critics and sceptics. Some have even hoped the Merge would have a ‘Midas touch’ effect in the broader crypto market. Bitcoin has been bearish for a while, struggling around the $20K - $25K mark. Meltem Demirors, the chief strategy officer at Coinshare, feels the Merge has no significant addition to Ethereum. In an interview on the 22nd of August with CNBC, she stated: “While internally there’s a lot of enthusiasm within the crypto community and Ethereum community around the merge as an event that will dramatically reduce supply while potentially driving demand. One of the realities on the macro side is people are worried about rates”. Her concerns about the Merge do not end there as she sees some stagnancy in the future of the network, adding: “I don’t think there’s a lot of new capital coming in to buy Ethereum on these changed fundamentals and technical. There’s also some risk that needs to play out with the market”. Meltem sums up the Merge as a “buy the rumour, sell the news” event. Regardless of this though, news about the Merge sent the crypto market on a short-term upward spiral in July 2022. However, data provider, Kaiko, reports that “ether’s price fall on the 19th of August brought a swift decline in open interest on derivatives - contracts that traders used to leverage bets on the future price of ETH”. Although many derivatives trades were liquidated owing to margin calls, this didn’t last as money flooded back into the ETH futures market - a significant spike in open interest. Furthermore, Coindesk notes “that ether’s perpetual contracts funding rates have significantly fluctuated; this resembles future “contracts on commodities but without expiration dates.”

The timetable for the Merge

Source: Ethereum

Many proponents of the Merge feel Ether futures will experience contango after the coalescence. This is because the Merge will reduce the supply of ETH, whereby increasing the demand for it and dragging the price upwards in the process. The director of research at Arca, Katie Talati, also agrees with this: “Ether’s real price appreciation will happen after the Merge, driven by increasing ETH locked up staking/securing the chain.” Specialised crypto asset trading company, Cumberland, projects $40million worth...


4 Weeks Ago

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

The possession of property has been a case of written rules and regulations, which is decided by a court or judge. But matters are now different, because the old-world is giving way to a new, digital age. Blockchain systems efficiently provide ownership rights, reducing bureaucracy, decreasing the cost to transfer real estate titles and eliminating much of the current paperwork, all the while enhancing transparency.

These attributes are being held out as reasons as to why blockchain-powered platforms offer the opportunity to transform real estate transactions. According to US finance company, MSCI’s, report: “The size of the professionally managed global real estate investment market increased from $7.4 trillion in 2016 to $8.5 trillion in 2017.” Today’s real estate and property market, however, consists of many isolated and freelance networks with transactional friction and ambiguity between existing systems. As predicted by Savills, the total value of real estate globally is in excess of $326trillion, so little wonder that owners and investors in property are searching for ways to improve transactions in this huge asset class. James Johnson and Dr. Holger Wolf at the law firm, White and Case, maintain that “blockchain has the potential to revolutionise the way the real estate sector operates, from smart contracts to management and execution of property sales and leases, and to the adoption by land registries.”
How blockchain will transform real estate

Source: Datadriveninvestor.com
Advantages of using blockchain in the real estate sector:
Real estate assets and property management: Tokenisation refers to a method by which sensitive information is replaced by a surrogate value, referred to as a token. Tokenisation of real estate assets according to Alphapoint “is the process of creating a digital asset that represents a single property or portfolio of properties on a blockchain-based system”. Essentially, property house owners can split their assets into tokens, which enables partial ownership of a property. Therefore, you’re not obliged to purchase the entire property at once, and using tokens makes it cheaper for users to diversify investments and gain equity. Tokenisation also offers the promise of improving liquidity since one can resell tokens through secondary trading on a digital exchange.

Three benefits of using blockchains for land registries

Source: whitecase.com
Blockchain-based smart contracts: a smart contract is a self-executing contract outlining the terms of the agreement between a seller and a buyer which are written into lines of codes. Letters of intent, listing agreements, offer sheets and closing documents are examples of contracts which may become digitised on blockchains. Using smart contracts rather than paper contracts can considerably speed up the real estate transactions. 
How smart contracts work in a simple property sale

Source: whitecase.com
Property search using blockchain-enabled MLS: in many jurisdictions real estate is transacted using Multiple Listing Services (MLS) for accessing the details of a property. The property listing on MLS provides significant and applicable information such as the location, features and availability of the property. MLS that use blockchains could change the listing data to be distributed across a peer-to-peer network, making the information more trustworthy and accurate. A public blockchain-based MLS could enable information about a property at a much lower cost.

No intermediaries: according to a report by Deloitte: “Lawyers, brokerages and banks have long been a part of the real estate ecosystem. However, blockchain could shortly begin a shift in their roles and participation in realty transactions.” Blockchains can potentially remove intermediaries, thus saving fees on commissions and costs charged by the intermediaries. This additionally...


A Month Ago

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

Digital nomads - people who typically work online in different locations that they select so as to earn their living, as opposed to having a fixed business location. It is estimated that the number of digital nomads globally is
in excess of 35 million, with 11 million thought to be in the US alone. The average age is thirty two and 61% of them are married, on average earning $110,000 p.a. and not surprisingly citing poor WiFi connections as the most frustrating thing about being a digital nomad. However, it is thought that the number of digital nomads will expand to over 1billion by 2035.

If this is the case and we assume that the average digital nomad only earns 50% of the currently average income (i.e., $55,000), and we further assume that these one billion people pay 10% income tax, then that equates to $5.5trillion of tax revenues. Hence, this helps to explain why various jurisdictions are scrambling to roll out the red carpet to attract these mobile, often highly intelligent young workers to come and work in their cities.  

Top 10 Cities to be a digital nomad in 2022

Source: International Accounting Bulletin
According to Flex Jobs, remote workers feel they are more productive compared to working in an office and list the following reasons as to why:
fewer interruptions (68%)
quieter work environment (68%)
more comfortable workplace (66%)
more focused time (63%)
avoidance of office politics (55%)
There are now forty-four digital nomad visa programs, as opposed to only twenty-one in February 2021, whereby making it increasingly easier to live and work in various locations. Spain has just announced its new digital visa program as it looks to tempt digital nomads (not to its great weather, beaches and food), but by reducing the tax digital nomads will have to pay from 25% to 15% for the first four years. When recently talking to Fraser Edwards, CEO of cheqd and a self-processed digital nomad, his response was: “I obviously expected to enjoy the digital nomad life but the biggest surprise was how much it reduced my stress levels whilst building a start-up. There is something extremely calming about being in a new place and being able to explore over evenings and weekends. This means I’m able to work much more efficiently and thoughtfully than being driven by stress. The main challenge is making sure to have consistent and predictable connectivity otherwise you can achieve the exact opposite, complete meltdown trying to find a connection so preparation and research for your next spot is absolutely crucial!”

Meanwhile, with regards to Decentralised Autonomous Organisations (DAOs), Ethereum defines them as:
“member-owned communities without centralised leadership
a safe way to collaborate with internet strangers
a safe place to commit funds to a specific cause.”
However, not all of the above may be the case depending on the DAO concerned but there is, without doubt, growing interest in DAOs and increasing awareness and discussion of the merits of decentralised finance (DeFi). In essence, DAOs are a new type of business structure using blockchain technology and employing smart contracts whereby removing the need for a centralised command and control structure - such as a board of directors and/or managers. Processes and procedures are voted on and agreed by the community then coded using smart contracts, which are further made available to the general public for all to see (therefore making DAOs very transparent). An example of one of the biggest DAOs is Uniswap which enables peer to peer exchange of crypto currencies built on the Ethereum blockchain. Uniswap is referred to by some as a DeFi platform or a decentralised exchange (DEX), and it deals in 170 cryptos with over $5billion of assets...

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

Blockchain is the ledger of transactions and accounts, noted and stored by all involved participants. Its purpose is to increase transparency, trust and accountability, and this is why it is an important element of modern-day farming. For example, blockchain in farming and agriculture has been employed as a system that increases the volume of reliable information available concerning inventories, contracts in agriculture and the general state of the farms. In the past, collecting such types of information was a costly affair, but blockchain is changing the narrative.

The use of blockchain technology has made it possible to improve the quality of the food supply chain and enhance the trust between the customers, retailers and farmers by constantly tracking the source and sustainability of various foods.

Source: Disruptordaily
As a reliable method of storing data, blockchain-powered platforms enable the facilitation of various information-driven innovations in order to herald a new era of smart farming. Using smart contracts, it is possible to automate many processes and can enable transactions between various stakeholders in a timelier fashion.

Concerns about blockchain in farming or agriculture 
Since blockchains rely on controls set by private organisations, it is easy for erroneous people to manipulate them to their own advantage. Unsurprisingly, privately-owned blockchains are less secure and easier to tamper with. Furthermore, small-scale farmers who do not have the required size, technological know-how and scale to apply blockchain technologies may be left behind. There are also concerns that blockchain technologies can be misused or abused and culminate in undermining food security.

SABIC launches blockchain pilot project
Saudi Primary Industries Company (SABIC), a Saudi Arabian chemical substances producer, recently launched a blockchain pilot venture together with the expertise agency, Finboot – with the objective to  examine the determine how  blockchain technology is able to offer end-to-end digital traceability of feedstock. The current technique of tracing the journey of feedstock is made arduous by the complexity in the petrochemical and chemical industry supply chains. SABIC’s blockchain pilot believes it will be possible  to reduce prices and time, enhance knowledge integration, reduce administrative efforts associated with the certification technique of supplies. Finboot’s ‘MARCO’ software program will track the product from where it is produced to SABIC who convert the base product into its round polymers. The supply of round polymers to Intraplás, a manufacturer of plastic laminated goods and packages for the food industry, for conversion into its packaging options will then also be able to be tracked.

Ucrop.it is an Argentina-based ‘agri tech’ company that tracks farmers’ sustainable practices on its blockchain-enabled platform. It creates ‘Crop Story,’ a blockchain-recorded data and information record that traces the farmers’ sustainable practices and helps them leverage their sustainability performance to access credit facilities from lenders. Ucrop has raised $3.1 million and is using blockchain to solve the differentiation between conventional commodity crops and climate-smart ones in an efficient, decentralised, digital and scalable way.

Vertical farming is a means of advancing the controlled environment of a modern commercial greenhouse. Through stacking plants vertically on shelves or tall pillars, vertical farming enables 10 times the yield for a given land area. Plants are grown in a completely enclosed environment, with LED lights instead of sunshine and closed-loop water recycling. A vertical farm can fit the equivalent of 250 hectares of farmland into a building the size of a large supermarket and, by utilising the artificial day length and season, it can produce crops all year round. In vertical farming, automation, data, sensors and other technologies are essential to its success and hence this type of farming may even have...

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

In October 2021, Facebook was rebranded as Meta. Despite losing $2.8 billion in Q2 2022, CEO Mark Zuckerberg said when announcing Meta’s latest results: “The metaverse is a massive opportunity for a number of reasons. I feel even more strongly now that developing these platforms will unlock hundreds of billions of dollars, if not, trillions over time.”. Meta has pledged billions of dollars of investments to build what it believes is the successor of the mobile internet: an immersive virtual environment available via augmented reality (AR) and virtual reality (VR) headsets and other hardware.

Recently, in a bid to build a digital wallet for the metaverse, Facebook rebranded its online payments service, Facebook Pay, to Meta Pay. This vision improves its interoperability and aligns the firm's payments offering with its grand ambition to build the ultimate metaverse. In 2021, $10 billion was raised by metaverse-related companies,  surpassing as much as twice what they had raised in the previous year. Citibank believes the global value creation opportunity from the metaverse could be as much as $13trillion. In previous articles, we have looked at how the metaverse influences society and commerce and in this article we will be discussing the opportunities of the metaverse for Muslims. 

Shariah-compliant metaverse
Shariah operates on the principle that "everything is permissible unless there is a clear prohibition." Technology, no matter how new, must be innovative, creative and, most of all, beneficial for humanity. Shariah is about adding meaning and any activity performed by a Muslim should be about meaning. Earning money or using technologies, in themselves, are not prohibited, but they have to be done in an honourable way - without harming or cheating others. This shows the importance of engaging Shariah experts in the co-creation of valuable endeavours together with understanding the Shariah boundaries. A Shariah-based metaverse could have the potential to be value-adding and beneficial for everyone - Muslim or non-Muslim.

With this in mind, the foundational blocks that need to be focused upon in developing a Shariah-compliant metaverse include:
Utility: Shariah is founded and based upon both wisdom and principles that bring value to people in this world and the other world. It encourages us to be entrepreneurial and creative in trade and business in order to fulfil our worldly needs. However, there is still a framework that governs practice. The Qur’an encourages believers to stay away from pursuits which are frivolous, aimless and unproductive. Not everything can be monetised; money should only be gained from goods and services which are lawful and deemed to have a reasonable benefit. In fact, an underpinning property for tradable goods or services in Shariah is that there should be a reasonable benefit. Therefore, the activities in a Shariah-compliant metaverse should be focused on utility and benefit.

Real vs virtual: any activity in the metaverse which impacts Shariah obligations or people’s rights will become impermissible.
Representation: designing avatars and concepts in the metaverse should follow the Shariah rules, not touching anything considered sacred or unlawful in Shariah.
Experience: for a Shariah-based metaverse, the experiences should be inspirational, educational and spiritual. A rule of thumb is that whatever is typically permissible to do in the world, according to Shariah, is generally permissible to do in the metaverse. For example, building casinos or nightclubs and similar experiences or engaging in such events in a metaverse would not be Shariah- compliant.

Trading: transactions in the metaverse must avoid all the prohibitions of Shariah, such as Riba, Gharar and others.

Warba Bank
Warba Bank, established in 2010 pursuant to an Amiri Decree aimed at reviving Kuwait’s economy after the country’s economic turmoil, recently announced that...

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

Digital assets come in many forms, including cryptocurrencies, NFTs, digital equities, debt instruments, real estate, and even fiat currencies packaged as central bank digital currencies (CBDC) and stablecoins. Arguably, CBDCs and stablecoins are set to have the biggest impact on business, society, and even governments, than any other type of digital asset.

Various jurisdictions are taking different approaches, from some countries openly banning them to others proposing new regulation and legislation. There is still a general suspicion (particularly around cryptocurrencies) as they could be seen to undermine the current financial system and the role of governments, while others feel digital assets can usher-in greater financial inclusion. Regardless, moves have been made by the two sides to end this enmity. Central bank digital currencies and stablecoins are two initiatives that can be seen to bridge the gap between both advocates of digital assets and regulators. 

Source: Remitano

The difference between CBDCs and stablecoins is that CBDCs are digital versions of a country’s fiat currency whilst stablecoins are a little more complex as they can be pegged to fiat currencies such as USDC, or indeed a basket of cryptocurrencies such as MakerDAO. CBDCs are issued by governments, whilst stablecoins are typically the products of private companies. Adam Back, from Blockstream, recently described CBDCs as being “worse than bank accounts”, further stating that they “will be worse than paper cash, stablecoins or even Bitcoin”. Back, a proponent of Bitcoin, must have been appalled to even include “worse” in the same line as Bitcoin but, no doubt, all in a bid to emphasis his concerns relating to CBDCs. CBDCs hold no real threat to cryptocurrencies but to online banking, maybe. All this is made evident when looking at those countries which have adopted CBDCs.

Source: Elithium

China is a leader in the CBDC space, with over 250 million registered wallets to its digital Yuan (which, incidentally, does not use blockchain technology). But it is not merely China that is interested in CBDCs as, according to the Bank of International Settlement (BIS), 90% of central banks are exploring CBDCs. Indeed, before China, Ecuador had launched its digital currency back in 2015 - Dinero Electrónico - but, although attracting 500,000 users, the government eventually withdrew it. Other countries which have CBDCs besides China are the Bahamas, the Eastern Caribbean Union and Nigeria. Countries which are currently testing CBDCs in pilot projects are South Korea, Jamaica, Ukraine, Sweden and Japan, and those which have CBDCs in development are India, Eurozone, the United Kingdom and the US. A BIS survey on central bank digital currency revealed that 60% of central banks were conducting experiments or proofs-of-concept, whilst 14% were moving forward to develop and pilot arrangements. These arrangements take one of three models - retail, wholesale or hybrid CBDCs. So, what are the differences between these types of CBDCs?

Retail CBDC is defined as the model wherein "the digital currencies are issued to the general public. The system is based on a distributed ledger and ensures anonymity, 24/7 availability and traceability. Moreover, it makes the application of interest feasible. Developing or emerging economies generally opt for the retail model with the thought of leading the emerging fintech industry. However, anonymity brings several hardships in terms of fraudulent activities."

Wholesale CBCD is defined as the model wherein "Wholesale CBDCs are offered to financial institutions that carry reserves...

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

Tokens have been used since the 17th century as beingessentially coins that represent a coin of the realm or are ‘good for’ a certain value of product”. People have used also tokens for exchanging goods and services. The concept and use of tokenisation in modern financial markets was developed by a company called TrustCommerce, back in 2001, to store sensitive credit and debit card information.

Credit card firms use tokenisation to replace a client’s primary account number (PAN) with a token, which is essentially a randomly generated set of symbols which are useless to hackers if they were to access the token. A more simplistic way to think of tokenisation is if you go to a casino, you use cash to buy plastic tokens for use in the casino, with the key point being that the tokens themselves have no value outside the casino. According to the publication, fisglobal: “Tokenization reduces risk from data breaches, helps foster trust with customers, minimizes red tape and drives technology behind popular payment services like mobile wallets”. Therefore, it is of no surprise that payment firms have been using tokenisation with the benefits of tokenisation for businesses including the fact that:

it reduces risk from data breaches 
it helps foster trust with your customers 
it means less red tape for your business
it drives payment innovations

Meanwhile, given the growing understanding and increasing use of blockchain technology, organisations are now using this technology to tokenise not just data, but real assets such as stocks, debt instruments, real estate, commodities, and even cash in the form of central bank digital currencies (CBCDs) and stablecoins pegged to the $ or £ or € etc. Global investments company, BNY Mellon, is one of the global titans when it comes to assets that it looks after for clients, with over $43trillion of funds that it has in custody. It defines tokenisation as: “the process of converting rights - or a unit of asset ownership - into a digital token on a blockchain”, believing also that, “the benefits of tokenization are particularly apparent for assets not currently traded electronically, such as works of art or exotic cars, as well as those needing increased transparency in payment and data flows to improve their liquidity and tradability”.

Tokenisation of assets

Source: BNY Mellon

Listed below is what BNY Mellon believes are the benefits offered by tokenisation :
reduced settlement times
broader investor base 
broader geographic reach 
infrastructure upgrade 
decreased cost for reconciliation in securities trading
regulatory evolution
improved asset-liability management
increase in available collateral 

Whilst tokenisation of equities offers exposure to the gyrations of the underlying stock, e.g., Google, Apple, Mircosoft, etc, tokenised stocks do not offer the legal rights associated with share ownership at the moment - such as voting rights. If you buy a tokenised equity via FTX, you will currently not be able to vote on corporate actions. The same is true for tokenised stocks bought via Binance. However, a feature that could prove helpful for some investors is that FTX is aiming to pay all dividends gross of tax whereby doing away with the need for international investors to be compelled to reclaim tax from various jurisdictions. As well as not being able to vote, holders of tokenised equities also need to be mindful that presently you are unable to buy tokenised shares from one provider e.g., Binance, and sell them on another platform e.g., FTX.

When asked about tokenisation, Clauss Skanning, CEO of Danish firm, DigiShares (specialising in tokenising...

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

The increasing interest and popularity of blockchain and the digital assets this technology creates have highlighted its various impacts. Both innovations are gradually becoming the mainstay for many industries and, due to the steady growth and multiple security factors they encompass, many corporate sectors have grown receptive to their offerings.

Companies such as Amazon and IBM oracle have introduced enterprise-grade blockchain systems that are scalable and secure. In the last few years, significant use-cases of blockchain and digital assets in many sectors have emerged, and the automotive industry is certainly not excluded.
Porsche and blockchain

Source: Porsche

In February 2022, Porsche became the first auto manufacturer to successfully use blockchain technology in its cars, with Oliver Döring, Porsche’s financial strategist, announcing: “We can use blockchain to transfer data more quickly and securely, giving our customers more peace of mind in the future, whether they are charging, parking or need to give a third party, such as a parcel delivery agent, temporary access to the vehicle. We translate the innovative technology into direct benefits for the customer.” However, many other carmakers are exploring ways to integrate this game-changing technology into their vehicles. They are all aiming to take advantage of its potential to dramatically change how information or data is stored and used, subsequently enhancing transparency and security and improving transactions. Below is a selection of ways in which car makers are able to use blockchain technology:

making user-friendly cars
Blockchains could be useful in helping drivers to unlock their vehicles; that is, the vehicle could be added to a blockchain, allowing the driver to communicate with it directly via an app. This would greatly speed up the vehicle's response time since instructions would no longer need to go through third-party servers. The integration could also enable car owners to grant others temporary access to their vehicles. The vehicle could be remotely unlocked via the app, granting a third-party or friend access into the vehicle. 

improving autonomous driving systems 
Blockchain is a decentralised database of records that could improve autonomous driving systems. As a self-driving vehicle navigates the vicinity, the blockchain would record data about the journey which could range from information about regional weather conditions to general traffic patterns. Blockchain is able to share the data whereby allowing other vehicles in the network to then access this information. A blockchain-powered platform could give other vehicles access to other vehicles' data, which would be an essential part of the infrastructure required to enable level-five autonomous driving - Oculus believes this could be possible by as soon as 2030. In agreement with this, Toyota had already teamed up with MIT Media Lab back in 2017 to work out ways in which to use blockchain to speed up autonomous vehicle technology.

ensuring materials are ethically sourced 
Two-thirds of the world's cobalt is mined in the Democratic Republic of Congo (DRC). Roughly 20% of this comes from artisanal unregulated mines that often exploit child labour, with about 400,000 children spending their days in these mines working for low wages under extremely dangerous conditions. Harnessing blockchain's ability to track supply-chains, a London-based blockchain start-up called Circulor aims to track cobalt from the time it leaves a mine until it reaches a manufacturer. The company is already testing the process using ‘clean’ cobalt from countries such as Canada and Australia. Furthermore, the company could refuse...

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

Over the last few years, the use of cryptocurrencies has seen growing adoption globally and some regions, such as Latin America, have turned to virtual money in the form of cryptos as an alternative option following the fall in government-regulated currencies. Between 2019 and 2021, the use of cryptocurrencies in Latin America rose by 1,370%. About the same time, El Salvador approved Bitcoin as an official legal tender, becoming the first country to do so.

Furthermore, the swift developments in crypto and digital assets have been sparking start-ups in the region. Last year, the value of crypto firms in Latin America increased almost tenfold from $68 million to $650 million. However, due to their volatility and the potential for criminal use, caution abounds over the proliferation of digital assets. For instance, the recent price falls in cryptocurrency values is being greatly felt by some countries in Latin America, with El Salvador having reportedly lost almost $40 million with crypto since the September 2021 adoption.
Overview of blockchain in some Latin American countries 
Due to the instability of the peso - the basic monetary unit of several Latin American countries which is experiencing year-over-year inflation of over 55% - there is need for an alternative. Cryptocurrency, by providing better chances, appeals to the Argentines who had once been looking to keep their assets in dollars or euros. In 2021, the crypto flow in Argentina reached $103 billion. There was a 340% rise in the number of companies paying their employees partly in crypto, thereby making Argentina the country with the highest percentage of crypto-paid workers. However, as crypto has grown in popularity the mining process has become more expensive, with local governments having raised energy taxes due to mining being highly energy-consuming. The country is also hesitating on introducing major cryptocurrency regulations due to the central bank expressing concerns about crypto's vulnerabilities despite growing adoption. 

Brazil, being Latin America’s largest economy, has been valued at $27.6 billion per year as of April 2022. The first cryptocurrency unicorn in Latin America, Mercado Bitcoin, is based in Brazil and its valuation increased to over $2 billion in 2021. According to the 2022 Global State of Crypto Report, Brazil, followed by Venezuela, has the highest percentage of its population owning crypto in Latin America and Brazil’s Congress has been planning to develop a regulatory framework. On April 26th 2022, the Brazilian Senate passed a bill governing virtual assets. The bill comprises of provisions that both define virtual assets and create rules for day-to-day usage. It also puts in place penalties for fraud.

Cuba has only recently rolled out internet connection for mobile phone users and already has about 100,000 citizens using some form of cryptocurrency. Compared to the 11 million citizens living in the country, this is not so high - however, this is only within a few months. Virtual currencies are popular in Cuba for remittance payments but, in November 2020, the then-US president banned the use of Western Union, which was the main company facilitating remittances to Cuba. In April 2022, after having allowed crypto for personal use in 2021, Cuba’s central bank approved licensing of some cryptocurrency service providers. Due to cryptocurrency’s anonymity and independence from national or multinational oversight, US restrictions could be boycotted. Venezuelans and Nicaraguans have likewise enlisted cryptocurrency to circumvent US sanctions.

El Salvador
El Salvador is the first country to adopt Bitcoin as an official legal tender. President Nayib Bukele framed his country as a pioneer and...


2 Months Ago

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

In 2020, the number of electric cars exceeded 10 million
(a rise of 43% compared to 2019),with the following parts of the world showing the biggest growth in new registrations of electric cars:

Europe 1.4million 
China 1.2million 
USA 295 000 

Environmentalists, such as Greta Thunberg, have always highlighted the dangers of climate change and Thunberg did this again at Glastonbury where she spoke about “governments creating loopholes to protect firms whose emissions cause climate change.  These firms are not the only ones that cause climate change. A quarter of the C02 that is emitted into the atmosphere can be linked to transportation, and a good percentage of world transportation revolves around road transport i.e., cars”. The BBC highlights, too, that “cars, buses and motorbikes - account for nearly three-quarters of the greenhouse gas emissions that come from transport.” But at this point in civilisation, is it impossible to do without cars since they are a fundamental aspect of our everyday lives? Indeed, some governments and organisations have envisioned a new way of riding without ‘poking’ at the earth. The idea of electric vehicles (EVs) has come to life and the industry is constantly morphing to remain true to its objectives. EVs are out to replace the internal combustion engines in the strive to reduce emission of carbon monoxide, hydrocarbons, nitrogen oxide, etc.
Electric car sales 2010 to 2021 globally

Source: IEA
Markets and Markets project that the global EV industry is expected to rise from 8.151million vehicles to 39.208million vehicles from 2022 to 2030, which equates to a CAGR of 21.7%. On the list of things driving the industry forward is governmental support through tax rebates and subsidies (compelling manufacturers to make EVs) and increased demand for low-emission vehicles. Unsurprisingly, the EV industry comes with its challenges but blockchain technology has found its place as a solution to some of these problems, including:

vehicle verification
The growth of the industry creates an inner market for the sales of used EVs. Before buyers decide to purchase a used EV, there is a plethora of information required to be completed such as safety devices in the car, miles clocked, servicing information, etc. Blockchain can be used to create, in effect, a digital ID for such EVs therefore enabling buyers to quickly verify any information they are given by the sellers. Meanwhile, blockchain technology and services company, BlockchainXdev, is building a vehicle ID since research from FIA (Fédération Internationale de l’Automobile) claims that 15% of vehicles circulating in Europe were subject to mileage frauds in 2018.

high production costs
Pre and post the COVID-19 pandemic, the cost of raw materials has risen and higher production costs have not been helped by an increase in transport overheads and general supply chain challenges. Blockchain-powered platforms can be used to track and trace materials that are being transported for production and generally improve supply chain efficiencies. 

few charging stations
EV enthusiasts are reticent about buying EVs due to concerns about the availability or lack of charging points when embarking on a long journey even though, in the UK alone, apps such as ZapMap now list over 400,000 EV charging points. One-way blockchain technology is tackling this problem is by facilitating power trading between charging ports and those who need it. Examples of...

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

In the past, the Bank of England and the Financial Conduct Authority (FCA) would have seemed to be out of step with the UK government. Earlier this year, Rushi Sunak, the previous Chancellor of the Exchequer and now aspiring replacement Prime Minister commented on this when he stated: “It is my ambition to make the UK a global hub for crypto asset technology…”  furthermore adding, “the Treasury has confirmed its intention to recognise stablecoins, digital assets pegged to the price of real world assets, as a valid form of currency.


Source: Twitter
Meanwhile, Nikolay Storonsky, CEO of Revolut, has been frustrated by the FCA “for its tardiness in dishing out a UK banking licence for the firm”. Storonsky has complained that UK regulators were slower to grant regulatory approval compared to other jurisdictions: “I definitely see the process is slower compared to other regulators,” he stated, adding, “I’ll give you an example - so we applied for 48 licences across the globe and we received 44, and three of the licences that we haven’t received are actually in the UK.” Storonsky is not alone, with 80% of firms having applied to the FCA to be on the crypto register now having withdrawn their applications. It seems to many that the Bank of England and FCA have been dragging their feet. The FCA, whilst not regulating crypto assets, keeps reminding the public of the risks and volatility of this assets class (and correctly so). The FCA defines crypto assets to be: “Cryptoassets are cryptographically secured digital representations of value or contractual rights that use some type of distributed ledger technology (DLT) and can be transferred, stored or traded electronically”. This could be interpreted as denoting that firms dealing or issuing NFTs would potentially need to register with the FCA, since NFTs would appear to meet the FCA definition. Meanwhile, the Bank of England is calling for more regulation correctly, arguing that “technology cannot remove all financial risk”. Yet behind the scenes there could, indeed, be more going on than some realise - the stakes are high and furthermore, as the UK economy faces the spectre of stagflation and rising interest rates, the embracing of blockchain technology and the digital assets that they can create could hold some powerful benefits for the country. Estimates suggest that the value of the UK’s goods and services could expand by as much as £41.5bn by 2025 and create a further 678,000 jobs. There are certainly plenty of jobs for those looking to work in the digital asset sector already - the UK is ranked second only to the US with almost 1,000 jobs for people to work on crypto projects being advertised. 

Back in April 2021, when announcing that it was going to allow omnibus accounts, the Bank of England’s explanation of these new accounts was that: “an operator of a payment system can hold funds in the omnibus account to fund their participants’ balances with central bank money. This will allow them to offer innovative payment services while having the security of central bank money settlement.” In addition to this, HMRC issued a consultation paper on 5th July 2022 “ to consider if costs could be reduced for taxpayers who participate in DeFi, and could tax treatment might be more aligned with the transactions' fundamental economics thus making tax collection more efficient?” The UK government does seem to be listening to those engaged in digital assets and supporting Sunak’s wishes as it has issued its Financial Services Bill as recently as on 20th July 2022. Included in this...

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

According to PwC, 60% of the hundred largest law firms in the UK have been increasing the amount of money they spend on technology, with e-signature, document storage and virtual data rooms being the three biggest areas of development.

Technology where legal firms are investing

Source: PwC

As PwC has reported: “Tech needs now cost the partners almost as much as half of what a firm’s premises cost. This just shows how central tech is now to the functioning of law firms.” Law firms rank Improve use of technology as their top priority for business support. Furthermore, blockchain software technology company, ConsenSys, believes: “Lawyers can leverage blockchain technology to streamline and simplify their transactional work, digitally sign and immutably store legal agreements”. Back in 2017, the 26th PwC annual Law Firms’ Survey revealed that 70% of surveyed law firms would utilise smart contracts for transactional legal services, 41% would use blockchain for transactional legal services, 21% for legal support and 31% for high-value legal services.

Benefits of blockchain technology in the legal sector
accessibility - by leveraging blockchain technology, lawyers can streamline and simplify their transactional work, and digitally sign and permanently store legal agreements. With the use of smart contracts, scripted texts and automated contract management, the time spent preparing, personalising and maintaining standard law documents is reduced. This is cost-saving for both the legal industry and the customers.

transparency - blockchain-based contracts have baked-in compliance thereby providing no room for ambiguity. Being a distributed ledger technology, blockchains create a shared ledger which is accessible by all relevant parties.

automation - according to CLIO’s Legal Tends Report 2018, lawyers spend about 48% of their time on administrative work. Utilising pre-designed smart contracts will automate non-billable administrative tasks and transactional work whereby offering greater efficiency in legal proceedings.
cost reduction - automating manual tasks significantly reduces the time spent on drafting and amending legal documents. Since clients pay the documentation cost, introducing smart contracts will cause a reduction in transaction costs for both parties.

efficiency - blockchain can streamline and automate many processes in the legal industry without losing any of the judicial authority. Also, cost and friction can be reduced by optimising administrative and critical tasks.

data integrity - legal documents are vulnerable to ill-intentioned hackers who seek to steal, destroy or manipulate critical information. However, to preserve data integrity, data can be stored in decentralised locations. If there is an alteration of evidence the associated hash value will not match, making it obvious that a change has occurred. Also, given that data is held on a blockchain in a cryptograph manner and on multiple servers, the use of blockchain-powered platforms offers improved cyber security and potentially better disaster recovery properties. 

Different uses for blockchain technology in the legal sector 
document management system (DMS) - DMS is specialised software for storing, accessing and managing files. This first step towards digitised documentation was created to simplify and accelerate office processes. It has great security with customisable access rights, data backup, and maintains regulatory compliances by simplifying data classification. DocFlow is just one example of a blockchain-powered DMS platform available for lawyers to improve the ability to track documentation, be more trustworthy and accelerate the whole document management process.  Although DMS has several advantages in the legal industry, some drawbacks have necessitated the...

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

Blockchain funds arguably come in two formats. Firstly, there are funds/vehicles that invest in assets to do with blockchain which would include cryptocurrencies or companies involved in using blockchain in some manner - these types of funds include hedge funds, private equity funds, ETFs (Exchange Traded Funds), ETPs (Exchange Traded Products), etc.

The second type of blockchain funds are mutual funds - the type that you, as a reader, have historically invested your savings and pension funds into but are using blockchain technology to create digital/tokenised funds. These digital funds will employ the same fund managers but, instead of only being able to be bought or sold once a day, will enable investors to potentially trade 24/7 and have independent market makers to price the funds - as opposed to the price being set by the asset management firm.

Historically, there are very few blockchain-mutual funds as mutual funds mainly because, for retail mutual funds specifically, they have to hold the majority of their portfolio in those assets which are quoted on recognised exchanges. This means investments such as shares in unquoted blockchain start-ups or cryptos are generally not allowed for traditional mutual funds. Whilst there are quoted specialist companies, e.g. Kasei Holdings *(which invests in a portfolio of cryptos), there are also a variety of other ways to offer exposure to blockchain-related assets, including blockchain ETFs. These are typically ETFs which own shares in companies that use or develop blockchains and will often have no exposure to cryptocurrencies. For example, Walmart uses a blockchain-powered platform to create an automated system for managing invoices and payments for its logistics partners, and Saudi Aramco which invested $5million into Vakt, itself helping to make the petrochemical industry supply chains more efficient using blockchain technology. Furthermore, ETFs can be broken down into the following categories:

companies that own cryptocurrency - MicroStrategy and Tesla

crypto exchanges and crypto miners - Coinbase is a cryptocurrency exchange and Riot Blockchain, Core Scientific and Marathon Digital are all Bitcoin mining companies

financial services firms - Galaxy Digital Holdings (a crypto asset manager), and Société Générale, HSBC and BNP Paribas are all working on blockchain-powered platforms

tech companies - NVIDIA (a microchip manufacturer) and Advanced Micro Devices supply hardware to support blockchain systems 

Launching in 2018, the Amplify Transformational Data Sharing ETF (BLOK), with its focus on blockchain technology, was the first blockchain ETF approved by the SEC and invests in companies developing and utilising blockchain technologies. Forbes has compiled a list of other blockchain ETFs one can invest in.
Increasingly, the asset management industry and service providers (i.e. custodians and administrators) are looking to create a digital version of a standard mutual fund. BNY Mellon, which is one of the leading fund administrators and providers of custody services, has been a strong advocate of how blockchain technology is going to impact the asset management industry: “Blockchain’s ability to lend transparency and speed to once cumbersome and opaque workflows can revolutionize the way custody banks serve their clients…. Real-time knowledge of incoming trades would be particularly helpful for fund managers during times of extreme market volatility. If money managers have immediate transparency into the creation and redemption of funds, they would be able to react to the market more quickly”.

Digital/tokenised mutual funds

Source: Tokeny

As reported in the FT, Timothy Spangler from the law firm, Dechert, believes: "A mutual fund...

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

Mental health is increasingly becoming the subject of conversations taking place in many different industries. This was particularly brought to light during the COVID-19 pandemic when most company employees were obliged to work from home and highlighted the varied mental health challenges people face in a cross section of jobs and age groups across the world.

Ever since governments and organisations started to make provisions for the mental health of their employees and citizens there is an expectation for employers and authorities to take a strong stance on mental health issues. Both blockchain technology and the metaverse have a variety of ways in which they can potentially support the mental health sector and offer some insight as to how workers will be able to embrace the ongoing digitisation that we face at home, at work and in our day-to-day lives.

Deloitte 2022 Global Health Care Outlook

Source: Deloitte
The global mental health industry is estimated to be US$527 billion by 2030, although the size of this sector is potentially much larger as many mental health issues still remain unreported. Furthermore, to some extent mental health still has a certain stigma attached to it, although there is now increasing awareness and sensitisation as regards the approach and treatment of mental health illnesses. Tragically, the COVID-19 pandemic caused rates of suicide around the world to spike and, at the time, the National Library of Medicine published a report Suicide Risk and Prevention during the COVID-19 pandemic
 explained how preventing suicide needed urgent attention. In the US, the National Institute of Mental Health has estimated that 1 in 5 adults lives with a mental illness. Only half of these people have received treatment for their illness. 

Author and alternative medicine advocate, Deepak Chopra, has recently launched his "Never Alone Initiative - Worldwide Alliance” which is a partnership between the Chopra Foundation and Hedera Hashgraph. The Deepak Chopra Foundation itself is a not-for-profit organisation and has selected Hedera Hashgraph for its distributed ledger technology to meet some of the challenges around supporting mental and emotional well-being. Chopra hopes to create emotional support and a support system for everyone and anyone who is experiencing mental health services. "Never Alone" is designed to create a community of transparent and vibrant participants in health, wellness, and mental health. The blockchain-powered platform is designed to allow medical practitioners and mental health and wellness experts to load information to a database that cannot be altered or tampered with but can be accessed globally.

Source: BusinessNews
Meanwhile, TAGO, a UK-based tech firm has turned to tokenising mental health. Its objective is to help its users find professional mental health counsellors and experts easily whilst also earning through their "talk to earn" model in which both users and consultants converse. Tago has also created its own metaverse, Tagoverse, with its Tago token being utilised to govern the community. Holders of the token can attend courses, participate in spiritual events, exchange spiritual items, and engage in the staking program to earn more voting rights and premium access. Users/members of the platform are never left stranded as they can always talk with Tagosol, the world's first NFT mental health AI assistant. It is designed to help users find answers to their mental health problems, relax, earn rewards and help control their emotions.

Another company using tokens to help mental health challenges is the US firm, FiveBalance, with...

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

The first Decentralised Finance DeFi project back in 2015 was MakerDAO, which enabled smart contracts to be used to lock up Ethereum tokens and generate Dai, a stablecoin pegged to the U.S. dollar. Fast forward to now - DeFi has $38billion of assets in this sector and in the last 180 days generated over $4billion of revenue.

So, not tiny, but compared to other financial markets, not that significant. Therefore, after seven years the question remains, is DeFi to remain merely a niche sector or can it, indeed, realise its potential and really challenge traditional financial markets? Smart contracts are very much a key driver in the DeFi sector, with IBM defining them as: “Digital contracts stored on a blockchain that are automatically executed when predetermined terms and conditions are met”. Linking with this, decentralised apps (dApps) are applications which use smart contracts and offer the ability to offer many of the services that historically banks have offered - making payments, lending, saving and buying and selling of assets. 

Meanwhile, tokenisation is steadily becoming more prevalent as a natural extension of TradFi for existing asset classes such as equities, debt instruments, commodities, real estate and even national currencies in the form of stablecoins and CBDCs. However, as our lives (including the provision of financial services) become ever more digital, physical national jurisdictions potentially become less relevant - yet local laws and regulations will still need to be adhered to. Digital markets will increasingly need to be globally coordinated if safeguards and investor protection are to remain in place. Therefore, surely there will be the need for consensus as to what actually needs to be regulated, and why:
the protection of consumers? 
for market stability?
to maintain confidence in the markets?
to encourage innovation?  

DeFi opportunities
DeFi is inclusive: provided you have a digital wallet and have access to the internet, you are able to use DeFi and not have to rely on banks and other money transfer firms.

Transactions are transparent: DeFi offers the ability to monitor actions in real-time including the repayment of loans, alterations in interest rates and releasing collateral. As there is greater transparency, users ought to have more confidence and trust.

Smart contracts: it is possible to automate many traditional risk management and compliance monitoring functions.

Data is held cryptographically and decentralised: blockchain-powered platforms hold data securely, and permission as to how and when access to data can be pre-programmed before a DeFi transaction is entered into. Since data is decentralised, it has built-in disaster recovery credentials and offers enhanced levels of security from cyber-attacks.

Disintermediation: DeFi use of blockchain means there is only one ledger/database that the various parties can have access to and, being digital, it is possible to send and receive payments faster and cheaper (especially when dealing on a multi-jurisdictional basis) without having to engage with several intermediaries. This generates cost savings and efficiencies in terms of transactions and reporting.

 DeFi challenges
Change: DeFi technology is new and regulators and institutions are cautious of change since this could impact on investors, potentially resulting in fines and compensation as well as damaged reputations. Furthermore, many of the systems and procedures are yet to be fully tested although the recent collapse in crypto prices has, for some DeFi platforms, been a baptism of fire.

Regulation, or lack of: Swarm Markets in Germany was the first licensed DeFi platform globally. There is minimal, if any,...

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

Blockchain technology is impacting many industries and society as a whole. There is a growing number of jobs now available for those who possess blockchain skills and, as the chart below indicates, the compensation rates are attractive and global in nature. Now, more than ever, the demand for blockchain jobs has grown.

In a survey carried out by LinkedIn, blockchain-related jobs were the most sought after in the US, the UK, France, Germany and Austria. This growth is not being recorded in other traditional businesses/industries but, interestingly, different industries are looking at ways to inculcate blockchain technology into their normal workflows. Companies such as J.P Morgan, Wells Fargo and other firms on Wall Street currently have preferences for employees who have knowledge and experience in cryptocurrencies, or the technology that powers them - i.e. blockchain. Likewise, with growing evidence of an impending recession in many jurisdictions, there will undoubtedly be on-going pressure to reduce costs and look for new ways in which to be more efficient. So, we could well see even greater demand for those with blockchain skills and knowledge.
Compensations for blockchain engineers 

Source: Hired.com
Hired.com re-iterates the huge growth for those with blockchain skills - even when compared to other jobs in the IT sector. Indeed, in an article from Julian Messner at Robert Walters (a leading global recruitment company), recently said: “Across all sectors, there is a strong demand for blockchain IT professionals who are able to leverage their technical expertise to improve operations and drive business objectives. This will require developers to have both expertise in blockchain – already a niche skill set – as well as familiarity with the industry they are developing applications for. For example, in fintech, blockchain product owners, backend or front-end developers, and UX/UI designers are required to have some level of experience with e-wallet and online payment gateway solutions as well – making it hard for companies to find skilled candidates. The shortage of skilled talent has seen inflated salaries, with blockchain professionals commanding 30% higher salaries compared to other IT professionals.”

Advantageous to this is that opportunities in and around blockchain are varied and span many industries and insomuch as the blockchain industry is considered a technical one, there are also plenty of non-technical jobs available to all.

Blockchain vs other developer roles

Source: Hired.com
Below are some of the job opportunities in the space and what they entail:
There is a massive demand for the right people to create blockchain-powered applications and the required architecture. If interested in such a role, programming languages such as Python, C++ and Javascript will be useful.

Quality engineer
The quality engineer is responsible for making sure every aspect of a blockchain-powered service or product meets agreed quality control standards. Blockchain quality engineers ensure projects are ready before they are released to external clients, and then are charged with ongoing quality checks. A mix of technological skills and strong communication skills are key characteristics that employers will be looking for. 

Legal and/or compliance roles 
There is a huge demand for staff in legal and compliance roles who have an understanding of blockchain technology. The rules and regulations around the use of blockchain and the digital assets that they create are still being formulated in many jurisdictions. However, as we see organisations embracing blockchains and using smart contracts, legal and compliance staff will be required to have...

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

As technology becomes more accessible, business models around video games evolve. In the late seventies and early eighties, games were played on arcade machines in local shopping centres. These days, games are played on smartphones and computers. Whichever platform, there are business models that suit each player. In the evolution of the gaming world, different models have been created.

Pay-to-play was the first model involving gamers having to pay to play games without any earning opportunity. The second model involves free-to-play (self-explanatory), whilst the third and latest model is the play-to-earn (P2E) ecosystem. 

The play-to-earn (P2E), or sometimes called play-to-pay, business model (a recent innovation in the gaming industry) offers gamers ownership over in-game assets and thus allows them to increase their value by actively playing the game. It provides users with the opportunity to not only add value, but exchange and/ or sell the assets they have earnt/played for to other gamers. Players are creating value for other players and the developers by participating in the in-game economy and, in turn, they are rewarded with in-game assets. These assets may be anything - NFTs, cryptocurrencies or in-game resources that are tokenised on a blockchain. Most P2E games have native tokens for in-game purchases and trading between players and they derive value through the use of their tokens. Axie Infinity, a leading example of P2E games, counts on players making a hefty upfront investment in Axies (the game-specific NFTs).The in-game assets earned from playing can then be traded at an appreciated price with other gamers. 

Whether or not you earn from playing, or the amount that you earn, depends on the length of time you invest in the game, the game's popularity, and the demand for the in-game assets or tokens from other gamers.

How the play-to-earn model stands out
asset ownership - play-to-earn gaming platforms, unlike the traditional game, use NFTs which are owned by the users. Gamers can mint and customise NFTs. They can also be transferred to NFT marketplaces for sale or converted to cryptocurrencies or fiat currency. NFTs, used in navigating through the game, can come in the form of avatars, land, pets, etc.

decentralisation - play-to-earn ecosystems typically operate under a decentralised governance framework, allowing their users to participate in crucial decision-making processes.

earning opportunities - aside from offering players interesting gameplay, play-to-earn gaming platforms make earning opportunities available for players. Gamers can collect in-game assets whilst they carry out different tasks, depending on the gameplay.

Is the business model sustainable?
The sustainability of the business model depends on many factors. Indeed, problems linked with this concept exist since the appeal of earning money could dilute the gaming experience. One of the identified risks is a game's ability to continue growing the economy it intends to build. According to Adrian Kolody, a DeFi startup founder, the only way a play-to-earn model can be sustainable is by making sure the game's users are of high quality. This may not be true for all cases. For instance, Axie Infinity was recently reported to be going through a difficult time - Axie is tied to crypto markets and players get Smooth Love Potion (SLP) tokens for each game they win and, in larger tournaments, can earn another cryptocurrency, Axie Infinity Shards (AXS). The company, as of October 2021, had raised more than $160 million from investors and Sky Mavis reported that Axie Infinity crossed 2...


3 Months Ago

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

Since the end of March, the price of Bitcoin has been slowly dropping. In May, however, the situation became worse; Bitcoin dropped further than it had in the preceding month, immediately causing the catastrophic failure of Terra, a cryptocurrency project which was once valued at
more than $50bn.

This week, Bitcoin fell below $21,000 for the first time in over 12 months. The cryptocurrency is down more than 68% from its all-time high, close to $68,990, back in November 2021. Likewise, Ethereum is down 63% from the historic highs set in the same month. In both cases, over 50% of the decline occurred this year. Experts have warned that things could continue to deteriorate, although the current situation doesn’t yet match the severity of the 2018 crash (in which Bitcoin lost 80% of its value). Nonetheless, investors are at a crossroads. Many, following the old investment adage ‘buy the dip’, are looking for a piece of the volatile crypto market in the hope that this is a temporary downturn rather than a long-term bear market. Furthermore, some investors, in a bid to be careful, have asked the critical question: “Should I buy the dip?"

Is it time to buy the dip?
So, back in November 2021, Bitcoin was trading at around $69,000 but, suddenly, it slipped to around $55,000. It was called 'dip' and, unsurprisingly, many investors jumped to 'buy the dip'. A month or so later and Bitcoin fell to around $45,000. Here was another chance to buy the dip, and many investors took that chance. Again it dipped, this time to around $33,000, and once again the hopefuls bought the dip. Currently, Bitcoin is trading at around $23,000. The principle of buying the dip is based on an assumption that these price drops are temporary aberrations, correcting themselves over time. The buyers hope to exploit these dips by buying at a relative discount and reaping the rewards when prices rise again. It has happened many times before and it can happen again. However, cryptocurrency markets are notoriously volatile; hence buying crypto at any price - dip or no dip - is risky. Although prices could return to previous levels, on the other hand, they could leave your investment underwater by falling even further. 

Total market cap: from over $3trillion to $1trillion

Source: Coingecko

If the past is prologue, then the current crypto crash could bounce back as it did last year when prices fell to similar levels before returning to pre-dip levels. But of course, there is a possibility that they might not. Worthy of note is, that every kind of investment has past performance which is no guarantee of future results. Whether or not to buy the dip cannot be answered in one word. You may have to ask yourself questions before taking either step. What amount of money can I afford to lose, since any investment has its inherent risk? How long am I prepared to wait if the price does not rebound in the short term? Do I set a stop loss - i.e. if the price falls by another 25%, do I stay invested or leave an order with an exchange to sell?

Why is crypto crashing?
The specific reason for the current dip is yet to be agreed on. There are, however, speculations. The decline has been attributed...

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

Bear markets for assets are nothing new and unfortunately neither are the crashes that inevitably follow them. Three of the better-known crashes were: the Dutch Tulipmania (1634-1638); the South Sea Bubble (1720); and the Bull Market of the Roaring Twenties (1924-1929). Of these, arguably the Dutch Tulipmania was a bubble because tulips have never been treated as an investment, whereas equities such as today’s crypto markets have fallen - only to rise again as confidence returns. In more recent times, equity markets have seen asset prices fall sharply on a number of occasions:

1972 - 1974: UK 74%
1987 Black Monday: DOW Jones 22% in a day
2000 - 2002: NASDAQ 75%
2007 - 2009: NASDAQ 56.8%

The reasons for falling asset prices often have their roots in what the ex-chairman of the US fed, Alan Greenspan, called “irrational exuberance.” Interestingly, if we look at what Greenspan said in his speech back in December 1996, it may well help to offer some guidance for the current predicament crypto and equity investors now find themselves in - that is, “erratic money, (i.e., wide variations in the quantity of money relative to the demand for money), distorts market price signals and the allocation of resources. Rational economic calculations, especially those affecting investment decisions, become more difficult when the future value of money is uncertain. Inflation and deflation that follow from erratic money undermine both economic and social order”. Well, we have certainly witnessed a lot of money being created, and arguably this has propped up asset prices as interest rates were crushed and companies and individuals went on a credit binge and asset prices inflated. According to the Federal Reserve Bank of St. Louis, 35%+ of all US$ ever printed by the U.S. government was printed in 10 months in 2020. 

Source: Fred.StLouis.org

The US was not alone as we saw the world’s central bankers enter into aggressive monetary easing (create cash and buy bonds so reduce interest rates) which had actually started before COVID-19 gripped the world with fear. With all this cash ‘sloshing’ and uber-low interest rates around, it is no surprise that equities, bonds, property and crypto prices increased in value as ‘erratic money’ fuelled an attitude of ‘risk on’ i.e., investors looked for higher risk opportunities which helps to also explain some of the heady valuations of tech stock and cryptocurrencies. The trouble is, is that asset prices are driven also by something incredibly intangible, i.e. sentiment, and once this fickle driver turns it is very hard to regain it in the short term. Having said this, a recent Bank of America survey has found: “Ninety-one percent of 1,013 people the bank surveyed in early June said they expect to buy crypto in the next six months. That is the same percentage as those who actually bought in the past six months.”

Furthermore, one of the challenges cryptocurrencies face is that many of them cannot be assessed using traditional valuations methods. Most of the organisations which have created and issued cryptos generate little income, let alone are profitable, but hold a promise that they will gain mass adoption and one day will be profitable. The crypto market has indeed seen some very large price increases and Bitcoin (still today at over $20,000) has been a staggering investment for those who have held it for 5 years, let alone 10 years. But there are many holders of cryptocurrencies which will be substantially worth less due to their ICO or DeFi or NFT holdings. However, there is an expression - ‘reversion to mean’ - and, given the almost parabolic rise in...

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

As reported by Reuters: “Buy Now Pay Later (BNPL) firms have created one of the fastest-growing segments in consumer finance, with transaction volumes hitting $120 billion in 2021 up from just $33 billion in 2019, according to GlobalData.” However, stiff competition, rising interest rates and weaker consumer spending are creating challenging headwinds for BNPL. Klarna, which was Europe’s biggest FinTech firm has seen profits fall and is now laying off staff as it faces bad debts and strong competition from firms such as Afterpay.

BNPL has effectively enabled consumers to have free credit by purchasing goods, agreeing to pay for them over the following 3 or 4 months, but paying no interest. Mercator Advisory Group reports that more than 50% of US consumers have used a BNPL option in the past 12 to 14 months. Juniper research estimates that by 2026, the BNPL sector could be worth more than $1trillion with the number of users growing from 340 million to over 1.5billion. Even Apple is offering BNPL features on its new iPhone app and some are proposing that could this also lead to the tech giant (with over 507 million customers using Apple Pay) to be looking to start offering some form of crypto?

Having seen how digital assets and blockchain technology are ingressing into most businesses, it ought to come as no surprise to see that BNPL platforms are also enabling their customers to use crypto: Affirm, Zip in Australia, Klarna, XRPayNet are using their blockchain to create an app that offers BNPL functionality. Furthermore, @Pay is merging blockchain and crypto technologies with the BNPL concept and generating cost savings using smart contracts. @Pay has stated that: “they wish to be a key participant offering DeFi e-commerce and instore solutions to shopper and merchants”. Adam Mazzafero at @Pay believes: “BNPL based on blockchain is the only viable alternative if these companies are to prosper. Being DeFi-based means significant cost savings to traditional BNPL products, a robust ecosystem for shoppers and merchants, all within an ecosystem rewarding financial responsibility.”

A growing interest in BNPL, coupled with using a new method of payment in the form of cryptos and a technology that is able to automate process thus reducing costs whilst generating greater transparency for all, is a powerful combination. So, it is easy to see why there is considerable interest from the BNPL platforms in digital assets and the technology that powers them. As to how potential regulation around cryptos impacts these plans, or indeed the lack of profitability among the BNPL platforms - only time will tell if BNPL and the use of these digital assets are here to stay.

Written by Jonny Fry
Writers linkdin: https://www.linkedin.com/in/jonnyfry/

Terraforms labs launched Terra in 2018, with Terra being an open-source blockchain payment platform for an algorithmic stablecoin - a cryptocurrency that automatically tracks the price of currencies or other assets. The Terra blockchain was designed to enable users to instantly spend, save, trade or exchange Terra stablecoins.

The Terra protocol creates stablecoins pegged to each other and consists of two cryptocurrency tokens - Terra and Luna - which can be exchanged for each other. This is the burn and mint equilibrium. Algorithmic stablecoin, Luna, is a cryptocurrency and rather than use a dollar to back its stablecoin, Terra used its native coin, UST, which was meant to be stable, whilst Luna was meant to absorb its volatility.
So, how does Terra’s algorithm work? 
More Luna is generated to purchase as much UST needed to keep it at a 1$ value. If the price of Luna goes back to normal (i.e., $1) the excess Luna is burnt. In essence, an algorithm is needed to manage the underlying token. The algorithm is constantly buying or selling to maintain the balance and so keep Terra at $1. Luna was designed to absorb the price volatility of UST, since more selling pressure for UST decreases the price of Luna.

Image credit: Bitnovo
What happened, it is believed, is that the Terra project grew too fast. This could be attributed to the high annual percentage yield (APY) of 20% , the return being offered to those who wanted to Yield Farm (where the owner of a crypto agrees to lend or borrow crypto on a DeFi platform and is paid/pays a APY based on the value of the crypto lent/borrowed). This was one of the highest in the space, and many people rushed in to take advantage of the high APY. The protocol also allowed for instant withdrawal, unlike some yield farming protocols which require lenders to lock up their crypto holdings for a set period of time. Sam Bankman-Fried, the CEO of FTX, said: “Terra was a case of “mass enthusiasm” and “excitement” with bad marketing.”

The trouble is, that whilst Terra wasn’t a Ponzi scheme it turnouts it had several loopholes that arbitragers and investors were quick to exploit. But Terra was not shrouded in anonymity as most Ponzi projects are. Furthermore, arbitragers usually take advantage of the native coin being above a dollar to make a profit - for instance, if Luna is $1.05, they could buy $100 worth which becomes $105 Luna, then sell 100 Luna for 100 UST, whereby making a $5 profit. This is a low-risk investment for most arbitragers and can also be done on the flipside. All the while they are doing this, the algorithm keeps trying to make it a stablecoin. So, what happens when many arbitragers start exploiting the market to make gains? Well, it looks like a Ponzi….. 

The second moving part is the Anchor protocol, the primary lending/protocol for the Terra ecosystem. Roughly 70% of UST in circulation is sitting in Anchor and this makes Anchor a significant stakeholder. But Anchor gave anchor tokens to borrowers as an incentive, and the amounts they get can be more than what they pay in interest. Both Anchor and Luna noticed the slack and moved to nullify them. Anchor topped up its yield reserve to $450 million. Luna upped...